NEWEUROPE19th Year of Publication | Number 1009 | 2 - 8 December , 2012 | € 3.50 www.neurope.eu

While the phrase ‘challenges and oppor-tunities’ is a tired cliché in Brussels,Greek Education Minister, ConstantinosArvanitopoulos is facing a grave situa-tion, but one where the urgency ofreform is driving him to not only makebold and overdue structural changes, it isproviding an opportunity to change howstudents will be educated, giving themtools that will help them in school andfor the rest of their lives. The ministerspoke with New Europe about his plans.

The desperate financial situation inGreece is serious, “Education was affect-ed by austerity measures, we had to cutsalaries of professors, we won’t have theluxury of employing part time teachers inthe next year,” he says, adding, “but themost important thing happening inGreek education right now is the intro-

duction of structural reforms. This ishappening at all levels of the educationsystem at the same time. We don’t havethe luxury of following a gradual reform,taking one step at a time, because wesimply don’t have the time.”

While many agree on the urgent needfor, if not reform, then a reconstructionof education, there has been opposition,“We’ve looked at legislation that wasn’tenacted because of a vocal minority inacademia, so now with the changes Imade in August, we bypassed this minor-ity and elected the governing councils inthe universities and now we have a newsystem of government in universities. Weintroduced electronic voting so the vot-ing process couldn’t be interrupted andblock the process.”

Last 27 November, the Eurogroup

finance ministers “saved” Greece from

bankruptcy once again, by agreeing to

disburse € 43 billion over the next few

months. By doing so, they bought some

more time for Greece but also for

themselves.

It has indeed been their strategy to

“kick the can down the road,” since the

beginning of the crisis, three years ago,

while hoping to some day reach a

broad agreement on the structural

problems that plague Europe and are at

the origin of the sovereign debt crisis.

And they don’t seem to want to deal

with the troubles of an official Greek

default until that day.

The last agreement is not only about

lending more money to Greece, but

also about making its debt “sustain-

able”. The aim is to lower the Greek

debt-to-GDP ratio from its current

level of 190% to a more “manageable”

124% by 2020…Thus, several other

measures, favorable to Greece, were

decided; these include an extension of

the repayment period for Greece’s

bailout loans, a reduction of interest

rates, a sovereign debt buyback

pogram etc.

Also, the biggest part of the money

to be received as a first installment

under this plan (around € 23.8 billion

out of a € 34.6 billion) will be used to

recapitalize the Greek banks after the

heavy losses they suffered from the so-

called PSI earlier in the year.

As in any new plan, the figures above

just emphasize that the previous plan’s

goals were not realistic, and so could

the current targets’ prove to be. And

before the new Euro-zone agreement’s

ink was dry, Citigroup issued its own

forecasts contradicting those of the

troika, and painting a much more grim

future for Greece.

According to Citibank, Greek GDP

will contract by more than 7% this

year, and will keep contracting up to

and including 2015; unemployment is

seen to attain catastrophic levels, up to

40% in 2015, and will start to decline

after 2017. Eventually, always accord-

ing to Citibank, Greece will be forced

to leave the euro somewhere between

the next 12 and 18 months.

But can the crisis hit nation really be saved?

Greek Minister announces structural change

continued on page 3

Greece rescued again

KASSANDRAAfter the rather rusheddecision of CommissionPresident Jose Barroso todismiss Health Commis-sioner John Dalli...

·Page 32

·Page 3

NOBEL EUROPE The European Union has ahistoric chance to resolve abitter, frozen conflict in itsneighbourhood...

·Page 8

ENLARGEMENT During the 2nd meeting ofthe High-level Dialogue onthe Accession Process(HLDAP) with Bosnia andHerzegovina (BiH)...

·Page 26

MIDDLE EASTThe Arab minority in Israelfinds itself at a crucial junc-tion. While enjoying politicaland civil rights ,it still faceslingering discrimination...

·Page 10

EU Commissioner for Economic and Monetary Affairs Olli Rehn, Greek Finance Minister Yannis

Stournaras, Luxembourg's Prime Minister and Eurogroup president Jean-Claude Juncker, Italian

President of the Financial Stability Board and Governor of the Bank of Italy Mario Draghi (LtoR)

meet prior an Eurozone meeting on November 12, 2012. | AFP PHOTO GEORGES GOBET

The economic crisis in Europe hasturned the European Union into“something radically different” thanits original political intention, divid-ing member states and opening-upsociety to extremist opinions, GeorgeSoros has said. Speaking in Budapest,Soros said that the European Unionis holding together “out of grim real-ity”. He said that the EU is far fromthe open society it had originallyaimed to be.

Crisis mode

·Pages 14-15

By CHRISTOS KISSAS

Hair condition

Page 21

ARTS &CULTURE

INTERVIEW: CONSTANTINOS ARVANITOPOULOS

NE 10 YEARS AGO

There was a different type of whitewash at the European Parliament this week.|AFP PHOTO / JOHN THYS

The Shooting Gallery

A decade ago there was progress on enlarging the EU, adding a further 10 countries, including the dividedisland of Cyprus, all of whom were fully admitted two years later.The move did bring in former Warsaw Pactnations, bringing them into the western sphere and greater prosperity. This enlargement was a radical changethat largely ended the split between west and east Europe. The change in the EU is still being felt, but thenew members are playing a full part in the EU.

Damn debate ordamning debate?

Some time back, the Irish Times, Ireland’s paper of record,ran as its advertising slogan, ‘Questions Answered,Answers Questioned’. It wasn’t an original quotation, ofcourse, but in the context of its use, perfectly capturedwhat a newspaper should do; not only in the obvious wayof holding public authorities to account, but also in theseparation of fact and opinion, of news and analysis.Questions do not always provide comfortable answers, orindeed provide any kind of satisfactory answer in them-selves; think of Bishop Berkley’s poser about the sound ofa tree falling in a forest, or the famous koan about thesound of one hand clapping. A literal answer may have yougoing around in circles.“Is jailing the leader of a neo-Nazi gang really going to combatintolerance in Europe?” That was just one of the questionsposed at the Tackling Hate Speech conference in Budapest on27 and 28 November. The conference looked at the historicalroots of hate speech, and how it might be stamped out. The sit-uation is not good; examples show that hate speech has grad-ually, but undeniably, infiltrated the real world – transferredfrom cyberspace to the concrete jungle – and, worse still, takenover mainstream political communication. Nowadays, fearfulof losing votes to the extremes, politicians incorporate some oftheir hardline rhetoric, in the hope of stemming a haemor-rhage. Debate be damned. Enforcing particular opinions on citizens is always per-ilous, and should be approached with caution, naturally.In this case, it is the threat to free speech.Unconformable views about race or religion are notautomatically racist or sectarian, in the same way thatill-informed comments that serve as a call to violentaction are. Context is everything.Everyone has the right to be offended, but being offendedis not the same thing as being persecuted. In Europe, astwo separate reports issued this week (27 November) illus-trate that hate speech, and it’s violent real world partner incrime, hate crime, has not gone away in the EU, despite itssincere aim to eradicate prejudice. There is seemingly agenuine problem in Europe with a renewed upsurge inracist or otherwise intolerant behaviour. It is somethingthat needs to be tackled head-on, not by vague words ofcondemnation. Complex debate is nothing to be scared of.Political leadership is at the heart of this. George Soroshas complained that this generation of leaders has letEurope backslide into the kind of times that fuelled fascistextremism in the run-up to the second world war. Badtimes, he says, encourages intolerance. There is historicalprecedence for this, of course, and the fear of a return to arecent genocidal path is maybe too mush to worth con-templating; better to clamp down that admit the burgeon-ing reality. A lurid, somewhat fanciful picture, but left togo on, could Europe again face the disastrous dilemma itwas confronted with 90 or so years ago.But his is not the only question facing Europe. The eco-nomic crisis, and general mistrust about financial institu-tions, seen to be withholding much needed tax revenuesfrom national and European purses, and which so manybelieve is fuelling the rise in hate crime, also needs to beaddressed. Which means the EU asking some very awk-ward questions of its own economic and corporate poli-cies. The debate needs to be had; questions need to beasked, and answers need to be questions.

MANAGING EDITOR

Alia Papageorgiou alia@neurope.eu

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kgeropoulos@neurope.eu

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acarling@neurope.eu

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aalamanou@neurope.eu

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lkissa@neurope.eu

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acoronaki@neurope.eu

DIRECTOR

Alexandros Koronakisakoronakis@neurope.eu

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ISSN number: 1106-8299

02NEW EUROPE2 - 8 December , 2012

ANALYSIS

03NEW EUROPE2 - 8 December , 2012

EXCLUSIVE INTERVIEW

While the phrase ‘challenges and oppor-

tunities’ is a tired cliché in Brussels, Greek

Education Minister, Constantinos Arvan-

itopoulos is facing a grave situation, but

one where the urgency of reform is driv-

ing him to not only make bold and over-

due structural changes, it is providing an

opportunity to change how students will

be educated, giving them tools that will

help them in school and for the rest of

their lives. The minister spoke with New

Europe about his plans.

The desperate financial situation in

Greece is serious, “Education was affected

by austerity measures, we had to cut

salaries of professors, we won’t have the

luxury of employing part time teachers in

the next year,” he says, adding, “but the

most important thing happening in Greek

education right now is the introduction of

structural reforms. This is happening at all

levels of the education system at the same

time. We don’t have the luxury of follow-

ing a gradual reform, taking one step at a

time, because we simply don’t have the

time.”

While many agree on the urgent need

for, if not reform, then a reconstruction of

education, there has been opposition,

“We’ve looked at legislation that wasn’t

enacted because of a vocal minority in ac-

ademia, so now with the changes I made

in August, we bypassed this minority and

elected the governing councils in the uni-

versities and now we have a new system

of government in universities. We intro-

duced electronic voting so the voting

process couldn’t be interrupted and block

the process.”

Arvanitopoulos doesn’t see the academ-

ics as an enemy, “What is amazing, is the

participation of the academic community.

With an average of 80% to 85%, people

voted for change, reforms. We gave the

ability to the silent majority in academia

to express itself. The positive aspect is that

there is a large majority that wants to

move forwards.”

He intends to consolidate the depart-

ments and institutions, to bring the ‘shape’

of education towards what the country

needs, now and in the future and is

preparing a presidential decree that will

bring a strict evaluation of the education

arena, noting, “This has not happened for

30 years.”

There are other deep changes to come,

including a new digital system to place

the right numbers of educators in each

school, aiming to end the current system

which requires 20,000 part-time teachers

being hired every year. This will be com-

pleted by September 2013.

If one word sums up the minister’s ap-

proach, it is change. “Change means a

paradigm shift, it ’s difficult to change

ways of thinking, but there is the realiza-

tion and acceptance things must change,

but when it comes to offering proposals,

some people back off. It’s difficult some-

times to accept change.”

His answer to reluctance is constant di-

alogue, “It is not to enforce change but

make the community participants in

change.”

This change also reaches every student.

Arvanitopoulos says that rote learning of

facts and figures is not enough to prepare

people for the future, what he intends to

do is change how people are educated,

teaching students how to educate them-

selves, how to think, examine and draw

conclusions. “We have to start teaching in

this way from very young learners.”

The challenge is being overcome,

painfully, but the opportunities will come.

EDUCATION

Greek Minister announces structural change

By Andy Carling

Greek Education Minister, Constantinos Arvanitopoulos

(continued from page 1 )

Although these forecasts look overly pes-

simistic, (and the thousand or so articles

we have read so far in the “serious”

Anglo-saxon press about Greece’s exit

from the euro-zone have proved wrong),

the official troika’s forecasts have in some

way “symmetrically” been overly opti-

mistic. All the rescue plans decided to

date have created a much deeper reces-

sion than expected, thus making the

goals that they themselves had set, unat-

tainable.

So, in this backdrop, is it still possible to

save Greece? I strongly believe that the

answer will come from Greece itself and

not from its international “rescuers.”

And the answer lies in the denominator

of the debt-to-GDP ratio. In other

words, Greece’s future solely depends on

its society’s will and its government’s

ability to implement those measures that

will stimulate its economy, and attract

foreign investment.

Some serious efforts have been done to

this end, including a sharp reduction of

public deficits, a significant decrease of

wages across the board, and a partial dis-

mantlement of a largely constraining

labor legislation. However, these meas-

ures are “too little, too late” to bring real

change to the country’s economic land-

scape. Public administration and its fa-

mous bureaucracy, the single most

deterring factor to foreign investment, is

still practically intact; very few if any

measures for simplifying the bureaucracy,

other than vague promises, have been

taken so far.

Tax legislation, of a proverbial complex-

ity, is getting even worse: 14 tax laws

were passed over the last three years, re-

flecting the changing reactions of gov-

ernment officials towards the consecutive

failures of the tax collection system.

More to that, these laws (some of which

have never been applied) are typically

complemented by regulatory texts (circu-

lars) that are supposed to “clarify the

law.” Only last year, in 2011, 250 such tax

circulars were issued, practically one per

working day, with many of them contra-

dicting one another…

This is far, indeed, from the ideal envi-

ronment that would appeal to interna-

tional investors, but it’s just about all the

current Greek administration can pro-

duce.

The main issue is neither the last rescue

plan itself, nor the gloomy predictions of

some major international bank. The true

question is whether Greece wants to be

saved, and more precisely if its current

political class is able and willing to make

the necessary “administrative revolution”

the country badly needs. Is it too much

to ask? Sometimes, I think of it as if we

were asking the old communist regime to

demolish the Berlin Wall…

Christos Kissaswww.christoskissas.com

The latest Fitch Ratings Senior Fixed-Income Investor Survey has revealed amixed message, as investors are cau-tiously optimistic over the direction ofEuro zone policies.

A strong majority of 81% believedthat the interventionist policies of theECB, such as the Outright MonetaryTransactions, where there is a definitecommitment to buying sovereign bondsunder a conditional programme, along-side the European Stability Mechanismare significant steps forward. Althoughthey thought this would not entirely al-leviate the financial and political risksthat still linger, more optimistically 5%of respondents stated that the plans ad-dress the concerns of investors who nowenvisage the end of the crises soon. Only14% were outright pessimistic sayingthat they thought that pressure will buildup on Spain and Italy, and these meas-ures would have little or no impact.

Sovereign debt was still the biggestworry with 91% of those questionedsaying this would be the most dan-gerous risk to the European creditmarkets, with 70% believing a doubledip recession would be the next mostmajor worry, followed by geopoliticalrisk, where 65% thought this was thebiggest concern for financial stability.

The Single Supervisory BankingMechanism (SSM) has also boostedinvestor confidence in the Euro Zone,with 79% of those questioned expect-ing the ECB to take the mantle ofbeing a cross border supervisor, thisfigure includes the most positive 16%who believe that the SSM will beginas planned from January next year,and will be fully operational in 2013.

This 1 January deadline was reiter-ated at the November ECOFIN meet-ing, but there are still aspects of theSSM that have still to be fully negoti-ated, such as the involvement of non-Euro member states. MonicaKlingberg Insoll, Managing Director,Credit Market Research for Fitch said:“There has been a surprisingly opti-mistic view of the Euro zone crisesfrom the investors in their responses tothe questions, when it comes to theEuro Zone it is essentially a politicalquestion, where as financial experts aremay be more confident in the systemthan the ones closer to it.”

“The fact that decisions will bemade from the ECB is welcome as itis an important step as a change tocloser homogenisation with the sin-gle banking mechanism, although toagree on the banking union may takelonger to sort out that what the Euro-pean Council hope for Only 12% ofthose asked said that banks now facethe most difficult refinancing obsta-cles, a considerable increase in confi-

dence compared a the same survey inJuly, where twice as many respondentsthought refinancing was the most se-rious issue for banks.

In comparison the developed marketsovereign markets were of a huge con-cern, as 58% of those questioned believethat there is trouble ahead for them. Thegap in confidence is mainly attributed tothe general improved market sentimenttowards banks, as 35% of the investorsvoted for financials as their preferred sec-tor. This more than doubled the score ofthe previous quarter, making the one ofthe most positive increases over onequarter in the five year history of thesurvey.

“Most people essentially agree withthe direct effect of the ECB in terms ofpolicy.” Explained Monica KlingbergInsoll.

“If you look at the results in the finalquarter of last year, the concerns aboutbank refinancing in the survey reached50%, then came the direct action of theECB with the Long-term refinancingoperations in December and in Februarythis year. This brought the advantages ofthe banks being able to fund themselvesat low cost, and subsequently helpedmany banks regain market access.”

Bank credit quality was mostly underthreat from macro economic conditionswith 35% believing the situation wascritical and a further 55% saying that itwas important. Access to funding was astrong issue, with 75% stating that thiswas critical or important, and a further20 % saying that access conditions waslimited.

Confidence on credit conditions waspoor in the retail, leisure and consumerproducts sector, alongside energy andutilities, industrials and manufacturingand the telecoms and media industriesover the next 12 months . Scores wereno higher than 11% from the retail re-spondents, in saying that credit condi-tions will improve, and that was onlytentatively improve.

This was in contrast to the investmentgrade corporates and the emerging mar-ket corporates, who are more assuredthat there will be a moderate looseningof bank lending conditions, with 39%and 31% of respondents respectivelyhaving a positive outlook, sparking a de-bate whether the financing from theECB will be increasingly released intothe real economy.

Lester Pitch, CEO of TAM assetmanagement based in London, said: “Ican understand the confidence on bankrefinancing, but that is taking into ac-count the all time low that the bankshave come from. As for lending I thinkit will be a drip effect, and it will taketime for lending to reach the levels of theeighties and nineties.”

“The banks can’t rebuild economiesuntil they have rebuilt themselves, thereis no quick fix to this as some Europeaneconomies seem to believe. Banks haveto get there balance sheets right, al-though there has been some regulatorypressure with fines being imposed fornot lending as such but mishandlingcapital, again it will be a drip effect andbanks will need another year or two toget themselves on a more even keel.There maybe encouragement from thepolicies of Europe, but they are not fullyimplemented just yet so we have to waitand see.”

One of the most surprising resultsfrom the survey was the confidence ex-pressed over the US ‘fiscal cliff ’, wheredue to the Capitol Hill budget impassethere may be a $600 million of tax in-creases and spending cuts triggered,which is argued could place the US backinto recession with severe repercussionsfor European economies.

Monica Klingberg Insoll of Fitchopined: “We also thought that it wasa surprise, but the 82% do recognisethe uncertainty that the current posi-tion in the US is causing, and this sur-vey was taken before the election tookplace.”

ECONOMY

Time to rebuild; cautiouslyLatest Fitch results give mixed message

By Peter Taberner

04NEW EUROPE2 - 8 December , 2012

ANALYSIS

A view of the offices of Fitch Ratings in New York, New York, USA.

EPA

/JU

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IN L

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Making the rightenergy choices forrural communities

In 2013, the European Commission plans to propose a new cli-mate and energy framework for the period up to 2030 and, as sug-gested by Energy Commissioner Gunther Oettinger, bindingtargets for renewable energy are heavily on the Commission’smind. While the Commission aims to further cut greenhouse gasemissions and strengthen energy savings, one must not forgetabout the role of rural areas in achieving those goals. This is par-ticularly important as currently the Commission and MemberStates are focused on providing clean energy solutions to cities,leaving out rural areas with dirtier energy choices.According to a research study by Ecofys, the energy mix in ruralareas is often dominated by dirtier fuels such as coal and heatingoil. This leads to high CO2 emissions, and increased levels ofhealth threatening air pollutants such as NOx, SOx and PM inrural areas.With the intermittency of renewable energy sources, there is alsoa need to look into cleaner energy options which could support re-newable energy production. For instance, currently used coal andheating oil could be easily replaced by decentralised and lower-carbon fuels. A full switch from coal and heating oil to LPG in thefive biggest EU Member States would result in a reduction of 7.7Mt CO2-eq in rural households and services: emissions from over7.5 million inhabitants.According to the ‘FREE Choices Campaign’ launched by the Fu-ture of Rural Energy in Europe (FREE) initiative in November2012, current energy problems in rural areas could be simply solvedthrough prudent policy initiatives that stimulate investments thatcan deliver lower carbon outcomes. The EU could, for instance,start with promoting decentralised and cleaner energy technolo-gies by putting forward a 60/40 energy mix target for heat pro-duction in rural areas (60% renewables, 40% gas) by 2050. A 60/40energy mix would mean that the share of renewable energies inheat production would quadruple in rural areas, while LPG andLNG would substitute for more polluting fuels. 60/40 is just oneof the ideas the FREE initiative is putting forward for furtherstakeholder discussions in its ‘White Paper’.Next year’s EU proposal on the climate and energy frameworkopens up an opportunity for rural areas to be a part of the overalldesign of the national energy mix. This opportunity cannot andshould not be missed.Cleaner energy production in rural areas is not the only componentwhich needs closer attention from policymakers. Research showsthat energy efficiency levels in rural regions are significantly lower,caused by the nature of many of the older prevalent buildings.In order to fully use the energy saving potential in rural areas, cur-rent energy efficiency programmes and policies need to help over-come existing barriers related to an increasing gap between ruraland semi-urban households and the fact that the income per in-habitant is 21 to 62% lower in rural areas.Energy efficiency in rural areas could be, for instance, improved byintroducing a strategy on the renovation of buildings and puttingforward an annual 3% target for rural buildings by 2020. What’smore, introducing innovative public/private financing schemes forenergy efficiency upgrades for rural consumers would enable theuptake of energy efficient technologies such as Micro-CHP.Member States could create financing facilities aggregating dif-ferent streams, such as their own national resources, EU Struc-tural Funds, resources allocated to energy efficiency from EUproject bonds, and resources from investment and developmentbanks.Rural areas can play an important role in helping the EU reach itsambitious carbon reduction goals for 2020 and those targets thatare likely to come thereafter.

Andrew Ford is the Group Public Affairs Manager of SHVEnergy and Founder of the Future of Rural Energy Europe Ini-tiative project

New Europe content partner

By Andrew Ford

ADVERTISEMENT

The European Climate Commissioner has justmade a proposal to stabilise the EuropeanUnion’s emission trading system – a market forgreenhouse gas emission allowances that hasbeen in place since 2005. Under the proposal,allowances worth six month of EU emissions(900 mn tonnes) would be temporarily takenout of the trading system, and sold in 2019 and2020 rather than 2013-2015.

This “back-loading” is supposed to revampcarbon prices that dropped below €10 pertonne of carbon dioxide because of the accu-mulation of a large stock of excess allowances inthe system. The excess results from unexpect-edly low demand for allowances induced by theeconomic crisis, and from emission reductionsincentivised by complementary policies on re-newables and energy efficiency. That is, whiledemand for electricity and steel was signifi-cantly lower than expected during the reces-sion, the remaining electricity generation fromfossil fueled power stations was partly replacedby subsidised wind and solar plants. In addi-tion, the carbon price has been depressed bymore credits than expected from greenhouse-gas reduction projects outside Europe havebeen converted into EU emission allowances.

The rationale for “back-loading” is that it willpush up the carbon price and provide incen-tives for market participants to continue to saveon emissions. More importantly, a politicalcommitment to revamp the carbon price issupposed to send a signal to all actors that theEU sticks to the emission trading system as thecore pillar of its decarbonisation strategy.

What is worrying about this step is that itseeks to create credibility in a system by politi-cally infringing into it. The emission trading sys-tem is enshrined in legislation that is verydifficult to change and foresees a linear decline in

carbon emissions even beyond 2050. Demon-strating that the system can be politically con-trolled might back-fire in the long term. Whyshould market-players that have to take invest-ment decisions for forty or more years care abouta price signal that can so easily be manipulatedby a political decision in 2012?

Creating long-term credibility in a market inwhich supply and demand can be largely de-termined by policymakers is very difficult. Butlong-term credibility is essential to drive pri-vate investment into low-carbon technologiesthat will only pay back after decades.

One way this could be achieved is by expos-ing current and future climate policymakers tothe risk they are creating for low-carbon in-vestment. That is, if future policymakers decideto undermine the emission trading system, theywill have to compensate companies that in-

vested based on the claims made by policy-makers today that the emission trading systemis stable.

This could be organised in form of a privatecontract between low-carbon investors and thepublic sector. For example, a public bank couldoffer contracts that agree to pay in the futureany positive difference between the actual car-bon price and a target level. Low-carbon in-vestors would bid to acquire such contracts tohedge their investments. This would producethree benefits: First, the public bank would beable to collect initial payments (a sort of optionpremium) and make a profit if a sufficientlytight climate policy is maintained. Second, theprivate investor significantly reduces its expo-sure to the – political – carbon market andhence accepts longer pay-back times for its in-vestments. This would unlock long-term in-

vestments that are currently too risky. Third andmost importantly, public budgets would be sig-nificantly exposed to the functioning of theemission trading system. If future climate pol-icymakers take decisions that lead to increasesin the number of available allowances, theymight be called back by the treasuries as thiswould activate the guarantees pledged to in-vestors.

