21st Year of Publication number 1034 9- 15 June, 2013 € 3.50

The Bulgarian parliamentary elections of 12 May brought to light a number of grave

problems that the newly elected government has to urgently deal with, to avoid total collapse.

There is considerable public an-ger towards the authorities, due to the string of errors committed by the previous GERP government, under the leadership of Boyko Borisov. In response, GERP have brought their considerable propaganda machine into action, to manipulate public opinion and turn the citizens’ anger over the problems caused by Bori-sov, into discontent against the new government.

In politics, perception is also a reality and the outgoing leaders are trying to impose their own illusions, but Bulgaria is a deeply political country and it is highly unlikely that the old leaders can further damage the country.

Brussels is a vital part of the so-cio-political future of Bulgaria and Borisov has had the complete con-fidence of all levels of power, both politicians and administrators, in the institutions.

But no longer: All confidence in him has suddenly vanished.

Borisov’s closest political associ-ate, Tsvetan Tsvetanov, the former interior minister visited Brussels last week, trying to raise political sup-port for himself, GERB and Borisov.

He was met with closed doors. All the political leaders he met, in-cluding Joseph Daul MEP head of the European Peoples Party, Man-

fred Weber MEP and Michael Gahl-er MEP, refused their support.

One important issue where Ts-vetanov was looking for support from his EPP friends was the case recently opened against him by the Bulgarian Prosecutor, involv-ing widespread use of telephone tapping.

It was made perfectly clear to him that he could expect no support or assistance from Brussels whatso-ever, as a matter of principle.

The strength of this response explains Tsvetanov’s next move. On his return to Sofia he gave up

his parliamentary immunity in a desperate attempt to look heroic by facing possible imprisonment, albeit for telephone tapping.

However, in Brussels, the case of the fake ballot papers and other il-legal practices committed by GERP in the last election which deprived the Socialists and other parties of almost half a million votes has been widely discussed. Despite all the ir-regularities are being proven with sufficient evidence, the winners of the election decided to not appeal against the result.

(More on page 3)

In the crossfire

Bulgaria's new coalition Prime Minister Plamen Oresharski (C) speaks on 29 May, 2013 during an official cabinet sworn-in ceremony at the parliament in Sofia. Oresharski proposed a cabinet to help him lift the country out of the problems it is still facing.|AFP PHOTO / NIKOLAY DOYCHINOV

“For the moment I will not give out any statements, the accusations brought against me as a former Secretary of state already being public. It is my opinion that they are unsubstantiated and time will prove the existence or lack thereof of high level political implications in this case, so it is rumored that Deputy Liviu Dragnea is targeted,” Valentin Preda has told New Europe.

The former Secretary of State Preda has been detained in what he says is a set up resulting from a road block on 19 Feb-ruary and his detention.

Prosecutors withheld him under charges of complicity to the direct or indirect use of information that are not destined for public use – with the pur-pose of obtaining for himself or other parties of money or other benefits and the possession outside of work duties of a document that constitutes a state se-cret, if the act is of a nature to endanger national security.

On 8 March the criminal case against him was extended for taking a bribe.

According to the authorities, Secre-tary of State Preda while in office, and

compelting his normal course of work, presumably had an accomplice in the person of police commissioner, Dan Emil Manolachi.

The latter had allegedly removed, right from the national authorities, the secret documents that he had passed over to Preda.

Various sources have circulated that Preda was asked to state that the respec-tive documents were destined for Vice Prime Minister Liviu Dragnea in the hearings conducted.

(More on pages 3,6)

ECONOMICS Page 08

ENVIRONMENT Page 07

GIRP AGM shines spotlight on Sofia

Latvia given green light for euro membership

Russia, OPEC face shale gas challenge

EU-Russia seek pragmatic ties

RUSSIa Page 31

EUROZONE Page 10

HEaLTH Page 04

ENERGY Page 12

Resetting Bulgaria

23

Valentin Preda

02 ANALYSIS NEWEUROPEwww.neurope.eu

9- 15 June, 2013

Australia $3.4, Austria EURO 1.81, Balkans EURO 4, BelgiumEURO 3.50, Holland EURO 2.69, Central Asia USD7.5, Central

Europe USD5, Canada $5, Denmark: DKK 19,95, Eastern EuropeUSD7.5, France EURO 3.04, Germany EURO 3.57, Greece EURO4, Hungary HUF400, Japan Y900, Italy EURO 3.62, Nordic coun-

tries USD7, Pacific Rim USD8.5, Russia USD 4, SwitzerlandSFr4, UK GBP 4.5, USA $2.95, all other countries EURO 6

Infrastructure projects near

The European Commission is preparing anambitious project for a transeuropean trans-port network to facilitate economichomogenisation in the enlarged Union.Without it the enlargement will remain anempty shell and the 10 new countries willstay outside the mainstream west Europeanmarkets. editorial p. 2

Scania seeks EC help over Volvo

Scania AB has approached the EuropeanUnion Commission in a bid to prevent rivaltruck maker Volvo AB from being givenmore time to sell its controlling stake in thecompany. p. 19

Zones plan on hold

Despite initial optimism for the establish-ment of industrial zones in the wider regionof Bulgaria, latest developments haveshown that the idea is doomed to faceopposition. p. 39

Structuralreforms vital

Kazakhstan must maintain structuralreforms and boost social sector spending,the International Monetary Fund said in areport following talks between the govern-ment and the global agency at the end ofMay. p. 44

North Europeangas pipeline on

Russia and Britain have signed a memoran-dum on the North European (North Trans-Gas) gas pipeline project. Igor Yusufov, theRussian energy minister, and StephenTimms, the British minister for energy, e-commerce and postal services, signed thedocument. p. 46

Berlusconi's faux pas causes European uproar

NOTEBOOK

Italian presidency starts with a row The Italian Presidency of the EuropeanUnion started with a row. Commentingon his ideas for the presidency of the EUover the next six months, Italian Euro-pean Affairs Minister Rocco Butiglionesaid he will initially try to relax the provi-sions of the fiscal Stability Pact, which isbecoming, according to him, a straightjacket, specially for the 12 countries ofthe Eurozone.

Within hours the answer came fromanother Italian and a sworn economist,Romano Prodi himself, the president ofthe European Commission.

Without chewing his words Prodi saidthat the fiscal Stability Pact has offered alot to the single European currency,Euro, and there is no question of relax-ing its provisions for restricted fiscaldeficits. At the same time the Commis-sion is pressing France and Germanyhard to reduce their own fiscal deficits.

In this respect the ECOFIN council in itslast meeting ordered France to reducethe state budget deficit to acceptable lev-els before October. This country will bethe first one to pay the fine of half a per-centage of GNP unit for excess fiscaldeficit.

So the Italian intervention on the Stabil-ity Pact comes at a very delicatemoment, when the Commission is tryingto contain two of the most powerful EUcountries - France and Germany. Theapplication of the Stability Pact was verycomplicated, even without the Italian"help," and now it is... hell.

And this is only a premonition of whatwill materialise over the six-month Ital-ian presidency period. Not to say any-thing about the Italian Prime Minister,Sylvio Berlusconi, who presides over theEuropean Council as of last Tuesday.

IItalian Prime Minister Silvio Berlusconi caused anuproar at the European Parliament in Strasbourgby saying German Socialist MEP Martin Schulz,who had criticised him in a speech, would be per-

fect in the role of a Nazi concentration camp overseer. "I know there is in Italy a man producing a film on

the Nazi concentration camps. I would like to suggestyou for the role of kapo," he said referring to a campinmate given a position of authority over others by thecamp authorities.

The remark, which Berlusconi later said was meantto be "a joke," sparked outrage in Strasbourg, where hewas outlining the Italian programme for the EU presi-dency.

Heads of Europe's top political parties asked Euro-pean Parliament President Pat Cox to try and defuse thefierce row. The 626-member parliament is split over theissue with the Socialist Group demanding Berlusconiapologise for the remark and the conservative EuropeanPeople's Party faction, which includes Berlusconi's ForzaItalia, siding with him and demanding an apology fromSchulz.

The incident seriously marred the start of the Italianpresidency of the European Union as leaders through-out the EU lashed out at the Italian government leaderfor breaching parliamentary etiquette. The EuropeanCommission however said its relations with Italy wereunharmed despite what it termed the "serious incident."

Later, shortly after speaking with the Italian premier,German Chancellor Gerhard Schroeder accepted a tele-phonic apology from Berlusconi saying, "He stressed hisregret over using this expression." p. 7-8

www.new-europe.info11th Year, Number 528

THE EUROPEAN WEEKLY

July 6 - 12, 2003

New EuropeEU nodsGM foods The European Parliamentadopted tough new rules onlabelling genetically modi-fied crops and food in theEuropean Union, effectivelyending the bloc's years-oldunofficial moratorium onmarketing GM products.The new EU legislationcomes amid mounting criti-cism from the United States,which has complained to theWorld Trade Organisationabout Europe's repeatedrefusal to accept GM prod-ucts. The new rules willmean an end to the 15-nation bloc's refusal since1998 to approve any newGM crops or foods for salein Europe. But the regula-tion requires producers andbusiness operators to pro-vide details of the so-called"traceability" of GM organ-isms so that consumers cantrack down the use ofbiotech products at allstages in the production andmarketing chain. "Thisshould give consumers grea-ter confidence that the safe-ty of GM products will beindependently assessed bythe European Food SafetyAuthority," said EU Con-sumer Affairs Commission-er David Byrne. p. 6

cyanmageyelloblack

Silvio Berlusconi forced to apologise

Italian Presidency kicks off with Nazi dust

Russian-Iraniannuclear cooperation

angers West

Moscow has said it views as groundless the West's crit-icism of Russian-Iranian nuclear cooperation. Russ-

ian Minister of Atomic Energy Alexander Rumyantsev wasquoted as saying by the press that there is no cooperationbetween Russia and Iran other than that on the peacefulutilisation of nuclear technology. The West, and especiallythe United States, has accused Russia of supplying nuclearmilitary know-how to Iran, and demanded on these groundsthat the construction of the Bushehr nuclear power plant bestopped. Iranian officials said six teams of IAEA inspectorshave visited Iran's nuclear installations and monitored itsnuclear activities over the past three months. Russia is cur-rently constructing power unit one of the Bushehr nuclearpower plant under an intergovernmental contract estimat-ed at over USD 800 million. The contract holder is Atom-stroiexport. For that purpose, Russia will train over 700 Ira-nians to operate the Bushehr nuclear power plant. Theplant will be launched and initially operated by Russianpersonnel who will be replaced by Iranians. p. 29

New Europe bylinesBuro Jo Leinen, MEP

onEuropean Parliament adopts statute for European political parties, p. 3

A. Papandropouloson

US suspends military aid to Bulgaria, p. 4

The Shooting Gallery

“Most battles are won before they are fought,” Sun Tzu. |AFP PHOTO / ANDREW COWIE

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How times change and yet stay the same. The main headline doesn’t really help date the lead story, it would hold for most weeks, but the sub reminds us of this less than glorious moment, when Berlusconi gravely insulted Martin Schulz, then a mere, if not humble, MEP, by comparing him to a Nazi concentra-tion camp guard. If only that would have been enough to end the Italian’s career. The EU was also grappling with the issue of geneti-cally modified food, trying to play friends to both sides. The new rules they trumpeted did nothing to end the controversy, which rumbles on. We had the beginnings of pan European political par-ties, which are as unknown to the public now as then and Russian co-operation with Iran was straining rela-tions, yet another issue that is still unresolved.

ne 10 YeARS

AGO

MMThe European Commission is being picked-on. According to the Interna-tional Monetary Fund (IMF) it hasn’t exactly been doing a bang-up job in salvaging the Greek economy. In a stinging report, the IMF said that the EU’s executive didn’t do enough on structural reforms, and that Greek debt should have been restructured as soon as the crisis erupted. The commission, said the IMF, was wrong in allowing the Athens government to delay structural reforms until 2012.The commission was soon on the defensive, saying that it fundamentally disagreed with the IMF’s assessment; contagion was stemmed, the wider Eurozone was saved. As for the accusations that structural reforms were mishandled, such a notion was “plainly wrong and unfounded,” according to a commission spokesperson.The media, largely depending on nationality, has been taking sides; with claims foul play and deceit. One UK newspaper, with just a hint of hyper-bole, even suggested Commissioner Olli Rehn is guilty of crimes against economics and should fall on his sword.Mario Draghi, president of the European Central Bank, has come to the commission’s defence, however. He didn’t actually read the IMF report, but, was sure it was unfair. He said that criticism was obviously based on hindsight. For his own part, Draghi says that his own institution has noth-ing to apologise for. Subdued growth has been predicted for 2013, a slight lowering of previous expectations. The IMF report is the only time the commission has come under fire of late; French President, Francoise Hollande, isn’t too happy about sug-gestions by Brussels that France should organise its economy according to their recommendations. Such diktats, he said, shall be summarily dis-missed. Instead, along with German Chancellor, Angel Merkel, he will present his own economic plans when leaders gather for a summit later this month. Money has already been pledged to combat youth unemploy-ment. Merkel has said that Brussels should have less influence on eco-nomic decision making from now on. Recent news from France hasn’t exactly been glowing, however; rising unemployment and a shrinking economy don’t point to sound economic planning. Debt levels are still not where they are supposed to be. Amid all the gloom, Latvia has been given some good news insofar as it has formally been given the green light to become the 18th member of the Eurozone. Given the level of problems in Greece, Portugal and Spain, as well as declining economies in Finland, France, the Netherlands and elsewhere, this may be less of a blessing and more a poisoned chalice. Prime Minister Valdis Dombrovskis, who has presided over the econom-ic recovery of his country through a commission-pleasing austerity pro-gramme, has said that joining the euro will foster continued growth. Olli Rehn has said that Latvia’s willingness to push for Eurozone membership is a sure-fire sign of confidence in the future of the single currency; eve-rything is going swimmingly. It won’t be long, surely, before Poland gets roped-in. With continued economic rockiness in the Eurozone, understandably anything that can be seized upon as good news, is. But while the Euro-pean Commission defends its record in Greece, and triumphs its expan-sion in Latvia, citizens, as witnessed in recent local elections there, as well through the rise of populist parties elsewhere, are not so convinced of institution infallibility anymore.

Maintaining a brave face

03ANALYSISNEWEUROPEwww.neurope.eu9- 15 June, 2013

(Continued from page 1)The reason is that they do not trust Presi-

dent Rosen Plevneliev to rule the country for another six months with a “service” govern-ment, which would continue the catastrophic policies of the previous “service” government. This is a very good reason to anticipate a rather long life to the present government despite it being based on a very delicate coalition.

In this context, on 3 June, Grogor Zdravkov, a member of the civil organisation Legia Anti-mafia, told, live on air, to two popular TV sta-

tions, among others, that the top banker in the country, “Chairman of Corporate Commer-cial Bank Tsvetan Vasilev turned out to be re-ally tough (with the previous government) and didn’t surrender to them, so they created a “the-oretical” way to … influence him physically.”

When the reporter asked Zdravkov, “Meaning to kill him?” he received an affirma-tive answer.

Political observers in Brussels foresee the break of the GERP party, possibly into three parts:

The first will be the ‘bad GERP’ with Boiko Borishov and Tsventan Tsventanov, composed mostly by people that will be often hosted by the Bulgarian jail system.

The second will be the group that will try to differentiate from Borisov, in spite of the fact that they were the protagonists of the Borisov choices, and will include President Rosen Ple-nievlev, the former friend of the Prime Minis-ter Tzvetelina Borislavova, Ivo Prokopiev and EU Commissioner Kristalina Georgieva.

It is likely highly, however, that a third

part that will be born, from the honest GERP elected members of Parliament who truly rep-resent the Bulgarian conservatives, who suffer together with the Socialists and all others.

A significant asset for Bulgaria is in Brus-sels: The President of the European Socialist Party, former Prime Minister of Bulgaria, Ser-gei Stanishev, who said that the new Bulgarian government should do its utmost to make sure that the country secures as much as it can from European funds, which it risks losing at the moment.

He also announced the willingness of Prime Minister Plamen Oresharski to conduct his first official working visit in Brussels and meet representatives of all European Union Institutions.

Bulgarian farmers ring cow bells and shout slogans during an anti-government protest in front of Bulgarian Parliament in Sofia, Bulgaria, 25 March 2009. Some 1000 farmers protection against falling incomes and year-round subsidies. |EPA/VASSIL DONEV

Enlargement

Brussels 20 June 2013

Freedom of Expression and Media in the Western Balkans and Turkey

@NEW S

SPEAK UP ! !The European Commission hosts the second Speak Up! Conference to assess progress and challenges regarding freedom of expression and media in the enlargement region.

Conference Themes• Freedom of expression and media in the Western Balkans and Turkey:

Progress and persisting issues• New media and new journalism• The role of parliaments in protecting freedom of expression and media• The way forward

Watch online & join the debate on Twitter (#SpeakUp2)For further information on the conference and participation,visit www.speakup2conference.eu

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(Continued from page 1)The difference between the accusa-

tions brought against Preda and the impli-cation of Liviu Dragnea are great.

While Preda was picked up and taken to the security offices, from the parking lot of the Ministry, not the same thing hap-pened with the alleged author of the effec-tive removal of documents, DNA commis-sioner Dan Emil Manolachi, making him appear like a provocative agent. According to local reports there is no evidence that the state secretary Preda, would have him-self copied or passed on to Liviu Dragnea any secret documents.

To the contrary, he did not even touch them and did not even see them. The doc-uments were copied from a photo camera found in Preda’s car.

04 HEALTH NEWEUROPEwww.neurope.eu

9- 15 June, 2013

Sofia center stage in GIRP European health talksCommissioner Borg emphasises affordability of medicines

Medicines, pharmaceuticals, health and the European institutions were on the menu as Sofia hosted

the European Association of Pharmaceutical full-line Wholesalers (GIRP) and its annual general meeting from 3-4 June in the Bulgar-ian capital.

GIRP as an association represents the na-tional associations of over 750 pharmaceuti-cal full-line wholesalers serving 31 European countries, including major pan-European pharmaceutical full-line wholesaling compa-nies therefore bringing with it a strong phar-maceutical stakeholder group and participants to the Bulgarian scene.

The 54th conference was opened by the Bulgarian Health Minister, Tanya Andreeva who also spoke with New Europe at the event and shared her belief that “Bulgaria is strongly moving forward, our path is set,” she said.

One of the main points of discussion at the gathering includes the impact of the economic crisis on the European healthcare sector, in par-ticular the impact of budget cuts and austerity measures on the already strained health sys-tems. Another issue is the access to medicines through sustainable healthcare solutions.

During the event, GIRP hosted a national workshop on the pan-European medicines verification system (EMVS) during which Richard Bergström encouraged national stakeholders to co-operate and propose na-tional medicine verification systems in line with the European Stakeholder Model’s founding principles.

On a general note pharmaceutical full-line wholesalers purchase, store and deliver medi-

cines. They purchase medicines from manu-facturers, store them in their warehouses and deliver them to pharmacies. Pharmaceutical full-line wholesalers are invoiced by manufac-turers before they invoice their customers.

Currently in Europe around 85% of all medicines used by patients are delivered by pharmaceutical full-line wholesalers via phar-macies.

According to updated GIRP data for the six largest European countries (France, Ger-many, Italy, the Netherlands, Spain and the UK), in comparison to 2010 when full-line wholesalers pre-financed the supply of medi-cines to the tune of €10.2 billion over a pe-riod of 41 days, in 2012, the numbers have increased to €10.5 billion and 44 days respec-tively resulting in a clear increase of 300 € mil-lion and three days in as little as two years.

European Commissioner for Health To-nio Borg also spoke at the conference saying that he notes that the programme included discussions on how to “keep European

healthcare “in shape” while on an austerity “diet”.

“Ensuring the sustainability of our health systems and making them fit to tackle the challenges of an ageing population is precisely what we are trying to address at European lev-el,” Commissioner Borg said.

“The financial crisis is far from over and its effects are still being deeply felt, right across the European Union. It is no secret that health ex-penditure is in decline for the first time in recent decades, and that factors such as demographic change, chronic disease and changing expecta-tions are pushing up the cost of healthcare.

“All too often health is only perceived as a cost, rather than as an asset for the future. It is often forgotten that the health sector accounts for 10% of GDP in the European Union. This highly innovative sector employs 15% of uni-versity graduates in the EU. Healthy people also mean a healthy workforce. This is why the Commission adopted a paper in February on

“Investing in Health”, which forms part of an overall package on “Social Investment”,” Borg said.