Consequently, all actors – also investors notcovered by the scheme – would know that thereis money on the table. This would serve as amuch stronger and hence more credible com-mitment device for preserving the integrity ofthe emission trading system.

Georg Zachmann is a Research Fellow atBruegal, a a European think tank specializingin economics.

ENVIRONMENT

Decarbonisation is no 100 metre race

"Persons with disabilities are among themost affected by the crisis; they are thefirst to pay for a situation that they arenot responsible for. The protection of therights of persons with disabilities is,therefore, more imperative than ever. It’stime for the EU to implement the UNConvention on the Rights of Personswith Disabilities (CRPD) that it has rat-ified. We do not just want a way out ofthe crisis. We want a human rights wayout of the crisis. That’s the only way to-wards an accessible Europe where all cit-izens have equal rights andopportunities", Yannis Vardakastanis,President of the European DisabilityForum (EDF) stressed to New Europe onthe eve of the 3rd European Parliamentof Persons with Disabilities.

On 5 December, the event will gathermore than 450 delegates from organisa-

tions representing persons with disabili-ties (DPOs) all around Europe. They willmeet in the European Parliament withEuropean Parliament leaders, MEPs andEU decision-makers to discuss how Eu-rope can ensure the protection of therights of persons with disabilities in thistime of crisis.

In 2013, the EU will have to present itsfirst report to the United Nations on theprogress it has made on the implementa-tion of the rights of its 80 million citizenswith disabilities, making the timing ofthis forum critical. These rights are de-fined in the UN Convention on theRights of Persons with Disabilities(CRPD), the first human rights treatythe EU has ever ratified.

A resolution will also be discussed andvoted by delegates from the organisationsof persons with disabilities calling on the

European institutions and consultativebodies, the EU member states, the socialpartners, civil society, NGOs, DPOs andother stakeholders to take appropriatesteps towards the implementation of therights of persons with disabilities in Eu-rope. The event will be structured simi-larly to a plenary sitting of the EuropeanParliament by also using the same speak-ing rules.

This is the third time that such anevent is taking place at the EuropeanParliament. The first one was organisedin 1993 and the second one in 2003. Bothevents were concluded with the adoptionof Resolutions (1993 and 2003) and aManifesto on the forthcoming EuropeanParliament elections.

Participation to the event is restrictedto organisations of persons with disabili-ties which have been invited to nominate

delegates and members of the EuropeanParliament. However, there will be a webstreaming of the event at the website ofthe European Parliament with interpre-tation in most EU languages.

Speakers at the event include: MartinSchulz, President of the European Parlia-ment, Hannes Swoboda, President of theEuropean Parliament’s Socialists & De-mocrats Group, Roberta Angelilli, VicePresident of the European Parliament, Er-minia Mazzoni, Chair of the Committeeon Petitions, Pervenche Bères, Chair of theCommittee on Employment and SocialAffairs, Adam Kosa, MEP, Chair of the EPDisability Intergroup, Herman VanRompuy, President of the European Coun-cil (video message), Nikoforos Diaman-douros, European Ombudsman, andYannis Vardakastanis, President of the Eu-ropean Disability Forum.

HUMAN RIGHTS

Protecting the rights of persons with disabilities at a time of crisis

06NEW EUROPE2 - 8 December , 2012

ANALYSIS

Commissioner Janez Potocnik proposes radical changes to emmissions trading.

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07NEW EUROPE2 - 8 December , 2012

ANALYSIS

Would a mafia godfather be trusted toend organised crime? Would a wife-beater be the right man to ask about howdomestic violence should be punished?Would an auditor to Enron be the bestsource of advice on making companiespay more tax?

The answers to these questions hardlyneed to be spelled out. Unless they repentor display signs of remorse, wrongdoersare not usually consulted by policy-mak-ers tasked with addressing the harm theycause. For some reason, though, an ex-ception is made for accomplices to cor-porate misdeeds.

Before the end of this year, the Euro-pean Commission will publish an actionplan for tackling tax avoidance and eva-sion by large firms. As I've been trying todeepen my knowledge of taxation issuesfor a while, I was eager to learn who theEU executive has turned to for guidance.To my astonishment, I found out that theCommission's tax department has hiredPricewaterhouseCoopers (PwC) to writea number of studies in recent times.

PwC is world's biggest auditor. Al-though Arthur Andersen may be the ac-countancy firm generally associated withEnron, PwC was also deeply implicatedin that scandal a decade ago. It providedadvice on off-balance sheet transactionsboth directly to the Houston giant and topartnerships run by Andrew Falstow, itschief finance officer. That was despitehow ethical standards applying to the ac-countancy profession require a degree ofobjectivity when dealing with differentclients.

As if that wasn't bad enough, PwCgave a clean bill of health to the accountsof banks and other financial service oper-ators that engaged in highly risky activi-ties before the global crisis. PwC was theauditor for American Insurance Groupfor many years, yet did not disclose a "ma-terial weakness" in AIG's accounting

methods until 2008. By that time, AIGwas involved in a dispute over "collater-alised debt obligations" with GoldmanSachs. PwC was also the auditor for the"vampire squid", to use Rolling Stonejournalist Matt Taibbi's colourful de-scription of Goldman Sachs.

Meanwhile, PwC confessed in 2011that it failed to detect flaws in the ac-counts of JP Morgan over many years. Ina separate case, it agreed last year to forkout $7.5 million to settle charges by theUS Securities and Exchange Commis-sion over the deliberate inflation of rev-enue by India's Satyam ComputerServices. Because of the scale of the mis-reporting, the affair has been dubbed"India's Enron".

And, of course, PwC has handled MittRomney's accounts since 1990. Docu-ments unearthed during the US presi-dential election campaign indicated thatRomney availed of legal loopholes to dra-matically reduce his tax bill over a 15-yearperiod.

In his book on tax havens Treasure Is-lands, Nicholas Shaxson calls major au-ditors like PwC "the private police forceof global capitalism". The limitations ofprivate police forces were highlightedwhen the Olympic Games came to Lon-don during the summer: G4S was unableto perform tasks traditionally done by thepublic security forces. The same can besaid of PwC. Is it right to give a for-profitauditor the sole responsibility for signingoff the accounts of the globe's most pow-erful corporations?

PwC clearly serves the interests of itsmasters. It helps ensure that the super-rich pay a much smaller proportion of in-come tax than the rest of us. PwC is activein those tax havens that EU officials pro-fess to abhor. In Jersey, it even wrote a lawdesigned to shield auditors from scrutiny.

On the surface, it appears absurd thatthe European Commission has hiredPwC to provide expert analysis on suchsubjects as business tax reform and the

links between tax avoidance and globalpoverty. Yet if you work from the as-sumption that the Commission is under-taking no more than a window-dressingexercise, things begin to make more sense.

The EU executive has indicated thatthe forthcoming action plan on tax avoid-ance is part of its work on "corporate so-cial responsibility" (CSR). We aresupposed to believe that by working intandem with big business, the Union'sgovernments and institutions can con-vince them to cough up a bit more so thatfuture generations will have good qualityschools and hospitals.

Yet CSR is about as meaningless asputting a picture of a dolphin on a tankreplete with toxic chemicals. As JoelBakan explains in his book The Corpo-ration, the laws of most countries are clearabout the role of big business. Underthese laws, the overriding responsibility ofcorporate decision-makers is to maximisecorporate gains. "The law forbids anyother motivation for their actions," Bakanwrites. "Corporate social responsibility isthus illegal - at least when it is genuine."

As it happens, PwC is not the only "ex-pert" with a less than pristine record ad-vising the Commission's tax department.Michael Devereux is one of those to havecontributed to a data-heavy study on the"effective tax levels" paid by corporations,which has been prepared at the Commis-sion's request. He is director of the Ox-ford University Centre of BusinessTaxation. The centre's website thanks anumber of corporations for their "gener-ous" financial support. Among them areVodafone, a British telecommunicationscompany that paid no corporate tax inBritain last year.

Depriving EU countries of an esti-mated 1 trillion euros per year, tax eva-sion and avoidance is one of Europe'smost pressing problems. Turning tothose who benefit from this problemfor "expert" advice is one sure way ofpreventing a solution.

Questions over the choice of advisors for Algidras Semeta, Commissioner for for Taxation and Customs Union, Audit and Anti-Fraud.

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EU takes tax advice from Enron's auditor

By David Cronin

RethinkingCapitalism

Rethinking Capitalism is essential today. In these timesof economic recession, people are losing faith in theeconomic system. It is an earnest need of our time tore-instill the faith in our current system otherwise itwill lead to anarchy. To re-establish faith and trust inthe economic system, we need a holistic moral and eth-ical revival including all the four essential pillars of so-ciety: the Government Institutions, Private and CivilSociety Organizations, Faith Based Organizations andthe Media. We need to foster a coordinated effortamongst these stakeholders. If any one of these pillarscollapses, the others also become disabled. Ethics in business need to be highlighted. Thoughscams are happening all around us, it is essential to re-alize that there are successful economic and businessinstitutions that follow strict ethical practices. Whenfaith in ethics is lost and unscrupulous, unethical andillegal shortsighted business practices become a norm,it creates social unrest and disharmony in society.Sooner or later this leads society towards violence, cor-ruption and depression. The United Nations has declared that mental depres-sion will be the second biggest killer by 2020. If a largeportion of the population is mentally depressed, there isno way a healthy economy or better social system can bedeveloped. Given the rising incidence of physical andmental illnesses, as well as behavioral disorders in thesociety, attempts to establish a robust economy will bejust like putting makeup on a corpse. This is wherefaith-based organizations can play a vital role. Over-ambitiousness often boomerangs as depression, whichcan be countered by self-referral or spiritual values.Reinstating faith in ethics will keep the hope burningand will give strength to manage the crisis when it ismost needed. Intuition, innovation and proper imple-mentation all happens when there is integrity in one’sconsciousness. It is Spirituality, which brings about thisintegration in one’s personality, and enhances intuitiveability. An ability to work without prejudice of any sort and areadiness to look into the new paradigms are skills setsessential for the modern era. Along the same lines as acarbon credits system, there could be a points systemfor corporate social responsibility (CSR) too. OftenCSR is undertaken simply as a showpiece rather than asolution. The proactive implementation of the humanvalues in the corporate program can bring them to theforefront in any transaction and bring back muchneeded faith in our current economic system.Wherever there is unrest and violence in society, pros-perity remains a farfetched dream. The lack of faith inthe system is a leading contributor to such unrest. Lackof sense of belongingness and greed causes corruption.These issues cannot be tackled only through law; itneeds social commitment and awareness amongst peo-ple. Faith based organizations play a big role in creating vi-olence free society and corruption free community. Afew leaders leading by example can impact the lives ofmany, for example in India, Mahatma Gandhi inspiredpeople through his spiritual gatherings, which includedmulti faith prayers and hymns. These congregationswere integral to the movement to regain India’s free-dom.It is time to kick-start enlightened imaginations. Withthe efforts of honest politicians, businessmen with in-tegrity, religious leaders with credibility, visionary edu-cationalists, social workers with compassion and claritywe can re-instill faith in our current system. This dream is possible to achieve when we rise aboveour limited mindset of my country, my religion and mypeople to embrace the greater perspective of my planet.

New Europe content partner

By Sri Sri Ravi Shankar

08NEW EUROPE2 - 8 December , 2012

ANALYSIS

RestartingEurope

Europe is facing one of the strongest challenges of itshistory. In a time of uncertainty, the imperative of rein-venting the European Dream is more and more thechallenge of individual and collective mobilization ofall ou us, effective Citizens of Europe! Once upon atime in Europe, a Contract of Trust as an answer tothe expectations of a New Society, more demandingand more capable of driving the imperative of excel-lence, will to be signed as the right answer to the future!The global economic situation of Europe is becomingdifficult: the european companies are facing more andmore the strong competition from companies from Mid-dle East and Asia, Public Accounts of most of the euro-pean countries are facing unsustainable deficits,Unemployment is very high. That´s why a New Con-tract of Trust for Europe is more and more an imperative.The New Europe must be supported by some strategicproposals that demand for a new operational agenda. This New Contract of trust must be supported bysome strategic proposals that demand for a new oper-ational agenda. Europe must know how to integrate ina positive way its citizens. Social cohesion is done withthe constructive participation of the citizens and it ismore and more necessary an effective attitude of mo-bilization for this effort. Education must be the righttool for this strategic ambition for Europe.Innovation and Technology are the “enablers” for com-petitiveness in Europe. Universities and Companiesmust perform a new strategic partnership centered inthe objectives of the added value, creativity and knowl-edge. This is the basis for a future effective implemen-tation of the New Eu2020 Strategy. Europe has still astrong opportunity to implement an agenda of innova-tion – the opportunity is more and more know and itcan´t be lost.The message is very objective - The excellence of Europeis more and more the excellence of its Regions. The devel-opment of strategic projects like the Poles of Competitive-ness, Clusters of Innovations and Knowledge Cities andRegions is the effective confirmation that the basis for anew agenda in Europe depends on the capacity of its re-gions. A New Europe is more and more the confidence ofthe development of New Regions.Europe has a unique identity based on its strong cul-ture. The European Culture is a unique asset. Europemust be able to involve other global partners in theconstruction of integrated projects focused on the de-velopment of culture as a driver for development. Thereinvention of culture is itself a very innovative way toinvolve more and more the European actors in thisproject for the future.We want 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

The European Union has a historicchance to resolve a bitter, frozen con-flict in its neighbourhood.

We talk about our common for-eign and security policy, but we areoften too timid about using our in-fluence in our neighbourhood, evenwhen all 27 member states are inbroad agreement.

Yet right on our doorstep we see aconflict which cries out for a con-structive and imaginative initiativeby our High Representative, CathyAshton.

The European Union will thisweek accept the Nobel Peace Prize inOslo, a testimony of its peace cre-dentials as an organisation that pro-motes peace both inside and outsideits borders. The Nobel Prize Com-mittee decided to recognise the “[…]stabilising part played by the EU[that] has helped to transform mostof Europe from a continent of war toa continent of peace. The union andits forerunners have for over sixdecades contributed to the advance-ment of peace and reconciliation,democracy and human rights in Eu-rope.” This is the most appropriatetime to remind ourselves that a lothas been done but also that a lot isstill left to do.

Coming from Estonia, I know onlytoo well how difficult it can be tomake the transition from being partof an authoritarian country to beingan independent state that looks toEurope. We were lucky to get prac-tical help from outside, not only fromour closest neighbours, Finland and

the Scandinavian countries.Right now this is the case in the

South Caucasus, whose closestneighbours are Russia to the northand Iran to the south. This is a re-gion that has strong historical linksto Europe and is set to play a cru-cial role in our own economic fu-ture, as it exports increasingamounts of energy.

Yet I feel that more could be donein order to solve the conflict betweenArmenia and Azerbaijan.

It is more than twenty years nowsince those countries fought a bloodywar over the status of Nagorno-Karabakh, halted by a fragile cease-fire that left the underlying issuesunresolved. Today Armenian troopsoccupy the area and surrounding re-gions, while 875,000 refugees and in-ternally displaced persons live inAzerbaijan. Continuing border skir-mishes have led to deaths on bothsides.

My purpose is not to take sides,but rather to seek to galvanise theEuropean Union to try much harderto resolve this conflict.

That is why when we debated thatcase in the European Parliament inSeptember I suggested that the timehad come to break with the past andto try a new approach.

I told my colleagues of my strongbelief that we have a historic chanceto resolve this frozen conflict andthat we owe it to our neighbours andto ourselves now to act differently totry to secure a lasting peace in thesouth Caucasus.

I see a real risk that full scale fight-ing could break out again if we con-tinue to do nothing – and nothing is

essentially what we and the interna-tional community have been doingfor the last twenty years.

In theory, the responsibility for se-curing a peaceful settlement restswith the Minsk Group, an organisa-tion established by the Organisationfor Security and Co-operation inEurope. The Group has three co-chairs – Russia, the United Statesand France. It has met regularly fortwenty years and got preciselynowhere.

We need something dramatic tobreak the log jam – and my proposalis that the European Union shouldnow replace France as one of thethree co-chairs in order to bring anew influence and dynamism to theprocess. I really hope that both Parisand Brussels will consider this ideaseriously and take it for what it is,not a criticism of any one country,but rather a genuine attempt to kickstart a fresh attempt to bring a last-ing peace to our neighbourhood byusing the new tools that our com-mon foreign and security policy hasgiven us.

I don’t doubt for a moment thatthe issues dividing the parties are sodifficult as sometimes to look almostinsoluble. But that was how itlooked in Northern Ireland too andthere too it took resolve, courage andsustained support from outside to getto where we are today. I think thatwe now face a similar opportunityand duty in the South Caucasus.

Does anyone have a better idea?

Kristiina Ojuland is an EstonianMEP and member of the ALDEgroup in the European Parliament.

Time for a change? How far have we come and what are we willing to shift in order to re balance the balanced.... Pictured is the signing of the

Treaty of Rome in 1957.

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A historic chance for the European Union

By Kristiina Ojuland

Read it inbooks

I was four years old when my mother told me newsthat changed everything.Realising that my desire to read books was gettingpast the levels that she could afford, she said, “I’mgoing to have to take you to the library.” She then ex-plained what a library was, which I understood as aplace where I could get as many books as I wantedevery week. For free.I found that hard to believe, I mean, as a kid, you justdon’t think life can get that good, so the next day Iwas taken into our local museum, pausing only tolook at, and fail to comprehend, the Foucault’s pen-dulum in the entrance hall and in front of a tall desk,where she had a chat with the lady there and thenfour small pieces of card were passed down to me andI was told to go through into the large room beyondand choose some books.Not believing my luck I dashed in and…I suddenly stopped. The place was absolutely full ofbooks, more than I ever saw before. This was the chil-dren’s library and it blew my unformed mind away.The idea that I could go and choose my own books,make my own decisions, and then go away and readthem was like standing on the edge of a whole newworld.It still blows my mind today, with 46 year of mem-bership of a public library behind me.This was the start of weekly trips to the library. Infact the first time that I caught a bus on my own, withparental approval, was to go and return my books.Like any addict, my reading habit got stronger and afew years later, I was sneaking into the adult library,mainly because they had better books and a lot moreof them. Then I discovered a reference library up-stairs. I learned a lot more in that building than in myschooling.Even though many years have passed, my memoriesof the library are today among the clearest and mostjoyful of my life. I owe this to my parents who taughtme to read before I ever went to school and to thosereformers and philanthropists that saw the social im-portance of public libraries.Think of them as a precursor to the internet, a knowl-edge network available to all, pretty much for free.But what is the future of libraries? Every time thereare calls for cuts in public services a library or moreget closed. They’re branching out into becoming an internet caféand filling the shelves with DVDs.The world is moving to the rather austere and clini-cal e-book and Kindle. Cuts publishing costs but howdo you borrow one?Is my generation the last of the book lovers? It doesseem that we’re becoming a more visual society, wherepeople don’t listen to music, they watch music videos.That’s putting it too bleakly, there have been somewonderful initiatives, like the Poems on the Under-ground, started in London and now in cities world-wide and the Commission is keen on encouragingreading. I like that Commissioner Vassiliou is advo-cating reading for fun. When was the last time a Commissioner wanted toput more fun in your life?

ACarling@NEurope.eu

By Andy Carling

09NEW EUROPE2 - 8 December , 2012

ANALYSIS

CONSTRUCTIVE AMBIGUITYLITERACY

Get a life, get a bookCommissioner Vassiliou says the future is an open book

The latest YouGov poll, researched as thelatest summit was taking place, showsthat many Brits are looking for a moredistant relationship with the EU, but athird want to stay in, almost half wantout.Questioned about the Summit andbudget negotiations, 41% said Cameronwas “right and realistic” to request a freezein the budget, including a majority ofTory and Liberal voters. An additional35% said he was not ambitious enoughand should be looking for a cut.

There was support for Cameron’s threatof vetoing a budget, 57% overall, madeup of 75% Tory voters, 47% Labour and45% Liberal.Asked if David Cameron should call areferendum on the UK’s membership ofthe EU 57% said yes, with the support of75% of those indicating they would voteConservative. In such a referendum, 32%said they would vote to stay in, up fourpoints in the last month and a steady49% said they would choose to leave.When it comes to the nature of the rela-tionship, 19% would like things to re-main as they are and 46% asking for

something “that is little more than a freetrade agreement.”Over 60% wanted the EU to have fewerpowers in the areas of Justice and crime,the economy, farming and agriculture,fisheries and employment rights and reg-ulations. Slightly more popular is externalrelations and the environment, where44% and 47% wanted fewer powers re-spectively.When asked about the European Parlia-ment, 61% said there were too manyMEPs, but by a majority of 58% to 21%,people wanted MEPs to be elected andnot nominated as they were pre-1979.

The EU Commissioner for Educationand Culture, Androulla Vassiliou is ex-cited to be an ardent advocate of one ofthe most valuable and instrumental pro-grams that the EU has ever seen, knownas Europe Loves Reading.

Europe Loves Reading is a compre-hensive approach that encourages bet-ter literacy rates in Europe, as well asreintroducing reading as a popular pas-time that should be implemented in amore favorable manner.

On Commissioner Vassiliou’s websiteshe makes a statement on the impor-tance of this new proposal, "We need tohelp more children start reading forpleasure and to re-ignite the pleasure ofreading among adolescents, young peo-ple and adults. Reading for the sake ofreading should gain a bigger place in ourdaily life, in schools and outside it, on abus or on a train, whether it's from abook, a magazine, a computer or mobilescreen."

According to the United Nations Ed-ucational, Scientific and Cultural Orga-nization’s fact sheet that reveals the mostup to date statistics on literacy rates,Central and Eastern Europe are consid-ered to have the second highest literacyrates behind Central Asia. Adult Liter-acy is at a 98% while the Youth Liter-acy Rate is at 99%.

An informed and educated popula-tion is flourishing throughout Europebut as in many things in life, refinementcan always be used. In a world wherecompetition keeps growing and knowl-edge is the way to power, it is essentialthat in order to be an active participantof society you use the skills that havebeen acquired in order to furtherprogress.

Promotion and participation for Eu-rope Loves Reading program will be

done through campaigns and eventsacross Europe that invite all ages to culti-vate a deeper understanding on currentliteracy rates. A strong emphasis of read-ing aloud during these events will be acommon motif, along with advocatingmultilingual agendas in order to promotecomprehension of all the various lan-guages that are used throughout Europe.

A special group of experts have beenappointed by the Commissioner to ex-amine and investigate better ways of in-troducing reading as a pleasurableexperience that all should grow to loveand view as a necessity. In 2013 after ayear of researching, results will be pub-lished and improvements will be madealong with better techniques of tacklingthe problem.

The launch of this program began inBudapest, Hungary and has extended toother important cities throughout Eu-rope such as Brussels, London, The

Hague, and Florence. In Brussels theCommissioner entered a classroom ofchildren and instigated a discussion ask-ing children what their opinions wereon reading, informed them of the edu-cational climate of Europe and thedrawbacks it is currently experiencing,and then proceeded to allow the chil-dren to read out loud from a book oftheir choice.

In London a visit was made to a pri-mary school where she took interest ona project where trained volunteers andprofessionals read to children that havemental handicaps.

As Commissioner Vassiliou visitsmore cities to promote her new ap-proach to reading, her team of experts isstudying and coming up with bettermodes of operation in how to improvethe literacy rate and revive the spirit ofknowledge and scholarship throughoutEurope.

EU FUTURE

For whom the poll tollsBrits looking at semi-detached EU relationship

By Andy Carling

Children enjoy books in a newly-opened library in the Center for Foreigners in Biala Podlaska,

eastern Poland.

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ANALYSIS

The Arab minority in Israel, about 20 % ofthe total population, finds itself at a crucialjunction. While enjoying political and civilrights, incl. collective rights as regards lan-guage and education, it still faces lingeringdiscrimination.

In recent years its political representationhas become radicalized and is questioningIsrael as the nation state of the Jewish peo-ple. Instead of promoting a two-state peacesolution, Israeli Arabs tend to condition anoverall settlement on the solution of theirinternal problems in Israel.

A recent report by International CrisisGroup (ICG, Middle East Report no 119),“Back to basics: Israel’s Arab minority andthe Israeli-Palestinian conflict”, paints arevealing and pessimistic picture of what isgoing within the Israeli-Arab society.What seems to unite this divided commu-nity is an estrangement from the state ofIsrael, bordering in some cases to openhostility and manifest disloyalty to thestate. The relations between Arab and Jew-ish citizens are characterized by mutualmistrust.

A striking example is what happenedduring the Israel-Gaza war. Israeli Arabparliament members at a gathering of thenationalist Balad party observed a momentof silence for those who were killed inGaza. That´s natural but no word of con-demnation was heard about the indiscrim-inate rocket attacks from Gaza againstcivilians in Israel, Jews and Arabs alike.

How have we ended up in this situation?No doubt general tendencies in the Israelisociety and the on-going occupation of theWest Bank are factors. The Israeli Jewishsociety has become divided with increas-ing socio-economic gaps.

Terror and existential external threats re-sult in fear and prejudices against the Arabminority. An opinion poll (Haaretz, 23October) shows that more or less half ofthe Jewish population favors discrimina-tion of the Arab citizens in Israel and evendescribes the situation as a kind ofapartheid. If the poll is representative, thefigures are very worrying.

The number of Palestinian citizens cast-ing a vote in national parliamentary elec-tions has dropped from 75 % in 1999 to 53% in the latest election in 2009. The 2006election saw the establishment of a Popu-lar Committee for Boycotting the Knessetelections. This seems to be counter effec-tive if the goal is to increase the number ofArab Knesset members – currently 14 outof 120 - in order to influence Israeli poli-tics. If the Israeli Arabs would optimizetheir electorate potential, they could reach20 mandates or even more in the Knesset.

A majority of Palestinian citizens stilldefends Israel’s right to exist but severalevents in recent years indicate delegitimiz-ing of the country in which they are livingand on-going erosion in loyalty to Israel.

In 2006 and 2007, Arab civil society un-

veiled a series of so-called “Vision docu-ments” which have been described as thenearest secular Palestinians have come fora consensual political manifesto. Unfortu-nately their starting point is that the Pales-tinians in Israel are “the indigenous peopleof the country”, whose land has been takenover by “colonial takeover”. The objectiveis to transform Israel to a “consensualdemocracy” with the Arab minority havinga right to veto major decisions affectingthe community.

Israeli Arab NGOs have been involvedin calls for boycott, divestment and sanc-tions against Israel (BDS movement). TheBDS movement wants to boycott all Israeliproducts, not only those manufactured inthe occupied territories, and calls even forabolishing research cooperation with Is-raeli universities. Again, Arab NGOs seemto be ignoring their own interests sinceboycotts may have damaging effects onArab and Jewish citizens alike.

Another sign of disloyalty is the behav-ior of Arab Knesset members and their tieswith surrounding countries in conflict orwar with Israel, especially by politicians be-longing to the Balad party and the north-ern wing of the Islamic movement. Byreceiving funds from undemocratic Arabcountries, they are also conferring a degreeof legitimacy on them.

During the war with Lebanon in 2006,Arab Knesset members expressed sympathyfor Hezbollah even though a significantnumber of the rockets it fired landed inArab villages and neighborhoods in Haifaand the Galilee, killing 18 Arab citizens.

Most notoriously, in April 2010, sixArab members of the Knesset togetherwith other leading community figures vis-ited Libyan leader Gadhafi, somethingthey must have regretted by now. Then itwas described by a participant as an at-

tempt “to connect more deeply with theArab world”. It’s no wonder that peoplewithin the Arab community in Israel havestarted questioning the integrity of theirelected leaders.

In May 2011, the two branches of the Is-lamic movement announced their recon-ciliation. According to ICG´s report, bothbranches acknowledge that the balance ofpower has shifted in favor of the more rad-ical northern branch whose leader is incit-ing to violence when calling to “protectJerusalem´s Islamic sites”. The Islamicmovement has no clear stance on a rangeof important social issues, such as violenceagainst women, honor killings, polygamyand child marriage - all of which are for-bidden in Israel.

It cannot be denied that Israeli Arabshave justified grievances against discrimi-nation in Israel. According to the ICG re-port, a number of laws have been identifiedthat privilege Jews over Israel´s Arab pop-ulation. But it must also be said that someof their complaints seem exaggerated andunfair, in particular if one compares theirsituation with that of minorities in othercountries.

Some grievances mentioned in the ICGreport seem unfounded. The symbols ofthe Israeli state are the Shield of Davidand the candelabrum in the Temple, theMenora. These are Jewish symbols whichare historically connected with the coun-try. Other countries are picturing the cres-cent or the cross on their national flags.Neither is it unusual that a state forbidsproviding “support for armed struggle by ahostile state or a terrorist organization”.

Both Hebrew and Arabic are recognizedas official languages. Street signs are oftenwritten in both languages, also in non-Arab neighborhoods. Judaism is no statereligion in Israel, and all religions are man-

aging their own holy places. Arab munici-palities enjoy local self-government andlevy their own local property taxes.

The fact that the minorities in Israel –with the exception of the Druze commu-nity – are exempted from military service ishardly discrimination; rather it’s an un-usual recognition of their exposed situationand dual loyalties. What used to be dis-crimination in the past was that social ben-efits were conditioned on military service;this practice has however been found ille-gal in the rulings of the Supreme Court.Efforts are made by the public administra-tion to increase the number of civil ser-vants from the Arab minority.

When it comes to the moribund peaceprocess, the Arab minority could serve as abridge for peace. That would require its rep-resentatives to “speak the truth” to organi-zations such as Hamas. Instead they seemto be linking the implementation of theirrights in Israel with an overall peace settle-ment, something which would make it evenmore difficult to achieve peace. An overallpeace settlement would improve the situa-tion of the Arab minority in Israel.

Israel needs to take steps to root outracism against its Arab minority, work forbetter integration, reduce tension andabolish any remaining discrimination inlegislation and practice. The Arab minor-ity in Israel has collective rights as regardslanguage, education, and personal statusmatters and should preserve these rights.They can hardly expect to be accorded ad-ditional “national rights” in Israel when si-multaneously the Palestinians in theoccupied territories are trying to establishan independent Palestinian state.

Mose Apelblat is an official in the Euro-pean Commission. He has written this ar-ticle in his private capacity.

Moving in opposite directions? A Jewish settler (L) passes by an Arab man in traditional dress on the Temple Mount in Jerusalem.|

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CONFLICT

The Arab minority in Israel: bridge for peace?By Mose Apelblat

Ever since the European Parliamentadopted its first resolution on the UnitedArab Emirates in late October, expressingprofound concerns about its human rightsrecord, the UAE has gone to great lengthsto contest its accuracy.

It countered with a narrative that fea-tures the UAE as a model of enlightenedprogress in the region and a bulwarkagainst militant Islamist groups, a narra-tive for which the Italian ambassador tothe UAE offered public support on No-vember 6 when he said that, “Italy consid-ers this country as a model of tolerance inthe Arab world and appreciates theprogress so far achieved by the UAE gov-ernment in the field of respect for humanrights.” The statement should be under-stood in the context of Mario Monti’s tripto the UAE on November 20, as Italyseeks to develop trade ties and secure theUAE’s assistance in easing its debt burden,but a cursory glance at developments thisyear reveals the UAE is no model ofprogress, and as recent events have madeclear, the human rights situation is deteri-orating rapidly.

Since the beginning of the year, UAEstate security has detained without chargescores of people with ties to a non-violentIslamist group, al-Islah. Those rounded upand held in places unknown includeprominent human rights lawyers, judges,and student leaders. The authorities havealso harassed and in some cases deportedUAE-based human rights defenders, de-nied legal assistance to political detainees,and even deported lawyers seeking to pro-vide the detainees with legal assistance.

When you throw into the mix credibleallegations of torture at UAE State Secu-rity facilities and poor living and workingconditions for impoverished constructionand service workers from south Asia, it isclear that there is a vast gap between AbuDhabi’s narrative and the facts on theground.

The UAE did everything in its powerto stop the European Parliament’s resolu-tion. It sent a delegation to Strasbourg tolobby the elected representatives, and itsambassador in Brussels threatened thatthe resolution could “needlessly damageEU-UAE relations.” Those relations havethus far been sustained in part by avoidingEU-UAE discussions on human rights, orat best confining them to what EU diplo-mats refer to as “discreet” meetings.

The UAE was not without its defend-ers in the parliamentary debate. The UKConservative MEP Charles Tannock dis-missed the notion that the UAE was a se-rial human rights violator as “completelyabsurd,” asserting that most of the de-tainees were “Islamist hardliners” whowanted to “close down the churches andpersecute Christians.”

On the day the resolution passed, the

spokesman of the French Ministry forForeign Affairs responded to a questionabout the resolution by stating that theyare “well aware of the progress made bythe UAE” in the field of human rights.The Italian ambassador, Giorgio Starace,offered his endorsement of the UAE’ssupposed ‘progress’ only a few days lateradding that the resolution did “not reflectthe completeness of the scenario and givethe possibility to the counterparts to pres-ent and disclose in an exhaustive formtheir point of view.”

The UAE, not surprisingly, dismissedthe resolution as “biased and prejudiced”and on November 1 the deputy secretary-general of the Arab League chimed inthat the resolution was “biased and exag-gerated.”

The UAE’s attempts to discredit re-search and documentation provided bylocal human rights defenders and interna-tional organizations come as no surprise.Of greater concern are the indulgent com-ments by third parties. The evidence be-lies the claim that the UAE is aprogressive state where human rights isconcerned.

Neither have the UAE’s defenders pro-duced evidence to support their allega-tions that that al-Islah – which was set upin the UAE in 1974 and until relativelyrecently operated with the full consent ofthe authorities – is intent on getting ridof churches, and rolling back the gains of-ficials claim to have made on women’srights in the UAE (by which they cer-tainly don’t mean tens of thousands of mi-grant domestic workers, many of whomendure appalling abuse and exploitation).

It is stunning how the French and Ital-ian diplomats can talk about progress inthe UAE and avoid any comment on thearbitrary detention of 63 dissidents anddenial of legal assistance, and the harass-ment and intimidation of peaceful critics

of the government, Islamist and non-Is-lamist alike. The rights to liberty, dueprocess and fair trial are not predicated onindividuals keeping their opinions tothemselves, and the unfortunately credi-ble allegations of torture by UAE state se-curity alone should give them great pause.

Those who have promoted the UAE’s

hackneyed progress narrative should taketheir lead from the European Parliament’selected representatives, who concernedthemselves with the facts and referencedinternational law. The UAE’s supporterswould also be advised to take a look at theterms of its new federal decree on cyber-crime, which yet again reveals just how lit-tle the UAE rulers are committed to aprogressive and tolerant society. Issued onNovember 13, the new law criminalizes awide range of non-violent political activ-ities carried out on or via the internet,from criticism of its rulers to organizingunlicensed demonstrations.

In June the EU adopted a “strategicframework,” which it said would “placehuman rights at the center of its relationswith all third countries, including strate-gic partners.” The MEPs deserve creditfor applying those principles to a countrythat has grown accustomed to cosy re-alpolitik and oh-so-“discreet” referencesto human rights. Now EU High Repre-sentative Catherine Ashton, her diplo-mats, and EU member states includingItaly, should follow suit and fulfill thepledges they made in June.

Joe Stork is deputy Middle East directorat Human Rights Watch

DIPLOMACY

UAE no model of progress 11NEW EUROPE

2 - 8 December , 2012ANALYSIS

Catherine Ashton (L), High Representative of the European Union (EU) for Foreign Affairs and Secu-

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By Joe Stork

ADVERTISEMENT

Russian gas monopoly Gazprom said it di-scussed liquefied natural gas (LNG) optionsin the Far East and the prospects for co-operation between Gazprom and relevantJapanese companies.

Following a meeting of Gazprom ChiefExecutive Officer Alexei Miller with JapaneseAmbassador to Russia Chikahito Harada inMoscow on 27 November, the Russian com-pany said the meeting participants confirmedthe paramount importance of Russian LNGsupplies to Japan.

Both sides discussed the progress with theproject of an LNG plant construction near Vla-divostok and emphasised the successful co-operation between Gazprom and Japaneseenergy companies within Russia’s Sakhalin IIproject, the company said.

Russia is the largest supplier of gas throughpipelines. However, the LNG export is deve-loped only as part of the Sakhalin II projectnorth of Japan with the involvement of Gaz-prom and Royal Dutch Shell.

More than 85% of deliveries of LNG fromGazprom were to Asia-Pacific countries in2011. The company said it aims to invest morethan $14bn on developments in the Sakhalinregion. In September, Gazprom signed a me-morandum of understanding with Japanese of-ficials for a LNG project in Vladivostok, Russia.The plant could produce as much as 10mntonnes of LNG per day. Full capacity is expec-ted by 2016 with about 70% of the LNG desi-gnated for the Japanese market.

Japan is in the fourth largest energy consu-

mer in the world. The share of natural gasin the Japanese energy mix is currently at 14%and is expected to grow as the company looksfor alternative energy supplies following theFukushima nuclear disaster. Japan imports 96%of consumed natural gas in the form of LNGand is the world's largest LNG importer. In thefiscal year of 2011 the country consumed83.18mn tonnes of LNG.

Russia’s Energy Minister Alexander Novakhas said that, when taking into account the fast

growth of the world LNG market, the overallpotential of supplies from the deposits on theYamal Peninsula and the Far East centres tothe markets in Europe and Asia will consist of41-46mn tonnes of LNG. “At the same time,supplies to the Asia-Pacific countries will playa key role,” Novak said.

Russian Gas Society Valery Yazev has notedthat Japan is highly interested in importingLNG from the western coast of Canada andthe US. A consortium of Japanese companies is

planning to build a LNG factory on the sou-thern coast of Alaska that will produce 20mntonnes of LNG a year and deliver it using itscarriers. Japan plans to implement the projectby 2018, Yazev said. Against this background,Russia has determined to expand its presenceon the world market. The Yamal-LNG projectimplemented by Russia’s Novatek private gascompany will pave the way for producing 15mntonnes of LNG a year in the initial stage. Later,its capacity will be significantly increased.

On 27 November, oil prices rebounded aftereurozone ministers and the InternationalMonetary Fund (IMF) reached an agreementto help reduce Greece's debt and unblock vitalflows of bailout money. The deal eased traders’concerns that the country’s problems could getout of control, shaking the global economy anddenting oil demand. The deal also boosted theeuro, making dollar-priced oil cheaper and sup-porting demand, leading to higher prices.

New York's main contract, West Texas In-termediate (WTI) for January delivery,bounced 35 cents to $88.09 a barrel, and BrentNorth Sea crude, also for January, jumped 25cents to $111.17.

The political crisis in Egypt, the fragile cease-fire in Gaza and the ongoing conflict in Syria,also kept pressure to oil prices.

In Brussels, the eurozone and the IMFagreed to unlock €43.7bn in three-instalmentloans and grant significant debt relief going for-ward for decades to come.

"Everything went well," Greek Prime Min-ister Antonis Samaras told reporters outside hismansion at about 3 a.m. on 27 November. "To-morrow, a new day starts for all Greeks."

"The decision will certainly reduce the un-certainty and strengthen confidence in Europeand in Greece," said European Central BankPresident Mario Draghi.

IMF chief Christine Lagarde said the dealwould bring Greece's debt back towards a "sus-tainable" path.

However, the prospect of a potential reces-sion in the so-called "fiscal cliff" remains, weak-ening the prospect of oil demand.

But violent protests in Egypt over an ex-pansion of the powers of President MohamedMursi could destabilise the rest of the region,keeping pressure on oil prices. Violence inEgypt balances out the cease-fire between Is-rael and Hamas, Chris Weafer, chief strate-gist at Moscow’s Sberbank InvestmentResearch, wrote in an e-mailed note to in-vestors on 26 November. “The price of oil

looks to have support again at the start of thenew week. Although the cease-fire betweenHamas and Israel is holding, the violentprotests in Egypt against the president’s lat-est legislative changes are a definite cause forconcern,” Weafer wrote. Apart from theworry that the anti-government protest maylead to a new wave of instability in the region,Egypt was one of the important brokers ofthe Israel-Palestine agreement. If the Cairogovernment is now distracted, there will beless pressure on Hamas to fulfil its obliga-tions. Oil traders will likely focus on thoseconcerns for now and keep the risk premiumin Brent and Urals high,” he added.

ENERGY|OIL PRICES

Oil prices benefit from Greek deal, Egypt violence

Russia’s oil giant Rosneft and Norway’s Sta-toil have agreed to protect Russia’s Arctic en-vironment during exploration of the region’snatural resources. Rosneft head Igor Sechinand Statoil CEO Helge Lund signed thedeclaration on the protection of the environ-ment and conservation of biological diversityof the northern region.

"Environmental issues are paramount forus, especially when it comes to the develop-ment of Arctic resources. We plan to signsuch a declaration with all our partners be-fore we start active exploration of the shelf, sothis should be an unconditional priority foreveryone," Sechin said.

The other partners of Rosneft in Arctic ex-

ploration are Italy’s ENI and US giantExxonMobil.

In order to ensure effective implementationof the Declaration, Rosneft and its industrypartners will consider the establishment of adedicated Coordination Centre with the par-ticipation of representatives of Roskosmos,Russia’s Ministry of Transport and Russia’s

Ministry for Civil Defence, EmergencyManagement and Natural Disasters Re-sponse (EMERCOM).

Rosneft plans to sign bilateral coopera-tion agreements with EMERCOM, theRussian Ministry of Transport and Roskos-mos within the framework of the Declara-tion’s realisation.

ENERGY|EXPLORATION

Rosneft, Statoil ink Arctic environmental declaration

ENERGY|LNG

Gazprom eyes lucrative Japanese gas market12NEW EUROPE

2 - 8 December , 2012ENERGY & CLIMATE

Japanese natural gas tanks are seen in the background. Japan is in the fourth largest energy consumer in the world.

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Cleaner and more energy efficient en-ergy solutions, propelled by targetedEU policies, could transform today’senergy profile for rural communities,according to a White Paper on ‘PolicyRecommendations for SustainableRural Communities in Europe’ re-leased on 28 November.

The paper was published by the Fu-ture of Rural Energy in Europe(FREE) initiative, a platform dedi-cated to realising the potential of ruralcommunities through greater energychoice.

Across Europe, rural communitiesare faced with a series of energy chal-lenges. These were highlighted in lastyear’s Ecofys study on Rural Energy

in the EU, which revealed that a dif-ferent fuel mix is used in rural areas,with generally more polluting fuelsand higher emissions per capita.These are caused by the greater use ofcoal and heating oil and higher emis-sions of pollutants as NOx, SOx andParticulate Matter affecting the envi-ronment and human health. Withoutparticular attention paid to ruralareas, the EU’s goals of a competitive,low-carbon and secure energy supplyare thus jeopardised.

“Those who live in cities and thosewho live in remote and off-gas gridareas deserve the same types of choices– cleaner and healthier energy choices– and at the moment we simply don’t

have that. They need support for newinitiatives,” MEP Lambert van Nistel-rooij from the Netherlands underlinedat the launch.

Introducing a strategy on renovationof buildings in rural areas, streamlin-ing direct investments into energy ef-ficiency projects, supporting lowercarbon and renewable energy, and en-suring that energy policy is ‘ruralproofed’ will guarantee a level playingfield between rural and urban energyusers, according to the paper’s findings.

The White Paper also proposessome ideas for further stakeholder dis-cussion, including a 3% annual reno-vation target for rural buildings and a40% gas / 60% renewable energy mix.

ENERGY|RURAL COMMUNITIES

EU policies could transform rural energy

Facing Western sanctions, Iran is plan-ning to build new oil storage facilitiesso it can store more of the fuel. Nearly8.1mn barrels will be added to Iran'scrude oil storage capacity by the nextsummer, Press TV quoted Iranian Off-shore Oil Company Director Mah-moud Zirakchianzadeh as saying. Theexisting terminal is near Iran's south-ern Bushehr province.

Iran has the world's third largestproven oil reserves and was the Or-ganization of Petroleum ExportingCountries’ (OPEC) second largest ex-porter, but sanctions have curtailed theflow since summer. It slipped to thecartel's third place in July after the Eu-ropean Union imposed oil sanctions toforce Tehran to stop its uranium en-richment programme.

According to the International EnergyAgency, Iran's oil exports plunged to 1mnbarrels a day in July, after standing at the1.74mn-barrel mark a month earlier.Crude oil exports account for about 80%of the country's foreign revenue.

Press TV reports that Chinese im-ports of Iranian crude oil have in-creased 19% from September toOctober.

ENERGY|OIL

Iran plans to boost oil storage capacity

Russian gas monopoly Gazprom hasstarted talks with British oil and gasmajor BP on the latter’s participation inthe construction of a new leg of theNord Stream gas pipeline which willconnect Russia’s Leningrad district andGreifswald in Germany under the BalticSea and later to Britain’s Norfolk, newsagencies reported. However, talks are inan "early stage".

British Prime Minister DavidCameron backed the initiative whichwas on the agenda of his talks with theRussian leader Vladimir Putin duringthe London Olympics. The agreementon the issue could be reached in themiddle of 2013. The British govern-ment is said to favour a deal that wouldmake Gazprom the second-largest nat-ural gas supplier in the country.

Nord Stream, running through theBaltic Sea to Germany, is part of a net-work of pipelines planned by Gazpromto diversify Russian natural gas exportsto European consumers, bypassingUkraine.

Recently, the European Commissionsaid it launched an anti-trust investiga-tion into Gazprom's practices in central

and eastern European markets.The first leg of the Nord Stream gas

pipeline system went into service lastyear.

In related news, Gazprom is revivingplans to build a power plant in Germanyto boost sales to its biggest export mar-

ket via Nord Stream and develop Euro-pean generation. EON reportedly plansto build and operate a combined heatand power generation plant in the townof Lubmin, near Nord Stream’s entrypoint, through a joint project companywith Gazprom’s Wingas venture.

13NEW EUROPE2 - 8 December , 2012

ENERGY & CLIMATE

Gazpromstrengthens itsgrip on Turkey

A Gazprom deal to export natural gas to private com-panies in Turkey for 30 years indicates a change of strat-egy for the Russian gas monopoly, Gokhan Yardim, gasexpert and former CEO of Turkey's state gas companyBotas, told New Europe on 29 November. He high-lighted that this is not a deal between Gazprom and theTurkish government or state companies but it is com-pletely between the Russia state giant and private Turk-ish companies.“Gazprom knows that they cannot do a long-termagreement with the state company so they prefer tomake a deal with the private companies for 30 years,”Yardim said.At the end of 2011, Turkey's state giant Botas did notrenew an expiring 25-year contract due to a pricing dis-pute. “The Botas contract was extended for one year totake the ‘make up’ gas and after that there is no contract.The government, considering the shortage of the gas inthe coming years in Turkey, said that the companies canmake a deal with Gazprom,” Yardim said.On 26 November 2012, Turkey's energy market regula-tory authority gave private energy companies Akfel,Bosphorus and Kibar 30-year licences to import 6bncubic metres of gas per year from Russia's Western Linepipeline. The fourth private company - Bati Hatti – willimport Russian gas over 23 years. The four companieshad previously agreed with Gazprom to import 6bncubic metres of gas a year on the Western Line, whichruns through Ukraine, Romania and Bulgaria to Turkey,with an annual capacity of 14bn cubic metres.The agreement is very important for Gazprom. Turkeyhas always been a significant partner for Gazprom andit’s the Russian company’s second-largest gas consumer.Turkey is also likely to become an energy trading hub,capitalising on its increasing gas needs and proximity tocheap natural gas resources and European markets.It’s no coincidence that Russian President VladimirPutin chose Turkey as his first journey abroad in nearlytwo months following a mysterious back injury thatforced him to postpone numerous foreign trips. On 3December, Putin will travel to Istanbul where he willmeet Turkish President Recep Tayyip Erdogan.Turkey is a growing market for Gazprom as it faces de-clines from its core consumers in the EU. The Russiangas giant is also facing a European Commission an-titrust probe, which is seeking to determine whetherGazprom abused its dominance in central and easternEuropean markets.Yardim said Gazprom’s new strategy is to strengthen itsposition in Turkey. “It’s against the European Union butTurkey is not a member. It’s underway to become amember so Gazprom uses the advantage of Turkey’s po-sition,” he said.Meanwhile, Akfel, Bosphorus, Kibar and Bati Hatti willpay a lower price than the Turkish state company Botaspaid for Russian gas. “For Botas the price is high butfor the private companies the price is low,” Yardim said,adding that the Turkish private companies will benefitfrom reduced gas prices up to 40%. “This is a win-winsituation for Turkey and the Russian Federation,” theformer Botas CEO said, adding that Russia gets a guar-antee that Turkey will buy its gas for 30 years and Turk-ish private companies get a lower price.