This paper he outlined reaffirms that health is a value in itself and a key contribu-tor to achieving economic prosperity and a job-rich recovery from the current crisis. Its key three main messages are spending more efficiently, but not necessarily more; invest-ing in people’s health, particularly through health promotion programmes; and investing in health coverage to reduce inequalities and tackle social exclusion.

He also covered safety as part of his talk tot he Annual General Assembly as “the health-care that patients receive in the EU must be of the highest quality, and it must be safe. Safety is something on which we cannot and will not compromise,” he said.

In the pharmaceutical sector, The Eu-ropean Commission’s vision is a regulatory environment that ensures only safe, effective, and high quality medicines are brought onto the market, while providing legal certainty for developers and incentives for innovation.

Pharmaceutical wholesalers are impor-tant within this vision having a key role to play in distribution and maintaining sup-plies, even in remote locations the Commis-

sioner reminded. “This is particularly the case for full-line

wholesalers. You save pharmacies money and patients waiting time. Furthermore, you repre-sent a thriving, innovative sector that generates economic growth and creates jobs,” he said.

The Commission is proactively taking measures at the level of the whole supply chain to maintain the quality and integrity of medicinal products whilst stepping up the fight against falsified medicines the Commis-sioner said.

“We are currently working on the imple-mentation of the new Directive on falsified medicines. In particular, we are preparing the delegated act on the unique identifier to appearon the outer packaging of medicines. Pharmacies will use this unique identifier to verify the authenticity of the medicines they sell.

“We will pay attention to developing a ver-ification system that can be easily integrated into the existing supply chain. This will ensure a high level of security for patients whilst also being cost-effective.

“We have also revised the guidelines on good distribution practices. These were pub-lished in early March and will enter into force next September. The main goal is to ensure medicinal products are stored and distributed under appropriate conditions, taking particu-lar care to avoid unnecessary costs,” he said.

The Commission has also taken forward an important act on the new rules for import of active substances. They are now working on another act on good manufacturing practices for active substances.

Bulgarian Health Minister, Tanya Andreeva ( C ) with fellow general meeting participants in Sofia, Bulgaria, 3-4 June, 2013

Lilly’s Andrew Hotchkiss speaks about improved access to medicines at the GIRP Annual General Meeting in Sofia, Bulgaria, 3 June, 2013. ( C ) Lilly/GIRP

05ANALYSISNEWEUROPEwww.neurope.eu9- 15 June, 2013

STOCKHOLM – With Swedish cities roiled for weeks now by rioting by unemployed immi-grants, many observers see a failure of the coun-try’s economic model. They are wrong. The Swedish/Scandinavian model that has emerged over the last 20 years has provided the only vi-able route to sustained growth that Europe has seen in decades.

Europeans should remember that percep-tions of strength and weakness change fast. In the 1980’s, Scandinavian countries stood for chronic budget deficits, high inflation, and repeated de-valuations. In 1999, The Economist labeled Ger-many “the sick man of the euro” – a monument of European sclerosis, with low growth and high unemployment.

Now, however, the specter of devaluation has disappeared from northern European countries. Budgets are close to balance, with less public ex-penditure and lower tax rates, while economic growth has recovered. The transformation of the old European welfare state started in northern Europe, and it is proceeding to most of the rest of the continent.

Today, it is difficult to imagine the mindset that prevailed before Margaret Thatcher came to power in the United Kingdom in 1979 and Ronald Reagan in the United States in 1981. Thatcher’s greatest achievement was the liberali-zation of the overregulated British labor market, while Reagan turned the tide with his inaugural address: “In this present crisis, government is not the solution to our problem; government is the problem.” The moral superiority of high mar-ginal income taxes suddenly waned. Free-market ideas took hold.

In northern Europe, the transformation of the welfare state started in Denmark in 1982. In deep financial crisis, traditionally social-dem-ocratic Denmark elected a conservative prime minister, Poul Schlüter, a jovial man with a bow tie. One of his first decisions was to peg the Dan-

ish krone to the Deutschmark to stop the infla-tion-devaluation cycle. The Danish peg – now to the euro – still holds.

Schlüter’s second big decision was to dereg-ulate the Danish economy, which now has the world’s largest number of enterprises per citizen. But he left the country’s high taxes and welfare state in place.

In the early 1990’s, Norway, Sweden, and Finland experienced a horrendous real-estate, banking, and currency crisis. Output fell and unemployment skyrocketed. In 1991, Swedish voters broke the reign of the Social Democrats, electing a coalition government under conserva-tive Prime Minister Carl Bildt, who called his program “the only way.” Bildt tried to follow Schlüter’s lead, but, in 1992, Sweden was forced to devalue – though his deregulation of markets did work well.

Sweden’s greatest achievement was a gradual cut of public spending by no less than one-fifth of GDP from 1993 to 2007. Meanwhile, Swe-den’s public debt was reduced from 73% of GDP

to 39% of GDP, while taxes have been cut repeat-edly. The Social Democrats returned to power in 1994, but they accepted Bildt’s new fiscal poli-cies, and even carried out a revolutionary pen-sion reform in 1998 that properly tied benefits to payments.

In parallel with the Scandinavian crisis, com-munism collapsed in Eastern Europe in 1989 and in 1991 in the Baltic states. Poland’s first post-communist finance minister, Leszek Balce-rowicz, showed an amazed world how commu-nism could be abolished and a market economy built almost instantly. The rest of Central Europe and the Baltic states followed his lead.

Former Estonian Prime Minister Mart Laar was the most radical European reformer. Indeed, his ideas about taxation have revolutionized Europe. In 1994, he introduced a flat personal-income tax, a policy that most Eastern European countries have since adopted. In 1999, when Laar became Prime Minister again, he abolished the tax on corporate profit, which was harming entrepreneurship.

As a consequence of the ensuing tax compe-tition, corporate-tax rates have fallen to 15-25% in most European countries.

More broadly, Estonia has revolutionized public finances. Since 1992, it has maintained a more or less balanced budget, with hardly any public debt. It slashed public expenditure and capped spending at 35% of GDP – the same level as in the United States.

As free-market thinking has taken hold and similar reforms have proliferated, the social-wel-fare state is being transformed into a social-wel-fare society. Government spending remains large enough to guarantee reasonable public services and a social safety net. Reformers have exposed the public sector to competition, not least from private providers, rendering it more efficient.

The systematic reforms in the United King-dom, Denmark, Sweden, Poland, and Estonia have much in common. First, all were caused by a profound crisis of the social-welfare state: fall-ing output, rising unemployment, large budget deficits, inflation, and devaluation. Without se-vere crisis, no significant reform was likely.

Second, a change of government through elections prompted reforms and gave them democratic legitimacy. Reform does not require a state of emergency, as is often argued.

Third, reforms require a strong leader. No major reform has been undertaken through con-sensus, though successful reforms usually gener-ate a broad consensus a few years later. At that point, reforms can be carried forward by those who had initially opposed them, as happened in Denmark and Sweden.

Finally, fundamental reform of the social-welfare state requires leaders who embrace free-market ideas. Rethinking requires a new ideol-ogy, and, after one country has shown the right direction, neighbors often follow.

Europe has now reached the point at which most of its laggards are prepared to accept the social-welfare society. This humane European capitalism is now hastening toward crisis-ridden southern Europe.

© Project Syndicate 1995–2013

Where Europe works

US Secretary of State John Kerry (2dL) and Sweden’s Foreign Minister Carl Bildt (2dR) stand in front of a map as they visit the LKAB’s iron ore mine in Kiruna, Sweden on 15 May 2013. |AFP PHOTO /

SCANPIX / HANS-OLOF UTSI

By Anders Åslund

Anders Åslund is a senior fellow at the Peterson Institute for International Eco-nomics in Washing-ton, DC, and author of How Capitalism Was Built.

At an event at the Brussels Press Club her-alding the release of the fifth Guide to Effec-tive Lobbying in Europe, EU commissioner Maroš Šefčovič defended the role of lobbying in Brussels.

Speaking alongside CEO of lobbying firm Burson Marsteller EMEA Jeremy Galbraith, Šefčovič called lobbying “a legitimate exer-cise,” going on to later say that it was “part of the political game” and that the common per-ception of lobbyists as “fat cats smoking cigars and slipping wads of cash into the pockets of unscrupulous EU officials,” was inaccurate.

The report on which the event was cen-tred was the product of a four month long sur-vey of nearly 600 officials in Brussels and 19

member states on what constitutes effective lobbying. It trumpets the necessity of trans-parency from lobbying organisations, noting that 26% of respondents thought that a lack of transparency was the most negative aspect of the lobbying industry.

Šefčovič highlighted the efforts of the cur-rent commission to aid this problem by estab-lishing a voluntary transparency register in 2011. The register, which now contains about 5,600 entries, is intended to allow any inter-ested party to discover who is pursuing what interests in Brussels.

While Šefčovič touted the success of the register, some are not satisfied. In a statement made to New Europe, Olivier Hoedeman of EU watchdog organisation Corporate Europe Observatory commended the commission’s

efforts to increase transparency thus far, but said that the voluntary register has failed to deliver on its promises. Specifically, Hoede-man remarked that the absence of many large corporations and law firms that actively lobby EU institutions from the register represented a serious flaw in the current voluntary scheme and urged serious consideration of a manda-tory system.

A December 2012 report on the effective-ness of the register by Transparency Interna-tional was similarly critical.

On the issue of whose voice in being heard in Brussels, Šefčovič downplayed the influ-ence of big business. In his speech, Šefčovič said that the “general view of lobbying as be-ing the sole domain of ‚big business‘, of giant multinational corporations with unlimited

quantities of money to spend,” was overly dra-matic and went on to call attention to the di-versity of organisations that participate in lob-bying activity in Brussels.

Šefčovič also praised the rules that exist to protect the independence of the EU policy making process, calling them “pretty good,” despite the series of recent lobbying corrup-tion scandals in Brussels – notably the allega-tions of bribery that forced former commis-sioner for health and human affairs John Dalli to resign last year.

Addressing those remarks, Hoedeman ex-pressed disappointment that Šefčovič “doesn’t take… seriously” the issue of imbalance in representation between large, wealthy busi-nesses and the public interest or the problem of the ‘revolving door.

By Dillon Clancy

Commissioner defends transparency of lobbying in Brussels

06 ANALYSIS NEWEUROPEwww.neurope.eu

9- 15 June, 2013

A transport minister set up?A closer look at the Preda case

The Romanian authorities have, as New Europe reported last week, brought in a new head of the anti-corruption ser-

vice which seems to be great news, on the oth-er hand, the now former Secretary of State of Transport Valentin Preda seems to be caught in the crossfire of the system.

Driving in late February he was stopped searched and taken to the national authorities where he was detained and interrogated fol-lowing two civil charges.

On 19 February he was accused of com-plicity in the direct or indirect use of infor-mation that was not destined for public use – with the purpose of obtaining for himself or other parties of money or other benefits and for the possession, outside of work duties of a document that constitutes a state secret, if the act is of a nature to endanger national security.

Three weeks later he is newly accused this time of criminal charges, namely of taking a bribe.

The manner of the arrest and the proceed-ing hearings and allegations are where the waters seem to become murky however as ac-cording to the national service Preda had an

accomplice that of police commissioner, Dan Emil Manolachi. The latter had allegedly re-moved, right from the DNA, the secret docu-ments that he had passed over to Preda.

Various sources state that Preda detained for these hearings in order to state that the documents in question were in effect destined for Vice Prime Minister Liviu Dragnea.

Manolachi admitted that he had copied some notes from a DNA case file. To what extent these are state secrets is remains to be seen as it is also known that all parties involved have access to these respective notes.

The implication therefore of the Vice Prime Minister seems from all of the above, far fetched.

While Preda was picked up and taken to the national security office, with all the im-plied circus-like scandal, from the parking lot of the Ministry, the same thing did not tran-spire with Manolachi. Secondly, there is not the least bit of evidence that the state secretary Preda, would have himself copied or passed on to Liviu Dragnea any secret documents. To the contrary, he did not even touch them and did not even see them. The documents were

copied on a photo camera found in Preda’s car the accused has stated.

The security services that did not guard its secret data, and more so , left them at the disposal of commissioner Manolachi, did not start any investigation against the peo-ple responsible for them in the institution, even though, whenever there is a question of divulging state secrets, the first to be found guilty is the one that did not assure their security.

The state secrets from Preda’s case could be seen by people without certificates ORNISS, because in the tabs 81-84 of the prosecution file, attached by the security au-thorities in court to the complaint against the preventive measure issued by the prosecutor through the Ordinance, were documents clas-sified as state secrets - not a first according to the court report obtained by New Europe.

Preda‘s lawyer also requested, that given the fact that the meeting was public, to take note of the file by closing the existing state secret documents on which the prosecution accused her client with being aware of, docu-ments that should be subject to strict protec-tion implying their access only by people with ORNISS certification.

The release and disposition of classified documents being divulged is a problem of its own right.

How can anticorruption prosecutors ac-cuse the former secretary of state by damage / injury to national security (although there is no evidence that Preda knew about these doc-uments or that he took the camera to down-load content, camera that was delivered to him right by the DNA judicial officer), as long as these documents could be seen by the parties, magistrates and clerks?

Moreover, how can these documents now still be considered as evidence for this case?

Following journalistic research, in any country of the European Union area, the act of which Preda is accused, respectively hold-

ing the state secret documents is not incrimi-nated, but disclosure of them is.

Seeing that the first accusations are not supported by solid evidence, the prosecutor DNA force things in an attempt to cover his mistakes and expand prosecution against Val-entin Preda for the alleged criminal offense of bribery - to approve a payment on a contract with CNADNR.

Statements made public by former Minis-ter Ovidiu Silaghi and from documents, show that Preda never had attributions regarding the National Company for Administration of National Roads in Romania.

(from page 1)

19 February – prosecutors from the na-tional security service alerted to crimi-nal prosecution against the sitting sec-retary of state of transport in Romania, two counts outstanding I - complicity to the direct or indirect use of information that are not destined for public use – with the purpose of obtain-ing for himself or other parties of money or other benefitsII – Possession outside of work duties of a document that constitutes a state secret, if the act is of a nature to endanger national security

8 March – Criminal case is launched against Preda for taking of a bribe

Accusations of having an accomplice in the person of Dan Emil Manolachi ensue.

−During his hearings sources have said he was asked to state that the documents he allegedly stole were destined for Vice Prime Minister Liviu Dragnea.− Now looks like all parties have access to these documents.

TIMELINE

The authorities in Bucharest are struggling with straightforward goings on of their security service it seems. |EPA/ROBERT GHEMENT

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07ANALYSISNEWEUROPEwww.neurope.eu9- 15 June, 2013

European militaries scramble to obtain drones

Ban on bee-killers doesn’t end EU’s bias towards pesticides

The use of unmanned aircraft, so called “drones,” has become a hallmark of 21st century military operations. Such

aircraft have become infamous for their use by the United States to hunt terrorists in the mountains of Pakistan and elsewhere, but the US is far from the only user of the technol-ogy. Almost every state in Europe has procured some type of drone technology over the past ten years; most notable among them are Ger-many, the United Kingdom, Italy and France.

Germany currently leases several Heron drones from Israel, which have been used for unarmed reconnaissance in Afghanistan. A request to purchase larger and more capable (read: armed) Reaper aircraft from the United States has been granted approval by the Penta-gon and is awaiting Congressional support.

Officials in the German government have said that there has been no commitment made to purchase the drones, and that a decision

would not be made until after the federal elec-tion in September of this year, according to Deutsche Welle. Some in the German govern-ment have expressed doubt as to why the mili-tary needs the aircraft, since the mission to Af-ghanistan is set to end next year and unmanned aircraft are not allowed to fly over European airspace.

The German defence ministry recently an-nounced that it was withdrawing from the Eu-roHawk reconnaissance drone program, which has thus far cost the German tax payers an esti-mated €500 million.

This move has prompted fears that Ger-many will also pull its support for the NATO plan to procure five GlobalHawk drones from American aerospace company Northrop Grumman.

The UK owns five Reaper drones, which are armed with Hellfire missiles and GBU-12 precision guided bombs and have been em-ployed in combat in Afghanistan.

The RAF plans to purchase an additional

five aircraft, though funding for the program is set to expire at the end of operations in Afghan-istan in 2014. Ministry of Defence officials are trying to obtain additional funding to retain the capability. To that end, the UK has been seeking more autonomy for its drone operations, which currently depend heavily on cooperation with the United States. Trials are set to begin soon on the UK-made Brimstone missile, which is intended to supplant and eventually replace the US-made Hellfire missiles currently in use. Ad-ditionally, last month the RAF began operating drones in Afghanistan from the UK. Previously all UK drone operations had been based at Creech Air Force Base, the United States’ pri-mary drone base near Las Vegas, Nevada.

France has requested Reapers from the United States after having to rely on intelli-gence supplied by American drones operating from Niger during the 2012-13 intervention in Mali. French defence minister Jean-Yves Le Drian said earlier this month that “We need this capacity in the short term,” and that France was

“in discussions with each to buy some straight away.” The US Department of Defence has ap-proved an initial request for two aircraft, with the final order expected to total five to seven aircraft according to Le Monde.

Italy possesses a handful of unarmed Reap-er and Predator drones, which have been used for surveillance in Afghanistan. A request to the US to arm the drones received a lukewarm re-sponse; prompting the Italians to begin pursu-ing the development of a European medium al-titude, long endurance (MALE) combat drone. EADS, Dassault and BAE Systems all have drone projects under development, but all are expected to be several years off at the least. At present only the United States and Israel pro-duce combat unmanned aircraft.

For once, the European Union’s scien-tific advisers seem to have got something right. Three pesticides have been banned

for two years after the wise boffins voiced con-cerns after their harmful effect on honey bees. The measure is of immense importance: about one-third of the fruit and vegetables in our diets are grown with the aid of insect pollination, so threats to bees imperil food production in gen-eral. This isn’t the end of the story, however. While the European Food Safety Authority (EFSA) in Parma, Italy, should be applauded for initiating the research which led to the bans, that body continues to behave as if it is joined at the hip with big business.

The bees dossier offers a case in point. EFSA’s assessments of whether pesticides

are safe are conducted by a panel of “experts”, several of whom also undertake research fi-nanced by the chemical and agri-food industries.

One of those “experts” - Ettore Capri from Italy - even runs a “think tank”, the main purpose of which is to downplay the dangers associated with pesticides.

Known by the acronym OPERA, this outfit recently published a report titled “Bee health in Europe”. The report seeks to shift the focus from pesticides by pinning the blame for dwindling bee numbers on a “wide range of factors”.

Though the document may be liberally sprinkled with scientific terminology, it cannot be considered as objective or unbiased. A care-ful reading shows that it was prepared with the help of Bayer, Syngenta, Dow and BASF. All of those firms make pesticides; their bottom line depends on being able to persuade regulators to approve their products.

I contacted EFSA spokesman James Ram-say, asking him if he accepted that Capri was involved in a conflict of interests. “No,” Ramsay replied. He told me that OPERA was viewed by the authority as a “food safety organization” as it pursues “public interest objectives”.

When I got in touch directly with Capri, he insisted that he is not involved in “research projects financed by private companies on bee health” and that he had not taken part in an EFSA working group dealing with bees.

Those explanations are Jesuitical. OPERA’s entry to the register of lobbyists

run by the European Commission states that it received 50,000 euros from the private sector during 2012. If that money wasn’t used on its re-search and advocacy work, then what was it used on? Interior decorating? Bus fares?

Moreover, OPERA jointly organised a con-ference with Syngenta in Brussels during Sep-tember 2012. The programme for the event says that one of the main topics addressed was bio-diversity, a concept that is meaningless without bees and other insects. Are we really to believe that Syngenta did not pay at least some of the costs of organising this event?

Capri’s effort to distance himself from EF-SA’s work on bees is contradicted by information on the authority’s own website. A list of par-ticipants for a “symposium” hosted by EFSA last month indicates that Capri was in attendance. You’ll never guess the topic of this confab. Bees.

Faced with accusations that they are setting the agenda followed by EU institutions, corpo-rate lobbyists tend to point to decisions which didn’t go the way they wanted as evidence that they are not really that influential. The ban on bee-killing pesticides looks like that kind of a de-cision - until you examine it a bit more closely.

Firstly, the ban is of a limited duration: we can be certain that the chemicals industry will be pressing for it not to be renewed once it expires. Secondly, it has loopholes: the three pesticides may still be sprayed on winter cereals. Such crops may not attract bees directly but the use of pesticides on them means that toxic chemicals will still be released into the environment, with potentially adverse consequences for insects.