KGeropoulos@NEurope.eufollow on twitter @energyinsider

By Kostis Geropoulos

ENERGY INSIDER

The landing station of the Baltic Sea gas pipeline Nord Stream in Lubmin near Greif-

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ENERGY|GAS PIPELINE

BP could join Russia’s Nord Stream pipeline

BUDAPEST - The economic crisis inEurope has turned the European Unioninto “something radically different” thanits original political intention, dividingmember states and opening-up society toextremist opinions, George Soros hassaid.

Speaking in Budapest at the conferenceTackling Hate Speech: Living TogetherOnline, Soros, the philanthropist and chair-man of Soros Fund Management, said thatthe European Union is holding together “outof grim reality”. He said that the EU is farfrom the open society it had originally aimedto be.

“Hate speech, xenophobia and extremismare symptoms of a more deep-seated crisis thathas a hold on Europe”, he said. “This crisisstarted out as a financial crisis, but the way theauthorities have dealt with it, or, perhaps Ishould say, not dealt with it, has turned it intoa political crisis”.

This political crisis, he said, “threatens theEuropean Union”.

The historical beginnings of the EU, hesaid, “fired people’s imaginations, includingmine”, but has since fractured member states,and transformed the EU into “something rad-ically different”. Where once there was a “vol-untary association” of countries, now the finan-cial and political crisis has widened the gulfbetween nations.

“We now see that the centre is dictating pol-icy to the periphery, and the periphery is sub-ordinated to the centre”, he told delegates.

The crisis that began in the US in 2008, saw“greater problems in Europe than anywhereelse”, he said. The reaction of German Chan-cellor Angela Merkel to the crisis is a large partin continuing the decline of the political sys-tem in the EU, he said.

“The euro crisis has brought the financialsystem to the point of bankruptcy”, he said,adding that the hard pushing of austeritymeasures has seen the Eurozone “divided intocreditor and debtor nations, where the creditor

nations dictate policy”.The centre, represented primarily by

Germany, “is imposing a regime of strictausterity on the periphery. This is causing“immense human suffering” and “inflatinghate speech, xenophobia and all forms ofextremism”. The EU has been “trans-formed into the opposite of an open socie-ty”, he said.

“The ways of preserving the euro shouldbe modified so as to meet the political

objectives of the European Union”. “Ifthere is a contradiction between the finan-cial problems and political objectives of theEuropean Union, then the political objec-tives should take precedence. Unfortunate-ly, that is not the case.

The continued tension between thecentre and the periphery, “is such a dis-mal prospect that it can not be allowed tohappen”, he said. “One way or another,we should get back to our shared values”.

TACKLING EXTREMISM

Soros: political crisis in EU causing ‘immense human suffering’By Cillian Donnelly

14NEW EUROPE2 - 8 December, 2012

ANALYSIS

George Soros speaks at the Tackling Hate Speech conference in Budapest on 27 November: “Hate speech, xenophobia and extremism are symptoms of a more deep-seated

crisis that has a hold on Europe...this crisis started out as a financial crisis, but the way the authorities have dealt with it, or, perhaps I should say, not dealt with it, has turned it

into a political crisis”.

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Rising examples of hate speech in the EUthreaten to turn Europe’s economic crisisinto a “social and moral crisis”, a leadingmember of the Hungarian government haswarned.Zoltán Balog, minister for human re-sources, which is responsible for the func-tioning of the health and welfare systemsin Hungary, told a conference on 27 No-vember that while antagonism betweenpeople is “as old as mankind”, increased ex-amples of hate speech in Europe should be“an alarm signal for the state of play of thecommunity”.Hate speech is defined as any kind of in-citement to violence targeting any particu-lar type of person of ethnic group.The minister’s comments come a day afterMarton Gyongyosi, a member of the far-right Jobbik party, demanded to know inparliament a list of MPs or governmentmembers who are Jewish, or have Jewishorigins, which would, according to Gy-ongyosi, make then a threat to national se-curity, given the Hungarian government’sbacking of Israel.Speaking at the Tackling Hate Speech:

Living Together Online conference in Bu-dapest, Balog said that this incident illus-trated the need for Europe to address thesubject. He said that the Hungarian par-liament “Steadfastly resists and deploresthe listing of any Hungarian person,whether Jewish, Roma or whatever”.

For Europe to tackle hate speech, includ-ing online, he said that historically it hasalways been a part of society, and, in manyways, was almost “mandatory to hate cer-tain people”. He said that the current atti-tudes in Hungary can be traced back to itscommunist past. “I learned how people

could be destroyed by hate speech organ-ised by the state”, he said.“Hate speech is always embedded into thesocial environment”, he said. “If we changethat environment, then, and only then, canwe tackle hate speech successfully”.Later on in the day, he expanded on this,saying that “there is no racism as such”, justthose who represent societal fears stirredup by the extremes. “You cannot change aperson, but you can change the social envi-ronment”, such as by education and tack-ling the causes of poverty.He said that education will continue to bemaintained by the central government.From September 2013, he said, it will beobligatory that “every Hungarian child willlearn about Roma history and culture”.Also speaking, Thorbjørn Jagland, secre-tary general of the Council of Europe,which organised the event, said that therapid expansion of information sources,while presenting a greate opportunity forcitizens, also came with some risks. “It is areal danger we are chasing in Europe”, hesaid, “when one speaks, another acts”.“There needs to be a real debate between po-litical leaders and the population”, he said. “Weneed much more political leadership”.

SOCIETY

Europe facing ‘social and moral crisis’By Cillian Donnelly

A young Roma woman holds a flag with the name of a regional Roma civil rights organisation as Roma

people gather in Heroes' Square in Budapest, Hungary 11 October 2009.

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Hate crime is on the increase in Europe.Threats, intimidation and violence againstpersons singled out for persecution on thegrounds of ethnicity, religious belief, gender,disability or sexual orientation continues inthe European Union, in spite of its avowedcommitments to democracy and tolerance.Two reports released by the EU’s Agencyfor Fundamental Rights (FRA) on 27 No-vember, highlight the fact; nearly in in fourpeople in Europe have been the victim ofsome kind of hate crime, with Sub-Saha-ran Africans and Roma suffering the high-est levels of abuse. Taken together, thereports “clarify the ‘dark figure’ of hatecrime”, according to the FRA.

While both politicians and observers ac-knowledge the increase of hate crime, thereis still some debate about to proceed in tack-ling the phenomenon, and its adjunct, hatespeech. With the increased use of the inter-net and social media sites by radical groups,hate speech is being perpetuated online,leading to the sinister proposition of hate“moving from cyberspace to the physicalworld”, as Jenö Kaltenbach, chair of theCouncil of Europe’s Commission AgainstRacism and Intolerance (ECRI), put it.

Hate crime starts by creating an “us andthem” mentality, as FRA Director MortenKjaerum, a point reinforced by ThorbjønJagland, secretary general of the Council ofEurope (CoE). Speaking in Budapest at theTackling Hate Speech Online conferenceon 27 November. He said that “any kind ofviolence against people, even genocide andholocaust, starts with someone being sin-gled out”. His words came the day follow-ing an incident in the HungarianParliament where a member of the far-rightJobbik party demanded a list of Jewish MPs.He called them a threat to national security.

Historically, this has strong resonance in

Europe. With the eurozone in financial cri-sis, the spectre of history repeating loomslarge. Also speaking in Budapest, the phi-lanthropist and author George Soros saidthis has since mutated into a political crisis,which threatens the existence of the EU. Hepoints the finger at bad leadership, especiallyeconomic leadership, and argues that thecurrent rise in extremism is a direct conse-quence of a failure of this generation of po-litical leaders.

A failure of leadership is one thing, a fail-ure to debate and otherwise engage properlywith the issue is another; and is allowing thiskind of rhetoric to co-opt the centre. “Theseare not simply the views of the minority”,says Benjamin Ward of Human RightsWatch (HRW), “but are informing our po-litical views in Europe. All too often we seeirresponsible speech, not just on the ex-tremes, but by mainstream parties”. In 2010,UK Prime Minister David Cameron pro-nounced multi- culturalism dead, whileGerman Chancellor Angela Merkel saidmigrants should accept Germany’s Chris-tian culture. Some years back then-ItalianPrime Minister Silvio Berlusconi has sug-

gested that migrants “swell the ranks ofcriminals”, while a Greek deputy describedmigrants as “cockroaches” during a parlia-mentary debate.

The consequences of this are “very stark”,he says. In Greece, for instance, where thehuman rights situation is, he says, “totallydisturbing”, masked gangs roam the streetsattacking migrants, who, in turn, fare no bet-ter with the police, who “tell them to goaway, fight back, ask them for a €100 fee forfrivolous charges or threaten them with ar-rest if they are undocumented”.

“This has to change” he said; and it isagreed that change is needed. Zoltán Balog,Hungarian minister for human resources,which is responsible for the functioning ofthe health and welfare systems, has said thatthere is a need “to combat poverty”, and a“need to change the social environment”,through education initiative and the like.From September 2013, Roma history andculture will be taught in schools. Of all Eu-ropeans, the Roma people are currently thebiggest target for violence and abuse on thecontinent. According to Jenö Kaltenbachthese kinds of initiatives, and pretence atmaintaining an optimistic appraisal of thesituation “looks good on paper, but in reallife is completely different. If a politician isreally responsible for what is happening inhis country, he should not make positivestatements”.

Jagland has suggested “mobilising” on theinternet to counter the postings of extrem-ist groups, while others have suggested leg-islation as a deterrent (law enforcement, saysKaltenbach, sends a “strong message thathate speech is unacceptable”), but there is anobvious danger to free speech; get the legis-lation wrong and it opens the door to cen-sorship. Benjamin Ward points to the UK,which has seen a rise in prosecutions overTwitter postings, proceedings either underpublic order offences or a breach of thecommunications act, rather than specificanti-discrimination or suchlike laws. Ac-cording to HRW, prosecutions should onlybe carried out if there is a direct link to vio-lence, something, Ward says, is in little evi-dence in these cases. Other nations in otherterritories observe Europe and its laws andbehaviour, he says, often seeking to emulate,adding to the pressure to have exemplarystandards. Bad laws, he says, “are a gift torepressive governments”.

FUNDAMENTAL RIGHTS

Hate speech: from cyberspace to the real world

15NEW EUROPE2 - 8 December , 2012

EU WORLD

By Cillian Donnelly

Demonstrators hold a banner reading "We commemorate the victims killed by the NSU - The

problem is called racism" during a protest march against racism on November 4, 2012 in Berlin.

Twelve months after revelations that a neo-Nazi trio was likely behind a seven-year murder spree

targeting immigrants, in which nine men of Turkish and Greek origin and a German policewoman

were killed, Germany has sought to mend security flaws.

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In the 90s, listening in to Radio Libre des Milles Collines wasa must for the Tutsi people of Rwanda. Not because of its popmusic, its drunken commentators or its raucous phone-ins, butbecause if they heard their names mentioned, they knew theyhad to hide. Broadcasting to a largely illiterate and poor pop-ulation, thirsty for entertainment, Hutu extremists used the air-waves to spread message of hate, and direct the mobs towardstheir targets. The result was predictable; an inflation of preju-dice that escalated into a civil war culminating in the deaths ofan estimated eight hundred thousand people.Radio is a quietly powerful medium. We wake in the morn-ing to music or news bulletins; we travel in taxis and cars withthe radio blasting out. It is technically easy to produce and eveneasier to receive, and can beat the censor - witness SerbianRadio B92’s dogged resistance to Slobodan Milosevic as itbroadcast over the border from Romania, or the London-basedexiles using short wave radio to transmit Radio Free Zimbabwefrom a grimy London street. Radio has proved a weapon ofwar: in the hands of ethical journalists, it can be a force for good.There is no doubt that in situations of social conflict, the mediahas a power to help, hinder, or harm. But stop for a minute andimagine what use the extremists might have made of Twitter,and the latent dangers of the social media revolution becomeall too clear. Already, German police have uncovered a massivenumber of online links in their hunt for neo-Nazis involved incriminal attacks, and Norwegian mass murderer AndersBehring Breivik freely admitted to using the internet to pros-elytise his extreme anti-Muslim views. Police in the UK thisweek released figures that show a 150% rise over the past yearin convictions for offensive postings online; with a good num-ber of trolls guilty of abusive comments and some of false ac-cusations against the innocent. At the same time, in some of theformer conflict zones of Europe, unmoderated comment pageson mainstream media sites are providing a place to spread eth-nic poison and potentially destabilise the sometimes precariousstatus quo.What we call hate speech has always existed, and governmentsin Europe at least have traditionally used legislation to curtail itsworst effects. Social media has changed the rules of the game,making it easier to spread hatred at the touch of a button, andharder to track down the culprits, especially if they hide undera mask of anonymity. The “anonymous” label is under fire frommany quarters; the Council of Europe’s Secretary GeneralJagland has clearly stated his opposition to its use. Launchingnext year’s European-wide campaign against hate speech inBudapest this week, he stressed the risk that democracy may beswept away by extremist views, proving that the phenomenonis a larger part of a general problem.Governments and international organisations are now acting toturn the tide, and many are using the legal framework offeredby the Council in its Budapest Convention on Cybercrime.Bodies such as ECRI – the European Commission againstRacism and Intolerance – are able to act as an early warning sys-tem against rising intolerance in European countries. Laws arebeing put in place, and extremists are getting the message thattheir behaviour is abhorrent to the majority of society.The fast changing communications of today pose a threat andoffer an opportunity. As we move to adapt to new realities, it isworth remembering that hate speech has always existed. Newnational laws and international treaties may help to stop thebush-fire spread of hate and lessen its worse effects, but theroots of racism, homophobia and inter-ethnic conflict will re-main as long as we do not find ways to create understandingand tolerance in our day to day life. The online world is a mir-ror of the real world, and the real world is where change musttake root.

By Gutenberg

Tackling hatred in society isthe key to halting it online

Wikileaks founder Julian Assange,who used the web to promote free-dom, has now published a bookwhich defines the web as "the mostdangerous facilitator of totalitarian-ism we have ever seen."

Cypherpunks: Freedom and theFuture of the internet is the title ofthe book and its introduction waswritten in the Ecuadorian embassyin London, where Assange has beenseeking to avoid extradition toSweden to face sexual assault claimsduring five months.

The 192-page book was publishedon 26 November, in digital and printform, and Assange calls it a "watch-man's shout in the night" warningthat the net can either free us orenslave us, but stated that it's not amanifesto.

In October, the Australian internetactivist, announced his intentions topublish a book, based on the tran-script of an interview conducted ear-lier in the year with three fellow"cutting-edge thinkers" on the web,and broadcasted on the Russianstate-controlled TV channel RT.

"Within a few years, global civili-sation will be a postmodern surveil-lance dystopia, from which escapefor all but the most skilled individu-

als will be impossible. In fact, we mayalready be there”, the book says.

His personal experiences haveinfluenced the way he sees the worldnow and this change is patent in thebook's introduction, where he says:"While many writers have consid-ered what the internet means forglobal civilisation, they are wrong …They are wrong because they havenever met the enemy … We havemet the enemy."

Julian Assange's “book-fellows” areJeremie Zimmermann, co-founderand spokesman for the French citi-zen advocacy group La Quadrature

du Net, Jacob Applebaum, a US-based computer security expert, andAndy Müller-Maguhn, a leadingGerman hacker.

Zimmermann told the Guardianthat the book covers issues like dataprotection, corporate influence overpolitics, transparency, copyrightenforcement and child pornography,among others.

The Holywood director OliverStone called Cypherpunks "grip-ping, vital reading", and journalistJohn Pilger, a supporter of Assange,describes it as "above all, a warningto all". NR

Assange's book warns over internet slavery

The finding of microbes flourishingin an Antarctic lake sealed undermore than 19 metres of ice couldincrease the chances for life inextreme environments, such as SolarSystem's icy moons.

Previous studies indicated that thebrine has been isolated from the sur-face environment for at least 2,800years, but now researchers from theUniversity of Illinois at Chicagofound a diverse community of bugsliving in the lake's dark environment,at temperatures of -13°C.

The lake is called Vida (life) and is

the largest of several unique lakesfound in the McMurdo Dry Valleys.Despite its name, it doesn't containoxygen, is acidic, mostly frozen andhas the highest nitrous oxide levelsof any natural water body on theplanet.

“This provides us with newboundary conditions on the limitsfor life,” said researcher Peter Doran.

“The low temperature or highsalinity on their own are limiting, butcombined with an absence of solarenergy or any new inputs from theatmosphere, they make this a verytough place to make a living,” hestated.

The researchers took out cores of

ice, using sanitary procedures andequipment.

They collected samples of brinewithin the ice and assessed its chem-ical qualities and potential for sus-taining life.

“Geochemical analyses suggestthat chemical reactions between thebrine and the underlying sedimentgenerate nitrous oxide and molecularhydrogen. The hydrogen may pro-vide some of the energy needed tosupport microbes,” added professorFabien Kenig.

He also explained that they areplanning to use radar and other geo-physical techniques to “probe whatlies beneath.”

By Nerea Rial

16NEW EUROPE2 - 8 December , 2012

TECHNOLOGY

Julian Assange addresses the media and his supporters from the balcony of the Ecuadorian

Embassy in London | AFP PHOTO / CARL COURT

Lake Vida doesn't contain oxygen, is acidic and mostly frozen

Google may have to change its business model after an

Australian court fined the search engine over online

defamation and considered it a publisher.

The tech giant has to pay $200,000 in the country and,

from now on, it will have to be more active in policing the

content it links, at least in Australia, if it doesn't want to pay

thousands of dollars again.

Milorad Trkulja, an Australian music promoter, took action

against Google in 2009, after online material (including

images) linked him with criminal figures in Melbourne.

When his lawyers asked the search engine for the offend-

ing material, they replied saying that in line with its policies

on content removal he should contact the owners of the

website concerned instead.

Google has always defended itself against court decisions by

saying it's not a publisher and that it's just a service that pro-

vides search results automatically using algorithms.

Therefore, the company considers that it's not responsible

for the content produced on sites which use the search

engine to promote their material.

Besides, UK courts agreed with the definition of this busi-

ness model as a platform for content and defended ISPs

during Tamiz's case, in which the former Thanet

Conservative candidate sued Google for online defamation.

Justice Eady considered that Google should not be regard-

ed as a publisher and even defended free of expression on

the Internet.

However, the Australian jury concluded that the company

was the publisher of Trkulja's images and of the defamato-

ry information. Besides the $200,000 in damages from

Google, the music promoter won $225,000 more from

Yahoo, which hosted the site concerned.

"Google's search results are a reflection of the content and

information that is available on the web. The sites in Google's

search results are controlled by those sites' webmasters, not by

Google”, the search engine stated after the case.

This lost may mark a change in the way judges around the

world look at search engines as providers of content, mean-

ing bad consequences for companies like Google or

Internet Explorer.

To avoid this, they should investigate carefully all the

requests related with defamatory content and immediately

delete or block them. The "not our responsibility, contact

the webmaster" answer will not be enough from now on,

and this “extra” responsibility over the material will change

completely a business model that identifies the number one

search engine.

Complainants have nothing to lose with those court

actions, in fact, they have a lot to win if they sue these com-

panies. But, whichever way you look at it, Google will lose

its identity or millions of dollars. NR

Google's businessmodel in dangerAustralian court considered the

search engine a publisher

Google has to pay $200,000 in Australia after online defamation

Microbial life founded in Antarctic lakeThe discovery could be a clue to life in other planets

17NEW EUROPE2 - 8 December , 2012

TECHNOLOGY

Mobile technology can boost European economyEurope needs to bet on mobile communi-cations to drive growth, increase employ-ment, stimulate innovation and improvesustainability. This was the main messagethat the GSM Association (GSMA) sentto the attendants during the ConnectedEurope conference in Brussels on 28November.

The event explored how mobile-enabledservices can revolutionise core Europeansectors such as transport, healthcare andutilities. Besides, it examined how a rightpolicy framework can accelerate the roll-out of new mobile services that will boostsocio-economic benefits for the region.

Despite the mobile industry is losingrevenues, the sector is still a key pillar forEurope, comparable in size to aerospaceand larger than pharmaceuticals, with totalrevenues amounting to around €174 bil-lion, according to GSMA.

“Europe is experiencing successive wavesof mobile connectivity”, stated AnneBouverot, GSMA Director General. “Thefirst wave - Europe’s GSM success - con-nected people on the move. The secondwave brought mobile broadband at ever-increasing speeds to hundreds of millionsof Europe’s citizens and businesses.”

She explained that the third wave is tak-ing place now “with mobile networksdelivering connectivity to devices rangingfrom health monitors and smart meters toconnected cars, transforming the face ofindustry and the lives of individuals.”Europe has the highest mobile penetrationrate in the world, with total connections of135% and predicted to rise to 152% by2017. Furthermore, by the end of this

decade, mobile connections will increasemore than 60%, meaning 2.1 billion.

Mobile connectivity is expected to gen-erate by 2020 in Europe almost €23 billionfor healthcare; €46 billion for Smart Citiesand utilities; and €48 billion for the auto-motive and transport sector.

Thanks to this strong potential, MemberStates will be able to drive growth throughnetwork investment, job creation and con-tributions to public funding, and generatefurther employment opportunities beyond

the jobs created for an estimated 1.7 mil-lion citizens. Likewise, the EU will havethe possibility of create a platform forinnovation across all sectors and supportsustainability by limiting carbon emissions.

“Europe has been an innovator andleader from the inception of mobile com-munications, although this leadershipposition has weakened in recent years”,Bouverot continued. Therefore, to recov-er and be again at the top of the mobilesector, all stakeholders from private

industry to governments must worktogether.

GSMA Director also called the EUinstitutions to work on policies and regula-tions to re-position the mobile sector “atthe forefront of this exciting industry.”Besides build consumer trust in new ser-vices, they should also establish a regula-tion to address key issues such as connec-tivity, by investing in mobile broadband,and enable development of innovative con-tent, services and business models.

An American Spokane-based companylaunched on 18 November its intelliPaperIndiegogo project. Indiegogo is an interna-tional crowd funding site, while the projectis a smart-paper disposable USB drive thatcan be used either wirelessly, with any nearfield-enabled device, or by plugging it intoa USB port just as a normal USB drive.As the mission of the company is to pro-vide innovative low-cost data sharing solu-tions, it presented the intelliPaper onIndiegogo with the hope to raise $300 000in order to ‘bring the technology to us’. With the raised funds, the company plansto offer 9 different categories ofintelliPaper greeting cards packed in a set,containing also a reader and software tomodify content. The idea of a paper USBwas born in 2008 and since then, the com-pany has developed a number of ideas ofproducts to offer using the same technolo-gy- event tickets, trade show handouts andmagazine inserts. It also worked on andcompleted a number of projects, amongwhich a USB for online study course and avariety of business cards. The technology of intelliPaper consists of

embedding the necessary electronic com-ponents into paper, where the look, feel andfunctionality of the paper are preserved. The final product is a paper containing asmall piece of silicon and according to thecompany intelliPaper is much more envi-ronmentally friendly than other USB

devices which have significant plastic andmetal components.The paper USB is easy to work with- oncethe intelliPaper device is separated fromthe card that it comes with, the folding ofthe paper provides sufficient thickness andtension so that good contact is madebetween the device and the USB port. Dueto the nature of paper and the processinvolved, it cannot be expected that productis reused many times. However, it can bereused as long as the paper and the USBcontacts are still intact.One can find additional explanation of howto use intelliPaper here. Below is a video ofAndrew DePaula, president and CEO ofthe company named under the same nameas its product, talking about his project. Sofar, the campaign raised only $285.Nevertheless, there are still 27 days to reachthe sum of 300 000 dollars until it ends.

IntelliPaper - the paper USB

By Nerea Rial

By Stanislava Gaydazhieva

ADVERTISEMENT

In order to keep up with global competitiveness Europe must engage on mobile

Source: https://www.intellipaper.info/

On 28 October 2012, Ukrainians elected a newparliament in a poll that is widely consideredto be yet another sign of a reversal of democracyin one of the EU’s most important neighboringcountries. While the electoral process was in-deed subject to a number of irregularities, thedominant interpretations in Brussels and otherEU capitals in the EU with regard to theseelections are, however, highly misleading. Con-centrating on the imprisonment of the formerprime minister, Yulia Tymochenko, and in-dulging in speculations about presidentYanukovych’s next possible further authoritar-ianist moves, led many to focus rather obses-sively on power struggles within the Ukrainianelite and on the personalities of certain key ac-tors. This is problematic as it ignores broadersocietal tendencies.

Notwithstanding the many flaws that ac-companied the electoral process, the newlyelected parliament does, in fact, represent theplurality of opinions. In line with pre-electionexpectations and in spite of the loss of two mil-lion votes, the Party of Regions (PoR) was ableto preserve its parliamentary majority in theUkrainian parliament, the Verkhovna Rada,due to the support of many so-called “inde-pendent” candidates. The elections also confirmthe political cleavage between the PoR and theopposition coalition, composed of Ty-mochenko’s Fatherland Party and the Front ofChange, led by Arseniy Yatsenyuk. In addition,they brought to the fore a strong, albeit hetero-geneous, group of representatives expressingdisillusionment with the mainstream politicalforces in the country. With almost 14% of thenational vote, the UDAR party, led by worldboxing champion Vitaly Klitchko, presents it-self as a moderate and pro-modernization al-

ternative. In contrast, the impressive polling ofthe Communist Party and the neo-fascist Free-dom Party reflect the fact that radical politicalalternatives channel a great deal of social protestagainst the current state of affairs in Ukraine.

As a result, the Ukrainian parliament,which holds its first session on 17 December,is exceptionally representative as compared toits two neighbors Russia and Belarus, whichsuffer from a “managed democracy” and au-thoritarian rule, respectively. Undoubtedly, theconduct of the Ukrainian parliamentary elec-tions feeds the views of those who fear thatUkraine will soon join this obscure club ofregimes. And yet, any interpretation of where

the country is headed needs to go beyond themere interpretation of irregularities and po-tential vote rigging: while Ukraine’s electionsconfirmed the country’s political system asneither authoritarian nor fully democratic,they certainly highlighted its enormous socialcomplexity.

The wide range of the voters’ allegiances, thediversity of the society, the nature of a Ukrainecomposed of a rural West and heavily industri-alized East, and the lack of integrative, main-stream political projects such as a democraticrepositioning towards a Western model of lib-eral democracy determine the country’s politi-cal fabric. This mix of factors is reflected, on thedomestic front, in the many diverging views onthe type of political system that should be es-tablished, the economic model that should befollowed and the foreign policy direction thatshould be pursued. To date, eight years after theOrange Revolution, there is still no clear socialconsensus on the value of liberal representativedemocracy, the market economy, and a Euro-Atlantic foreign policy.

Any attempt by a political player in Ukraineto break with the currently pursued middle-of-the-road policy of muddling through is boundto trigger social opposition. This complexity isboth the country’s strength and weakness. Onthe one hand, substantial regression towardsauthoritarian rule will meet considerable soci-etal resistance; on the other, Ukraine’s consid-erable plurality consolidates its status of beingtrapped in transition.

In Brussels and other EU capitals, decision-makers look at Ukraine with a mix of frustra-tion and reserve. After the disillusionment withthe Orange Revolution, the ongoing imprison-ment of Tymochenko, and the faltering politi-cal and economic reform process, “Ukrainefatigue” is nowadays discernible in almost allEU institutions. However, this fatigue is by andlarge self-inflicted, as the EU projected fore-doomed expectations onto the country. Evenso, Brussels expects the national political eliteto lead the country out of that grey zone lying

somewhere between a former post-Sovietmodel of authoritarian rule and a liberaldemocracy.

Arguably, it is regrettable that Ukrainian vot-ers did not vote for “more Europe” and moredemocracy. But these elections were not aboutthis choice. The preferences of the Ukrainianelectorate, exposed to rising political alienationand social apathy, were determined more byeveryday concerns and the creeping economiccrisis than this alleged dichotomy. As if this isnot enough, the political indifference and evencynicism of many voters is also the result of thepost-ideological nature of party-like move-ments created around leaders fostering influ-ential, wide-ranging and fluctuating patronagenetworks.

If the EU wants to overcome this highly per-sonalized power game in Ukraine and avoidfurther radicalization of the political landscape,it should bring this diverse and antagonized so-ciety into its policy. European recognition ofUkraine’s societal complexity requires a tailoredapproach that takes the country as a whole intoaccount and not just its political elite. Showingthat society is an essential element of the EU’sapproach means going beyond the exclusion-ary and limited policies of visa liberalization andjust a handful of occasional exchanges with afew privileged civil society actors.

If the EU is able to demonstrate to Ukrain-ian society that the (currently stopped) associ-ation process and the envisaged Deep andComprehensive Free Trade Area agreement arebeneficial to all factions of society, in the shortterm too, it is quite likely that even Russian-speaking Ukrainians in the Eastern part of thecountry will reconsider their negative attitudetowards the EU. Apart from the EU’s readinessto engage in such a process, this also requiresBrussels to engage with its critics in Ukraineand acknowledge that the EU’s supposedlytransformative power is about transforming therelations between state and society for the ben-efit of the latter, and not just the political andeconomic elite.

However, if the EU continues with pastpractices, then Europeanization and the Euro-pean perspective will remain an intangible and,in fact, empty promise for the majority ofUkrainians and the country will equally remainsubject to political manipulation in domesticpower disputes. The EU should not wait forsome oligarchic clans to see their selfish inter-ests materialize as a consequence of Ty-mochenko’s release and the subsequent signingof the EU-Ukraine association agreement. In-stead, Brussels should regard and treat theagreement as an integrative and inclusionarytool to help reinvigorate the Ukrainian trans-formation from the bottom. But for this to hap-pen, it needs to start seeing Ukrainian society asit is. That means that Brussels will have to ac-knowledge its enormous diversity and stop re-garding it as being split between the east andwest.

Dr. Michal Natorski is Senior Research Fellowat the European Neighbourhood Policy Chair,College of Europe (Natolin campus), and Prof.Tobias Schumacher is the chairholder of theEuropean Neighbourhood Policy Chair.

Protesters shout slogans as they hold placards showingUkraine's jailed former prime minister Yulia Tymoshenko

during rally of the opposition in front of the Central Election Commision in Kiev on November 12, 2012

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18NEW EUROPE2 - 8 December , 2012

EASTERN PARTNERSHIP

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POLITICS

Ukraine and the EU: where to?By Michal Natorski and Tobias Schumacher

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 for more info advertising@neurope.eu or don’t hesitate to call us at +32(0)2 5390039

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LAST MINUTE TICKETS FOR SHOWS & CONCERTS AT -50%

Avec le soutien de LA COMMISSION COMMUNAUTAIRE FRANÇAISE

Tickets for half price for performances and concerts on the same day. Arsène 50 offers you every day a wide range of performances, advises you in your choices and takes care of your reservation.

www.arsene50.be

Ticket sale: - At BIP, 2-4 rue Royale (Place Royale) 1000 BruxellesTuesday to Saturday, from 12.30 pm to 5.30 pm- Online on www.arsene50.beTuesday to Saturday, from 2 pm to 5.30 pm

RESTO BITES

Pacific Eiland, Ieper

It´s always good to get out of Brussels now and again and Ypres,in particular this restaurant, is a very good reason to do so.Situated, as it is, on a tiny island in the city, Pacific Eiland is sur-rounded by water and set in very tranquil surroundings.Spanish occupiers built the island in 1640 to deter their enemiesbut, today, the restaurant, which gets a mention in the prestigiousMichelin guide, serves to attract visitors in their droves.It´s little surprise given the quality of food its talented ownerRobert Van Eygen and his team produces.Fish dishes are its speciality but freshness, tranquillity and exclu-sive surroundings are the key elements.In its tearoom & bistro you can enjoy a quick bite or a menu ofthe day or, alternatively, try the real Altamira “Stone grill” that al-lows you to grill your food yourself.It has three terraces and, after a good meal, you can even try yourhand on one of the restaurant´s rowing boats moored outside.The kids are well catered for with both an indoor and outdoorplayground.Located just 300 metres from the train station and close to thecity centre the restaurant, which is reached by an idyllic bridge andboasts a completely refurbished interior, is an ideal stop for any-one looking for a fulsome and deliciously prepared meal beforeheading back to the capital.Highly recommended.

Blue TuesdayThe Jon Spencer Blues Explosion20:00, 11 December, Ancienne Belgique

In the story of the blues, there’s a special place for Jonand his band. Hailing from Hanover, the one in NewHampshire in the US, they have been not just explo-sive on stage since their beginnings in 1991, but havealso blasted a path in a new, alternative rock and roll. This has brought them the respect of their peers andhas given a platform for interesting collaborations withdiverse talents like Elliott Smith, Beck, SolomonBurke, Steve Albini, Martina Topley-Bird and AdRock of the Beastie Boys.They’ve been around long enough to have their firstretrospective released, ‘Dirty Shirt Rock 'n' Roll: TheFirst Ten Years’ which reminded people of their talent,with the band being relatively inactive for a few years.Fired up by the response to dirty Shirt, the band hitthe road again and developed their latest recording,‘Meat and Bone’ which Mojo magazine described as“No retro trip, this, greasy grooves and hollered pulpitsoundbytes remain Blue Explosion's prime business--and business is good.”Uncut said of the new release, “It includes great music,but it still has that hairy, unpredictable, somewhat de-mented aspect that gives the Blues Explosion itsunique spark.”Get down to the AB and blow your mind with theblues.More: www.abconcerts.be

Snooper TrouperSnoop Dogg

20:00, 29 December, Ancienne BelgiqueOf course, there’s no way of knowing if Calvin Cor-dozar Broadus Jr will still be using that name pastChristmas, especially as he recently announced hewas calling himself Snoop Lion after being re-chris-tened by a Rastafarian priest during a recent visit toJamaica. He explained why, “"I didn't know that untilI went to the temple, where the High Priest asked mewhat my name was, and I said, 'Snoop Dogg.' And helooked me in my eyes and said, 'No more. You are thelight; you are the lion.' From that moment on, it's likeI had started to understand why I was there."Well, in some ways he’s the ‘greenest’ act in music.There’s a lot more to him than music. He is also a suc-cessful businessman and is even contemplating anentry into Scottish football, announcing that he wascontemplating buying into Celtic FC. For his last Eu-opean tour, he made a series of videos wearing theshirts of teams in the cities he was touring in. Whatshirt will he be wearing in Brussels, Anderlect or R.U.Saint-Gilloise? Tickets are going to sell very fast, so bequick and after the Christmas celebrations, why notget some Snoop in preparation for the New Year?More: www.abconcerts.be

Calcutta calling20:00, 10 December, BozarDebashish is a child prodigy whohas brought Indian classical musicto a global audience and runs aschool for musicians in the princi-ples of the music and a specialcourse in the guitar.He began playing a lap guitar atthe age of three, making his radiodebut at the advanced age of four.At the age of nine, he left his par-ents for ten years to study underthe pioneer of Indian slide-guitarBrij Bhushan Kabra. At agetwenty, he was awarded the Presi-dent of India Award for winningthe National Music competitionof All India Radio.He says that he found the tradi-tional Indian instruments “too re-strictive,” and his love of the slide

guitar led him to invent his own,including a lap steel ukulele.Hardly what many would regardas traditional, but it shows hiscommitment to excellence and in-novation. Since his collaborationwith the US master guitarist BobBrozman he has become popularin the West too and even won aGrammy nomination for hisalbum Calcutta Chronicles. Forthis concert he is joined by hisbrother Subhasish.

Debashish and Subasish Bhattacharya

Whose blues? Snoop Vader and his entourage.| EPA/JUSTIN LANE

19NEW EUROPE2 - 8 December , 2012

BRUSSELS AGENDA

20NEW EUROPE2 - 8 December , 2012

ARTS & CULTURE

One of the classic story themes in history

is that of the journey. Started by Homer’s

Odyssey, it has been constantly with us,

but in the 1960s a new version started ap-

pearing on the cinema screen, the road

movie which came of age in the next

decade.

1971 saw two classics of the genre, with

an independent twist that echoed the

anti-establishment tone. Two Lane Black-

top and Vanishing Point still keep their

edgy feel and still amaze.

The arguably demented director, David

Lynch also used the genre, making one of

his most accessible films, and the slowest

road movie of all time, The Straight Story,

the tale of an old man who makes a long

journey by tractor to mend his relation-

ship with an ill brother.

But what is the fastest road movie?

For the answer, we have to go to Paris,

scene of C'était un Rendezvous (It was a

date). This short film from 1976, coming

in at 8 minutes 38 seconds, leaves viewers

open mouthed, for it is the ultimate ‘edge

of the seat’ film. The director, Claude

Lelouch was threatened with arrest after

showing the film, but with so many

breaches of highway law captured on cam-

era, he refused to name the driver.

It shows a journey from Porte Dauphine

to Pl du Parvis du Sacré Cœur, via some

of the city’s most famous sights. Filmed in

one August morning, at around 5.30, the

car and its driver remain a mystery. But

what can be learned from the film is that

they drove through over a dozen red lights

and went down a few streets the wrong

way, reaching speeds over 220 km/hour.

Remarkably, its premier in the US was

as a short before the main production,

Woody Allen’s Interiors, which must have

been a change of pace.

There is also a Brussels version, made by

cameraman and director, Pascal Colson,

who drove from St Gery in the centre of

the city to Zaventem airport in 8 minutes,

with a chattering passenger.

Colson told New Europe how the film

came to be made, “The idea came when a

friend with a Porsche offer me a trip at

200km/hour on the Brussels ring.” In-

spired, he then started searching the in-

ternet for fast car videos, “and by chance I

pick up the Lelouch film, then the idea of

a woman speaking went to my mind.”

Why not? What is a road movie with-

out a woman?

Colson said that they managed to have

a few close shaves along the way but, “I

didn't tell the producer that we will drive

at 200km/hour (was his camera on the

car), but at the last moment he decided to

sit in the back.”

“ The driver and I didn't hear him until

arriving at the airport where he open the

door and threw up.”

Colson escaped Lelouch’s difficulties, “I

didn't have any legal problems, was fun.”

If any more film makers are inspired, Col-

son suggests, “To do another remake, the

best place will be in Africa, through a

market, but you should not miss the

plane!”

Colson’s remake can be seen at

http://tinyurl.com/brusselsremake

Las Vegas, the city that truly never

sleeps, holds a better reputation than

New York City with everything open 24

hours 7 days a week, all year round. Sin

City is typically known as a place where

gambling is the main currency, the use of

alcohol and drugs is encouraged, and the

women of the night are famed for their

naughtiness. It has held up to the stan-

dards that were embedded in its exis-

tence since the days of the Rat Pack until

the days of Hunter S. Thompson’s Fear

and Loathing in Las Vegas. Aside from

these standards Las Vegas has so much

more to offer than just being a place of

immoral indulgences.

It is possible to meander the Las Vegas

strip and come across attractions that do

not involve the consumption of sub-

stances. Freemont Street Experience,

which is located in Old Las Vegas is

street that is a whopping 1400 feet long

and is 90 feet high.

This space-framed attraction holds spec-

tacular light shows every hour, and con-

tains a variety of street performers and

crazies that will be sure to entertain you

at any time of day.

A mere half-hour drive off the strip an-

other famous site is Primm, Nevada, that

contains the 1934 Ford V8 death car of

Bonnie and Clyde. On display with the

car are remnants of the famed thieves es-

capades, along with an impressive

amount of guns and ammunition. A 45-

minute drive south of Las Vegas lays one

of the greatest architectural accomplish-

ments that was constructed in the 1930’s,

Hoover Dam. A 400-foot Dam carefully

monitors the raging waters of the Col-

orado River through its revolutionary hy-

droelectric power capabilities.

The remnants of the Old West are still

clearly visible when visiting former silver

mining towns known presently as Ghost

Towns.

Calico Ghost town is one of the most

legendary, where one is able to walk the

old streets, visit the mining operations

that were once in existence, and visit the

haunted hotels to see if the ghosts still

come around to disturb the living. Route

375 also known as Extraterrestrial High-

way lies deep in the desert where the

top-secret government classified Area 51

exists. This highway is a highly untrav-

eled route, but alien hunters are known

to congregate around the “black mailbox”

that is not black anymore, but is used as

a meeting point for alien hunters. Rumor

has it that 2-3 UFO sightings happen

every week, but the documentation of

these events have not been recorded since

2001.

Being a Las Vegas local and having

moved away for college and travelled the

world, whenever I return to my home-

town, I come to appreciate the beauty of

the desert and the obscenities that hap-

pen on a daily basis. Las Vegas cannot be

viewed as a place to completely forget re-

ality, but rather a gem in the desert that’s

seductiveness goes beyond the lewdness

of the Las Vegas Strip.

ADVERTISEMENT

CINEMA

Reel Roadrunner

Las Vegas beyond the stripBy Jess Rinaldi

21NEW EUROPE2 - 8 December , 2012ARTS & CULTURE

The Paris Quai BranlyMuseum’s recent exhibi-

tion, ‘Beloved Hair: Tro-phies and Trifles’ (till July 14th,2013), deals with hair, a universal

subject, which concerns anthro-

pology and fashion, as well as art.

Indeed, hairdressing and hair

care have always served to differ-

entiate man from animal, to sepa-

rate the civilized from the wild.

Hairstyles express each individ-

ual’s personality, narcissism and

intimacy, while conforming to the

social, political or religious re-

quirements of a given group. They

serve as a means of both represen-

tation and distinction.

Part of the exhibition is there-

fore dedicated to the theme of ‘re-

nunciation’, either through

shaving or letting hair grow end-

lessly: Buddhist priests, skinheads

and traditionalist Jewish wives all

shave their heads, while devout

Sikhs never cut their hair.

Shaving the head may either be

part of an initiation process or can

act as a sign of submission and hu-

miliation. Women who were

guilty of having a relationship

with German soldiers during the

World War II or prisoners in con-

centration camps, for instance, had

their head shaved publicly.

Furthermore, before taking their

vows, Catholic nuns cut their hair

to symbolically renounce the

world, while in other cultures, cut-

ting one’s hair signifies mourning.

In contrast, keeping very long hair,

like 1960’s hippies did, may be a

sign of social discomfort and re-

bellion.

Hairstyles mainly help define

the boundaries between masculin-

ity and femininity, but may also

cause gender confusion in the case

of cross-dressing or transexualism.

Hair follows the lifecycle and

marks the passage of time as it

grows, falls or whitens. However,

it doesn’t decay after death and

can survive millenaries, as proved

by the discovery of the mummy of

Ramses II (1301 – 1235 B.C.),

which revealed that the Pharaoh

had thick blondish-red hair.

Hair’s mysterious imputrescible

quality has made it a powerful

relic and ornament in many non-

Western cultures throughout the

world, while forming a bond with

the ancestors’ realm.

The exhibition displays an im-

pressive (and somewhat macabre)

collection of ‘shrunken heads’, tro-

phies coming from the Northern

Peruvian and Eastern Ecuadorian

tribe, Achuar Jivaro, among oth-

ers. The practices of headhunting

and scalping were rituals that were

meant to absorb the power and

energy of the tribe’s enemy. The

enemies’ heads were reduced but

the hair was carefully preserved in

order to lavish on the victims’ vi-

tality and strength.

Finally, hair plays an important

role in the art of seduction in every

culture, as it takes over or subverts

social norms. Another section of

the exhibition refers to the West-

ern feminine stereotypes linked to

hair colour as seen in painting,

photography or the cinema. It also

shows the highly sophisticated

African hair braiding styles, with

their strict arrangement and com-

position, which seem to defy Na-

ture itself. Louise Kissalkissa@neurope.eu

Emma, relic, circa 1900

© Collection Jean-Jacques Lebel

The Bouffant Belles team at the start of a race, 1964

© Neal Barr

Mkpuk eba, 1974

Photo by J.D. 'Okhai Ojeikere

© Collection André Magnin/Musée du Quai Branly

19th Century trophy: human head, cotton, feathers, and resin from Brazilian Munduruku

headhunting tribe

© Musée du Quai Branly/photo: Patrick Gries

Hair conditionBELOVED HAIR: TROPHIES & TRIFLES – MUSÉE DU QUAI BRANLY, PARIS

GERMANY | INDUSTRY

BASF completes acquisitionof Becker UnderwoodBASF has completed the acquisition of Becker Un-derwood from Norwest Equity Partners, a US-basedprivate equity investment company, for a purchase priceof $ 1.02 billion (€ 785 million), The Company re-ported on 28 November. With the acquisition, BASFis now a leading global provider of technologies for bi-ological seed treatment as well as seed treatment col-orants and polymers. BASF has also expanded itsproduct portfolio in the areas of biological crop pro-tection, turf and horticulture, animal nutrition andlandscape colorants and coatings. In the comingmonths, a detailed integration plan will be developedby a joint team of BASF and Becker Underwood em-ployees. Most businesses of Becker Underwood willjoin the newly established global business unit Func-tional Crop Care as part of BASF’s Crop Protectiondivision. Within this new unit, BASF will merge its ex-isting research, development and marketing activitiesin the areas of seed treatment, biological crop protec-tion, plant health, as well as water and resource man-agement with those of Becker Underwood. BeckerUnderwood’s animal nutrition business will be inte-grated into BASF’s Nutrition & Health division. Thenewly formed global Functional Crop Care unit willbecome effective 1 January, 2013. In 2011, BASF’sCrop Protection division reported sales of around € 4.2billion and is expecting another record year in 2012.With its products and services, BASF helps growers toimprove their yields and the quality of their products.

FINLAND | BANKING

EU expansions eyed forHolvi online banking groupHolvi, the Finnish financial services start-up, is planningto expand its operations to Europe next year. The com-pany, which offers online funding especially to groupssuch as sports organisations and political campaigns, isalready up and running in Finland, it was reported on 27November. Holvi has got new financing in a fundinground organised by serial Danish entrepreneur and in-vestor Thomas Madsen-Mygdal. He confirmed that thenew investment is intended to drive Holvi’s expansionacross the European Union in 2013. Holvi allows indi-viduals or groups a transparent online banking servicewith a simple bank account. The company charges a smallfee for the transactions. The company’s target customersare those that traditional banks aren't enthusiastic about,such as sports or campaigns which don’t need large loans,and are not traditional targets for banks.

GERMANY | EUROPEAN MEDIA

Financial Times Deutschland foldsThe publisher of the Financial Times' German off-shoot has said production will be stopped shortly andsome 320 employees will lose their jobs, RTE Irelandreported on 23 November. The Financial TimesDeutschland has a circulation of about 100,000. It waslaunched at the height of the Internet boom in 2000but was never profitable. Hamburg based publisherGruner + Jahr said it sees "no way" to continue pub-lishing the loss making paper beyond 7 Decemberamid further falling advertisement revenues. Thepaper's journalists first reported that the daily is "aboutto be stopped" after a board meeting last Wednesday.The publisher of the English-language FinancialTimes, Pearson, sold its stake in the German paper in2008, but it continued to appear on the same distinc-tive salmon-colour paper.

22NEW EUROPE2 - 8 December , 2012

EUROPEAN UNION

A US court has temporarily halted a bidby the Associated Press to split from apartnership with Germany's insolventDAPD news agency and link up with thelarger rival DPA agency instead, The Localreported on 28 November.

The temporary injunction by JudgeAlvin Hellerstein in New York federalcourt put the brakes on a reshuffle of AP'soperations in Germany. Hellerstein or-dered that the leading US news agency "istemporarily restrained and enjoined" fromhalting its distribution of news, images orother products to DAPD. The order alsobars AP from "providing any text, news,information, metadata or other content toany non-DAPD-affiliated entity" in Ger-many or Austria.

Meanwhile, DAPD, which declaredbankruptcy last month, is required by thecourt to keep up its payments of €65,000a week to the AP. Both AP and DAPDagreed to the terms of the temporary orderahead of the judge signing off.

The temporary injunction is in responseto a lawsuit filed by DAPD following theannouncement on 14 November that APand DPA had hatched an alliance to dis-tribute each other's stories and photos,while the smaller, financially troubledDAPD was being dropped.

AP and DPA had said in a joint state-

ment that the arrangement, expected tobecome effective on 1 January, would allowDPA to distribute AP photos and

stories in Germany and Austria and textin Switzerland. AP would have access toDPA coverage of Germany and Austriaand represent DPA photos for sale in mar-kets outside of Germany, Austria andSwitzerland. AP spokesman Paul Colfordsaid because both parties had agreed toholding off for now on the split withDAPD, this was not a setback. A newcourt hearing was expected on 18 Decem-ber. DAPD welcomed the temporary halt

to what it called a "legally invalid" move byAP to terminate their contract.