And thirdly, there are some dangerous sub-stances not covered by the ban. Greenpeace has identified four pesticides in addition to three ones recently banned that have been shown to “acutely affect bees”, according to the group. These pesticides are widely used throughout Europe.

EFSA, again to its credit, has issued a warn-ing about one the four substances - fipronil - over the past few weeks. Almost definitely, it will come under pressure from the chemical industry to ease off on its work on bees. Having scientists who are favourably disposed to pesticide-makers sitting on EFSA panels undoubtedly works to

that industry’s advantage. There are bigger issues than honey bees at

stake here. As I argue in my new book Corporate Europe, EFSA is in denial about how many of the “experts” it turns to for counsel are lackeys of big business. The authority has been admonished by the EU’s internal watchdogs, the Court of Au-ditors and the Ombudsman, on some of these matters; yet the underlying problems persist.

In 2008, EFSA suffered some embarrass-ment when it emerged that Suzy Renckens, who coordinated its activities on genetically modified (GM) foods, was hired by Syngenta, a maker of GM seeds (as well as pesticides). The “revolving door” case begged the question: how can regu-lators be expected to put manners on firms they regard as future employers?

Syngenta supports Capri’s activities but EFSA doesn’t see this as in any way problematic. Syngenta has also lobbied strenuously against the ban on bee-killers.

There’s only way of pretending there’s noth-ing wrong here: burying your head in the sand.

An environmental activist wears a respirator mask to stage a protest in a canola field during the cam-paign ‘No poison on our fields’ (‘Kein Gift auf unsere Felder’) near Fahrland, eastern Germany, on 22 May, 2013. The acitivists fight for mandatory goals and measures to reduce pesticides in agriculture as well as a tax on pesticides.| AFP PHOTO / MARC TIRL GERMANY OUT

Dillon Clancy is a Political Science and International Affairs Student at the University of Florida, he will be the Editor of the Political Science Group Magazine in 2014.

By Dillon Clancy

By David Cronin

08 ANALYSIS NEWEUROPEwww.neurope.eu

9- 15 June, 2013

The ECB on globalisation Protectionism is not the answer

The world must not fall into pro-tectionism, due to government bail outs and financial legisla-

tions, that have led to a bias towards home and regional bank lending, said the European Central Bank’s (ECB) ex-ecutive board member Benoit Coeure.

In a speech delivered in Seoul for the Bank of Korea International Con-ference 2013, entitled “Assessing Glob-al Liquidity in a Global Framework”, Coeure revealed that there was evi-dence that a “de-globalisation process” is taking place following the effects of the financial crash.

Coeure argued in his speech: “In ad-vanced economies, for example, finan-cial regulation and other forms of public intervention have contributed to global fragmentation. Government bail-outs, risk-based capital requirements and the ring-fencing of capital and liquidity by local supervisors have constrained banks’ risk-taking outside domestic jurisdictions. In the Euroarea, this has been compounded by the perception of a rising risk of sovereign default, erod-ing the fiscal backing of cross-border liquidity provision.”

He went on to say that financial fragmentation was becoming more prevalent at a global level, where the relationship between bank lending domestically and internationally has grown wider apart, in favour of lending closer to home.

After banks in Europe were de-leveraged, Coeure said the share of Euroarea banks’ cross-border credit de-

clined, which has reduced investments especially in Asia, in areas such as infra-structure and trade credit.

In central and eastern Europe, there has also been strong evidence that there is a bias towards regional risk sharing Coeure explained.

There were other warnings over monetary policies that could have a negative global effect, such as the Bank of Japan’s decision to double its infla-tion target, that could have started a currency war, even though there has been little evidence that there has been any damaging global impact so far.

Coeure called for international risk sharing to be preserved, where benefits globally can be gained from an unfet-tered financially open system.

When there are pockets of capital flows that may become unravelled or out of control, then macroeconomic ad-justments should be the remedy, rather than a plethora of regulatory measures that could stifle future growth, as the IMF recently said.

The retreat from cross-border lend-ing Coeure claimed, has amplified the effect of the financial crises particularly to those countries that had no access to alternative sources of funding, which then prompted more official credit.

Following the collapse of Lehman Brothers this is what happened on a worldwide scale, this caused an in-terventionist response from the IMF alongside multilateral development banks.

After 2010 in the Euroarea, official support also arrived in the shape of the European Financial Stability Fund, and

then the European Stability Mecha-nism. As they supported liquidity by the Eurosystem to banks that were vulner-able, here Coeure believed the Euroarea can be seen as a microcosm of the global economy.

Fredrik Erikson, director of the Eu-ropean Centre for International Politi-cal Economy, said: “The de-globalising of the banking sector is a big worry, and there has been a variety of different regulations of raising barriers to cross border financing. For an example of the consequences, trade finance has suf-fered enormously that today the regula-tions mean it can’t be done, France were hugely influential in this market but now that has disappeared.”

“In Europe regulators have believed it to be more prudent to invest in Greek government bonds, rather than invest conservatively in areas such as trade finance, and invest in domestic bonds rather than to help proper banking.”

In achieving a level playing field in banking regulations created after the crash, Coeure also pointed to the im-portance of the single banking mecha-nism adopted in the Euroarea, in ensur-ing a free flow of capital in the hope to infuse growth in European economies.

“Ideally there would be one global regulator to oversee the financial world but that is a fantasy, governments like to retain control of the financial sector in the event of big problems occurring. They also like to retain some control to use a variety of mechanisms to support their domestic economies, and to help entities in the private markets.” Erikson said.

Women walk past a currency exchange sign in a shopping district in Seoul on 9 May, 2013. South Korea unexpectedly trimmed its benchmark interest rate by 0.25 percentage points on May 9 the first cut for seven months aimed at boosting an economy hit by slumping exports. |AFP PHOTO / JUNG YEON-JE

By Peter Taberner

The innovation hubs

By Francisco Jaime Quesado

Europe is giving particular attention to the role of Innovation Hubs. Firms, universities, centers for innovation are develop-ing a new collaborative strategy towards a new agenda for a new competitiveness centered in the value creation. Like Jose Manuel Barroso stressed recently in Lisbon during an impor-tant summit, it´s essential to learn the lessons that more than ever emerge from a Europe that is trying to rebuild its compet-itive advantage and to reinvent its effective place in a complex and global world. Innovation, once again, is the right key for the future of Europe. The Innovation Hubs are a challenge to a new ambition in terms of new ideas and solutions for the crisis we are facing. In a time of change, Europe can´t wait. Europe must confirm itself as an “enabler actor” in a very demanding world, intro-ducing in the society and in the economy a capital of trust and innovation that is essential to ensure a central leadership in the future relations with America and the more and more dynamic developing world. The actors from Europe should be more and more global, capable of driving to the social matrix a unique dynamic of knowledge building and selling it as a mo-bile asset on the global market. The Innovation Hubs are a new answer to the individual and collective expectations of a society of change. Where people know who they are and have a strong commitment with the values of freedom, social justice and development. This is the reason to believe that a new standard of Democracy in Europe, more than a possibility, is an individual and collective neces-sity for all of us, effective European citizens. Habermas is more than ever present – the difference of Europe will be in the ex-ercise of the capacity of the individual participation as the cen-tral contribution to the reinvention of the collective society. This is a process that is not determined by law. It is effectively constructed by all the actors in a free and collaborative strate-gic interaction.The Innovation Hubs are a signal of conviction in new dynam-ics of knowledge and creativity. When Habermas spoke about this special global capacity of creating a new commitment be-tween the Europeans toward the challenge of the future, he was in fact speaking about this commitment with a New De-mocracy in Europe. Based in new standards of Social Innova-tion, this kind of New Third Way is above all the confirmation that in Europe the individual performance in a complex soci-ety is possible, desirable and above all necessary for the future.The Innovation Hubs are an example of confidence in the Reinvention of Europe. Reinventing Europe and giving the European Actors (States, Universities, Enterprises, Civil So-ciety) the opportunity of developing new challenges focused on innovation and creativity is in a large sense giving a central contribution to a New Global Order. The Reinvention of Eu-rope is the reinvention of its people and institutions. An active commitment, in which the focus in the participation and de-velopment of new competences, on a collaborative basis, must be the key of the difference. These are the lessons we really need from the a new agenda for europe.

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

09ANALYSISNEWEUROPEwww.neurope.eu9- 15 June, 2013

Why Turkey is rebelling

ISTANBUL – Turkey’s economy has been booming for a decade, earning praise not only from financial markets, but also from development economists like Jeffrey Sachs. Why, then, have peaceful demonstrations that began in Istanbul’s landmark Taksim Square turned into a nationwide protest move-ment, with hundreds of thousands of people taking to the streets in opposi-tion to Prime Minister Recep Tayyip Erdoğan’s government?

Sachs, and others, have rightly ac-knowledged and praised the Erdoğan government for its economic policies, which have led to a higher growth rate. But the question is whether a develop-ing country like Turkey can sustain rapid economic growth if the same gov-ernment is undermining basic liberties and impeding the advance of key insti-tutions needed for long-term success.

The Erdoğan government’s bru-tal response to the protests highlights this dilemma. Initially, fewer than 200 peaceful demonstrators gathered in an effort to protect Taksim Square – the last green space left in central Istanbul – against the construction of yet anoth-er shopping mall. As the government cracked down, with Erdoğan adopting an uncompromising position in defi-ant speeches, the protests grew – and continue to grow, despite (or perhaps because of) the use of excessive police force. Unofficial figures indicate that more than 1,000 people have been in-jured so far, and more than 1,000 have been arrested.

True, Turkey’s annual GDP growth has averaged 5% over the last decade of rule by Erdoğan’s Justice and Develop-ment Party (AKP). But this should not lead anyone to conclude that Turkey is a development success story. If we have learned anything from the extensive research on growth and development that now exists, the key to sustainable progress lies in a country’s institutional design.

Institutions embody and reinforce a society’s rules. They consist of both informal constraints (traditions and cultural norms) and formal rules (con-stitutions, laws, and regulations). They

shape the structure of an economy.There is an important distinction

between policies and institutions. Poli-cies reflect choices that are made within a political and social structure – that is, within a set of institutions. It is the institutions within which policies are framed that ultimately affect economic performance. Property rights, for ex-ample, influence investment decisions by protecting entrepreneurs against the risk of expropriation, and an inde-pendent judiciary is necessary to ensure credible enforcement of such rights.

Turkey still lacks the institutions that are critical for long-term progress. Its International Country Risk Guide score (a commonly used index that measures the overall quality of a coun-try’s institutions) is one of the lowest in the OECD. Turkey also ranks last in the OECD’s Better Life Index. Only 31% of adults aged 25-64 have completed secondary school; inequality is danger-ously high; and, according to the Com-mittee to Protect Journalists, more jour-nalists are imprisoned in Turkey than in any other country, including China and Iran. The 2013 report by the democra-cy watchdog Freedom House indicates that civil liberties in Turkey are increas-ingly threatened.

In recent years, much research has investigated the complex relationship between culture and institutions, with the former creating a set of informal constraints on the latter. Can Turkey lead the way among Muslim-majority countries in showing that a rather con-servative culture is not a constraint on

the type of institutions that are needed for sustainable growth and develop-ment?

Turkey’s success, as measured in terms of economic growth, is impres-sive indeed. Prudent monetary and fiscal policies, a cleanup of the bank-ing system after the 2000-2001 crisis, and investment in infrastructure surely played a part. These policies set in mo-tion a process of transitional/catch-up growth, with Turkey steadily closing the income gap vis-à-vis rich countries.

But we should not mistake transi-tional growth with long-term success, which requires strong institutions, in-cluding protection of property rights and civil liberties. This, in turn, will help to realize investments in education (especially for women) and technology, together with structural reforms, all of which have been highlighted as areas of concern in several studies of Turkey in recent years. It is far too early to ask, “How did Turkey do it?” and declare an answer based on policies that will boost short-run growth but that will run out of steam if not properly augmented.

Whether or not Turkey is a long-run development success remains to be seen. The indicators so far are not very favorable. The recent events in Taksim Square and in other Turkish cities are a stark reminder of the country’s still-weak institutional infrastructure. People are still in the streets – and they seem in no hurry to go home. I hear them chant-ing as I write this: “Democracy without liberty is no democracy.”

© Project Syndicate 1995–2013

By Sebnem Kalemli-Özcan

Sebnem Kalemli-Özcan, Professor of Economics at the University of Maryland, College Park, is Senior Resident Scholar at the

International Monetary Fund, a research associate at the National Bureau of Economic Research, and a research fellow at the Center for Economic Policy Research.

Enough is enough part 2

By Andy Carling

Constructive Ambiguity

Any thinking person would agree that nostalgia is not what it once was. Earlier generations could wax lyrical about the summers of their youth, the books and sounds that signify im-portant times, places and above all, people that they met on the slow amble to the grave.No such luck for us, Thatcher’s children. No, I’m not going to blame her for anything, but as I head towards my dotage, a time when the worries of the world should fade and the ever longer trip down memory lane does fulfil a purpose, to help one sense the journey, the course of a life and the ripples it will leave behind, it’s not turning out like that.There’s a lot less nostalgia around than there used to be, main-ly down to Operation Yewtree and the various other police in-quiries currently afoot to bring famous sex offenders to justice before, or shortly after they turn up their toes. It’s a bit like seeing Inspector Knacker of the Yard play at St Peter.I was reminded of this by seeing the response to a brand new tale of off the books knee trembling in or around the Con-servative party that has even shocked the whips office. Having seen previous scandals, from Major/Currie to Milligan/Or-ange the mind just refuses to guess what combination could be more disturbing than what we already know about.But it’s the memories we’re losing. Pretty much every child-hood hero or inspiration has turned into something shocking and tawdry. There’s also another way that the great and good can flush away the treasured memory: The sequel.I’ve just learned that some fools are going to make a sequel to the film Blade Runner. Obviously, whoever came up with that bright idea couldn’t pass a Voight-Kampff test, but the film that truly needed no sequel, indeed couldn’t have one, is now adorned with an unwanted second volume.The story was by Philip K Dick, one of the finest science fic-tion writers. The sequel is to be vomited onto paper by a lump of meat known as Michael Green, who has previously graced the world with a script for The Green Lantern. No, me nei-ther. This is not a new plague, perhaps only the Godfather beat that, but only once.The classic hit of my teenage years was Jaws, and I remem-ber sneaking into the cinema to watch it, and boy it was good. Jaws 2 wasn’t; Jaws 3D really wasn’t. I can live with that, as indeed can anyone who knows the idea of a franchise – a sort of club for the deeply unimaginative.But they remade Get Carter, placing it in Las Vegas with Syl-vester Stallone, a man thoroughly confused into overcompen-sating for having a cat’s name. The Italian Job was remade, though nobody quite knows why, perhaps Noel Coward and Michael Caine aren’t quite good enough for the young gen-eration. It’s awful. I’d suggest we made them play Rollerball, but some swine’s gone and remade that as well.There are some 50 films being remade, perhaps not with the pointless slavishness of Psycho, the Gus Van Sant version, a shot by shot remake.Among these are Barbarella, because Jane Fonda was too for-gettable, Highlander, because there can be very many indeed and what we’ve all been waiting for, All Quiet on the Western Front, starring Harry Potter. War is Hell.

Protestors clash with Turkish riot policemen on the way to Taksim Square in Istanbul on 5 June, 2013, as part of ongoing protests against the ruling party, police brutality, and the destruction of Taksim park for a development project. Turkey’s Islamic-rooted government apologised today to wounded protestors and said it had “learnt its lesson” after days of mass street demonstrations that have posed the biggest challenge to Prime Minister Recep Tayyip Erdogan’s decade in office. | AFP PHOTO/BULENT KILIC

10 ANALYSIS NEWEUROPEwww.neurope.eu

9- 15 June, 2013

L atvia has officially been allowed to join the Euro. This is not necessarily a surprise; the country has being sin-

gled-out by Brussels as something of a success story, with Prime Minister Vlasis Dombrovs-kis being seen as a poster boy for austerity. From an EU point of view, Latvia has ticked all the boxes.

With the publication of its latest conver-gence report on Latvia, the European Com-mission has today (5 July) formally agreed that the country will become the 18th mem-ber of the single currency on 1 January, 2014.

The announcement has been much antici-pated by the European press, somewhat dilut-ing the impact of todays’ formal announce-ment by the EU’s economics commissioner, Olli Rehn.

Announcing the country as the latest ad-dition to the single currency, Rehn trumped Latvia’s recent economic efforts, coming back formal position of recession to one of eco-nomic advantage. “Latvia’s experience shows

that a country can successfully overcome mac-roeconomic imbalances and emerge stronger,” he said on 5 July.

Latvia suffered near-bankruptcy in the early 19990s, before overturning its economy through a combination of government cut-backs and structural reforms, which, while im-pressing the European Commission, have not being without criticism.

But, according to the commission, Latvia’s expressed desire to join the single currency, coupled with its growing economy, and re-cent economic performance, means that it is a prime candidate for euro membership.

The convergence report, is the latest in a series of reports complied by the European Commission and European Central Bank, that assesses the progress made by a mem-ber state towards joining the euro, upon their insistence, and determines that country’s eli-gibility. Speaking at the European Commis-sion’s headquarters in Brussels on 5 June, Olli Rehn said that Latvia’s continued desire to join the euro was a “sign of confidence” in the single currency.

Know your LatviaA look at the newest member of the eurozoneFollowing its return to democracy in the wake of the collapse of the Soviet Union, Latvia re-instates much of its 1922 constitution. This document, officially known as the Satversme, established a government based on a par-liamentary-style, fused-powers system. The country of 2.2 million joined the European Union and NATO in 2004, barely a decade after throwing off the shackles of the Soviet Union.

The parliament, known as the Saeima, is made up of 100 members in a single chamber. Members are elected to four year terms by the citizens of Latvia via proportional representa-tion. Seats are allocated to any party that re-ceives more than 5% of the vote in a constitu-ency, of which there are five.

The head of state is called the president, and is elected to a four year term by the Saeima. The duties of the president are largely ceremo-nial, though they do wield some political pow-er. Key among the president’s powers are the ability to dissolve the Saeima (at considerable personal political risk) and nominate the prime minister, though the latter is subject to approval

by the Saeima. Presidents may not serve more than eight consecutive years in office.

The prime minister holds the most power in the government, and is responsible for ap-pointing the cabinet and leading the govern-ment. Prime ministers are by convention the leaders of the most successful party in the

general elections, held every four years, and are not subject to any term limits.

The current government came to power in the wake of the 2008-2009 financial crisis and a 2011 corruption scandal. The recession sparked by the financial crisis struck Latvia particularly hard; at the peak of the crisis in

2010 the Baltic state was experiencing unem-ployment in the neighbourhood of 20%. A new centre-right government was elected in 2009, with Valdis Dombrovskis of the New Era Party (later part of the Unity coalition) serving as prime minister. The 2009-elected government put into place a program of strict fiscal austerity sparking sharp opposition in Latvia but garnering the admiration of the EU and IMF, the latter of which gave a bailout loan to Latvia in 2008.

Since 2010 the economy has grown ro-bustly, gaining 1.2% in the first quarter of this year alone.

Corruption and lingering issues caused by decades of Soviet occupation are the most sig-nificant problems faced by the country today. For the better part of a decade Latvian politics was dominated by a group of wealthy busi-nessmen known as ‘the oligarchs.’ The issue of corruption came to a head in 2011. When the oligarch-controlled parliament failed to lift the immunity of an official under investigation, then president Valdis Zatlers threatened to dis-solve the government and call for new elections. Anti-oligarch sentiment was clearly evident in the results 2011 elections, which strongly re-jected the oligarch-controlled parties.

The country also faces the lingering issue of a large Soviet-remnant population of non-citizen ethnic Russians. Attempts to politically and cul-turally integrate the Russophones, who account for over 30% of the population, have failed in the past, most recently in February 2012.

By Cillian Donnelly

By Dillon Clancy

Latvia given green light for euro membership

People walk past a currency exchange office in Riga on 5 June. Seemingly unfazed by the Eurozone’s lumbering debt crisis, Latvia has requested - and received - EU approval for entry as the single currency’s 18th member on January 1, 2014. A majority of Latvians oppose their government’s drive to join the Eurozone and do not favour the currency switch.| AFP PHOTO / ILMARS ZNOTINS

Latvia’s Prime Minister Valdis Dombrovskis arrives for a meeting of the European Council in Brussels, 14 March. | BELGA PHOTO/BERNAL REVERT

11EU-WORLDNEWEUROPEwww.neurope.eu9- 15 June, 2013

A sian and European governments, business leaders and civil society talk to each other in numerous

fora and on an expanding array of politi-cal, economic and social questions.