"Based on this decision, our clients canrest assured that we will continue to offerthe familiar service in the usual quality, in-cluding the international coverage," Wolfvon der Fecht, partner at law firm Met-zeler von der Fecht and managing directorof DAPD, said. "We will implement therestructuring concept -- which we intro-duced on November 12, 2012 -- asplanned and are going to establish theDAPD newswire group on an economi-cally sound basis once again."

AP split from DAPD frozen by US court

GERMANY|EUROPEAN MEDIA

Metso biomass power plant to supply SwedenFINLAND|ENERGY

Finnish engineering and technologycompany Metso has announced it willsupply Varnamo Energi AB with a bio-mass power plant for combined heat andpower production in Varnamo in Sweden,it was reported on 27 November. Thestart-up of the plant is scheduled for au-tumn 2014. The value of the order is about€ 17 million. Metso's delivery will include

a complete power plant, including instal-lation, training and commissioning. Theplant will have a thermal output of 13.4MWth for district heating and an electri-cal output of 3.6 MWe. The plant will uselocal forest residues such as bark and woodchips as fuel. “This is an important invest-ment in the future of Värnamo and in theenvironment," said Gunnar Crona,

Chairman of Varnamo Energi. The orderis included in Metso’s Pulp, Paper andPower fourth quarter 2012 orders re-ceived. After this investment 100% of thearea's district heating will be producedwith biomass. In addition, we will produceapproximately 20 GWh of electricity an-nually, which means a doubling of locallyproduced green electricity.

EU takes closer look at state measures in favour of airBalticLATVIA|COMPETITION

The European Commission has openedan in-depth investigation to verifywhether various public support measuresprovided by Latvia in favour of the ma-jority State-owned airline airBaltic are inline with EU state aid rules. At this stage,the Commission has doubts that thesemeasures were carried out on terms thata private player operating under marketconditions would have accepted. Theopening of an in-depth investigationgives interested third parties an opportu-nity to comment on the measures underassessment. It does not prejudge the out-come of the investigation, it was an-nounced on November 20.

Latvian airline airBaltic has experi-enced financial difficulties since 2008,

which resulted in significant losses andnegative equity in 2010 and 2011, and re-ceived several public support measures.The Commission started to look at themon its own initiative and received twocomplaints. The in-depth investigationwill focus on a 16 million Latvian Latsloan (approx. 22.65 million euro) grantedby Latvia in October 2011, the interestrate of which was substantially reducedby Latvia in December 2011, the firsttranche of 41.6 million Latvian Lats (ap-prox. €58.89 million) of a second loangranted by Latvia in December 2011.

The inquiry will also focus on a capitalincrease agreed in December 2011 byLatvia and BAS, a former private major-ity shareholder of airBaltic, through loan

conversion and a cash contribution fromBAS, the acquisition by Latvia and BASof 0%-coupon bonds issued by airBalticin 2010, several transfers and paymentsmade in behalf and/or to the benefit ofairBaltic by a nationalised bank, and atransfer to airBaltic of a claim held byLatvia in exchange of just LVL 1.

The Commission will now investigatewhether these measures constitute stateaid in the meaning of EU rules, i.e. if theyprocured an economic advantage to air-Baltic over its competitors in the EU Sin-gle Market. In the affirmative, theCommission will investigate whetherthese state aid measures can be foundcompatible with EU state aid rules thatallow certain categories of aid.

Restrictions for AP in German press agency.

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23NEW EUROPE2 - 8 December , 2012EUROPEAN UNION

IRELAND | BANKING

AIB on target for 2,500 staff cutsAllied Irish Banks (AIB) has said it expects to hit

its target of 2,500 lay-offs by 2014, Breaking News

reported on 27 November.

More than 1,000 staff have left under a voluntary

scheme, including early retirement, with another

700 to go by the end of December.

In an interim management statement, AIB said it

expects to see bad debt provisions for 2012 materi-

ally reduce from this year’s elevated levels. It also

said the pace of arrears in the mortgage book has

slowed, along with those in relation to loans to

small and medium- sized businesses.

“Although economic conditions remain challeng-

ing, we have seen signs of a stabilisation in under-

lying economic indicators, including house prices,”

the statement said.

“We have materially accelerated the rate of engage-

ment with customers in difficulty and are now pro-

viding forbearance and restructuring options to

customers to ensure sustainable repayment sched-

ules.”

AIB said about 70% of mortgage customers with

revised terms are adhering to the new conditions.

Elsewhere, the bank said it is implementing pay

cuts of 15% for senior levels and pay freezes at jun-

ior levels.

Its branch network has also been drastically re-

duced, with 45 sub-office closures and six branch

amalgamations completed in Ireland by the end of

November.

Eight branches and four sub-offices will be closed

in AIB UK by the end of December, while another

16 Irish branches are expected to close in 2013.

‘Stalking’ and ‘Stalking involving a fear of violence’ have now becomecriminal offencesunder Section 111 of the Protection of FreedomsAct 2012, which adds a section 2A to the Protection From Ha-rassment Act 1997.

From the act(3)The following are examples of acts or omissions which, in par-ticular circumstances, are ones associated with stalking(a)following a person,(b)contacting, or attempting to contact, a person by any means,(c)publishing any statement or other material(i)relating or purporting to relate to a person, or(ii)purporting to originate from a person,(d)monitoring the use by a person of the internet, email or anyother form of electronic communication,(e)loitering in any place (whether public or private),(f)interfering with any property in the possession of a person,A person guilty of an offence under this section is liable on sum-mary conviction to imprisonment for a term not exceeding 51weeks, or a fine.The new laws on stalking could possibly be effective for harass-

ment by electronic means, known as trolling, as well. These offencesare the final culmination of the Independent Parliamentary Inquiryinto Stalking Law Reform which reported in February 2012. Theycame into effect on 25 November to coincide with the internationalday for the elimination of violence against women and sit alongsidethe existing legislation.

The new offences are added in to the Protection from Harass-ment Act 1997 which in Section 1(1) states a person must not pur-

sue a course of conduct: which amounts to harassment of another,and which he knows or ought to know amounts to harassment ofthe other. The second arm of the offence prohibits a course of con-duct which causes 'serious alarm or distress' which has a 'substan-tial adverse effect on the day-to-day activities of the victim' andbrings with it a threat of imprisonment up to five years. These aremeant to highlight the importance and very serious threat of ha-rassment and stalking.

Clare Bernal was shot dead in Harvey Nichols store inKnightsbridge in September 2005. Michael Pech began stalkingher after their brief three week ‘relationship’ had ended. After hehad harassed Bernal for a period of time, one day he followed herfrom work and blocked her getting off the train. She told him toleave her alone or she would call the police. He told her ‘if youdare report me I will kill you’ and ‘if I can’t have you, nobody will’.He was charged under section 2 of the 1997 Act and breached bailon a number of occasions.Whilst awaiting sentence hewent back to Slovakia and pur-chased a gun. On Tuesday 13September, Pech entered theHarvey Nicholls store, walkedup behind Clare and shot her inthe head four times. He thenturned the gun on himself.

Women aged 15-44 are moreat risk from rape and domestic vi-olence than from cancer, car acci-dents, war and malaria, accordingto World Bank data.

Stalking; a new offense covers trolling?UNITED KINGDOM |PRIVACY

Dairy farmers have taken their message to the streets of Belgium and the European Institutions in a move which blocked much of the

traffic and the life around the institutions. Here we see milk being splashed via the most effective of dispersal methods, a fireman’s hose.

The protests lasted for two days during the last week and if demands are not met they may very well be repeated on the 13 December.

By Joanna Papageorgiou

Profits take off at GatwickUNITED KINGDOM|AVIATION

Bosses of Gatwick Airport in England saidthe airport’s pre-tax profits for the periodApril-September had reached £ 172 million(€ 212.7 million), Breaking News reportedon 28 November.

This was an increase of 4.8% on the sameperiod last year.

Turnover for the first six months of the2012/13 financial year was £ 325.8 million– a 3.6% rise on the April-September 2011figure.

Passenger numbers for April-Septemberthis year were 19.9 million – a 1.2% increaseon the same period last year.

Gatwick’s chief executive StewartWingate said: “These strong half-year re-sults come at the same time as Gatwick en-ters its fourth year under new ownership. In

that time we have focused on growth anddelivering greater passenger choice, con-venience, better customer service and, cru-cially, more connections for both businessand leisure travellers.

“Three years of competition has seenGatwick grow its European short-haulbusiness, while also opening up new routesto key markets in Russia, China, Vietnamand Korea. We have seen passenger growththroughout this period and our qualitystandards are today unparalleled.

“Over the next three years we will con-tinue to transform the airport, maximisingthe opportunities in the short-haul marketwhile stepping up our efforts to attract air-lines that serve markets of strategic impor-tance to the UK.”

ADVERTISEMENT

ROMANIA|TRANSPORT

CFR gets EBRD loanThe European Bank for Reconstruction and Develop-ment (EBRD) is lending €175mn to Romania’s state-owned railway infrastructure operator, CompaniaNationala de Cai Ferate (CFR) to enable the companyto restructure its balance sheet by repaying its short-term liabilities. The loan will free money for vital in-vestments and maintenance works aimed at improvingthe quality of the railway network, EBRD announcedon 28 November.

ROMANIA|FURNITURE

Lemet invests in 5 storesRomanian furniture manufacturer Lemet has in-vested some 1.8mn lei (approximately €400,000) inopening 5 new Lem’s stores in Bucharest, Ploiesti,Iasi, Ramnicu Valcea and Suceava. The stores havesales areas of between 850 and 1,500 square metres,Business Review reported on 27 November. Lemet’sstore network now reached 102 stores countrywidewith a total sales area of about 65,000 square metres.In the first nine months of 2012, the manufacturerhas reported sales worth 153mn lei (approxi-mately €34mn), up 20% year-on-year.

GREECE|RETAIL

Jumbo plans Romanian market entryGreek toy retailer Jumbo is preparing for expansioninto Romania, where it plans to open eight stores by2016, according to the company. Jumbo hopes toachieve a sales level of some €37mn in 2016, RomaniaInsider reported on 23 November. The company aimsto open in 2014 the first stores in Romania, where italready owns a piece of land in Bucharest, some 47,000square metres. The news about Jumbo coming to Ro-mania surfaced earlier in 2008, but the retailer delayedit and focused on Bulgaria instead. The group has 7stores in Bulgaria and 3 in Cyprus, apart from the 51 inits home country Greece. The Jumbo network runsunder franchise in FYROM and Albania.

ITALY|RENEWABLES

ENI launches plantOn November 27, the Italian oil and gas companyENI has launched the first prototype photovoltaicshelter developed by ENI researchers based on a newsolar energy technology which allows generating elec-tricity through luminescent solar concentrators. Theplant, which will be used as an outdoor laboratory forthe testing of the new devices, is a dedicated parkingfacility for electric vehicles and allows charging thebatteries through the current generated by the dedi-cated panels.

ITALY|SCOOTERS

EIB lends €60mn to PiaggioOn 28 November, the European Investment Bank(EIB) and the Italian manufacturer of scooter brands,Piaggio signed a €60mn finance contract to supportPiaggio Group’s research and development projects.The loan will be for a term of seven years and will beused for research and development projects to be car-ried out at Piaggio Group’s Italian sites. The invest-ments planned by Piaggio over the period 2013-2015will enable the Group to carry out and increase itsR&D activities.

24NEW EUROPE2 - 8 December , 2012

EUROPEAN UNION

The European Court of Human Rights(ECHR) has ruled against Bulgaria fol-lowing its failure to properly investigatethe rape of a 14 year old girl for 10 years,despite having confessions from the per-petrators.

The young victim immediately in-formed her parents of the assault and fileda complaint, where she named three ofher four attackers. A medical report thenext day led to the three admitting theirguilt and named the fourth rapist.

The girl attempted suicide on two oc-casions following the attack.

However, between 5 October 1994 and

19 October 2004, no investigative stepswere taken.

On 19 October 2004, the suspects, whohad been charged with the crime, werequestioned again and retracted theirstatements and claimed innocence.

In January 2006, the girl’s lawyer com-plained to the public prosecutor’s officeabout the long delay in the investigationand out of concern that the case could bebrought to a halt because of time limits.

In April 2006, two of the charged sus-pects had their cases dropped because oftime limitations, a third was declaredunidentifiable. The fourth was found

guilty and sentenced. The ECHR saidBulgaria was in violation of the provisionsof the European Convention on HumanRights. Bulgaria was ordered to pay thevictim €17 000 in damages and costs.

The Bulgarian authorities were unableto explain why there had been no inves-tigation for a decade.

The Strasbourg-based court renderedits decision in the case M.N. v. Bulgaria(no. 3832/06), concluding that the pas-sivity of Bulgarian investigating authori-ties compromised the effectiveness of theinvestigation, which also allowed two sus-pects to evade justice.

Bulgaria slammed over bungled rape caseBULGARIA|HUMAN RIGHTS

US visas for Bulgarians remain in forceBULGARIA|VISAS

During an exchange of views with theEuropean Parliament Committee onForeign Affairs (AFET), the UnitedStates Ambassador to the EuropeanUnion (EU), William E. Kennard, con-firmed that the visas for Bulgarian citi-zens will remain in force.

Kennard replied to a question raisedby the Bulgarian MEP, Evgeni Kirilov,saying that he could understand the dis-appointment and that the work in di-rection US visa-free entry continued,but the current situation “is likely tocontinue for some time”.

Bulgaria is one of the countries, to-gether with Cyprus, Romania andPoland, whose citizens still are requiredto be in possession of visas in order to

enter the United States. Czechs, Bul-garians and Romanians also need visasfor travel to Canada.

In the beginning of October, duringthe visit of the Secretary of the US De-partment of Homeland Security JanetNapolitano to Sofia a key agreementfor co-operation between the UnitedStates and Bulgaria in the fight againstserious crime was signed. The signeddocument allows the Bulgarian andAmerican special services to exchangereal-time information about DNA pro-files and fingerprints which is also oneof the key conditions for entry of Bul-garia in the visa-free program ofthe United States.

Even though according to Napoli-

tano there were also other requirementsthat needed to be met for entry in thevisa-free programme, the signing of theagreement was “a big and importantstep forward”.

On the other hand, the EuropeanCommission adopted on 26 Novem-ber its seventh report about breachesof the principle of visa reciproc-ity in third countries. The reportfound that in the past year EU citizenswere able to travel without visa tomore countries than before, but therewere still certain countries that, de-spite the current “reciprocity mecha-nism”, have not yet fulfilled theircommitment to ensure visa-free travelfor EU citizens.

Obama, Borissov to discuss July terrorist attackBULGARIA|DIPLOMACY

The press secretary of the American em-bassy in Sofia announced on 26 Novem-ber that President Barack Obama willhost the Bulgarian PrimeMinister Boyko Borissov at the WhiteHouse on 3 December.

The statement said that Obama wel-comes the opportunity to discuss withBorissov a broad range of bilateral and re-

gional issues, including Bulgaria’s leader-ship in NATO and its contributions tothe International Security AssistanceForce (ISAF) in Afghanistan.

Among the topic of on-going rule oflaw and judicial reforms, Obama andBorissov will also discuss Bulgaria’s in-vestigation into the July terrorist at-tack in Burgas which killed five Israeli

citizens and the Bulgarian bus driver.So far, there is no confirmation of the

identity of the suicide bomber from Bur-gas, but it is already clear that the inves-tigations of the attack are a key factor tothe inclusion of Hezbollah in the EU’slist of terrorist organisations as stated bythe French Ambassador to IsraelChristophe Bigot two weeks ago.

Bulgaria unable to explain why rape case was not investigated for 10 years

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25NEW EUROPE2 - 8 December , 2012ENLARGEMENT

TURKEY | DEFENCE

Egypt to procure Turkey’sANKA UAVEgypt recently announced plans to purchase10 reconnais-sance unmanned aerial vehicles (UAVs) ANKA fromTurkey, Zaman reported. Turkey and Egypt recently signeda relevant agreement to this effect after two and a halfmonths consultations. It should be noted that since 2004Turkey has worked to create first reconnaissance UAVwhich involved 180 engineers. The project envisagesmedium class vehicles with a long flight span. According toDirector General of Turkish State Aerospace IndustriesCompany (TUSAS) Muharrem Dortkasli, several neigh-bors of Turkey are also interested in ANKA UAV. MuradBayar, a spokesman of the Turkish Defence Industry Min-istry, Murad Bayar said that Turkey plans to start batch pro-duction of ANKA UAV next year. Compared to IsraeliUAV Heron, ANKA has several benefits. For instanceANKA UAV can lift more than 200 kilograms of payloadto the height of 30,000 feet but in case of Heron the num-ber stands merely at 185 kilograms. In recent years, theTurkish military-industrial company has focused on man-ufacturing domestic defence products. Currently, Turkeyconducts work to manufacture UAV Simsek, the secondmodel of the UAV, designed by the Turkish aerospace com-pany. The maximum takeoff weight is 75 kilograms, with aspeed of 740 kilometers per hour.

ALBANIA | OSCE

Documentation large part of governanceA workshop on participating in the International Civil Avi-ation Organisation Public Key Directory, was recently con-cluded in Tirana. The organisers of the workshop were theOSCE Transnational Threats Department/Action againstTerrorism Unit in co-operation with the OSCE Presencein Albania, AENews reported. It was attended by 12 Al-banian representatives from border, state registry and infor-mation technology agencies. The participants got theopportunity to learn how the ICAO PKD functions as amultilateral technical platform enabling border control toeffectively validate electronic security features stored in thebiometric Passport. Paul Picard of the TransnationalThreats Department/Action against Terrorism Unit saidthat the seminar stress the importance of a globally inter-operable validation system like the PKD. According to him,PKD is the best and most cost-effective way to validate theauthenticity of biographic and biometric data and help tocounter terrorism and prevent illegal cross-border activities.

TURKEY | ECONOMY

South African eyes new investmentsA delegation of South African entrepreneurs led by DeputyMinister of Trade and Industry, Elizabeth Thabethe re-cently paid a visit to Turkey. The delegation is on an Out-ward Selling and Investment Mission to the cities ofIstanbul and Izmir, Zaman reported. Thabethe said themission will play a vital role in enhancing trade and invest-ment between the two countries. It was reported that themission is an ideal opportunity for South African compa-nies that aim to export value-added products and servicesand for companies that are seeking foreign investment fromTurkey. According to Thabethe, participation in the missionwill serve as an excellent platform for the business circles ofSouth Africa and Turkey to identify trade and investmentopportunities in the two countries in the targeted sectors,create awareness of the South African value-added goodsand services and also boost exports to Turkey. In addition,the mission will also entail increased foreign direct invest-ment into South Africa as well as joint ventures betweenthe South African and Turkish companies, added Thabethe.

The leader of the opposition party inTurkey, CHP President Kemal Kilic-daroglu underlined the importance ofclose ties with the Balkan Region recentlysaying that It is very important thatTurkey has close relationships with eachBalkan country. The region has seen therise of Mustafa Kemal’s ideas on freedom.It will be a benefit for Turkey to focus onpolitical, economic, touristic, cultural proj-ects and to enhance the cooperation onsecurity issues. In order for the Balkans toobtain optimum benefit from the rela-

tionships with the European Union anddynamics of global change, a multi-di-mensional cooperation would be impor-tant and necessary between us. Thedialogue between countries and the roleof the regional institutions is very impor-tant in the historical transformation thatthe Balkan people from the Adriaticcoasts to Thrace. Institutions and plat-forms like the European Union, South-east European Cooperation Process,Black Sea Economic Cooperation Or-ganization and Regional Cooperation

Council are important for the peace andstability in the Balkans. We appreciatethat the countries in the region are in astrong solidarity with each other. It is verypleasant to see that besides the two-sidedor multi-sided corporate solidarity,Balkan countries are continuing their co-operation on foreign trade, transportationand energy. Moreover, it is again pleasantto see the fight against organized crime;cooperation between local administra-tions, trade chambers, civil society organ-izations and academic groups.

Focus on the Balkans TURKEY |DIPLOMACY

Turkish ship Ankara is seen in Canakkale Bosphorus in Canakkale, Turkey.

Gaza crisis might hurt Ankara-US tiesTURKEY |INTERNATIONAL RELATIONS

At a recent Islamic conference in Istan-bul, Turkish Prime Minister RecepTayyip Erdogan launched a strong at-tack against Israel for its ongoing mili-tary operation in Gaza, Zamanreported. He said that Turkey is one of a numberof Islamic states seeking to broker acease-fire in the Gaza Strip and end ex-changes of fire that have killed 96 Pales-tinians and three Israelis since last fewweeks. Calling Israel as a terrorists state,Erdogan blamed the West of ignoringthe “sufferings of Muslims in Palestine,Syria and Myanmar because of lack ofoil” and said the UN was merely watch-ing the killings in Syria. Some delegates

at the conference greeted Erdogan’sspeech with applause when he attackedIsrael and accused the UN of bias. Er-dogan went on to say that those whoassociate Islam with terrorism closetheir eyes in the face of mass killing ofMuslims, and ignore the massacre ofchildren in Gaza.

Meantime, US President BarackObama has strongly defended Israel inconnection with its operations againstGaza, citing its right to self-defense.Political observers in Turkey claimedthat opposing views of Erdogan andObama on ongoing military operationin Gaza could hamper ties betweenTurkey and United States.

According to analysts, a strong rela-tionship has developed between the USpresident and the Turkish prime min-ister, with the leaders in regular contactespecially about the conflict in Syria.Both support the opposition over Syr-ian President Bashar al-Assad.

However Erdogan, along withstrongly criticising Israel, has alsoslammed made thinly Washington andthe European Union for failing to reinin the Israelis.

Any prolonged continuation of theGaza crisis might threaten to hurt fu-ture relations between Turkey and theUnited States, according to interna-tional relations analyst Ulgen.

Indian company to build Tourist resort in Ohrid FYROM |TOURISM

Indian company Sahara India Pariwarrecently announced plans to invest in aproject in FYROM.

The project coined as 'SaharayanMakeeduniya' was submitted toFYROM Prime Minister NikolaGruevski and Vice Prime MiniterZoran Stavreski, MRTOnline reported.The company officials said it is proudprivilege that after few months of talksthe vision of chairman Subrata Roy Sa-

hara for a world class destination in theCity of Ohrid was presented toFYROM authorities.

“The project is developed across 240hectares around the Lake Ohrid, con-sisting of world class hotels, casinos, res-idential and recreational facilities and aninternational standard gold golf course,”Subrata Roy's son, Seemanto Roy, ex-ecutive director and head of the com-pany's international business

department said in a statement. The project envisages construction of

recreational facilities, an exclusive sparetreat, marina hotel, lake side enter-tainment hub, floating hotel and casino.The project which has undergone acomplete environmental study, was de-signed by Atkins, a UK based multina-tional engineering, design, planning,project management and consultingservices company.

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CROATIA|DIPLOMACY

CPC leaders eye CroatiaFormer Croatian President Stjepan Mesic was closely mon-itoring the just-concluded 18th CPC National Congress. Hecongratulated the new leaders of Communist Party of China(CPC) and expressed hope that China under the newlyelected leaders will prosper, Javno reported. He noted that af-fluent Chinese would provide a new potential growth pointfor Croatian tourism. Mesic was impressed with China’s ob-jective of building an ecological civilization, which was un-derscored at the CPC congress. According to him, the CPC'snew generation of leaders would continue to deepen rela-tions between Croatia and China relations. This year bothcountries celebrated the 20th anniversary of diplomatic tiesthis year.

SERBIA|DIPLOMACY

Belgrade, Baku to up ties Serbian Ambassador to Azerbaijan Zoran Vayovich re-cently announced that Azerbaijan and Serbia are activelydeveloping relations in economy and trade and other sec-tors, beta news agency reported. He noted that the currentyear's trade turnover was $15mn and is expected to reach$20mn in the rest of the year. He also informed that Azer-baijan has invited Serbia to tender a factory producing carsfor the railroad. In addition, Serbia has started implement-ing road construction project on the basis of funds grantedby Azerbaijan in the amount of $300mn.

SERBIA|AIRLINES INDUSTRY

Qatar flies to BelgradeQatar Airways recently inaugurated four weekly flights toBelgrade, linking Doha and Blegrade for the first time. Theservices between the cities will operate through Ankarawith the carrier’s Airbus A320, Beta news agency reported.It should be noted that Qatar Airways will open fourweekly flights to Belgrade. The launch ceremony of theroute was hosted Belgrade Airport, which garnered morethan 50 local dignitaries, VIPs and media. Speaking at theceremony, Qatar Airways CEO, Akbar Al Baker, said Ser-bia’s capital Belgrade is renowned across Europe due to itsbuzzing nightlife and unique cultural attractions.

MONTENEGRO|JEWISH UNION

EJU launches new officeEuropean Jewish Union (EJU) recently opened a new of-fice in Podgorica which was a hub for all Balkan countries.EJU leaders, government officials and members of the localJewish community attended the inaugural ceremony. Thenew office in Podgorica is part of the expanding network ofEJU regional offices that includes Brussels, London, Kiev,Geneva and Tel Aviv. “The Jewish community of Mon-tenegro and the entire Balkan Region are an integral part ofEuropean Jewry,” EJU CEO Tomer Orni said. EJU willtake all efforts to work towards promoting Jewish life andinterests in Western, Central and Eastern Europe, he added.

BOSNIA-HERZEGOVINA|LOANS

IMF mission ends visitAn International Monetary Fund (IMF) mission led by Ronvan Rooden recently paid a visit to Sarajevo and Banja Lukato discuss economic developments and policies for the first re-view under Bosnia and Herzegovina's Stand-By Arrangement(SBA), news agencies reported. On concluding his mission,Rooden said the mission was successful and reached under-standings on the government budgets for 2013 and the struc-tural reforms which aim to buttress public finances, preservingfinancial stability and improving the business environment.

26NEW EUROPE2 - 8 December , 2012

ENLARGEMENT

On 27 November, in Sarajevo was heldthe 2nd meeting of the High-level Dia-logue on the Accession Process(HLDAP) with Bosnia and Herzegov-ina (BiH). Commissioner for Enlarge-ment and European NeighbourhoodPolicy Štefan Füle attended the meeting.Concretely he said that despite the delaysin reforms BiH, its EU membership per-spective remains realistic.

BiH haven’t been able to meet itscommitments, which have taken at thefirst dialogue meeting in June in Brus-sels. Some essential issues such as theimplementation of the Sejdic/Finci rul-ing and a model for a coordinationmechanism of all levels of government

in EU matters has not been submittedyet said the Commissioner. “Neverthe-less, the EU membership perspective re-mains realistic”

Sejdic and Finci v. Bosnia and Herze-govina was a case decided by the GrandChamber of the European Court ofHuman Rights in 2009. Dervo Sejdic, aBosnian Roma and Jacob Finci, a Bosn-ian Jew submitted an appeal to the Eu-ropean Court of Human Rights on thebasis that Bosnia's Constitution violatesArticle 14 of ECHR. The BiH’s consti-tution designated that only ethnicsBosniaks, Serbs and Croats have the rightto be elected members of Presidency andHouse of Peoples of BiH.

BiH must proceed to these reforms inorder to ensure a trustful and effective co-ordination of all levels of government saidthe Commissioner. The lack of coordina-tion explains the reason why agriculturalgoods of animal origin cannot be ex-ported to the EU – including to Croatiaas from 1 July 2013. Thus, EU, BiH andCroatia must continue to collaborate inorder to confront additional challenges.

“The European integration of Bosniaand Herzegovina is in the first place tothe benefit of the citizens. The reformswill help your country to become morecompetitive, thus creating new jobs, pro-viding better education, making justicemore efficient,” the Commissioner said.

Füle: BiH’s EU membership perspective remains realistic

BiH|EU AFFAIRS

Average salary below 60% of consumer basket valueMONTENEGRO|LABOUR

Secretary-General of the Trade Union Al-liance (SSCG) Zoran Masonicic recentlyannounced that average salary in Mon-tenegro is below 60% of the consumer bas-ket value. The figures are quite alarmingfrom the perspective of international stan-dards, Montenegro Times reported. Ma-sonicic said that from angle of

international standards, an average salarylowers than 60% of the consumer basketis quite alarming, and if the country is evennear to the figure then it means Montene-gro lands in a critical zone.

He made the statement while com-menting that the value of consumer basketis nearly two times higher than average

salary. Ana Selic of the Center for Moni-toring (CDT) suggested that salaries ofthe Montenegrin MPs should be muchlower and adjusted to the living standard ofthe citizens. He called upon the govern-ment to reconsider their salaries. Averagesalary of Montenegrin MP is €1,200. Ac-cording to Monstats data, average.

Croatia, BiH to jointly combat corruptionCROATIA|CORRUPTION

Bosnian Minister of Trade and Eco-nomic Relations Mirko Sarovic re-cently paid a visit to Zagreb to meetCroatian Environment ProtectionMinister Mihael Zmajlovic. In courseof talks, the sides discussed environ-ment protection measures for Slavon-ski Brod and Bosanski Brod and waysto enhance co-operation in resolvingthe problem of pollution in the area,Javno reported.

Both ministers informed that govern-ment bodies at the higher level is work-ing out an agreement of understandingwhich will be signed soon. As a result,the issues are now elevated to a higherlevel which would accelerate and facili-tate a solution to the problem of pollu-tion in the two cities on the banks of theSava river.

Minister Zmajlovic was impressedwith the co-operation between the two

relevant ministries and noted that theissue was seriously taken. He stressedthat Croatia’s neighbours are ready tooffer full support in reaching a joint so-lution to the problem.

The ministers plan to organise ameeting with government representa-tives from Bosnia, Croatia, the BosnianSerb entity and management at the re-finery in Bosanski Brod. The topic willbe modernisation of the refinery.

EU Commissioner for Enlargement and European Neighbourhood Policy Stefan Fule said the European integration of Bosnia and Herzegov-

ina is in the first place to the benefit of the citizens.

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27NEW EUROPE2 - 8 December , 2012PARTNERS

ICELAND | ENERGY

Wind turbines go up courtesyof power company Landsvirkjun, the national power company, will put up twoturbines from the German company Enercon for experi-mental purposes by the hydropower plant Búrfellsvirkjun inSouth Iceland in the coming weeks.CEO of LandsvirkjunHörður Arnarson told ruv.is that so far, harnessing windpower has not proven cost efficient but that may be about tochange. The wind turbines will be 55-meters high, and incombination with the 22-meter long spades, they will be ofa similar height to Hallgrímskirkja church in Reykjavík.Each windmill costs approximately EUR 1 million (ISK163 million, $1.3 million) and has the capacity to produce900 KW of energy at a wind speed of 15 meters per secondor more. They are said to be able to withstand wind speed ofup to 70 meters per second. “It’s too expensive according tothe current electricity prices but we hope that after a fewyears developments will ensure that the prices and cost willaccommodate each other,” stated Hörður.

SWITZERLAND | HURRICANE SANDY

Insurance companies face stiff claims Swiss reinsurance group Swiss Re estimated that it will haveto pay around $ 900 million in claims stemming from dam-age done by Hurricane Sandy to the east coast of the UnitedStates, The Local reported on 26 November. Swiss Re saidlast Monday that total insured losses from the storm wereestimated at between € 20 billion and 25 billion. The group,which provides insurance for insurance companies, warnedthat its own exposure of $ 900 million "is subject to a higherthan usual degree of uncertainty and may need to be subse-quently adjusted." Sandy slammed into a densely populatedpart of the US, resulting in "prolonged power outages, dis-ruption to public transport and damage to other infrastruc-ture that have made recovery efforts very difficult," astatement noted. "It also complicates the loss assessmentprocess," Swiss Re said. Chief executive officer Michel Lieswas quoted as saying that "Swiss Re will support our clientsand partners in tackling this challenging situation, as we havedone in so many instances in the past." The so-called superstorm killed more than 110 people in the US and Canada.

NORWAY | POLITICS

Taking another look at extremismThe Socialists and Democrats in the European Parliamentare organising a conference to discuss how Europecan defeatrising extremism by increasing openness in its societies. Whathappened in Norway after the recent Oslo and Utøya attacksis an inspiring example as the tragedy has not stopped Nor-way from being an open and inclusive society. Led by its so-cial-democratic prime minister, Jens Stoltenberg, Norwayvowed to pursue 'more openness and more democracy', anapproach that Europe should also follow. Another focal pointis the influence that these attacks seem to have on extremistmovements in Europe. The conference will try to identifythe networks through which violent extremism is spread andconsider the threat it represents. The discussion will includecontributions from young people who survived the Utøyaand Oslo attacks, the chairman of the 22 July National Sup-port Group (the father of one of the victims) and AndersBreivik's defence lawyer. Hannes Swoboda, the president ofthe S&D Group, will open the debate. Other panellists in-clude S&D vice-president Sylvie Guillaume,vice-presidentof the Norwegian Parliament Marit Nybakk, MEP AnnaHedh, journalist and author Øyvind Strommen, journalistand author Jean Paul Marthoz, MEP and vice-president ofthe European Parliament Miguel Angel Martínez Martínez,academic Matthew Goodwin, researcher Jean Yves Camusand anthropologist Erika Fatland.

Swiss banking giant UBS was hittwice over last week for allowing arogue trader to commit massivefraud, with British regulators impos-ing a nearly $ 50 million fine andSwitzerland banning its investmentbank from staging takeovers, TheLocal reported on 26 November.

In yet another black mark forSwiss banking, regulators in Britainand Switzerland moved fast to pun-ish UBS for failing to stop roguetrader Kweku Adoboli, who was sen-tenced previous week to seven yearsbehind bars in Britain for gamblingaway $ 2.3 billion.

Britain's Financial Services Au-thority (FSA) watchdog said it hadfined the Swiss bank £ 29.7 million($ 47.6 million) for "systems andcontrols failings (which) revealed se-rious weaknesses in the firm's proce-dures, management systems andinternal controls."

The Swiss Financial Market Su-pervisory Authority, or FINMA,meanwhile announced several sanc-tions against the bank, includingstopping its investment banking armfrom making any new acquisitions.The Swiss regulator also orderedUBS to seek prior approval fromFINMA for new business initiativesin its investment bank, and placedgradually declining upper limits onthe investment bank's risk-weightedassets.

On 20 November, a jury in Lon-don found the 32-year-old Ghana-ian-born Adoboli guilty of twocounts of fraud, though it clearedhim of four charges of false account-ing.

During the two-month trial,Adoboli admitted losing the enor-mous sums but denied any wrongdo-ing. He claimed that senior UBSmanagers were fully aware of his ac-tivities and encouraged him to take

risks and raise profits.However, prosecutors said that in a

bid to boost his bonuses and chancesof promotion, Adoboli exceeded histrading limits, failed to hedge tradesand faked records to cover his tracksbetween 2008 and 2011.

The tactics initially paid off --prosecutors said he earned $ 90 mil-lion for UBS and its clients by May2011 and the bank rewarded himwith huge bonus increases, risingfrom £ 15,000 in 2008 to £ 250,000in 2010.

But as the financial crisis tookhold, Adoboli's deals went bad.

UBS only became aware in Sep-tember 2011 that unauthorisedtrades had taken place on its Ex-change Traded Funds Desk in itsGlobal Synthetic Equities (GSE)division in London — far too lateaccording to FINMA and FSA,which together probed UBS's fail-ings and found significant deficien-

cies in the bank's supervision ofAdoboli's trades.

FINMA, meanwhile, blasted UBSfor failing "to properly investigatethe many warnings triggered bytransactions from the ETF desk,(like) the unusually large profits gen-erated" there in early 2011.

"The fraudulent transactions exe-cuted by the rogue trader would havebeen detected sooner if these defi-ciencies had not existed," it said.

UBS, which qualified for a 30%discount in the British fine afteragreeing to settle early, said on Mon-day that it accepted the findings ofboth the British and Swiss regulatorsand stressed it was "pleased that thischapter has been concluded." Latelast month, UBS announced 10,000job-cuts as part of a massive restruc-turing of its ailing investment bank,which also burdened it with cata-strophic losses during the 2008 "sub-prime" crisis.

Double hit for UBS SWITZERLAND|BANKING

Former UBS banker Kweku Adoboli, accused of losing €1.78 billion through fraudulent

deals at the bank's London offices, arriving at Southwark Crown Court in London as the

jury continues to deliberate on a verdict. Adoboli, 32, who lost £1.4 billion of Swiss bank

UBS's money, was found guilty of one count of fraud at Southwark Crown Court, in

London. Swiss regulators moved fast on 26 November to punish Swiss bank UBS for

failing to stop a rogue trader from committing the biggest ever fraud in Britain.

Telemark's new data center hubNORWAY|ENERGY

A new data centre company has beenestablished in Norway to capitalize onhydropower produced in Norway’sRjukan Valley by building out morethan 250,000 sq m of data centrespace, it was reported on 27 Novem-ber.

Nydro AS is the result of a mergerof local data centre and property de-velopment company Rjukan Technol-ogy Centre and subsidiary of aregional power provider Tinn Energicalled Rjukan Mountain Hall AS setup to also focus on data centres.

The new company said its brandingis in its name – a combination of “new”and “hydro”.

Already the company has received apositive testimonial from Facebook’s

Data Centre Site Selection ManagerRachel Petersen, who participated in atour of the Valley.

“The most notable features includea robust, redundant electrical grid, in-expensive and green hydro power en-ergy and an ideal climate for datacentre cooling,” Petersen said.

Nydro SA hopes to turn the region,once the home of an energy-intensiveindustry that produced chemicals andfertilizers harnessing local hydropower,into the new home for green data cen-tres in the country, according toRjukan Technology Center ChairmanGregory R Malin.

“Using the same resources that builtthis valley, we once again have an op-portunity to become home to an en-

ergy-intensive industry of the future:data management,” Malin said.

Nydro SA plans to build out what itrefers to as “Mountain Halls” as wellas data centres across the region thatwill have access to locally producedgreen energy.

These facilities will also have accessto a power grid that the companyclaims has a 10-year, 10% uptimerecord and will be set in a climate thatis ideal for free cooling.

Norsk Hydro built the world’slargest power plant and a hydrogenplant in the region back in 1934 but itsfamous Rjukanfossen water fall – usedfor hydropower production - is alsoone of the country’s famous land-marks.

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GEORGIA|NATO

Commission meets in BrusselsThe recent NATO-Georgia Commission meeting in Brus-sels was attended by Georgian Defence Minister IrakliAlasania and State Minister for European and Euro-At-lantic Integration Alexi Petriashvili. NATO Secretary Gen-eral Anders Fogh Rasmussen chaired the event, CivilGeorgia reported. The NATO-Georgia Commission meet-ing took place after Georgian Prime Minister Bidzina Ivan-ishvili visited Brussels where he met Rasmussen and otherofficials. According to a press release issued by NATO, thiswas the first NATO-Georgia Commission since the Octo-ber parliamentary elections. Rasmussen said that the elec-tions in Georgia were free, fair and in conformity todemocratic standards. “Georgia had passed an importanttest, and next year's presidential elections will constitute an-other important test,” he said. He also recalled that he hadthe opportunity to meet President Mikheil Saakashvili andIvanishvili. In course of talks, he had discussed with Geor-gian authorities the importance of making co-habitationwork, in full respect for the constitution and the rule of law.

GEORGIA|GOVERNMENT

PM summarises workGeorgian Prime Minister Bidzina Ivanishvili summarisedhis last month’s work at a recent cabinet meeting. Address-ing 150 Georgian and foreign media, the premier said eco-nomic development, agriculture and education continuesto be the priorities of the cabinet, The Messenger reported."A strong economy is the key to many problems, includingrestoring sovereignty over the breakaway republics of Abk-hazia and South Ossetia and the return of Georgian im-migrants who have moved to different parts of the world insearch for a job to provide their families,” said Ivanishvili. Hestressed that the government plans to turn Georgia into anattractive and interesting country for all. He initiated theformation of an investment foundation and a "creativegroup". It was reported that the foundation will become abusiness partner to private investors, Georgian or foreign. Inaddition, the foundation will provide some part of the totalinvestment. Rich and affluent Georgians and foreign in-vestors are allowed to participate in the decision-makingprocess and also monitor the distribution of funds, addedIvanishvili. The “creative group" will be an independentstructure from the investment foundation, and will work injoint collaboration. According to Ivanishvili the "creativegroup" will work on determining investment priorities.

GEORGIA|DIPLOMACY

UK minister visits GeorgiaUK State Minister for European Affairs David Lidingtonrecently paid a visit to Tbilisi. Lidington met with Presi-dent Mikheil Saakashvili, Prime Minister Bidzina Ivan-ishvili, Foreign Minister Maya Panjikidze, NationalSecurity Council Secretary Giga Bokeria, other govern-ment officials, and civil society, Civil Gergia learnt fromBritish Embassy in Georgia. The British minister also vis-ited mission of European observers in Tbilisi and also metwith members of the mission.

AZERBAIJAN|BANKING

CB to help agricultural bankCentral Bank of Azerbaijan recently announced plans tosupport making of a specialised agricultural bank. CentralBank of Azerbaijan General Director Rashad Orujev saidmaking of the rural bank decision is not in CBA’s compe-tence, news agencies reported. He said that bank withinmandate, will provide all possible support in the establish-ment, organisation and effective operation of a new agri-cultural bank in the country.

28NEW EUROPE2 - 8 December , 2012

EASTERN PARTNERSHIP

Europe moved closer to energy securityand diversifying its gas sources with thepresident of Azerbaijan's state energycompany SOCAR saying his company isready to move ahead with the Trans-Anatolian Pipeline (TANAP). Azeri-Turkish joint venture TANAP isexpected to begin by carrying gas fromthe Azeri sector of the Caspian Sea witha possible later expansion to carry gasfrom Turkmenistan and other Caspianstates. Azerbaijan's Milli Majlis ratifiedan intergovernmental agreement betweenthe two countries on the pipeline recently.

On 23 November, SOCAR PresidentRovnag Abdullayev, in a meeting withBritish government officials in London,called for deepening ties between thecountries as TANAP -- expected to becompleted in 2018 -- emerges as a keyroute for future European gas supplies.TANAP will initially supply 6bn cubicmetres per year of gas from Azerbaijan’sShah Deniz field to Turkey, with further10bn cubic metres per year crossingTurkey on its way to Europe.

Abdullayev noted that Azerbaijan isone of the main oil- and gas-producingcountries in the world economy, whichwill be vital in the future to guarantee Eu-rope's energy security. SOCAR owns an80% share in TANAP along with Turk-

ish-state owned minority partners.TANAP is designed to carry natural

gas from the BP-controlled Shah Denizfield in the Azeri waters of the CaspianSea through Turkish territory to Euro-pean consumers.

The project would cross through Turk-ish territory to the European border be-fore it connects to either the NabuccoWest pipeline or the Trans-AdriaticPipeline (TAP) -- part of an effort by theEuropean Union to reduce dependenceon Russian gas supplies.

Azerbaijan’s Shah Deniz consortium isexpected to choose to supply 10bn cubicmeters per year from the project’s phase 2to either Nabucco West or TAP by mid-2013.

TAP will transport natural gas from thegiant Shah Deniz II development inAzerbaijan, taking it via Greece and Al-bania, and across the Adriatic Sea tosouthern Italy, and further into WesternEurope. The project is designed to ex-pand transportation capacity from 10bnto 20bn cubic metres per year, dependingon supply and demand.

Nabucco West would bring Caspiangas from the Bulgarian-Turkish border toBaumgarten and beyond. Nabucco Westis a modified concept of the Nabuccoproject. The concept foresees the con-

struction of a 1300 kilometre pipelinethat will run from the Bulgarian/Turkishborder to the Central European GasHub. The pipeline is designed to trans-port gas initially from Azerbaijan and isfully scalable to meet future gas transportdemand from the Caspian Region andMiddle-East to the European markets.The Shah Deniz partners have an optionto acquire as much as 50% of TAP.

SOCAR and its partners expect tohave TANAP built before Shah Denizstarts production by 2017. First exportsfrom the second phase of the Shah Denizfield are expected by 2018.

SOCAR in September offered to sella 29% stake in TANAP to potential part-ners like BP, Norway’s Statoil andFrance’s Total.

Azerbaijan has one of the fastest-grow-ing economies in the world and is seekingto boost ties with the EU. Brussels ispushing for the creation of the so-calledSouthern Gas Corridor to carry gas fromthe ample reserves of the Caspian andnorth Middle East through Turkey tomarkets in Europe.

As well as further enhancing Europeanenergy security, TANAP will also supplyTurkey, whose gas demand is expected toexceed its current 51.8bn cubic metres peryear in the next two years.

EU bets on SOCAR to reduce dependence on Russian gas

AZERBAIJAN|ENERGY

Azerbaijan’s Sangachal Terminal consisting of a natural gas processing plant and oil production plant, located on the coast of the Caspian Sea.

Azerbaijani investors eye Russian marketAZERBAIJAN|TRADE

Russian trade representative in Azerbai-jan Yuriy Shedrin recently announcedthat Azerbaijani investors are showingincreased interest in Russian market, Ac-cording to him, Azerbaijani investorshave already constructed tea factory, can-ning plant in Russia, news agencies re-ported. In the near future, oneAzerbaijani company will construct acomplex of construction materials pro-duction comprising of five plants. The

cost of the project is €30mn, he said. Theaforesaid company will also be involvedin development of gypsum deposits inGarachay-Charkas.Shedrin also discussed the activity ofRussian companies in Azerbaijan. Cur-rently, more than 500 enterprises andorganisations operate in Azerbaijanunder Russian capital. In the first ninemonths of this year, the Russian-Azer-baijani trade reached $2.3bn. He said

the trade has risen by 13.1% over thesame period of 2011. The trade repre-sentative noted that a record level oftrade was reached between the coun-tries in 2011-$3bn.He said that Russia is leading among thecountries exporting to Azerbaijan andwithout crude oil it is the main consumerof Azerbaijani production. Shedrin notedthat the structure of the bilateral tradeand economic ties continues to expand.

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29NEW EUROPE2 - 8 December , 2012EASTERN PARTNERSHIP

MOLDOVA|TRADE

Minsk, Chisinau reach dealsMinsk was due to host the 14th meeting of the intergov-ernmental Belarusian-Moldovan commission for trade andeconomic co-operation on 29-30 November. The partieswere expected to sign a number of bilateral documents de-signed to give additional impetus to the development of co-operation in various areas, the Economy Ministry ofMoldova said. Deals include a project to upgrade the cityelectric transport. Last year the trade between Belarus andMoldova made up almost a third of a billion US dollars. InJanuary-September 2012, the trade amounted to$250.9mn, an increase of 10.8% as against the same period2011. In January-September 2012, the Belarusian exportto Moldova hit the mark of $192.7mn, up 9.9% from thesame period a year earlier. Moldova exports to Belarus wentup 13.9% to $58.2mn.

BELARUS|DIPLOMACY

Minsk eyes French tradeThe Belarusian Embassy in France will focus on expand-ing economic co-operation between the two states, PavelLatushko who was recently appointed Ambassador of Be-larus to France said at the international commemorationmeeting timed to the 200th anniversary of the War of 1812that was held on Brilevskoye Pole on 24 November, BelTAreported. Latushko noted that the embassy is set to pro-mote the all-round co-operation with France, but “first ofall we will work to build up economic contacts”. In his view,neither Belarus nor France can be happy with the existingbilateral trade of $500mn.

BELARUS|HUMAN RIGHTS

Authorities evict groupOn 26 November, Vyasna, which has provided legal assis-tance to thousands of Belarusians who were fined, arrestedor imprisoned for criticising President AlexanderLukashenko's authoritarian policies, said officials haveevicted it from its office in Minsk, following last years' im-prisonment of its leader Ales Belyatsky. He was sentencedto 4½ years in jail last November on charges of tax evasionafter a trial the West condemned as politically motivated.He has headed Vyasna, the ex-Soviet nation's most promi-nent rights group, since 1996. Spokeswoman TatyanaRevyako said authorities confiscated a Minsk apartmentthat belonged to Belyatsky and forcibly removed Vyasna'soffice equipment from it.

BELARUS|AGRICULTURE

Duty on potash fertilizersOn 22 November Belarus has introduced an export dutyon potash fertilizers from 1 January to 31 July , BelTA re-ported. The export duty will be levied on companies hav-ing an exclusive right to export mineral or chemical potashfertilizers outside the Participating states of the EurasianEconomic Community (except for countries with whichBelarus signed international free trade agreements).

BELARUS|ENERGY

EBRD funds efficiencyThe European Bank for Reconstruction and Development(EBRD) launched a facility to promote sustainable energyfinancing in Belarus. The facility will help Belarus to re-duce its energy consumption and provide environmentalbenefits by reducing carbon emissions and pollution. Thefirst loan under the newly created $50mn EBRD pro-gramme is a five-year loan of $4mn to Minsk Transit Bank(MTBank).