They meet at bilateral level, in region-al cooperation meetings and within the multilateral framework provided by the United Nations and other international organisations. These gatherings are im-portant in deepening Asia-Europe links and understanding. But they are only part of a complex story.

Ever since the first high-profile Asia-Europe Meeting (ASEM) in Bangkok in March 1996, Asian and European leaders, ministers and officials have been work-ing on myriad fronts to forge a stronger region-to-region partnership on issues as diverse as green growth, global peace and prosperity, human rights, education and urbanisation.

Their work may not always make the headlines. And the progress they make can appear slow, plodding and incremen-tal. ASEM participants often complain that their work is not visible to the public, that ASEM does not punch its weight in the over-crowded field of global coopera-tion platforms and that 17 years after its launch amid much fanfare, ASEM is in need of a new lease of life.

With the next ASEM summit set to be held in Brussels in autumn 2014, the race is on to try and inject fresh impetus into a process which all 51 ASEM part-ners agree is a compelling necessity – but one which must be deepened and made more dynamic to stay relevant in a rapid-ly-changing world.

ASEM foreign ministers, who gather in New Delhi on November 11-12, are expected to come up with fresh ideas for reviving the Asia-Europe partnership.

As illustrated at a recent symposium held in Yangzhou, China, the problem facing ASEM is not a lack of initiatives on revitalizing the relationship; rather, the challenge is to find common ground among the many suggestions being put forward by ASEM partners – and then to refine and streamline recommendations before presentation to ministers and lead-ers.

Significantly, all 51 partners continue to underline the strategic significance of ASEM in the 21st Century. The fact that new countries continue to demand en-try into the club – which began with 26 founding partners in 1996 – is seen as a mark of ASEM’s attractiveness and vig-our.

Over the years, ASEM has also served as a “new Silk Road” connecting the two

continents and providing a unique plat-form for dialogue and cooperation, says an Asian official, adding: “Asia and Eu-rope need each other…we are closely interconnected and interdependent and draw on each other’s’ strengths.”

European policymakers say they are similarly confident that ASEM has great merits. “Its relevance has increased. ASEM is informal, comprehensive and still very attractive,” said one European official in Yangzhou.

The challenge is to maintain ASEM’s unique informality, networking and flex-ibility but also make it more pragmatic, effective and result-oriented – and more relevant to partners’ economic and social priorities.

ASEM should identify “more cooper-ation projects which are visible, tangible and serve the interests of people,” said an Asian official, adding: “ASEM should be a forum for action.”

More frequent meetings of ASEM economic officials and ministers were mooted, with participants also suggest-ing that ASEM should be used to explore new ideas, to stimulate and facilitate pro-gress in other fora and encourage capaci-ty-building across sectors.

The need for more ASEM contacts with civil society, including members of parliament, business representatives, scholars and journalists as well as local authorities, was underlined.

The most difficult task facing poli-cymakers is a much-awaited overhaul of ASEM’s working methods in order to make meetings – especially leaders’ sum-mits held once every two years - more in-teresting, relevant and productive.

Recapturing the excitement and en-ergy evident at ASEM’s launch in 1996 will not be easy, however. Over the years, ASEM meetings have become more for-mal and ritualistic, with ministers and leaders reading out well-prepared state-ments instead of engaging in direct dia-logue.

Meetings of ASEM senior officials

have also become long and drawn-out as participants talk more about proce-dures and dates than substantial ques-tions. “These meeting are a bottleneck in ASEM” said one senior official in Yang-zhou. “We have become a housekeeping body.”

Instead of reviewing a series of global and regional developments, ASEM sum-mits should have a more streamlined agenda, allowing leaders to engage in a real, in-depth and focused conversation on key concerns.

Leaders and foreign ministers should also meet in a so-called “retreat” format to ensure more intensive and interactive dialogue. “We want them to really get to know each other, forge friendships and understanding,” said one participant.

Chair’s statements and other docu-ments issued at the end of ASEM meet-ings should be short, simple and to-the-point rather than long and procedural. They should be media-friendly and un-derstandable to the general public, help-ing to enhance ASEM visibility.

The long-running debate on whether or not ASEM needs a secretariat to pro-vide institutional back-up was discussed. The drive to set up an ASEM Secretariat is essentially driven by Asian partners of ASEM who feel the need for such an in-stitution on their side.

Europeans, on the other hand, are generally satisfied with the current situa-tion since the European External Action Service plays an important coordination role for European partners.

As preparations intensify for the meeting of foreign ministers in Delhi, the conversation on strengthening ASEM is likely to gain pace. The aim is to prepare not only for the summit in Brussels in 2014 but for ASEM’s 20th anniversary celebrations in 2016.

As participants in Yangzhou said, the upcoming anniversary should not only take stock of ASEM cooperation so far but also set it on a new and revitalised course for the future.

By Shada Islam

Shada Islam, Head of Policy, Friends of Europe

Exploring ideas on ASEM’s future

Thongloun Sisoulith (L), Laotian Foreign Minister and Hungarian Foreign Minis-ter, Janos Martonyi (C), brief the press, as the Spokeswomen of the EU Presidency, Piroska Bako (R), looks on, at the end of the second day session of the 10th meeting of Foreign Ministers of ASEM, in 2011. | EPA/ZSOLT SZIGETVARY HUNGARY OUT

Rot and riot are awfully close

Some weeks back, on 20 May, rioting broke out in Sweden. The violence and civil disruption, which began in the Stock-holm suburb of Husby, sparked by the death at the hands of the police of a 69-year old immigrant, soon spread, eventually see-ing violent protests, including arson attacks, in several Swedish cities and towns. Many a young person, from working class and immigrant suburbs, where the rioting was largely contained, were arrested.Initially there was shock; Sweden, after all is perceived as the cradle of social democratic values, a place of liberal values and European ideals. The evidence, at least in terms of voter patters, is not so cut-and-dry, with a rise in conservatism and populism, including a turn against the European Union, taking hold. Recent OECD figures have pointed out that economic in-equalities in the country, brought about by tax cuts, leading to an obvious depletion of social services, are underlining civic unrest. On top of that, the recent figures released by the Euro-pean Commission, which suggest that economic recovery will not happen this side of 2013, cannot be a comfort to the Swed-ish government. According to those, youth unemployment is at an uncomfortably high level; 24.7%, the latest Eurostat fig-ures show. And Sweden is not even one of the country’s worst affected by the financial crisis, or, as we must now call it, the social and financial crisis. It even recorded small growth levels in 2012, while Eurozone countries slumped. This figure is by no means the worst; Sweden is roughly comparable to both Latvia and Lithuania, and a little behind France, although it is somewhat behind Ireland, Italy and Por-tugal, and way behind Greece and Spain. The United King-dom is inching its way towards Swedish levels, as is Belgium. Youth unemployment across the EU stands at around 24%.The most recent EU leaders’ summit pledged to address the situation, but it felt like too little too late. Subsequently, France and Germany have pledged to release funds to alleviate the problem, and will present a joint paper at the next summit later this month. The European Commission, they say, is not doing enough. The EU needs more effective economic governance, with powers taken away from Brussels.But more worrying than the percentage of young unemployed, is that Sweden has the highest ratio of youth-adult unem-ployed, ahead of Italy, the UK, Belgium and France. A gap, a very visible gap, is in evidence. A gap that fuels resentment and protest. There have been anti-austerity demonstrations, sometimes violent, across the EU in response to certain government poli-cies, but this represents something else, being less about policy and more about inequality. Other European countries are slashing social welfare systems, as well as education spending. Despite calls from the likes of the European Commission and the governments of France and Germany, the social dimension of Europe is not being pro-tected.The young unemployed are not responsible for the current crisis; that can be put down to their elders, many of whom, admittedly, are suffering alongside. But when it is obvious that those that have somehow escaped the rot are doing so much better, financially and in terms of their particular futures, it is hard sometimes to be placid. Concordia

TRANS-EUROPE EXCESS

12 EnErgy & climatE NEWEUROPEwww.neurope.eu

9- 15 June, 2013

Russia, OPEC face shale gas challengeOn 3 June, Brent crude fell below $100 a

barrel for the first time in a month de-spite OPEC’s decision to maintain pro-

duction, concerned by weak global economic growth. The Organization of Petroleum Export-ing Countries is facing its biggest ever challenge with the projected huge growth of shale gas and non-conventional oil coming at a time when it the oil cartel is struggling to maintain an internal consensus, Moscow-based analyst Chris Weafer, who is establishing a macro-political research consultancy in Moscow covering Russia and CIS, told New Europe on 3 June.

At the OPEC meeting on 31 May in Vienna, Nigeria’s Petroleum Minister Diezani Alison-Madueke said a committee will consider the ef-fect of shale oil on the global market for OPEC crude in the not-too-distant future.

Weafer noted that up to now there was a sense, in both Russia and within OPEC, that the US shale gas and non-conventional oil projects were not a real threat. Moscow and cartel mem-bers believed that volumes would not grow to the extent projected. The oil industry has faced many extreme projections, both of supply surg-es and supply decline, over the past fifty years, Weafer said, pointing out that none have, so far, materialised.

“‘This time is different’ remain the four most expensive words in the English language.

But the growth in US output has already ex-ceeded projections and, along with the ex-pected output from Canadian Sands and from Mexico and Brazil, the US is now clearly on course to cut its oil purchases from any OPEC member country by 2020 or shortly afterwards,” the Moscow-based analyst said. “That’s now the stark reality facing OPEC and other major exporters including Russia. After several years of denial they now have to start

planning for that different energy world,” he added.

On 31 May, OPEC members agreed, as ex-pected, to retain the cartel’s 30 million barrels per day output target through the rest of the year.

Weafer explained that the fact that OPEC did not cut production is not a reflection of its lack of concern over the growth in shale gas and non-conventional oil, but more a reflection of the fact that there is no internal consensus over how to react.

“The smaller OPEC producers, and espe-cially Iraq as its looks to rebuild its economy after the lengthy war, want Saudi Arabia and the other wealthy Gulf producers to take the hit and cut production to balance the growing competition. But the problem for Saudi Arabia is that even if it wanted to do that it cannot,” Weafer said, noting that one of the consequences of the Arab-Spring has been a huge increase in Riyadh’s social and defence spending. Saudi’s budget now needs the money almost as much as Iraq and Russia’s budg-ets do.

To some extent OPEC can defer the issue when it meets again on 4 December or into next year as the average price of Brent has been well above $100 per barrel for the past 12 months so there are surpluses to live off, he said.

Weafer predicted that the Iranian nuclear is-sue is also likely to return as a risk prop later in 2013. But from 2014, assuming the growth in US and Canadian production continues and as-suming that Russia will not slow its production by even one barrel, then the realty facing OPEC will be stark indeed, Weafer said, confident that Russia, which needs the oil revenues, will not de-crease its production.

Asked how the drop in oil prices is affect-ing Russia, he said the price of oil is more of a budget and confidence issue than a factor in GDP growth. The budget balances someplace just above $100 per oil barrel Brent so that Rus-sia’s finances have been in good shape for several years, he said, adding that the country has a very low sovereign debt load, which less than 10% of GDP, and financial reserves are the fourth largest in the world. “So, down to about $80 per oil bar-rel Brent should not be a major concern for the economy as the resulting budget deficit can eas-

ily be covered with a modest increase in sover-eign debt. Below $80 per oil barrel I believe that we would see some spending cuts and/or higher taxes and that would of course put downward pressure on growth,” Weafer said.

The Russian government has failed to per-suade both domestic and foreign investors to boost spending because of a failure to deliver a convincing long-term plan to expand and diver-sify the economy and a failure to deal with per-sisting negative issues such as corruption and a perceived poor rule of law, Weafer said. “So, if on top of that current situation, the price of oil were to fall sharply, then the knee-jerk reaction would be a faster slowdown in investment and much slower economic growth,” he said.

The Moscow-based analyst noted that the optimistic side of that story is that while high oil prices helped balance the budget and led to eco-nomic complacency in Russia, a sharply lower oil price might spurn greater efforts towards reform in order to boost investment and diversification. “We did see this in Russia through the first half of 2009 when Brent was much lower than the budget required. But all those plans evaporated as Brent climbed steadily back above $100 per oil barrel,” Weafer told New Europe.

Asked if shale gas is really a big threat for Russia and Gazprom, Weafer said it has already caused damage to the Russian gas giant in that the big increase in US shale gas production has led to a huge increase in US coal exports. “Those cheap coal imports into Europe have severely cut demand for Gazprom gas. The competition from cheap coal has also put considerable pres-sure on Gazprom to change its take-or-pay con-tracts to more short term contracts,” he said.

Gazprom still expects the gas market of the European Union to recover and grow consider-ably over the next decade. Weafer cited Gazprom Deputy CEO Alexander Medvedev as saying two weeks ago that he expects exports to Europe to increase by 80 billion cubic metres (from 139 billion cubic metres in 2012) to 220 billion cubic metres by 2020 and by a massive 200 billion cu-bic metres (to 340 billion cubic metres) by 2030. “Those forecasts do suggest that Gazprom is still hoping that shale gas is a relatively short lived phenomenon,” Weafer said.

By Kostis Geropoulos

OPEC Secretary General, Libya’s Abdalla Salem El-Badri, centre, at the 163rd meeting of the OPEC conference, Vienna, Austria, 31 May 2013.|AFP

PHOTO/ALEXANDER KLEIN

13EnErgy & climatENEWEUROPEwww.neurope.eu9- 15 June, 2013

Russian gas monopoly Gazprom and oil gi-ant Rosneft have received exclusive extrac-tion licenses to explore the Russian Arctic shelf in return for large cash payments. The licenses were agreed with the companies without a competitive tender.

Rosneft paid 1.4 billion rubles ($450 million) while Gazprom paid 1.2 billion. These amounts were specified in a resolu-tion passed by the government in 2009.

Exploration and extraction rights have been granted to Rosneft for two deposits in the Barents Sea, while three more in the Kara Sea have been given to Gazprom, ac-cording to an order signed on 23 May by Russia’s Prime Minister Dmitry Medvedev.

Russia has passed a law that only com-panies in which the state owns more than half and have at least five years of Arctic ex-perience are eligible for permits

LUKoil, the country’s second largest oil company, and Sugtneftegas are publicly owned, and therefore not up for a permit. Tatneft is the Russia’s sixth largest and oper-ates out of the Republic of Tatarstan, which is also the company’s primary shareholder.

The Kremlin has prompted Gazprom and Rosneft to work together in order to ef-ficiently explore and develop the uncharted waters in the Siberian Sea.

Gazprom said it will cut pipeline gas prices for European buyers in 2013. The Russian gas monopoly is facing rising competition at home and weak exter-nal markets. Spot prices have dropped below Gazprom’s long-term contracts and consumers have sought alternative sources such as liquefied natural gas (LNG) from the Middle East.

“The price correction will be even less than in the previous round of talks, when it stood at 7-10%,” Gazprom Dep-uty CEO Alexander Medvedev told a briefing.

Total rebates to European com-panies stood at 102.7 billion roubles ($3.22 billion) in 2012. Medvedev also said Gazprom would continue to cut

prices this year in new deals where its sale prices are pegged to declining oil prices, though at a slower pace than has been the case. He said new deals could include Italy’s ENI and France’s GDF Suez. Medvedev expects the average gas price for Europe in Gazprom’s long-term contracts will decline to $370-$380 per 1,000 cubic metres from $402 last year.

Shtokman’s future remains uncertainFacing major technical challenges

in the Arctic Barents Sea, the fu-ture of the giant Shtokman pro-

ject is still uncertain. Russian gas giant Gazprom told New Europe on 4 June that “at the moment the decision con-cerning Shtokman project is not taken yet”. It was asked if the development of the Shtokman gas condensate field in the Barents Sea will be postponed.

Earlier, Vedomosti daily quoted Gazprom Deputy Chairman Andrey Kruglov as saying the development of Shtokman will most likely be post-poned “for future generations”.

Shtokman, one of the world’s big-gest gas deposits, holds an estimated 3.9 trillion cubic metres of gas but its devel-opment is considered technologically difficult and costly as it is located some 550 kilometres offshore the Arctic Bar-ents Sea.

Analyst Chris Weafer, who is estab-lishing a macro-political research con-sultancy in Moscow covering Russia and CIS, told New Europe on 3 June that the Shtokman comment is not a surprise. “It has been clear for a long time that the project faces major technical challenges and will need innovative advances in Arctic sea-bed extraction before it can be considered,” Weafer said.

“The appetite to pursue those inno-vations and the huge capital costs asso-ciated with the project, has been consid-erably dulled with the major question mark placed over the global gas industry outlook by the supply advances and fur-

ther projections for shale gas,” he added.The Yamal Peninsula may become

the alternative to the Shtokman field. Gazprom has more than enough gas available onshore in the Yamal Pen-insula and, for the foreseeable future, doesn’t need the likely huge cost and equally large uncertainty associated with Shtokman, Weafer said.

According to Vedomosti, there were plans to develop the South Kirinskoe deposit earlier than Shtokman. It should become the base for a Gazprom lique-fied natural gas (LNG) plant in Vladi-vostok that is due to begin operating in 2018.

In summer 2012, partners in Shtok-man’s phase one delayed indefinitely

the final investment decision for the project due to rising costs. Shortly after that, Norway’s Statoil, which held 24% in Shtokman’s Phase One, pulled out of the project and returned its stake to Gazprom. In late March, Gazprom and French oil and gas major Total, which now hold 75% and 25%, respectively, in the project, agreed to prepare a road-map for signing a new deal on develop-ing Shtokman.

On 5 June Gazprom held its annual shareholder’s meeting, as it celebrates its 20th anniversary. At the conference, management noted that Gazprom is the largest gas supplier to the domestic market, citing its 73.1% market share in 2012.

Gazprom’s Sakhalin offshore field. Shtokman’s development may be postponed while Gazprom will focus on Sakhalin instead.|GAZPROM

Turkey Wants Kurds’ Energy Hand

By Kostis Geropoulos

Energy Insider

Turkey is turning to the Kurdistan Region of Iraq to meet its growing demand for energy. Co-operation with Erbil may help Ankara diversify its oil and natural gas sources and reduce its dependence on Russia and Iran but Turkey risks growing ten-sions with Baghdad and by extension, Tehran. “The Turks, like any other country, they want to diversify their sources,” Fadel Gheit, a senior energy analyst at Oppenheimer in New York, told New Europe on 7 June, arguing that Iraq is less stable than Kurdistan. “Most of the operators in Iraq would rather be in Kurdistan,” he said.The Iraqi Kurdistan region has four billion barrels of proven oil re-serves and current production would give Iraqi Kurdistan the po-tential to deliver around 215,000 barrels per day of crude to Turkey.Meanwhile, the United States doesn’t want to see Turkey pro-voke a Kurdish fight with Baghdad, which could also ease the opening for Iran in Iraq. But Gheit noted that the US govern-ment could have its own wish list but at the end of the day in-dividual companies will pursue their own interests. US Exxon and Chevron and France’s Total are all betting that Kurdistan is a better option for them than being in Iraq, he said. “The thing is far from over. We don’t know what kind of compromise Baghdad government will have and how this is going to impact spending and the development of Kurdistan,” the Oppenhe-imer analyst said.Easing US concerns, Turkish Minister of Energy Taner Yildiz recently announced that Turkey would likely make joint explo-ration and production deals with US companies in northern Iraq. In late May, ExxonMobil reportedly agreed to partner up with Turkish companies and the Kurdish Regional Govern-ment (KRG) to carry out exploration in northern Iraq. US Chevron, France’s Total and Russia’s Gazprom Neft have al-ready signed exploration deals. Analysts say Ankara’s relations with Erbil are guided by the peace process with the Kurdistan Workers Party (PKK), Syrian Kurdish autonomy issues, and energy projects. “It’s interest-ing because if you look at the politics and the map of Turkey, they’ve had pretty bad relationship with the Kurds. The Turks and the Kurds are not the best of friends so I really don’t know how this is going to play out long term and how Turkey will compromise on the autonomy that the Kurds within Turkey want and how is that going to impact their relationship with Kurdistan,” Gheit said.It’s a grey area. “Sometimes you have strange bedfellows,” he said, adding that Turkey has taken a hard line towards Syria, for example, but they are befriending the Baghdad government.Iran makes it even much more complicated. “It’s layers and lay-ers of conflicting interests. You have friends for the first part of the road and they become enemies in the second phase and then they become friends again in the third phase. That’s why all development projects are going to be very tricky,” he said.Oil and gas companies see big investment opportunities in the Kurdistan Region of Iraq, which needs help to develop its re-sources. “These companies, in my view, are walking through minefields and they have to be very careful,” Gheit said, adding that all these developments are going to be very expensive. KGeropoulos@NEurope.eu follow on twitter @energyinsider

Gazprom, Rosneft get Arctic licences

European states eye lower gas prices

By Kostis Geropoulos

14 EU-WORLD NEWEUROPEwww.neurope.eu

9- 15 June, 2013

A n enthusiastic, mixed bag of people gathered in the European Commis-sion’s conference room at the Char-

lemagne building last week. They were there to discuss the opportunities and risks present-ed by the recent rapid rise of crowdfunding. The industry grew by nearly 80 percent last year and is now an important financial vehicle for startups, SMEs and cultural projects. But crowdfunding is an umbrella term that covers just about everything you can do with your money: donate it, buy something, lend it or risk it so it accounts for the wide range of in-terests represented at the workshop.