On 26 November, Ukrainian Energyand Coal Minister Yuriy Boiko told re-porters that Kiev has not yet officially re-quested up to 18bn cubic metres of gasin 2013 from Russian gas monopolyGazprom. His was referring to a state-ment by Ukraine’s President ViktorYanukovych on 23 November thatUkraine has to reduce purchases ofRussian natural gas under price pressureand plans to buy 18bn cubic metres ofgas from Russia in 2013. "We haven't yetaired this figure [up to 18bn cubic me-tres] before our colleagues. As soon aswe submit our proposal officially we'llget a response," Boiko said.

Yanukovych said the stronger theprice pressure on Ukraine, the more Kievwill be interested in diversifying gas sup-ply sources, he said. "If Russia's pricepolicy changes for the better for us, wemight gradually restore the volume ofgas purchase. Otherwise we will con-tinue reducing the amount of purchaseand looking for more beneficial alterna-tive gas supply sources," he said.

Ukraine imported 40bn cubic metresof Russian gas in 2011, and has recentlylowered its forecast of gas imports to26bn cubic metres in 2012, down from27bn cubic metres earlier planned.

However, Gazprom's claims againstUkraine's Naftogaz could reach at least$2.7bn if the latter imports only 27bncubic metres of gas versus the con-tracted 33bn cubic metres, Ukrainiannewspaper Kiyv Post reported on 24November citing preliminary calcula-tions by experts.

Ukraine has for more than two yearsbeen unsuccessfully trying to persuadeRussia to lower natural gas prices to

$250 per 1,000 cubic metres from about$432/1,000 cubic metres currently.

Earlier in November, Ukraine’s PrimeMinister Mykola Azarov held gas pricetalks in Moscow with his Russian coun-terpart Dmitry Medvedev at which helater said little progress had been made.

In response, Ukraine has decided tosharply cut gas imports from Russia. Atthe same time, Ukraine has been work-ing to tap other sources of energy. Ear-lier in November, Ukraine's state-ownednatural gas company Naftogaz secured adeal with Germany's RWE to get gas.The gas will be delivered to Ukrainethrough Poland, by reversing one of thefew lines that connect the two countries'transmission systems.

Moreover, on 26 November Ukrainelaunched the construction of a lique-fied natural gas (LNG) terminal closeto the town of Yuzhne near to Ukr-

transnafta's oil terminal and Yuzhnyport. Ukrainian Prime MinisterMykola Azarov said the constructionof the LNG terminal is a real step insecuring Ukraine's energy independ-ence. "I hail a really historic momenttoday, as we've taken the first really bigstep in securing Ukraine's energy in-dependence," he told reporters in Kievon 26 November, after his participa-tion in a video conference on the startof the realisation of the LNG termi-nal national project. The total cost ofthe project is 1.151bn hryvnias. Theconstruction of the terminal is to befinished by 2015.

Looking for more gas sources,Yanukovych on 25 November left for avisit to the Middle East, including to theUnited Arab Emirates and Qatar. Qataris expected within three years to becomea major supplier of LNG to Ukraine.

Ukraine wants less gas fromGazprom, talks at impasse

UKRAINE|ENERGY

Headquarters of Russian gas giant Gazprom in Moscow, Russia.

Belarus, Holland discuss business tiesBELARUS|DIPLOMACY

On 26 November, representatives of Be-larusian and Dutch companies, banks,chambers of commerce and industry,state institutions, municipal authorities,and educational establishments havetaken part in a Belarus-Netherlands busi-ness forum in Hague, BelTA quoted thepress service of the Belarusian ForeignMinistry as saying.

Representatives of the business circlesof Belarus and Netherlands agreed toraise Belarusian export to Netherlandsand to step up investment co-operation.The decision to arrange a visit of Dutchbusiness circles to Belarus in 2013 wasmade. The sides will also consider creat-ing a Belarusian-Dutch business council.

Ambassador of Belarus to NetherlandsYelena Gritsenko informed about dy-namics of Belarus-Netherlands trade,economic, and investment co-operationin the last ten years. The Belarusian

diplomat informed forum participantsabout the country’s industrial, agricul-tural, technological, and transit potential.

Representatives of Belarus informedabout advantages of doing business in thecountry in conditions of the CustomsUnion of Belarus, Kazakhstan, and Rus-sia, about the investment climate of Be-larus, the terms offered by Belarusian freeeconomic zones, the Chinese-BelarusianIndustrial Park. As part of the businessforum, representatives discussed severalsectors, including agriculture, transportand information technologies. A businessmatchmaking session was held, duringwhich Belarusian and Dutch participantsreached an agreement on increasing Be-larusian export to Netherlands and step-ping up investment co-operation.

The Belarusian side was representedby First Deputy Agriculture and FoodMinister Leonid Marinich, Chief Aca-

demic Secretary of the National Acad-emy of Sciences of Belarus Sergei Kilin,Head of the Administration of the FreeEconomic Zone Grodnoinvest SergeiTkachenko, Director of the NationalAgency of Investments and Privatisa-tion Dmitry Klevzhits, Deputy Directorof the High-Tech Park Alexander Mar-tinkevich, representatives of the scien-tific and technological associationInfopark, the State Customs Commit-tee, the Belarusian State University ofInformatics and Radioelectronics, theBelarusian association of internationalforwarding agents and logistics, theR&D center for LED and optoelec-tronic technologies of the NationalAcademy of Sciences of Belarus, and adelegation of Belarusian business circlesarranged by the Minsk office of the Be-larusian Chamber of Commerce andIndustry.

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KAZAKHSTAN | AVIATION

Increase in internal air traffic The Kazakh Ministry of Transport and Communicationsrecently announced that the number of regular flights inKazakhstan increased by 3% to 87.3% for the past 10months, Gazeta.kz reported. The ministry said that late ar-rival of aircraft, weather conditions at airports and techni-cal glitches were main reasons of delays. Deputy Chairmanof the Civil Aviation Committee Serik Muhtybaev said theMinistry of Transport and Communications daily conductsmonitoring to improve the situation with flight schedules.It was also reported that the Kazakh Republic's bill on'Amendments and additions to some legislative acts ontransport' includes measures to strengthen the liability ofair carriers during delays. The Ministry of Transport andCommunications, Astana International Airport and AirAstana recently organized a round table in Astana to dis-cuss delays, passenger rights and obligations of airlines inthese situations. Special attention was paid to the rights ofpassengers in case of flight delays. So, the airport must pro-vide passengers with children under seven (in case of flightdelays) with mother and child rooms. The passenger alsohas the right to make two telephone calls, including inter-national lines for no more than five minutes or send two e-mails while waiting for a flight for more than two hours.

UZBEKISTAN | COMMERCE

Helsinki talks see way for business Regular political consultations between Uzbekistan and Fin-land were recently held in Helsinki. At the meeting, theUzbek and Finnish officials discussed State and prospectsof development of dialogue between the two countries,Uzbekreport.com learnt from Uzbek Foreign Ministry. Theparties noted they have great potential for further develop-ment of multi-aspect cooperation. Inter-parliamentary ties,trade and economic cooperation and investment interactionwere outlined as promising areas of cooperation between thetwo countries. Uzbek officials expressed interest of the coun-tries in joint projects with Finnish business for organisingproduction of modern telecommunications systems such aschips, accessories for mobile communication systems. Uzbekentrepreneurs are also willing to cooperate in the wood-working industry, where Finland takes a leading positiontraditionally. In this sector, Uzbekistan noted there are goodopportunities for cooperation thanks to the establishmentof Navoi Free Industrial Economic Zone and Angren spe-cial industrial zone, where investors are provided with taxand customs privileges. The sides also discussed issues re-lated to cooperation in culture, science, education and health.Other international and regional issues were also discussed.

TAJIKISTAN | SECURITY

Protests won't need Russian back up The Secretary-General of the Collective Security TreatyOrganization (CSTO) Nikolai Bordyuzha recently said hewill not allow usage of servicemen of the Russian militarybased deployed in Tajikistan for suppressing protests inKhorog, the capital of the Gorno Badakhshan Au-tonomous Region. He explained that Russian military con-tingent deployed in Tajikistan is intended to provideassistance to Tajikistan with repulsing external threats, Asia-Plus reported. He denied that there was any such agree-ment signed between the countries which call forinvolvement of Russian troops in tackling domestic politi-cal problems in Tajikistan. Bordyuzha expressed hope thatmeasures undertaken by the President of Tajikistan for sta-bilization of the situation in Khorog, will prevent any worsescenario. The clashes began in Khorog on July 24 whengovernment forces launched a military operation againstwhat it called “militants” following the murder of the re-gional security chief Abdullo Nazarov on July 21.

30NEW EUROPE2 - 8 December , 2012

EURASIA

BankIT'12 launches in Minsk KAZAKHSTAN|TECHNOLOGY

BankIT'12, the 9th internationalforum on bank information technolo-gies was recently held in Misnk. MariaPritchina, a specialist at the InfoparkAssociation said that the event gar-nered more than 800 participantswhich comprised of senior managersof banks and IT companies, managersof IT-units of financial institutions,professionals in IT, and representativesof the government agencies from Rus-sia, Lithuania, Kazakhstan and othercountries, Gazeta.kz reported. Theevent was organized by the NationalBank of Belarus, the Infopark Sci-Tech Association and the Associationof Belarusian banks.

Pritchina said that the purpose ofthe event is to increase the efficiencyof financial and credit areas of thecountry using advanced informationtechnologies. According to her, atpresent banks in the country are lead-ing in informatisation and interestedin getting the latest informationabout modern solutions in the field ofIT for banks, and exchanging experi-ences with colleagues and discussingpressing issues. Pritchina noted that

this year banks expressed interest inBI and CRM systems as these aretools which can enhance control ingeneral, provide the best opportuni-ties for assessing the efficiency ofbanking products, conducting riskmanagement and business strategy. Atthe event, special emphasis was paid

to areas as Internet banking, self-ser-vice machines, mobile banking, mo-bile Internet banking. The head of theNational Bank of Belarus NadezhdaYermakova was present at the open-ing ceremony of the seminar. Thebanks prioritised banking channel de-velopment as tasks.

Saima Telecom Selects DiViNetworksKYRGYSTAN|TELECOMS

DiViNetworks, a global provider of af-fordable data capacity for network opera-tors and service providers was recentlyselected as an additional IP capacityprovider by Saima Telecom, a leadingtelecommunication company in Kyrgyzs-tan, Irinnews.org reported.

Eli Lifshits, Director of Sales at Di-ViNetworks said that the company ispleased to have Saima join its DiViCloudnetwork, and be the first ISP in Kyrgyzs-

tan to enjoy affordable virtual capacity. Headded, “Wholesale capacity prices in CISinhibit the proliferation of broadband. Wewill continue to focus on this territory, andfuel Internet connectivity with affordablebandwidth.” The DiViCloud service willhelp Saima to satisfy the growing demandfor bandwidth in Kyrgyzstan.

"The price pressure combined with thegrowing demand for bandwidth requiresus to find non-traditional ways to gain af-

fordable capacity," says Ruslan Burangulov,CEO of Saima Telecom. He noted thatDiViNetworks' IP capacity is an afford-able equivalent to traditional bandwidth,and is apt for the company’s require-ments.Saima's network is served by theDiViCloud PoP in Moscow's InternetExchange; one of DiViCloud's thirteenPoPs. The virtual capacity is additive to thephysical bandwidth provided to Saima byKazakh Telecom.

WTO delegation visits DushanbeTAJIKISTAN|TRADE

A delegation of the World Trade Organi-sation (WTO), led by Chiedu Osakwe,Director, Accessions Division, WTO Sec-retariat, recently paid a visit to Dushanbe.The delegation was welcomed by Tajik-istan’s Minister of Economic Develop-ment and Trade Sharif Rahimzoda,Asia-Plus learnt from the Ministry ofEconomic Development and Trade(MEDT). A source at a MEDT said thatthe parties discussed issues related to Tajik-istan’s admission to WTO. Tajikistan hasbeen attempting to join the WTO since2001. It was recalled that last discussions ofTajikistan’s; joining WTO was held inGeneva in October. Osakwe also met withTajik Head Emomali Rahmon and dis-cussed issues related to the country’s ad-mission to WTO. It was learnt from thetalks that WTO will approve Tajikistan'sbid to join the WTO this December. TheWTO said that “all members” are expected

to approve the documents that Tajikistan'sworking group submitted for entry. A de-cision of Tajikistan’s admission to WTOwill be held during a meeting of theWTO's General Council on December11-12. Tajikistan is willing to undertake aseries of commitments designed to meetall WTO regulations. Tajikistan will be amember of the organisation in 2013 if itfulfills all the criteria and WTO membersalso approve the entry of the country.

Meantime, series of six one-day work-shops on raising Tajik business awarenessof the WTO has started in Dushanbe.Saidmumin Kamolov, National Pro-gramme Manager International TradeCenter (ITC), said the International TradeCentre gareners the representatives of Tajiktextile and clothing companies, large en-terprises of other sectors, as well as the rep-resentatives of the entities dealing withstandardisation and conformity assessmentin six cities of the country, to improve un-

derstanding and skills of Tajikistan busi-ness private sector on benefits, challengesand business implications of WTO mem-bership of the country. The workshops areheld under ITC project on “Implementa-tion of WTO Provisions and BusinessAwareness of WTO Accession”. The gov-ernment of Switzerland through the StateSecretariat for Economic Affairs (SECO)is offering funds. Edil Kalashev, ITC In-ternational Consultant on TBT, said thatthe aim of the workshop is to boost the un-derstanding of the private sector in theagro-industrial and textile sectors onWTO measures to stimulate free and fairtrade at the international level and to min-imize technical barriers, which can restricttrade. He added that the workshops wouldhelp Tajik private sector to be acquaintedwith knowledge on the WTO rules andways to develop skills for access to foreignmarkets after Tajikistan’s accession toWTO.

A South Korean Exchange Bank dealer works in front of monitors at the Exchange Bank in Seoul,

South Korea, 20 April 2011. Banking technology has come a long way and the event in Kazakhstan

BankIT'12 highlights the innovation in the sector.

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31NEW EUROPE2 - 8 December , 2012RUSSIA

ENERGY|ENERGY

LUKoil mulls Iraqi fieldRussia’s private oil major LUKoil is studying documents onIraq’s West Qurna-1 oil field, which US major ExxonMo-bil may exit, LUKoil CEO Vagit Alekperov said, addingthat the Russian company will make a decision on possibleparticipation in the project by the end of 2012. The oil com-pany holds 75% of the separate phase 2 project at the field.“We are looking at the main issue now, synergy,” Alekperovtold reporters in Moscow. LUKoil has bought oil from Kur-distan, defying Iraq's ban on trade with its independent-minded region. In related news LUKoil’s profit surged inthe third quarter. Net income rose 56% to $3.51bn from$2.24bn a year earlier, the Moscow-based company said.

RUSSIA|ECONOMY

GDP rate slowsRussia's Ministry of Economic Development and Tradesaid growth slowed down to 2.3% in October and thedownshift continues for the firth month on end. The di-rector of the Ministry's department for macroeconomicforecasting, Oleg Zasov, said it is fixing a steady slowdownof the growth rates of Russian economy. Meanwhile, Russ-ian consumer price inflation in November may have slowedto 0.4% to 0.5% as grain prices stabilised and the rublestrengthened, the Economy Ministry said. Consumer pricesrose 0.5% in October after gaining 0.6% in September.In 2012, annual inflation is likely to range between 6.5%and 7%, Central Bank Chairman Sergei Ignatyev said ear-lier in November.

RUSSIA|DIPLOMACY

Syria's armed conflictOn 28 November, Russian Foreign Minister SergeiLavrov said Moscow in no case would intervene in thearmed conflict in Syria. "Certainly, Moscow's involve-ment in the armed conflict is absolutely out of the ques-tion," Lavrov said in a comment published on theministry's website, adding the Russia-Syria military-technical co-operation was conducive to maintaining sta-bility in the Middle East. "It (the co-operation) has neveraimed at supporting any forces on the intra-Syria arena,"he said. Lavrov said Moscow was categorically againstexternal interference, especially the use of force, in Syria'sinternal events. "We do everything to stop the bloodshed,to bring the sides to the negotiating table, where the Syr-ians themselves would decide the future political shapeof their country," Lavrov said.

RUSSIA|CRIME

Mafia whistleblower diesA second post mortem has been ordered on the body of aRussian whistleblower, who died suddenly outside his homein Surrey while helping an investigation into money laun-dering and corruption in Russia, according to media reports.Alexander Perepelichny had turned over evidence to Swissprosecutors looking at a multi-million pound money laun-dering scheme allegedly run by corrupt Russian officials.Perepelichny died in mysterious circumstances outside hismansion in Britain, in a chilling twist to a Russian mafiascandal that has strained Moscow's ties with the West.Perepilichny, 44, sought refuge in Britain three years agoand had been helping a Swiss investigation into the Russ-ian money-laundering scheme by providing evidenceagainst corrupt officials, his colleagues and media reportssaid. He has also provided evidence against those linked tothe 2009 death of anti-corruption lawyer Sergei Magnitsky,a case that caused an international outcry and promptedthe United States to push for a bill cracking down on Russ-ian corruption.

Since early October, Russian PresidentVladimir Putin has cancelled several for-eign trips and his visits to Moscow fromhis suburban residence have become lessfrequent. His rare public appearancesprompted media reports, suggesting thatPutin’s state of health had deteriorated.His press secretary, Dmitry Peskov, hassaid the Kremlin leader is suffering froman old sports trauma, but dismissedmedia speculation that Putin’s state ofhealth is affecting his work schedule.

Putin has carved out a macho imagewith sporting stunts that included pilot-ing a Formula 1 car and a hang-gliderflight with Siberian cranes to guidethem on their winter migration path.Peskov has denied the injury was causedby Putin's hang-glider flight, a stuntridiculed by bloggers at the time, whichalso led to media speculation that hehurt his back.

Putin is also frequently shown onRussian television in his favourite sportjudo. It’s the Russian leader’s involve-ment in the martial arts sport thatcaused his latest injury, Belarus PresidentAlexander Lukashenko told Reuters inan interview on 27 November. "I knowhe has this problem. He loves judo. Helifted a guy, threw him, and twisted hisspine," Lukashenko said, adding that hehad been hoping to play ice hockey withPutin but the Russian President post-poned the match. "He tells me: 'We arenot prepared yet to take on your team.'He has damaged his spine somewhere.In a judo match. He was on the mat andhurt his spine," Lukashenko said.

Even though Russia has trade and en-

ergy ties with neighbouring Belarus andis part of the Common EconomicSpace, Moscow and Minsk have clashedover a number of issues and the twoleaders are not exactly close friends.

Meanwhile, Putin is back to his busyitinerary next week, putting an end tospeculation that his health is deterio-rating. The Russian President is visit-ing Turkey and Turkmenistan nextweek. Putin is also expected to meetTurkish Prime Minister Recep TayyipErdogan and President Abdullah Gülduring a working visit in Istanbul on 3December. Putin is scheduled to takepart in the third gathering of theHigh-Level Russian-Turkish Cooper-ation Council.

Energy co-operation between Rus-sia and Turkey is increasing. On 26

November, Turkey's energy marketregulator rubber stamped the licencesof four local private companies tolaunch Russian gas imports throughthe Western Line pipeline. Akfel, BatiHatti, Bosphorus and Kibar agreedcontracts with Russian exporterGazprom in September to import 6bncubic metres of gas per year. They haveall now been handed 30 year licencesfor the operation, except for Bati Hatti,whose approval lasts only 23 years.Turkey is also considering increasingits oil imports from Russia to avoid theimpact of Western sanctions againstthe Iranian oil sector.

On 5 December, Putin will attendthe summit of the Commonwealthof Independent States (CIS) in Ashga-bat, The Moscow Times reported.

Lukashenko: Putin has spine injury after judo match

RUSSIA|POLITICS

Vladimir Putin after a judo training session at Moskovsky sports and recreation center in

St. Petersburg, Russia, 22 December 2010.

Medvedev may run again for presidentRUSSIA|POLITICS

Russian Prime Minister DmitryMedvedev said he has not ruled out areturn to the Kremlin. “If I have suffi-cient strength and health, if our peopletrust me in the future with such a po-sition, then of course I do not rulesuch a turn of events,” Medvedev toldFrench reporters in Moscow whenasked if he had the ambition for an-other Kremlin term.

Medvedev served as president after

Putin stepped aside following themaximum two consecutive terms al-lowed by the constitution after his2000-2008 term. Putin stayed on as apowerful prime minister and returnedto the Kremlin in May 2012.Medvedev in turn was appointedprime minister in May. "This (return-ing to the presidency) depends on awhole range of factors." "Never saynever, especially as I swam in that river

once and this is a river that you canswim in twice," Medvedev said.

Russia will only go to the polls tovote for a president again in March2018. Medvedev acknowledged thatRussian society changed, “it had be-come more active and the authoritiesneeded to take account of this andreact". Medvedev said the governmenthad done this by introducing electoralreform.

Russia’s MegaFon raises $1.7bn in Moscow, London IPORUSSIA|TELECOMS

On 28 November, shares in Russia’ssecond-largest mobile phone operatorMegaFon made a weak debut in a$1.7bn initial public offering inMoscow and London.

Moscow-based MegaFon, which islargely focused on the Russian market,

is controlled by a holding company ofRussian tycoon Alisher Usmanovwhich owns 55.8%, while Sweden’sTeliaSonera has 29%. Usmanov isRussia’s richest man, estimated to beworth $18bn. Despite the IPO’s poorperformance, chief executive Ivan

Tavrin hailed it as “a clear endorse-ment of MegaFon’s investment case”which “reflects investor appetite forthe Russian mobile data growth story.”MegaFon's muted trading follows ahistory of poor performance by Russ-ian IPOs.

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After the rather rushed decision of Com-mission President Jose Barroso to dismissHealth Commissioner John Dalli, thePresident of the supervisory Committeeof OLAF Christiaan Timmermans hasresigned, without relating the resignationto the Dalli case and Joan Denolf was ap-pointed as new President.

To this effect, the new President, onNovember 26, 2012 wrote a letter to Pres-idents Martin Shultz (Parliament), Her-man Van Rompuy (Council) and JoseBarroso (Commission) asking, "TheCommittee must have immediate and un-restricted access to any document held byOLAF" and added, "to achieve this endthe (OLAF Supervisory) Committeeneeds clearly defined powers and a strongSupervisory Committee".

OLAF (the Anti-Fraud Office) is theonly EU Regulatory Body authorised toinvestigate EU staff and to transmit thecases to national judicial authorities ifpenal crimes are suspected. In the past, theBelgium police has requested, by its owninitiative, to have access to EU staff files.The EU authorities have granted the ac-cess in several cases and refused in a fewothers, on a case by case basis. A ratherbalanced and wise approach, giving theEU authorities the last word on issues

concerning its internal affairs. With hisletter, the OLAF Supervisory Committeedemands unlimited access to all EUdossiers, asking them to renounce in ad-vance the immunity granted to EU Politi-

cians and EU staff, as provided by theTreaties.

In this context, should be consideredthe role, the functions and the authoritiesof the Supervisory Committee of OLAF

as it is a very important and sensitive in-stitution, not only for the functioning ofthe EU Institutions but also to our juridi-cal civilization.

The first important element is the con-flict of interests. In this present Commit-tee there are at least two out of the fivemembers that seemingly have conflicts ofinterest between their appointment in theSupervisory Committee of OLAF andtheir duties in ordinary life. One is headof the police in a member state and theother is Prosecutor in another memberstate. Although the persons involved areboth beyond any questioning or argumen-tation for their integrity and profession-alism in exerting their duties, not manycitizens in Member States will considerthis proper. Indeed, EU citizens are verysuspicious of any situation coming fromBrussels which is not crystal clear and be-yond any doubt.

The letter of the President of the Su-pervisory Committee of OLAF to thethree European Presidents, is an excellentcase to review the role, the compositionand the functions of this supreme moni-toring organization in the spirit of theTreaties, and the need to preserve the in-dependence of OLAF from the nationalauthorities.

KASSANDRAThe parliament's exhibition centre is holding

a special event, 'The Sakharov Experience' We

can only wonder what horrors lie within...

Page 32 | New Europe

2 - 8 December , 2012

Kassandra@NEurope.eu

Once upon a time in Brussels...

Follow me on twitter @Kassandra_NE

EU politicians immunity at stake

European Parliament President Martin Schulz

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RWB launches anti-censorship siteInternet users will spread banned content to give it visibility

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