What was heartening about the event was that there was general agreement in the room that things need to be clarified and clarified fast ( by government standards ). The dona-tion and reward based crowdfunding compa-nies are able to move ahead quickly because there is little regulation for them. For equity and lending activity it’s usually 18 months be-fore they can start to operate publicly.

Some national governments are also mov-ing ahead more quickly than others. Different national regulatory frameworks cause prob-lems when companies want to expand to cross border activities. So the hope is that the work-

shop can bring a more co-ordinated strategy for the implementation and interpretation of regulations where it’s needed.

What needs to change?In a nutshell, nearly everyone discovers

crowdfunding opportunities via the world wide web. Yet, the payment mechanisms and financial certifications required to operate of-ten reflect national structures. Pan-European payment gateways and better portability of financial accreditations would benefit the Eu-ropean crowdfunding market.

Crowdfunding companies breaks down into two distinct groups when it comes to is-sues of regulation.

One the one hand you have the donation and reward based companies, the kind of com-panies like KickStarter and Indiegogo that most people have heard of.

Then, on the other hand you have the lending and equity based companies such as Zopa in the UK and Symbid in the Nether-lands. The donation and reward based compa-nies are seeking better integration of payment systems. Trust is a crucial in crowdfunding and the profit margins are very small so hav-ing more payment providers that offer pay-ment methods recognized across Europe with competitive rates is essential. For the compa-nies involved in the equity and lending models, speedier approval of their applications for the licence to start operations will pave the way and recognition of licences across the EU would dra-matically reduce the administration burden for successful, expanding, job creating companies. Restarting the application process to enter each national market just isn’t viable.

The size of the opportunity Crowdfunding is growing enormously

year on year and is offering entrepreneurs and artists the opportunity to create things of value, pre-validated by the fact that many peo-ple are willing to back their vision. New busi-nesses and jobs are emerging from this push and willingness to adopt crowdfunding. Jobs are being created from the bottom up and op-portunities that may have never see the light of day had it been left up to the banks are becom-ing real and proving the model works.

From our perspective at Green Crowd-ing, the opportunity is enormous and is a crucial part of the energy transition to wider

renewable energy use. Private individuals can only do so much, perhaps installing solar panels on their roof at home and keeping up with the latest energy efficiency measures. More than 50% of all renewable capacity is already owned by private individuals and farmers in Germany. Crowdfunding opens up the opportunity for private individuals without access to property to invest in and enable the expansion of solar, wind and ener-gy-efficient projects on public buildings and industrial land.

Let’s leverage crowdfunding to direct capi-tal to the things that people care about, jobs and the real economy.

Grandesso Federico had the opportunity to discuss the solar panel case with Italian Carlo Calenda, Deputy Minister for Economic De-velopment of Italy as well as wine and other pertinent trade issues arising at the moment. The deputy took a moment of his time to speak to New Europe, interview follows.

Which is your reaction following the Chinese announcement of the opening of an anti-dumping investigation on European wines?

After a very long and detailed investiga-tion, we supported the action of the EU com-mission. We hope that an agreement on this matter can be reached and we think that, in a way, an agreement is also expected by both par-ties. It’s important to deal with internationali-sation with a positive and open approach but we have not to be disarmed when we need to protect our interests.

Are you worried about a future Chinese decision to put duties on EU wines?

Yes, we are very worried about the open-ing of this investigation and we spoke about that with the Commissioners, we think then that with more “European” attitude among the member states, if we would have understood that the protection of our trade it’s a common interest which has to be more important of the single interests, we would have probably had a different reaction from China. We think then that an agreement will be reached and this in-vestigation won’t end up with a commercial retaliation which would be a wrong behavior.

French President Francois Hollande has called for an EU summit on trade rela-tions with China how do you see this move?

Yes, it’s a very good idea. We have to be more compact and not because China is an en-emy on the contrary China is a very important partner, we have to speak to our commercial partners only with one voice and be considered as a single player, this will stop the counterpart in taking bilateral action with single member states. On the short term some member states

could have some positive outcomes to negoti-ate directly but on the long term it’s Europe is going to be damaged. This is the position of the Italian government and it has nothing to do with the protectionism.

What did you discuss in your meeting with the European commission?

We spoke only about trade policy. We have put an accent on this initiative on EU wines and Commissioner De Gucht will take time to go deep and study the case, I want then to un-derline again that this is only an investigation. I hope that this action is not a commercial re-taliation and I hope that the two issues are not linked.

The Italian wine producers are very worried today, what can you say to them?

We immediately put this problem at the at-tention of the commissioner, we are going to be firm and clear about this issue. About this topic we would like to have a fast answer and we think that all these issues will end up with a

negotiatable solution, we hope that.

Did you take contacts with other coun-tries apart from France and start to lobby with other member states?

Honestly, we are tackling this problem not through a lobby action with other countries but putting the accent on the fact that we must be coherent with our guidelines of industrial policy. If we want the manufacturing industry to have a chance to be relevant again, and these are guidelines that all member states approved, the trade policy must go together and sup-port these guidelines. We think that not only with France but also with Germany there is a common objective even though this time on the issue of the solar panel this situation was not what we were expecting. With Spain then we had last week a parallel meeting during the OCSE summit, we shared the need to not slow down about the measure of trade defense and to push on a coherent trade policy that could fulfill the objectives of a more important role of the industry in the European GDP.

A tale about crowdfundingBy Sissy Müller

Sissy Müller is CEO of Green Crowding, a crowdfunding plat-form for renewable energy projects.

Bankers, Bureaucrats and Benefactors

Crowdfunding comes in so many shapes and sizes these days, the Moldovan student pictured Olga Turcan, 32, seen here working in the university’s library in Strasbourg, on 25 April, 2013, financed a part of her thesis thanks to crowdfunding, collecting €5,200 to pay her work on French language and culture in Moldova. |AFP PHOTO / PATRICK HERTZOG

Solar panels: Strike them while they’re hot

15EU-WORLDNEWEUROPEwww.neurope.eu9- 15 June, 2013

East Asia’s lessons for Africa

NEW YORK – On 1-3 June Japan hosted the fifth meeting of TICAD, the Tokyo Inter-national Cooperation on African Develop-ment. The meeting is a reminder that, while the rest of the world obsesses over Europe’s economic travails, America’s political paraly-sis, and the growth slowdown in China and other emerging markets, there remains a re-gion – Sub-Saharan Africa – where poverty is almost the rule, not the exception.

From 1990 to 2010, the number of peo-ple living in poverty ($1.25 per day) across Sub-Saharan Africa rose from less than 300 million to nearly 425 million, while the num-ber living on less than $2 a day grew from about 390 million to almost 600 million. Still, the proportion of those living in pov-erty declined from 57% to 49% in this period.

Developed countries have repeatedly broken their promises of aid or trade. Yet Japan, still suffering from two decades of economic malaise, has somehow managed to remain actively engaged – not because of its strategic interests, but in order to meet a genuine moral imperative, namely that those who are better off should help those in need.

Africa today presents a mixed picture. There are some notable successes – from 2007 to 2011, five of the world’s ten fastest-growing countries with a population of more than 10 million were in Africa. And their progress has not been based solely on natural resources.

Among the best-performing countries have been Ethiopia, where GDP grew by roughly 10% annually in the five years ending in 2011, and Rwanda, Tanzania, and Uganda, where annual output has grown by more than 6% for a decade or more. But, while some sources indicate that there are now more middle-class families in Africa (defined as having annual incomes in excess of $20,000) than in India, the continent also contains countries with the world’s highest levels of inequality.

Agriculture, on which so many of the poor depend, has not been doing well. Yields per hectare have been stagnating. Only 4% of arable and permanent cropland is irrigated, compared to 39% in South Asia and 29% in East Asia. Fertilizer use in Africa amounts to just 13 kilograms per hectare, compared to 90 kilograms in South Asia and 190 kilo-grams in East Asia.

Most disappointing, even countries that have put their macroeconomic house in or-der and have made progress in governance have found it difficult to attract investment outside of the natural-resource sector.

Japan’s engagement is particularly impor-tant not only in terms of money and moral support, but also because Africa may learn something from East Asia’s development ex-perience. This may be particularly relevant today, with China’s rising wages and appre-ciating exchange rate underscoring rapid

change in global comparative and competi-tive advantage.

Some manufacturing will move out of China, and Africa has a chance of capturing some fraction of it. This is especially signifi-cant, given that, over the last 30 years, Sub-Saharan Africa has suffered from de-industri-alization. Indeed, by the late 2000’s – owing partly to the structural-adjustment policies pushed by the international financial insti-tutions – manufacturing as a share of GDP in developing African economies was lower than it was in 1980.

But a manufacturing boom will not hap-pen by itself. African governments must un-dertake industrial policies to help restructure their economies.

Such policies have been controversial. Some argue that government is not good at picking winners. Some argue that it makes no difference whether a country produces potato chips or computer chips.

Both perspectives are misguided. The purpose of such policies is to address well-known limitations in markets – for example, the important learning externalities, as skills relevant to one industry benefit nearby in-dustries.

The goal of industrial policies is to iden-tify these spillovers, and governments have done a very credible job in this respect. In the United States, the government promot-ed agriculture in the nineteenth century; supported the first telegraph line (between Baltimore and Washington, demonstrated in 1844) and the first transcontinental line, thereby launching the telecommunications revolution; and then nurtured the Internet revolution. Inevitably, government – through its infrastructure, laws and regulations (in-cluding taxation), and education system – shapes the economy.

For example, American tax and bank-ruptcy laws, combined with deregulation policies, effectively encouraged the creation

of a hypertrophied financial sector.With resources so scarce, developing

countries cannot afford the luxury of such waste. They have to think carefully about the future direction of their economies – about

their dynamic comparative advantages.The world’s most successful developing

countries – those in East Asia – did just this, and among the lessons to be shared are those concerning how they conducted industrial policies at a time when their governments lacked the sophistication and depth of talent that they have today. Weaknesses in govern-ance may affect the instruments of industrial policy, but not its use.

Japan has other lessons to teach as well. Key elements of its development strategy – including its stress on education, equal-ity, and land reform – are even more impor-tant today in Africa. The world has changed markedly since East Asia began its remark-able developmental transition more than a half-century ago; and differences in history, institutions, and circumstances mean that policies must be adapted to local conditions.

But what is clear is that Japan and other East Asian countries followed a markedly dif-ferent course from that recommended by the neo-liberal “Washington Consensus.” Their policies worked; all too often, those of the Washington Consensus failed miserably. Af-rican countries will benefit from reflecting on these successes and failures, and on what they mean for their own development strategies.

© Project Syndicate 1995–2013

By Joseph E. Stiglitz

Joseph E. Stiglitz, a Nobel laureate in economics, is University Professor at Columbia University.

Coffee traders shop for deals on the floor of the Ethiopian Commodities Exchange (ECX) in Addis Ababa | AFP PHOTO / JENNY VAUGHAN

16 ARTS & CULTURE NEWEUROPEwww.neurope.eu

9- 15 June, 2013

The word, “raï,” in the colloquial Arabic of northwestern Africa, implies the ex-pression of opinion. It’s a fitting name

for a musical genre created by and performed for the Algerian poor, urban classes who need-ed to express their suffering under oppressive, French colonial rule.

The music is still a strong source of cultural identity for people of North African heritage, has served as a trumpet-call for popular pro-tests like Tunisia’s in the 2011 “Arab Spring,” and is the go-to party music for dance clubs and weddings. The average music-listener hears a raï song or raï-influenced song fairly frequently, and the history of this Arab “rock and roll,” is just as interesting as its vibrant rhythms and melodies.

The roots of raï can be traced to the west-ern Algerian port of Oran in the 1930s where Arab, French, Spanish and Jewish communi-ties lived in separate quarters alongside an in-creasing number of rural Bedouins moving to the city.

The music practices of each community, including classical Spanish al-andalous and fla-menco, classical Arab hawzi, Bedouin malhun

poetry, women-only poetic songs in praise of the Muslim Prophet Muhammad called medh, French cabaret, Saharan gnawa, and zendanis bar songs, infused to create one rhythmic, lyri-cal and catchy sound.

Similar to hip-hop, the blues and rock and roll, raï became a vehicle for political and so-cial expression, melding together common phrases and community sentiment for lyrical content. Raï musicians touched on the poverty and misery of life in the streets in their songs and audience members exclaimed “Raï!” dur-ing performances to show their support. Per-formances were a communal gathering, and singers mixed colloquial Arabic, Amazigh and Romance languages.

The ‘70s saw the incorporation of elec-tronic guitars, synthesizers, drum machines and trumpets into the music. New recording techniques allowed raï to spread throughout the Middle East, South America and Europe, sparking an interest in Arab music through-out the world. Collaborations between raï performers and other famous musicians, like the one between Cheb Mami and renowned new age-rocker Sting, became common. Raï was especially popular in France, partly due to strong demand from an emigrant Arab

community.Raï performers, known as “chiekhs” (for

men) and “chiekhas” (for women) in older generations and “chebs” and “chebas” for younger generations, also sang about intimate romance, alcohol consumption, consumerism and partying. The subject matter in the lyr-ics, as well as the mixed-gender dancing that occurred at raï performances and women’s prominent roles as raï singers conflicted with orthodox Islamic tradition.

The Algerian government, increasingly aligned with orthodox Islamic values, banned the production and importation of raï cas-settes, banned it from the radio and further harassed its singers by confiscating their pass-ports. The government eventually embraced raï after 1985 but censored taboo subjects, of-fensive language and antigovernment lyrics in the hopes to make a profit from its production.

This did not stop armed, extremists from opposing the music. Pressure against the genre and community increased dramatically in the ‘90s during Algeria’s civil war between the gov-ernment and terrorist blocs when these groups assassinated popular raï singers like Cheb Hassni, Cheb Aziz and Rachid Baba Ahmed.

France became a haven for raï performers, like the “Queen of raï” Cheikha Rimitti and “King of raï” Cheb Khaled, who faced perse-cution. The genre was kept alive there until the end of the civil war, having increased in popularity abroad and at home. Cheb Mami’s return to Algeria in 2000, after ten years gone,

brought 80,000 people to the venue. Since its inception raï was a source of sol-

ace for the downtrodden and the anthem for anti-government protests, like Khaled’s “El Harba Wine” (To Flee, But Where) during civil unrest in Algeria in 1988. In the song Khaled sang about how “the rich gorge them-selves, the poor work themselves to death…you can always cry or complain. Or escape…but where?”

Tunisian-born Mohamed Chaoua, who performs as MC raï, had been producing songs about how to get rid of the rule of former president Zine El Abidine Ben Ali five years prior the Tunisian revolution of 2011. His track “Wake Up,” was one his first songs to get banned, and, like the political sentiments of the people, was widely disseminated through social media.

Today raï music maintains its tradition of mixing diverse influences and appealing to both listeners who want dancing or listeners who want defiance. Songs like Cheb Hassan’s “Gouli Hali Franchement” combine Bedouin drums, DJ record-scratching, jazz chords and funky bass. The popular MC Lotfi Double Kanon raps over raï-infused hip-hop beats and criticizes Algerian contemporary society.

While it can be argued raï’s sound has changed too much over the years to be the same genre, its pervasiveness reflects its atti-tude as music for the people, with enough mu-sic and messages for everyone to have reason to express something - to “Raï.”

ADVERTISEMENT

By Nassim Benchaabane

Raï – pervasive, popular, music for the people

Algerian “King of raï” Cheb Khaled (left) performs with Egyptian singer Mohamed Mounir (right) at a 12 November concert in 2009 in Cairo, Egypt. | EPA / MOHAMED OMAR

We know what they were shouting, now we know why they were also dancing. Tahrir square, Egypt. |EPA/KHALED ELFIQI

17fashion & styleNEWEUROPEwww.neurope.eu9- 15 June, 2013

W hile retro fash-ions have flood-ed the market for

quite some time now, the most authentic way of enjoying vintage designs in their most glamorous and sparkling state is still to turn to Hollywood’s Golden Age.

Indeed, the history of fash-ion and the history of film have much in common: whether they’re Classical film lovers or not, fashionistas will surely find pleasure in discovering rare restored movies like ‘To-night or Never’ (1931) star-ring sublime actress Gloria Swanson who is exclusively dressed by Coco Chanel, fa-vourite Film Noirs like ‘Gilda’ (1941) with Rita Hayworth wearing French Hollywood costume designer Jean-Louis’ gorgeous gowns, Hitchcock thrillers like ‘Stage Fright’ (1950) starring Marlene Di-etrich in costumes designed

by Christian Dior himself, or even ‘Paris Holiday’ (1958) and Anita Ekberg’s entire Bal-main wardrobe, if only to mar-vel at the wonderful designs of these famous Couturiers.

Adding to that, how could one miss out Hubert de Givenchy and his long-lasting and outstanding collaboration with his muse, Audrey Hep-burn, who proudly paraded the Couturier’s most famous designs in eight of her films?

Many characterise the duo’s relationship as the perfect match, since Givenchy’s cut-ting-edge geometrical models greatly complemented Hep-burn’s ballerina physique in Cinderella-themed movies that often involved the trans-formation of a humble creature into a chic Parisienne, espe-cially in the ‘Sabrina’ (1954) and ‘Funny Face’ (1957) fair-ytales. The famous LBD (little black dress) is celebrated in both ‘Sabrina’ and ‘Breakfast at Tiffany’s’ (1961), while Audrey’s iconic mandarin col-lared coat, midi heels, pointed

pumps, gloves and cat-eye sun-glasses were famously noticed in ‘Charade’ (1963) among many other of her films.

Classical Hollywood movies certainly share a habit of isolat-ing editorial-like sequences, which seem to have a life of their own without particularly serving the plot. The scene in which Ava Gardner confi-dently strides down the yacht while undressing to reveal her one-piece black bathing suit in ‘The Barefoot Contessa’ (1954), for instance, bares a striking resemblance to a re-sort fashion catwalk.

Similarly, Grace Kelly’s flawless beauty and classy el-egance ‘burst’ out of the screen in ‘High Society’ (1956), especially when she wears an overly chic pastel ensemble to go sailing. Kelly also wears impressive ‘New Look’ ball

gowns in improbable settings in Hitchcock’s films ‘Rear Window’ (1954) and ‘To Catch A Thief’ (1955) all of which contribute to mak-ing her a spectacle, an impos-ingly beautiful figure put out on display for the eyes of the male protagonist who feigns indifference…without fooling anyone.

While at first glance these films seem to conform to tra-ditional gender roles and to ‘trap’ women into their frivol-ity, frocks and mannerisms, fe-male spectators can recognise the insolence and deceit of the female protagonist whose love-liness is constantly praised at the expense of the passive, in-terchangeable and insignificant male character.

For instance, in Howard Hawks’ musical comedy ‘Gentlemen Prefer Blondes’

(1953) which is a female ver-sion of the buddy movie, Mar-ilyn Monroe and Jane Rus-sell’s spectacular appearance gives them complete power and control over the male characters who are either exag-geratingly naïve or ridiculous. This feminine empowerment is expressed both through the costumes, which are flashy and ‘aggressive’, and through the shiny, candy wrapper comics aesthetic that mocks women’s consumption craze in 1950s America.

All in all, costumes either blend in with the setting and act as a tool for character de-velopment, or stand out as art pieces in their own right, espe-cially when they own the rec-ognizable signature of a great Couturier.

Louise Kissa lkissa@neurope.eu

The Golden Age of FashionHollywood Costume design & RetRo fasHion

Audrey Hepburn in ‘Breakfast at Tiffany’s’, 1961Grace Kelly in ‘High Society’, 1956

Rita Hayworth in ‘Blood and Sand’, 1941

Ava Gardner in ‘The barefoot contessa’, 1954

Marilyn Monroe in ‘Gentlemen Prefer Blondes’, 1953

18 BRUSSELS AGENDA NEWEUROPEwww.neurope.eu

9- 15 June, 2013

Broken Twin: A sobering voice of mystique and depth

A bone-chilling melancholy aura, the raw acoustics of Broken Twin, strip down to the bare beauty of musical aesthetics. Soulful and synonymously delicate, 24 year old Majke Voss Romme from Copenhagen, is sure to leave you with chills when you listen to her re-cordings. She is set to perform live, Friday, 14 June, at Ancienne Belgique’s Huis 23.With a vibe that is almost otherworldly, she draws influence from the sounds of the Northern hemisphere and artists such as Feist, Nico, and Anthony and the Johnsons. Her work reflects a resonating sense of loneli-ness and heavy sentiment, yet still harbors a subtle loveliness that moves the listener into a soothing reverie.She is quoted from Broken Twin’s webpage: “I like to work within my own little bubble whenever I write songs so no one can hear me. It’s a very personal process and the songs have a strong connection to my self; a theme, a feel-ing, an experience or a state of mind”.Majke and her former bandmate, fellow Dane Emilie Marie Kjær, produced Broken Twin’s debut EP, “Hold On To Nothing”, fully on their own, with their own pace and vision, seeking Brian Batz from Sleep Party People in

the final stages of the process to help mix the EP, contributing the eerieness he is notable for.Majke will perform as a duo with Under Byen violist Nils Gröndahl at Huis 23, and they are sure to deliver a memorable show at the Anci-enne Belgique, especially with Huis 23’s inti-mate venue atmosphere. Admission is free of charge but seats are limited, therefor registra-tion via reservationshuis23@abconcerts.be is recommended.Bob Van Reeth: A celebration

of milestones 13 June, Bozar

In tribute to the famous Belgian Architect, Bob Van Reeth’s 70th Birthday approaching this year, a unique exhibition of his architec-tural career will open at the Brussels Centre for Fine Arts on Thursday, 13th of June.

Bob Van Reeth, whose signature reads as ‘bOb” Van Reeth, currently leads the com-pany AWG (Architect Working Group) Ar-chitecten, in Antwerp. Van Reeth’s career as an architect started in 1965, designing buildings in Mechelen and Kalmthout. He became a teacher at the Nationaal Hoger Instituut voor Bouwkunst (The National Higher Institute for Architecture) in Antwerp in 1972, where he currently still resides, alongside with many of his notable architectural achievements.

Significant buildings’s of Van Reeth include the new wing for the Westyletern Abbey, the

black-and-white Huis Van Roosmalen facing the Scheldt, and the Zuiderterras, a grand café, all lo-cated in Antwerp. His group, AWG, won the ar-chitectural concours for the design of a memorial and documentation centre about the Holocaust in Mechelen. Van Reeth himself became the first Flemish Master Architect, in 1998.

The curators of the exhibit, Bart Ver-schaffel and Christophe Van Gerrewey, invite guests to retrospectively discover over 50 of Van Reeth’s projects and achievements, from his primary sketches, to various documents, photographs, and models regarding his work. The chronology of the exhibit is reversed, be-ginning with his most recent work, working it’s way back to his early student projects.

An all-encompassing historical analog of architectural vision, this distinctive presenta-tion of Van Reeth’s career is not to be missed. Tickets for the event range from €4,00-6,00, and the exhibition will remain until Sunday, 8th of September.

Holocaust museum - Kazerne Dossin, Mechelen (c) Stijn Bollaert

Restaurant l´Atelier28 Rue Franklin, BrusselsTel 02 734 9140www.atelier-euro.beIf you´re looking to find a spot of fine dining amongst the glut of restaurants in the EU quarter, you should head for l´Atelier.During the week, 95% of its trade comes from the nearby EU institu-tions but on Fridays, it boasts a more re-laxed, family-oriented ambience (“Hap-py Friday” is also when there´s 25% off all food). This delightful restaurant seats 80, plus there´s an upstairs 90-seat area, where wine was once bottled, for private functions and lovely terrace.Appropriately, one menu is named after local areas (Schuman, Leopold) while the good value, three-course “trio” menu is priced just 26euro pp (excluding drinks). Alternatively,you get the same plus the house aperitif, half bottle of house wine and coffee for an incredibly reasonable 35 euros pp.There´s a terrific wine list and a la carte starters include white asparagus “the Flemish way” while mains feature monkfish kebab and Scottish Angus rib steak. All are reasonably priced and deliciously prepared by the African-born chef Bako Moumouni.Here´s been there 20 years but Laurence Waerzeggers and her partner Marc (ably assisted by Group Manager David Gutkind) are just celebrating their first anniversary as owners. Highly recommended. (open noon-2.30pm and from 7pm. Closed weekends).

Resto Bites

19SCIENCENEWEUROPEwww.neurope.eu9- 15 June, 2013

Humanity’s most significant heritage site is not on the Earth, but on the Moon. The Lunar landings, between

1969 and 1972, mark the brief period when twelve men walked on the Moon, taking us be-yond our own planet.

Since then we have sent machines to other worlds, like Mars Curiosity and of course, Voyager 1, which is 18.486 million kilometres away from home, about to enter interstellar space.

But it is the moment when we first stepped on the Moon that will not only go down in his-tory, but will still be recalled as a defining mo-ment in our species story in the distant future. But will the Lunar landing sites still be around?

The question is not as abstract at it may seem. With the beginnings of space tourism and commercial interests, there could well be visits to the Moon in twenty years, some say much sooner.

The cause of preservation became more urgent after Google offered $30 million for the “first privately funded teams to safely land a robot on the surface of the Moon, have that robot travel 500 meters over the lunar surface, and send video, images and data back to the Earth.” By 31 December 2015.

Twenty three teams are actively compet-ing. More worrying, was a bonus prize for “precision landing near an Apollo site or other

lunar sites of interest (such as landing/crash sites of man-made space hardware).”

Alun Salt, from UNESCO Astronomy and World Heritage Initiative, tells New Europe, “I’m told the 3.6 million old footprints at La-etoli, Tanzania were reburied after they were damaged by tourists who wanted to compare their feet with an australopithecine’s. It would be nice if we could take a few small steps to pre-vent similar damage on the Moon.”

NASA quickly arranged talks with Google and agreement was reached on avoiding land-ing sites, in particular that of Apollo 11 and 17, the first and last visits by humanity.

It could take longer than that to put in place a framework to protect the sites and be-ing conservation and heritage into the space age. There are a few problems, not least that nobody owns the Moon, meaning that it be-comes difficult to protect something that no-body has dominion over.

It also means that a lot of work has to go into getting a legal framework made before real protection, and penalties for violations can be put in place, until then, there is precious little protection possible for such important sites on our collective history.

So far, the only protection is that of the American government insisting it owns what-ever they took to the Moon and left behind.

Salt explains, “To get a site heritage listed, the host nation has to nominate the site. How-ever, Article II of the Outer Space Treaty says that no nation can claim sovereignty in any way over the Moon. It’s made more compli-cated by Article VII. Any artefact in space is the responsibility of the state that put it there.”

He adds, “So Russia can claim ownership of Luna-2, but they can’t list the site where it landed as the first location where humans suc-cessfully placed a Lander. The same goes for the USA and Tranquillity Base. The Lander, the flag, all the waste are all protected as prop-erty of NASA, but the lunar surface they’re on is not.”

To put it bluntly, Salt says, “This means that the bags of faecal matter left on the moon have more legal protection than the footprints of the first landing.”

There are a large number of objects on the Moon, including Neil Armstrong and Buzz Aldrin’s moon boots, flags, empty food bags, tools and other items like a golf ball and lunar rover. There’s even a piece of art, an 8.5cm sculpture called ‘Fallen Astronaut’ which com-memorated the eight US and six Russian space who died in the space race.

The Moon does have some positives from a heritage perspective says Salt, “What would legal protection protect a site from? Archaeo-logical sites can decay from human interven-tion or slow natural decay. Nature isn’t a big problem. The sites are at risk from meteorite strike, but that’s a very low risk and you can’t legislate against that. It’s not like the sites are being overrun by forest, or under threat of earthquake damage.”

The sites are, however as fragile as they are inaccessible. NASA have produced a 96 page technical guide to prospective moonwalkers, which sets out exclusion zones, based at pro-tecting their physical artefacts and what they call ‘ongoing experiments.’

There are laser reflectors on the surface, which are being used in various ways, but they have shown that the Moon is edging away from earth, by a few centimetres a year, but these are being retired. The other point of scientific in-terest is in the rate of decay, or dust covering on the materials they left behind.

The space agency is also trying to strike a balance between preservation and scientific needs, something earthly conservationists can appreciate.

Visiting the sites could also have a good outcome. What exactly are the conditions of the tools and vehicles? Only one item has been returned to Earth – which showed that flu germs can survive in space, when Apollo 12 recovered the Surveyor 3 camera.

They have held the first and last sites at the highest level of protection and are open to discussions with those planning to drop in elsewhere.

As a heritage plan, it has major holes. For example, it isn’t universal, what about all the other nations who have thrown objects, in-cluding people at the Moon. What about pun-ishment? What about prosecution?

There is another issue; context.What about preserving what Buzz Aldrin

called the “magnificent desolation”? Shouldn’t the Apollo 11 landing site have its view pre-served with a large exclusion zone, or should people be allowed to get to near touching dis-tance? Many would say the former.

What we have to do now is to work out how to preserve our Lunar heritage. It’s going to take so long to agree a comprehensive treaty, we really should start today. If not we may find that some egomaniacal billionaire or error-making scientist gets there first and ruins it for everyone. For ever.

First footsteps into space heritageHow can we preserve the Lunar landing sites?By Andy Carling

The Lunar Observer has taken the closest photos yet of the Apollo 11 landing site. |NASA

20 TECHNOLOGY NEWEUROPEwww.neurope.eu

9- 15 June, 2013

A lberto Ruiz-Gallardón, Spanish Min-ister of Justice, has ordered the design of a Criminal Procedure Code’s draft,

which authorises the police to install trojans on computers from guarded individuals.

The text might provide remote control over computers, including tablets and smart-phones, related with sentences up to three years, cybercrime, terrorism, and organised crime. However, judges will have to justify the need of intervention before allowing police to take action.

According to the article 350 of the pro-posed draft, prosecutors may ask the judge for “the installation of a software that allows the remote examination and without knowl-edge of the owner of the content in comput-ers, electronical devices, computer systems, instruments of massive storage or databases.”

In other words, the text allows the instal-lation of trojans, a malware programme which is installed from different computers and that gives control over all the content without us-ers‘ noticing it.

The measure will be only authorised when the information that has to be investigated is stored under Spanish jurisdiction (fully or par-tially). In other situations, police will have to

follow international laws.Furthermore, the article 351 of the text ex-

plains that official agents may require coopera-tion from “anyone who knows the operation of the computer system or measures applied in order to protect data held there“. This means that Spanish authorities might require services from experts, “hackers” or computer compa-nies.

The Spanish Ministry explained that de-spite the text proposed will be the basis of their draft, for the time being no decision was made regarding remote control of computers.

“We will listen carefully to what they will say on this matter, but we will not take a deci-sion until we have discussed findings from dif-ferent areas and groups,“ said a spokeswoman from the Ministry of Justice.

Experts on the matter explained that if the draft includes these rules, Spanish authorities will have also access to passwords that citizens use for their email, social profiles, bank ac-counts and other online services.

In addition, companies will have to collab-orate with the police if they require the instal-lation of surveillance systems, something that will go against privacy rights and data protec-tion rules. NR

Spanish police might use trojans to spy on computers

CEO Coalition calls for cooperation to improve the Internet for kids

The Coalition of 31 CEOs and senior board members from international digital, media and tech companies set

up by the European Commission two years ago, expressed their commitment to continue working together in order to build a better In-ternet for kids.

During a meeting with Neelie Kroes, Commission Vice-President Responsible of the Digital Agenda, CEOs highlighted that when children’s issues are concerned, it’s co-operation and not competition that counts.

“Children need quality content online, and skills and tools for using the Internet safe-ly. Parents need support. And we are all bet-ter off if companies play a leading role in this effort. So we need to join forces for a greater impact,” said Neelie Kroes.

The CEO Coalition has been working in

new tools and systems during the last two years to offer a safe online world for children. For instance, all of them provide parental control tools and/or age appropriate settings, and they have created a technical task force on interoperability, to make online classifica-tion labels available across national borders in Europe and beyond.

However, they explained that there are still areas where companies can collaborate, like sharing educational material to be re-used, developing a common branding or logo for initiatives across Europe, involve everyone working in the educational firms, and raise awareness amongst parents.

One year ago, Neelie Kroes announced Commission‘s new strategy to protect chil-dren from Internet‘s risks.

The project, which also aims to fight against child abuse, includes the creation of a safe environment and awareness campaigns about online problems.

By Nerea Rial

EPA/KOBI GIDEON

Alberto Ruiz-Gallardón, Spanish Minister of Justice | EPA/LAW KIAN YAN

Tumblr founder David Karp and Yahoo CEO Marissa Mayer | MARIO TAMA/GETTY IMAGES/AFP

11_Say_No-UNiTE_Poster_Eng_Hi.pdf 1 11/15/11 3:38 PM

21TECHNOLOGYNEWEUROPEwww.neurope.eu9- 15 June, 2013

On 30 May, Neelie Kroes, Vice-Pres-ident of the European Commission responsible for the Digital Agenda, urged MEPs to defend net neutrality across Europe, and 4 June a group of twenty European CEOs and entrepre-neurs representing a variety of online businesses have decided to back her proposal.

The group, which includes compa-nies like Viber, The Next Web, Storify and WeePee, signed a letter that was delivered by MEP Marietje Schaake to the commissioner after her keynote speech during an event on Net Neu-trality in Brussels.

“As European entrepreneurs we are ready to back you as we also believe the European Union, its citizens and its

businesses need safeguards to curb the tendencies of access operators to act as gatekeepers of the Internet,” said the letter.

According to these entrepre-neurs, “such tendencies are harmful to the fundamental rights of users, to new and existing companies count-ing on the global reach of the Internet to launch and grow their businesses and to innovation and the economy in general.” They added that users‘ choice of which services they want to use “is already restricted across the European Union.” For instance, according to BEREC, “236 million mobile users in the EU can not use Skype”, explained James Waterworth, Vice President, CCIA Europe, during

the Net Neutrality event.Therefore, European CEOs and

entrepreneurs called on the European Commission to open the Internet, “so that everyone is able to send and re-ceive the content, run the applications and use the services of their choice, on the device of their choice.”

They also consider that network management should be keep to a mini-mum, as well as discrimination in the treatment of Internet traffic. “Network access providers must be prohibited from blocking, degrading, hindering,” they explained.

The group concluded their letter saying that transparency and facilitat-ing switching “are important but insuf-ficient to protect the open Internet.”

European entrepreneurs ask for net neutrality

France celebrated last weekend its first “online-primary” to chose the next Paris Mayor,

but the system has turned out to be vulnerable to multiple and fake voting.

In order to register a vote in the opposition UMP party’s “open pri-mary” and select a candidate, citi-zens had to pay €3 with their credit card, and give name, address and date of birth.

But, according to journalists from the news site Metronews, it was easy to breach the allegedly strict security of the “electronic election” and vote several times using different names. One of these journalists managed to vote five times, paying with the same credit cards and using names like the ex-President and UMP leader Nico-las Sarkozy.

The discovery generated anger within the party, but after a three-hour discussion the UMP decided to continue with the first round of vot-ing until Sunday‘s afternoon. Nath-alie Kosciusko-Morizet was elected as the party’s candidate in the elec-

tion for mayor of Paris next spring.Last November, the UMP was

also involved in rumours about the use of dirty tricks in an election to replace Sarkozy. The defeated can-didate François Fillon accused the party of “fraud on an industrial scale”. Jean-Francois Copé won, but hun-

dreds of overseas ballots were left out of the final count.

The situation in Paris shows the difficulty in designing electronic vot-ing systems. Experts consider that parties should be totally secure that they are using risk-free channels and that they cannot be manipulated.

Nathalie Kosciusko-Morizet won first online elections in France | AFP PHOTO / ALAIN JOCARD

Fake votes disturb first electronic election in France

Much ado about ‘Big Data’

By Jennifer Baker

“Big data” is the newest buzz-phrase that dominates technology discus-sions. But its meaning is often difficult to pin down and even more so whether it is a force for good or ill.According to the Big Data Public Private Forum (BIG), which is work-ing towards the definition and implementation of a clear strategy, big data is an emerging field “where innovative technology offers alterna-tives to resolve the inherent problems that appear when working with huge amounts of data, providing new ways to reuse and extract value from information”.In other words, there’s lots of data out there - let’s use it.Eric Schmidt, Google’s chief executive officer, estimates that we create 5 exabytes of data every two days - that’s as much information as was created from the dawn of civilisation to 2003. And this data explosion is growing at a rate of 40 per cent per year.According to Digital Agenda Commissioner Neelie Kroes, this is a market worth tens if not hundreds of billions of euros per year. But, as always, where something valuable is concerned, ownership becomes an issue.Who owns so-called big data? In the simplest terms, if you make a call on your mobile phone, is the information about that call yours, or the mobile phone company’s?This question has come to the top of the agenda in the United States in recent days as the news broke that the U.S. National Security Agency (NSA) was accessing huge amounts of social media data and, thanks to a court order, was getting meta-data information from Verizon.Meta-data is an element of big data. It’s information about information. SO in the case of the NSA, the agency wasn’t getting customer names or the content of phone conversations, but it was getting information that calls took place. Many customers are outraged that they were unaware of this.Which brings us to the issue of trust. As the Commissioner underlined in a speech recently: “We need to build trust. People have understand-able concerns – like about how health data might be used. We can’t do all these wonderful things until we build public understanding and con-fidence.”At a time when Europe desperately needs growth, Kroes believes big data could be the solution.“That’s why I’ve called data the new oil. Because it’s a fuel for innova-tion, powering and energising our economy. Unlike oil, of course, this well won’t run dry: we’ve only just started tapping it,” she said.“Much of this data is already here with us: but held by our public admin-istrations, locked up or unusable. This is data that is rich, comprehen-sive, and that taxpayers have already paid for. We need to open it up,” continued Kroes. And the Commission is practising what it preaches working towards a pan-European data portal, a one-stop shop for Europe’s open public data, for every country and every level of government.Big data does indeed hold promise of huge benefits. Scientists can col-laborate on a large scale, governments can use open public data to im-prove public services and boost innovation and mobile phone users are already using big data applications to make everyday tasks quicker and more convenient.Big data is here to stay, whether it is a boon or a curse depends on whose hands it is in and how it is used. A challenge now lies ahead for legisla-tors to map out the rules we need.

Brussels Geek

22 EUROPEAN UNION NEWEUROPEwww.neurope.eu

9- 15 June, 2013

DENMARK | TECH

Police data hacked, 2 suspects profiled Officials say the Swedish founder of the file-sharing site The Pirate Bay is suspected along with a Dane of hack-ing into a company handling sensitive information for the Danish police the Associated Press reported. Police in Denmark announced the investigation on 6 June, and a source close to the investigation told the AP that one of the suspects was Pirate Bay founder Gottfrid Svartholm Warg, who was arrested in Cambodia last year and repat-riated to Sweden where he is in custody, suspected in a similar case. The source spoke on condition of anonym-ity because he is not allowed to speak on the record. The Danish suspect was arrested on 5 June. National police chief Jens Henrik Hoejbjerg said the hackers copied some four million pieces of data but there was no im-mediate evidence it had been used.

SWEDEN | CULTURE

Swedish royal bride pulled over by police In egalitarian Sweden, not even a soon-to-be-married princess can get away with breaking the traffic rules. But Stockholm police may have missed one royal privilege when they pulled over Princess Madeleine near the pal-ace last week, four days ahead of her wedding to New York banker Christopher O’Neill the AP reported. Lars Lindholm, acting head of the unit that stopped her told newspaper Aftonbladet she faces a 1,000 kronor ($150) fine for driving in a bus lane. Lindholm said Made-leine’s father, King Carl XVI Gustaf, is the only Swed-ish royal with immunity from prosecution. However, court spokesman Bertil Ternert said police seem to have missed that Madeleine was driving a car from the Royal Mews with a special permission to use the public tran-sit lanes. Police spokesman Kjell Lindgren declined to comment.

LITHUANIA | AGRICULTURE

EU organic future to be discussed in VilniusIn July the International Federation of Organic Agricul-ture Movements will hold its seventh European organic congress gathering agriculture ministers from Greece, Lithuania being the host country will share its know-how and status as well as the Irish minister speaking on behalf of the presidency as changes to upcoming EU leg-islation following a consultation period will be reviewed and discussed. The members of the European Commis-sion dealing in organic agriculture will be present to display their findings as well as experts in the field, and organic stakeholders. European organic control systems will be discussed by Bernd Winkler from the European Commission’s Food and Veterinary Office during a seminar on Controls in Organic Farming”. CAP reform will be explored in terms of boosting organic farming with Edouard Rousseau, chair of the organic working group at COPA-COGECA, Europe’s main agricultural umbrella during the work-shop on developing a new organic action plan for Eu-rope. The European Consumer Organization (BEUC), will be represented by Camilla Udsen from the healthy food for informed consumers team – during the panel on an improved framework for organic in Europe.

The surging Elbe River crested in the eastern German city of Dresden, sparing the historic city center but engulfing wide areas of the Saxony capital on 6 June.

Residents and emergency crews had worked through the night to fight the floods in Dresden. The German mili-tary and the national disaster team sent more support in a frantic effort to sand-bag levees and riverbanks as floodwaters that have claimed 16 lives since last week surged north.

“Everybody’s afraid but the people are simply fantastic and sticking together,” said Dresden resident Silvia Fuhrmann, who had brought food and drinks to those building sandbag barriers.

The Elbe hit 8.76 meters (28 feet, 9 inches) around midday — well above its regular level of two meters (6 1/2 feet). Still, that was not high enough to damage city’s famous opera, cathedral and other buildings in its historic city center, which was devastated in a flood in 2002.

Germany has 60,000 local emergen-cy personnel and aid workers, as well as 25,000 federal disaster responders and 16,000 soldiers now fighting the floods.

Farther downstream, the town of Lauenburg — just southwest of Ham-burg — evacuated 150 houses along the Elbe, n-tv news reported, as the floodwa-ters roared toward the North Sea.

In the south, the Bavarian city of Deggendorf was hit by a third levee break on Thursday, with floods gushing into neighborhoods. Scores of homes remained underwater and authorities

warned that a dam was still in danger of bursting.

“It’s indescribably bad,” Bavarian gov-ernor Horst Seehofer said upon visiting the area. “It’s beyond comparison.”

In the Saxony-Anhalt city of Bitter-feld, an attempt to blow open another levee to lower waters threatening the city along the Mulde river was unsuccessful.

Some 30,000 residents in nearby Halle were urged to evacuate, meanwhile, as the Saale river reached its highest level in 400 years.

In the Czech Republic, firefighters

said some 700 Czech villages, towns and cities have been hit by flooding in the last few days and some 20,500 people had to be evacuated. In the country’s north, the water in the Elbe reached its highest level overnight and began to recede Thursday.

In the Slovak capital of Bratislava, the Danube was still rising from the record lev-els it reached a day earlier, but authorities said protective barriers have held firm so far.

So far, the floods have killed eight people in the Czech Republic, five in Ger-many, two in Austria and one in Slovakia. (Associated Press)

Under water; towns overflow

An aerial view shows a motorway junction partially flooded by water from the River Danube near the Bavarian village Deggendorf, southern Germany, on June 6, 2013. Ger-many pushed on with frantic efforts to secure saturated river dykes with sandbags on June 6, 2013, bracing for a surge of the worst floods in over a decade that have claimed 12 lives and forced mass evacuations across central Europe. |AFP PHOTO/CHRISTOF STACHE

Joining the Eurozone will bring eco-nomic stability to Latvia, the prime minister has said.

Speaking after the country was given the go ahead to become the 18th EU member state to adopt the single currency by the European Commission on 5 June, Valdis Dombrovskis said that “joining the Eurozone will foster Lat-via’s economic growth for sure.”

Dombrovskis has long-been an ad-vocate of joining the single currency. Speaking in Brussels last year, he said that adopting the euro would be the crowning achievement of Latvia’s recent economic reforms.

Latvia has turned its economy around, with international assistance and through tough austerity measures, from a position of recession in 2008-2009, to becoming the fastest growing economy in the EU in 2013.

The prime minister of neighbour-ing Lithuania, which will take over

the EU presidency on 1 July, Algirdas Butkevičius, endorsed the austerity pol-icy, saying in reaction to Latvia’s euro adoption that “economic stimulus be-gins with savings.”

Speaking at the announcement of the results of the country’s 2013 con-vergence report (which outlines eligi-bility criteria), EU Economics Com-missioner, Ollie Rehn, said that Latvia’s willingness to join the euro “is a sign of confidence in our common currency.”

The present Latvian currency, the lats, has been pegged to the euro for the past two years. It will be the second Baltic country, after Estonia in 2011, to become a Eurozone member.

Reacting to the news, which had been expected, MEP Burkhard Balz, the European parliament’s rapporteur on Latvian adoption of the euro, and, like Valdis Dombrovskis, a member of the centre-right EPP group, also said that Latvia’s decision to join the euro

was a sign of confidence in the single currency. He said the economic turna-round was due to “working very hard, painfully, but in the end successfully on its budget consolidation.”

The commission has given the rec-ommendation that Latvia is ready to join the euro from 1 January 2014. The formal decision is set to be approved by EU finance ministers on 9 July.

However, recent polls suggest that, despite the government’s push for euro membership, there is strong resistance amongst citizens to becoming a Euro-zone member, with recent local elec-tions witnessing gains for anti-euro can-didates.

Noting the political climate, Hannes Swoboda, leader of the socialist group in the European Parliament, said that his group hoped “the Latvian govern-ment will get the necessary support from its citizens to adopt the European currency in time.”

PM: euro membership will bring stabilityLATVIA |ECONOMY

GERMANY |ENVIRONMENT

23EUROPEAN UNIONNEWEUROPEwww.neurope.eu9- 15 June, 2013

FRANCE | DEFENCE

Arms trade treaty signed France signed the Arms Trade Treaty on 3 June in New York. In a statement released by the Defence Ministry France said that it welcomed the fact that many other members of the international community, notably within the EU, have taken the same step, once again express-ing their support for this text. The adoption of the Arms Trade Treaty on 2 April, by a very large majority, marked the completion of a long negotiation process. “By signing this treaty, we begin a new phase: that of the universali-zation and the implementation of the treaty. France looks forward to the swift entry into force of the Arms Trade Treaty, which is a major step forward for human rights, humanitarian law and international stability,” French For-eign Minister Laurent Fabius said in a statement. France highlights the important work carried out with all our partners, as well as with members of civil society. It would like to continue this cooperation in order to implement the treaty.

SLOVENIA | ECONOMY

Tax evasion and corruption talksThe Socialists and Democrats group in the European Par-liament Group held a Relaunching Europe initiative event on 'Fairness and Transparency' in Ljubljana, Slovenia on 3 June. The debate focused on tax evasion and corrup-tion and was hosted by Slovenian S&D MEPs Mojca Kleva Kekuš and Tanja Fajon. "Corruption destroys our society and so does tax evasion and tax fraud. Tax evasion is not just stealing from the state but also from your neighbour. So action to create a fair and just society must include eve-ryone – politicians, businesses and citizens themselves,” said Hannes Swoboda speaking at the launch."In the end, corruption and tax evasion both go back to one basic principle – whether we accept morality or whether we allow double standards in our societies. "The S&D Group is at the forefront in the fight against tax evasion and we have commissioned the study that revealed that €1 trillion is lost each year due to ineffectiveness and lack of action from the EU and national governments. "When we compare the €1 trillion lost with the figure of €6 billion that has been allo-cated to invest in fighting youth unemployment, it is pain-fully clear that we face a disastrous discrepancy. "We want to get back the money that is lost through tax havens, fraud and corruption. It is citizens' money and it is direly needed to invest in job programmes, education and innovation." "Tax evasion and fraud are not only an economic problem but one of morality and justice. If citizens pay their share to society we must expect the same from multinationals and rich people who have the knowledge to avoid taxes. "Eve-ryone agrees that the €1 trillion lost every year must be in-vested in relevant fields to foster growth,” said MEP Mojca Kleva Kekuš, author of the European Parliament report on tax evasion and tax fraud adopted last week. "We have to change people's approach to and perception of corruption. To fight this cancer in our societies, we have to stress the moral and social responsibility of all players including pub-lic administrations, politicians and people. We have to start with ourselves,” concluded MEP Tanja Fajon. Speakers at the event included Slovenian journalists and specialists in tax evasion and the fight against corruption, as well as rep-resentatives from European institutions involved in fighting tax fraud and corruption.

Belgian Hans Bruyninckx worked at Leuven University for several years, was the General Director at the HIVA Re-search Institute, which specialises in pol-icy research and has lectured on environ-mental policy, sustainable development, European politics and international re-lations before coming to the European Environmental Agency as its director.

His recent research has spanned di-verse topics including climate change policy, environment, international poli-tics and governance. Dr Bruyninckx has conducted and managed research in more than a dozen countries. Alongside his native Flemish, he speaks fluent Eng-lish, French and German. For more de-tails see Dr Bruyninckx’s biography.

He replaces Jacqueline McGlade at the end of her second five-year term.

On taking up the position, Dr Bruyn-inckx said: “It is a great honour to be selected for this role. Many of the Euro-pean Union’s great successes have been policies to protect our environment.

“Environmental issues are increas-ingly complex, interconnected and global, so the EEA needs to work to stay ahead and continue to provide effective information to policy makers. A healthy

environment is essential for the security, health and prosperity of European citi-zens.”

Since 2003, Prof. McGlade has over-seen a significant increase in the cover-age and extent of data and information processed and analysed by the EEA/Eio-net, and a doubling of the resources for the agency to support this work. In 2003 Turkey joined the Agency, followed by the full accession of 15 countries in 2004

and a continued programme of activities with the associate countries of the west Balkans. In 2006 Switzerland joined the EEA as the 32nd full member coun-try and a cooperation agreement with Greenland entered into force in 2010. The EEA is now formally cooperating on various projects with more than 60 countries across continental Europe, the Arctic, North Africa, the Middle East, Central Asia and beyond.

Restart for EEA as Belgian helms Copenhagen office

Belgian Hans Bruyninckx has taken office as Executive Director at the European Environment Agency (EEA) in Copenhagen. EEA.

The European Investment Bank (EIB) has agreed to a €400 million loan to the Renault Group to contribute to research and development for a new generation of affordable, environmentally friendly vehi-cles, a major project in technological and environmental terms.

The financial partnership was con-cluded last week at Renault Group’s Head Office in Boulogne-Billancourt (France), in the presence of EIB Vice-President Philippe de Fontaine Vive and the Renault Group’s Financial Director Dominique Thormann. This finance will

help the Group to develop a new genera-tion of efficient and affordable environ-mentally friendly vehicles, via the deploy-ment of innovative lightweight vehicle platforms, vehicles with new generation drivetrains and a new small urban vehicle with a groundbreaking platform.

“Cutting-edge technologies are a spearhead for the future in terms of sus-tainable development and competitive-ness”, Mr de Fontaine Vive emphasised at the signing ceremony. “Through our sup-port for innovation, we are preparing the future of the European motor industry.

And the first to benefit will be the EU’s citizens, in their daily life.”

This financing operation builds on the close partnership established between the EIB and the Renault Group and brings the total amount of finance provided by the EIB since 2009 for innovative Renault Group projects to nearly one billion euro.

This loan also demonstrates the Bank’s concrete commitment to inno-vation. Aware of this sector’s strategic importance for competitiveness and job creation, the EIB has made this area of its operations a priority.

EIB lends €400 million to Renault Group

Alstom, a large French multinational conglomerate, and its Russian partner Transmashholding (TMH) and the Rus-sian Railways (RZD) have entered into an agreement for the development of the first Russian dual-voltage freight locomotive called “2ES20”. The dual-voltage, double-section mainline electric locomotive with asynchronous traction drive, will be able to run on both 3kV and 25 kV current.

This will allow eliminating loco swap at station where the current is changed over, which will save time and resources.

The agreement was signed on May 30 in presence of Alstom’s CEO Patrick Kron by RZD President Vladimir Yakunin, TMH President Andrey Bokarev and Al-stom Transport President Henri Poupart-Lafarge during the VIII International Railway Business Forum “1520(1) Strate-

gic Partnership” in Sochi (Russia). The agreement sets up the founda-

tion of a team work to prepare and vali-date the technical design of the 2ES20 locomotive, expected to be finalised by September 2013, while the loco’s first pro-totype is expected to be ready for testing in March 2014. The delivery of 2ES20 electric locomotives to RZD is scheduled for December 2014.

Alstom, TMH together for Russian Railways

BELGIUM |ENVIRONMENT

FRANCE |AUTOMOBILE

FRANCE |TRANSPORT

24 EUROPEAN UNION NEWEUROPEwww.neurope.eu

9- 15 June, 2013

The European Investment Bank (EIB) said it plans to provide €100 million for key investments in Cyprus to contribute to the smart, sustainable and inclusive growth of the economy in line with the Europe 2020 strategy.

The loan will be used to part-finance investments in areas identified under the National Strategic Reference Framework for the 2007-2013 period, which include improving the competitiveness of the Cypriot economy, promoting sustain-able development, and investing in skills and innovation. This new loan comple-ments a first loan of €200 million provid-ed in 2012 for the same purpose.

The finance agreement was signed on 30 May in Nicosia in a public ceremo-ny. Cyprus’ Minister of Finance Harris Georgiadis signed on behalf of Cyprus

and EIB President Werner Hoyer signed on behalf of the bank in the presence of EIB Vice–President with responsibility for Cyprus, Mihai Tanasescu, during an official visit to Cyprus.

“We are joining forces with the Euro-pean Commission in supporting the pri-ority areas of sustainable development and human capital and building upon the excellent working relationship with the Cypriot authorities,” Hoyer said.

This second loan brings total EIB support for key investments in Cyprus to €300 million. EIB finance focuses on sol-id waste management, renewable energy, skills and innovation and urban develop-ment. The investments to be financed are grouped around selected priorities of two comprehensive Operational Pro-grammes (OPs) of Cyprus.

The EIB said that schemes imple-mented within these OPs are expected to contribute primarily to the achieve-ment of objectives in sustainable devel-opment and competitiveness as well as employment, human capital and social cohesion. The investments will address long-term objectives of the Cypriot economy in the sectors of solid waste management, port infrastructure, re-newable energy, knowledge economy, human capital, SMEs and sustainable urban development.

The projects financed include the improvement of operations of 37 waste sites in the Pafos district, development of a Green Point Network in Cyprus, de-velopment of the Open University of Cy-prus’s technological infrastructure and regeneration of Limassol’s town centre.

EIB provides €100 million loan for key investments

On 4 June, Greece’s Prime Minister An-tonis Samaras said his country plans to set up a national hydrocarbon company to prospect for natural gas and oil depos-its in the Ionian Sea and the area south of Crete.

Samaras held a meeting with officials from Greece’s Energy, Environment and Climate Change Ministry (YPEKA) and experts where he said speeding up explora-tion for hydrocarbon deposits in Greece is one of the country’s greatest comparative and geopolitical advantages.

The Greek premier noted that Athens has formed “strategic alliances” with for-eign exploration companies. International

competitions are currently under way for exploration off Ioannena and Katakolo, and in the Gulf of Patra, according to Sa-maras. He also hailed the involvement of Greek scientists in efforts to tap the coun-try’s energy potential as a prerequisite for the successful development of natural de-posits that may generate wealth.

Samaras called for the need that the Greek energy programme becomes a part of the European Union’s networks, under-lining its importance for the Greek econo-my and energy independence.

The Greek government hopes that the country will discover major oil and gas re-serves, similar to the discovery in Cyprus’

block 12 by US Noble Energy. Cyprus granted concessions for natural gas ex-ploration to ENI/KOGAS consortium in blocks 2, 3 and 9 within Cyprus’ EEZ and Total for blocks 10 and 11.

On 1 June, Noble Energy head John Tomich announced that an oil rig was due arrive that day on location to carry out an appraisal well in Cypriot block 12 gas field.

Cyprus Minister of Communications and Works, Tasos Mitsopoulos said the promotion and implementation of de-velopment projects constitutes a primary target for the government in an effort to tackle the adverse economic conditions the country is facing.

CYPRUS|DIPLOMACY

Nicosia, Paris hold talksThe financial situation in Cyprus, the Cyprus problem, the developments in the European Union and the Euro-zone, the latest initiatives of the French President for the EU, euro-Turkish issues and bilateral relations were at the centre of talks that the Cypriot Minister of Foreign Affairs, Ioannis Kasoulides had on June 3 at the French Foreign Ministry with his French counterpart Laurent Fabius, during a working visit to Paris. The developments in the Middle East and the wider south-eastern Mediterranean region, regional matters and energy issues were also dis-cussed, with special emphasis on the situation in Syria and in Mali. Kasoulides presented to his counterpart the financial situation that exists in Cyprus, underlining the focus of the Government on the successful confrontation of the crisis within the framework of the EU and the Euro-zone. Regarding the Cyprus problem, Kasoulides stressed the commitment of Cyprus to find a just and viable so-lution within the framework of the UN Resolutions and on the basis of international law and with respect for the human rights of all Cypriots. He also underlined the need for proper preparation to restart the talks, as well as the demonstration of the necessary political will from all the involved parties. The high level of bilateral relations be-tween France and Cyprus, which are based on common principles and values, was confirmed at the meeting.

SPAIN|DEFENCE

Spain inks Arms Trade TreatyShowing its commitment to the international commu-nity to establish a legally binding international legislative framework to regulate the trade in conventional weapons, Spain’s Minister for Industry, Energy and Tourism José Manuel Soria signed the Arms Trade Treaty at the Unit-ed Nations headquarters in New York. The treaty signed on 24 May establishes a universal model based on legally binding international rules for the export of arms, which will be applied by the national authorities of all signatory States. The Treaty aims to avoid the international sale of conventional weapons resulting in unlawful acts and viola-tions of human rights. The ministry said the signing of this Treaty culminates a negotiation process that has lasted for several years and a joint effort by the international com-munity to establish an agreement that strengthens inter-national security while respecting the right to the lawful trade of weapons.

SPAIN|TELECOMS

Telefónica’s AGM approves dividends distribution Spanish telecommunications company Telefónica’s An-nual General Shareholder Meeting (AGM) on 31 May approved the distribution of dividends for 2013, thus confirming the company’s commitment to its sharehold-ers and continuing the policy of the payment of dividends year after year, after having distributed €2.8 billion among its shareholders in May 2012. The approved dividend for 2013, of €0.75 per share, whose first payment of €0.35 will be made in November, represents a yield of 6.7% at cur-rent prices. This makes Telefónica the company with the highest expected 2013 dividend yield among the 25 larg-est companies by stock market capitalisation in the ICT sector. In his report to shareholders, Telefónica Execu-tive Chairman César Alierta explained that financial year 2012 “was a key year in the transformation of Telefónica, in which the decisions we have taken have already started to bring results”.

A rig operated by Noble Energy in the east Mediterranean, drilling in an offshore block on concession from the Cypriot government. |EPA/STR

CYPRUS|LOAN

GREECE|ENERGY

Greece plans hydrocarbon exploration company

25ENLARGEMENTNEWEUROPEwww.neurope.eu9- 15 June, 2013

TURKEY | FREEDOM OF EXPRESSION

MEPs criticise EEAS for late reaction on protests By Stanislava GaydazhievaThe members of the European Parliament (MEPs) sitting in the Committee on Foreign Affairs (AFET) heavily criti-cised the “late and weak” reaction of the European External Action Service (EEAS) on theprotests in Turkey during an emergency debate on 6 June.The statement of the High Representative Catherine Ashton on the situation in the country, which is candidate for European Union membership since 1999, came on 2 June, two days after the protests in Turkey started. In her reaction, Ashton expresses concern about the violence that occurred in Istanbul and some other cities in Turkey, and regrets disproportionate use of force by members of the Turkish police.“The statement of the EEAS is late and weak. What we are witnessing in Turkey is a democratic awakening, closely comparable to Paris 1968,” said the liberal MEP Andrew Duff.“The European Parliament needs to show the protesters their voices are being heard here - if not in their own coun-try,” added the labour MEP Richard Howitt and stressed: “As a European Parliament we should call on the European Union to match the United States in saying the protests represent legitimate democratic expression and respond to the protesters by calling for legal accountability for those re-sponsible for its violent suppression”.Howitt and a couple of other of his colleagues also stated that the parliament should condemn the statement of the Turkish Prime Minister that the protesters are “hand-in-hand with terrorists”.Most of the MEPs at the AFET committee, including the Dutch MEP from the EPP group Ria Oomen-Ruiten, ex-pressed disappointment in Turkey’s Prime Minister’s lack of response to demonstratorsand called for stronger responses towards crackdown of demonstrations in Turkey.According to Marietje Schaake, Dutch MEP from the ALDE Group, the events in Turkey are a wake-up call for Prime Minister Recep Tayyip Erdogan and should be a wake-up call also the EU.The Turkey advisor to High Representative Ashton stated during the AFET debate that her statements have been strong enough and distinguished from drawing a parallel between the Arab Spring and the demonstrations in Turkey.A representative of the European Commission (EC) an-nounced that the Enlargement Commissioner Štefan Füle will be on an official visit to Istanbul on Thursday and Fri-day to discuss the accession process of the country. It is expected that Füle will meet with Minister for EU Affairs Egemen Ba??ş and representatives of civil society includ-ing the Taksim Solidarity Platform.According to Marietje Schaake, Dutch MEP from the ALDE Group, the events in Turkey are a wake-up call for Prime Minister Recep Tayyip Erdogan and should be a wake-up call also the EU. During the debate in AFET, Schaake said that the Enlargement Commissioner should cancel his participation in the government-organised con-ference “Rethinking Global Challenges” and instead meet with AK Party leaders and opposition movements to seek to end the deep polarization. The EU should engage with Turkey to push for the rule of law, democracy, pluralism and respect for fundamental freedoms, added the MEP.And while the EU is still hesitant and indecisive on how to proceed with its strategic trade and economic partner and at the same time defend its well-established values also outside its borders, the Russian foreign ministry is-sued a warning for its citizens who travel to Turkey. The victims of the violent protests in the country have reached three after on Wednesday a man died in hospital from his wounds which he suffered in the Gezi Park protests.

Turkey’s prime minister used less belliger-ent language but said he would go ahead with redevelopment plans that have sparked nationwide protests, in com-ments Thursday that could be decisive in determining whether the nationwide demonstrations that have been taking place since May 31 fizzle out or rage on.

Speaking at a news conference in Tunisia, on the last leg of a four-day tour of North Africa, Recep Tayyip Er-dogan acknowledged that some Turks have been involved in the protests out of environmental concerns, but insisted that terrorist groups are involved in the unrest in a country seen as a democratic model for the Middle East.

It appeared unlikely that Erdogan’s comments would calm demonstrators. Protesters were gathering at an airport in Istanbul in anticipation of the prime minister’s return home Thursday night.

Erdogan frequently spends week-ends in Istanbul rather than the capi-tal Ankara. It was unclear whether he chose to land in Istanbul because he has a strong support base going back to his days as the city’s mayor.

Tens of thousands of people have taken to the streets of Turkey’s cities in protests that began after police violently cracked down on protesters camping out to protest plans for a development in Istanbul’s Taksim Square. Three peo-ple have lost their lives as a result of the on-going unrest.

The protests quickly spiraled into an outpouring of rage directed at Erdogan,

who the demonstrators see as increas-ingly autocratic and uncompromising. Anger has grown at police for frequent use of tear gas and water cannons, and a human rights group says thousands of people have been injured.

In Tunisia, Erdogan said he had “love and respect” for protesters with environmental concerns.

“But as I told you earlier, some ter-rorist groups are involved,” he said, claiming that an outlawed left-wing militant group that carried out a suicide bomb attack on the US Embassy in An-kara in February was also involved in the protests.

“They are involved. They have been caught in the streets and on social me-dia,” he said.

Erdogan said the Islamic-rooted government had already apologized for the violent police crackdown on the Taksim sit-in, but insisted that tear gas was used everywhere in the world to break up protests.

“Demands cannot be made through illegal means,” he said. Erdogan has in-sisted that democracy happens only at the ballot box, dismissing the demon-strators as an extremist fringe.

Erdogan indicated that the govern-ment would go ahead with the redevel-opment plans in central Istanbul, insist-ing the plan would beautify the city, and would include the planting of trees and the construction of a modern theater and opera. Erdogan has earlier said the plans included the construction of a

shopping mall.Some protesters in Taksim Square

were skeptical of Erdogan’s pledges.“I do not believe his sincerity,” said

protester Hazer Berk Buyukturca.Scrambling to contain tensions,

Turkish officials have in recent days delivered more conciliatory messages. Turkey’s deputy prime minister offered an apology for the heavy-handed way the sit-in protest was rousted.

Huseyin Celik, deputy leader of Er-dogan’s Islamic-rooted party, said the government is sympathetic to secular-minded Turks’ concerns and is prepared to take steps to “eliminate” their fears.

Celik has also called on supporters of Erdogan’s party not to come out in force to greet Erdogan when he arrives.

A police officer was reported killed on Thursday while trying to subdue a protest in southern Turkey, bringing the death toll in a week of demonstrations to three.

Gov. Huseyin Avni Cos said the of-ficer died in a hospital after falling into an underpass under construction in Adana, on the Mediterranean coast. He was trying to break up protests there.

Two protesters have been reported killed in the demonstrations in some 70 cities, and one person is on life support in a hospital in Ankara. The Turkish Human Rights Foundation said some 4,300 people were hurt or sought medi-cal care for the effects of tear gas.

The government says dozens of po-lice officers have been injured.

PM defies protestsTURKEY |SOCIET Y

Protesters demonstrate, on 6 June, at Kizilay square, in Ankara, the theatre of violence between demonstrators and Turkish police forces in recent days. Turkish Prime Minister Recep Tayyip Erdogan said on June 6 that members of a “terrorist organisation” were taking part in deadly anti-government protests sweeping Turkey and refused to cancel a controversial Istanbul development plan that sparked them. Protesters accuse Erdogan of imposing conservative Islamic reforms on Turkey, a mostly Muslim but constitutionally secular country. |AFP PHOTO / MARCO LONGARI

26 ENLARGEMENT NEWEUROPEwww.neurope.eu

9- 15 June, 2013

BOSNIA|SOCIAL

Bosnia temporarily allows registration of babiesOn 5 June, following a protest by young parents, Bosnia’s gov-ernment agreed to temporarily allow the registration of new-born babies, news agencies reported. MPs from Bosnia’s rival Serb, Croat and Muslim communities are at odds over how to draw up the districts that determine the 13-digit identification numbers assigned every citizen. A January court deadline for parliament to agree technical changes to the law on citizen reg-istration expired without a deal and registrations have effective-ly been frozen since early February. Dozens of people blocked the entrance to Bosnia’s Parliament to demand that lawmakers pass the new law on personal identification numbers.

SERBIA|ENERGY

TE-KO Kostolac electricity pro-duction tops 2.8 million MWhOn 4 June, Serbian coal miner and power producer TE-KO Kostolac said its thermal electricity output reached 2.8 million MWh in the five months through May, SeeNews reported. In May alone, TE-KO Kostolac produced 502,620 MWh of elec-tricity, lower than the planned 541,000 MWh. Coal production topped 3.8 million tonnes in the five months through May.

BOSNIA|ENERGY

Energoinvest wins Algerian engineering contracts Bosnian engineering firm Energoinvest said it was awarded two contracts by Algerian power transmission company GRTE worth of total €61 million, SeeNews reported. The first project is related to the design, equipment supply, construction works and installation, as well as testing and commissioning of two substations, El Milia and El Milia II of 400/220 kilovolt (kV) and 220/60 kV, respectively. The other contract refers to the design, equipment supply, construction and installation, as well as testing and commissioning of Mahdia 60/30 kV sub-station and for the extension of the second substation across 3 fields 60 kV, Energoinvest said.

CROATIA|DIPLOMACY

Ivan Starcevic new ambassador to ArmeniaIvan Starcevic has been appointed new Croatian ambassador in Armenia. He will have his seat in Athens, Greece, Croatian Times reported. Starcevic has presented his credentials to Armenia’s Deputy Foreign Minister Zohrab Mnatsakanyan. Both sides announced they want to further develop the rela-tions between Croatia and Armenia in the areas of science, education and culture.

CROATIA|ENVIRONMENT

Mermex conference to take place in ZagrebThe French Embassy in Croatia and the Institute Rudjer Boskovic are expected to hold a workshop on the international project Mer-mex, aiming to educate on the importance and fragility of the Med-iterranean Sea on 10-12 June in Zagreb, Croatian Times reported. The topic will be ecological situation in the Mediterranean Sea and the danger it faces with the development of tourism and economy.

Consumer interests should be “at the forefront of all aspects of polices” ac-cording to the Croatian European Com-missioner-designate.

Speaking at his formal hearing be-fore the European Parliament’s internal market committee, Neven Mimica, Cro-atia’s candidate for consumer protection commissioner, said that the EU should more actively promote consumer rights to citizens. He said that there should be an effort to “frontload consumer interest at the early stage of policymaking.”

However, he said that consumer po-lices should not be harmonised at Euro-pean level, and instead should continue to be administered through strength-ened national authorities.

Mimica was been questioned by MEPs as part of the formal process that all candidates for commissioner are obliged to undertake. Confirmation or rejection of his appointment, deter-mined on overall competence, European commitment, individual independence and communication skills, will be voted by the European Parliament during the next plenary session.

Croatia will join the EU on 1 July.The commissioner-designate was

quizzed on specific aspects of con-sumer policy, but was often vague in his answers, prompting several MEPs to press for more precise answers. Largely, though, Mimica painted a broad picture of how he saw consumers in relation to Eu policy. He said that consumers should be “empowered” in Europe, and that he hoped their “central role is un-leashed” through more citizen-friendly policies. “Consumer policy is what con-

nects the Union to its people,” he said.“I see my role as the guardian of

consumer policy,” he said, but was not forthcoming on specifics. Although, he did say he would work to ensure ongo-ing proposals on medical devices, prod-uct safety and market surveillance, were completed before his short mandate expires next year. He also said that rues relating to risk assessment needed to be “sharpened.”

Despite his limited time, he said that hoped “to make a real impact” in the job, and said that he hoped to deliver “con-crete results before 2014.”

He said that he will aim to “work with and across policy areas,” to ensure better consumer protection and rights in the EU. He also said he will “seek an al-liance with industry,” before adding that he would do this in “an open and trans-parent manner.”

As commissioner he “would spare no efforts to be in constant contact with authorities in member states to improve co-ordination of policies.” He said that member states, rather than the European Commission, should continue to admin-ister consumer policy in Europe. How-ever, he did say that the rules should be better worked out at European level, leading to a “a learning and spreading of best practice across the network of au-thorities.”

Ultimately, he said, the benefits of European consumer laws should be communicated more aggressively to citizens, which “must start before trans-position of laws.” He said he would use his mandate to “actively communicate European consumer policy.” In doing so, he said, this “may also encourage citizens to vote in European elections next year.”

Mimica: Consumer policy should be at ‘forefront’ of EU laws

Croatian Commissioner-designate Neven Mimica appears before the European Parliament’s internal market committee on 4 June. MEPs quizzed Mimica on the portfolio of the future commissioner for consumer policies prior to Croatia’s accession to the EU on 1 July.|AFP PHOTO/GEORGES GOBET

The Cabinet of Ministers of Ukraine has adopted a resolution on signing an agreement between the Cabinet of Min-isters and the Serbian government on co-operation in the field of rail transport. Ukrainian Infrastructure Minister Volo-dymyr Kozak said the implementation of the provisions of the proposed agree-ment would help improve the legal and contractual framework of Ukrainian-Serbian co-operation in the field of rail transport between the two countries.

However, the agreement will help at-tract additional cargo in order to more fully use the potential of transport infra-structure of both countries.

The statement said that in addition,

the signing of the agreement will help improve cargo transportation between Ukraine and Serbia and therefore raise the safety standards of rail traffic be-tween the two countries.

On 6-7 June, Ukrainian President Viktor Yanukovych was due to make a visit to Belgrade to meet with Serbia’s state leadership. Yanukovych and the Ukrainian delegation were expected to be received by Serbia’s President Tomis-lav Nikolic. The visit should also result in the signing of several bilateral agree-ments, after which Presidents of Serbia and Ukraine will exchange decorations.

Serbia’s delegation was expected to include Kozak, Minister of Finance and

Economy Mladan Dinkic, Foreign Min-ister Ivan Mrkic, Minister of Transport Milutin Mrkonjic, Minister of Agricul-ture Goran Knezevic, Minister of Edu-cation Zarko Obradovic and Minister of Culture Bratislav Petkovic.

The Ukrainian delegation was ex-pected to include Presidential Adminis-tration head Serhiy Lyovochkin, Deputy Prime Minister Yuriy Boyko, Minister of Culture Leonid Novohatko, Minister of Agriculture Mykola Prysyazhnyuk, and Education and Science Minister Dmytro Tabachnyk.

While in Belgrade, Yanukovych was also due to meet with Serbian Parliament Speaker Nebojsa Stefanovic.

Belgrade, Kiev ink intergovernmental agreementSERBIA|DIPLOMACY

CROATIA|EU

By Cillian Donnelly

27PARTNERSNEWEUROPEwww.neurope.eu9- 15 June, 2013

NORWAY | SECURIT Y

Convictions in al-Qaida terror plot upheldNorway’s highest court has upheld guilty convictions against two men involved in a 2010 al-Qaida plot to attack a Danish newspaper that caricatured the Prophet Muham-mad the Associated Press reported last week. Last year, a local court sentenced Mikael Davud to seven years in pris-on and co-defendant Shawan Sadek Saeed Bujak to three and a half years. A third defendant was acquitted of terror charges but convicted of helping the others acquire explo-sives. In its decision, the Supreme Court quashed their ap-peals, finding the men guilty. Investigators say the plot was linked to the same al-Qaida planners behind thwarted at-tacks against the New York subway system and a shopping mall in Manchester, England, in 2009. Norwegian investi-gators, who worked with their U.S. counterparts, said they had been building a bomb in an Oslo basement.

SWITZERLAND | MIGRATION

Quotas to restrict EU migrationSwitzerland applied its EU immigration quotas last week, since immigration has reached unacceptable levels, with for-eigners making up a quarter of the population. Immigrants from Estonia, Hungary, Lithuania, Latvia, Poland, Slovakia, Slovenia and the Czech Republic will have the number of long-term residence permits capped at 2,180. In addition, the long-term residence permits for the 17 older EU states will be capped at 53,700 for 12 months. Last, immigration to Switzer-land from Bulgaria and Romania is already severely restricted. The Swiss Federal Council used the “safeguard clause” of the 1999 Agreement on the Free Movement of Persons, which allows temporary caps on work permits if the annual influx exceed. On April the Council “came to the conclusion that the safeguard clause is one of several measures which can help to make immigration more acceptable to society and compat-ible with its needs.” The EU High Representative Catherine Ashton had expressed her regret on the Council’s decision. “These measures disregard the great benefits that the free movement of persons brings to the citizens of both Switzer-land and the EU.” According to BBC, the Swiss people do not want to share the EU misery and disrupt their social econo-my. The EU immigration quotas aim to help Switzerland to maintain the 3% unemployment rate. Moreover, on 30 May, the Swiss economy grew by 0.6% in the first three months of 2013 and compared with the same quarter in 2012, the na-tional economy grew by 1.1%. Last but not least, the EU im-migration quotas were also adopted because of the unstable Swiss property market.

SWITZERLAND | ECONOMY

Lawmakers stall bill to resolve US tax spat Lawmakers in Switzerland have stalled the passage of a government-backed bill aimed at ending a long-running dispute with the United States over tax evasion the Asso-ciated Press reports. The Swiss parliament‘s lower house voted last week to postpone further debate on the bill until it receives details of the deal the US plans to offer Swiss banks alleged to have helped American tax cheats. The de-cision is a setback for the Swiss government. Finance Min-ister Eveline Widmer-Schlumpf had last week presented the bill as an elegant way to allow Swiss banks to cooperate with US authorities without breaking Switzerland‘s strict client secrecy laws.

It may sound like an unlikely No. 1 best-seller for any country, but in Norway — one of the most secular nations in an increasingly godless Europe — the runa-way popularity of the Bible has caught the country by surprise. The Scriptures, in a new Norwegian language version, even outpaced “Fifty Shades of Grey” to become Norway’s best-selling book the Associated Press reports.

The sudden burst of interest in God’s word has also spread to the stage, with a six-hour play called “Bibelen,” Norwe-gian for “the Bible,” drawing 16,000 peo-ple in a three-month run that recently ended at one of Oslo’s most prominent theaters.

Officials of the Lutheran Church of Norway have stopped short of calling it a spiritual awakening, but they see the newfound interest in the Bible as proof that it still resonates in a country where only 1% of the five million residents reg-ularly attends church.

“Thoughts and images from the Bi-ble still have an impact on how we ex-perience reality,” said Karl Ove Knaus-gaard, one of several famous Norwegian authors enlisted to help with the trans-lation. Scholars aren’t surprised at the success of the plays or the new Bible translation, explaining that faith is a deeply personal matter in this nation of taciturn Scandinavians who regularly withdraw from city life to spend holidays at remote cottages in the solitude of the mountains, fjords and forests.

“Church attendance is a poor meas-ure of the Norwegian state of faith,” said post-doctoral fellow Thorgeir Kolshus at the University of Oslo. “Religion is a very private thing for Norwegians.”

Anne Veiteberg, publishing direc-tor of Norway’s Bible Society, said that increased immigration also probably has been a factor.

More than 258,000 immigrants have settled in the country during the last six years alone, adding diversity of race and religion. The Church of Norway estimates that around 60 percent of im-migrants are Christian, while the rest are Muslim, Buddhist or Hindu.

“Now that we’re exposed to other faiths, Norwegians have gotten more interested in their own faith,” Veiteberg said.

Released in October 2011 by the Norwegian Bible Society, the new trans-lation replaces a 1978 edition, with the goal of improving readability and accu-racy. For example, in the older version, Mary was called a “virgin.” In the new translation she is referred to instead as a “young” woman. The US Conference of Catholic Bishops also made this change in its latest Bible translation from 2011, saying the change didn’t alter teaching

about Mary, but was meant to address the possible different meanings of the Hebrew word “almah” in the text.

Norway’s Bible Society promoted the new translation like a pop fiction novel, stirring anticipation by giving out teasers of biblical stories before its release.

It turned to poets and authors such as Knausgard to make the text sing and resonate for a new generation. And it was packaged in a variety of ways, target-ing teenagers with pink leather or denim covers, and adults with bridal or sophis-ticated literary covers.

“It’s easier to read,” says Helga Haug-land Byfuglien, presiding bishop for the Church of Norway. “There is no over-interpretation of the text.”

It has sold nearly 160,000 copies and was Norway’s best-selling book in 2012. Church officials concede that hefty mar-keting campaigns helped explain the strong sales.

Like many other European nations, Norwegians have experienced decades of secularization as religion has taken a back seat to other pursuits. They are fiercely committed to jamming week-ends with skiing, hiking and other out-door activities, leaving little time other than Christmas or Easter to fill the pews.

Last year, Parliament unanimously decided to end the Lutheran church’s status as the official state religion.

Erik Ulfsby, artistic director at Det Norske Teatret, which staged the “Bi-belen” play, said that even if Norwegians don’t go to church, they still see the Bi-ble as an important part of their literary heritage.

“The (church) wants you to agree with their interpretation but the theater gives you the chance to think out loud and discuss the Bible,” he said.

The play, directed by Stein Winge, certainly offered a nontraditional inter-pretation.

For instance, rather than dying on a cross, Jesus was committed to a men-tal hospital and eventually executed via lethal injection. And, at the wedding at Cana, show-goers saw Jesus portrayed as being drunk when he changed water to wine.

“Bible” isn’t the first religious pro-duction to have Norwegians at the edge of their seats. Renowned actor Svein Tindberg has staged three monologues based on the Bible, each more successful than the last.

In the mid-1990s, “Gospel of Mark” was slated to run for 20 nights but was such a hit that Tindberg performed 220 nights. His latest production, “Abraham’s Children,” opened last year and has sold 52,000 tickets, compared to expecta-tions of 1,000 — outselling “Evita” in Norway.

Despite the unorthodox artistic interpretations that are emerging, reli-gious authorities in Norway are embrac-ing the concept of experiencing religion through art.

“Even if you don’t believe the core of the message, the Bible has rich, mean-ingful stories,” Byfuglien said. “Culture breaks the religious shyness that people have in association with the church and it’s a way for those who have distanced themselves to experience it in an inter-esting way.” (Associated Press)

The unlikely best seller

Norwegian Bible’s are rushing off the shelves as bookshops are running out of copies. In an unexpected situation for the largely secular nation Bible reading seems to be back on the menu for many. (A German version pictured, a historical artifact is one of the origi-nal Gutenberg bibles, the printing press began its life with religious content.) |EPA/UWE ZUCCHI

NORWAY | RELIGION

28 EASTERN PARTNERSHIP NEWEUROPEwww.neurope.eu

9- 15 June, 2013

GEORGIA|NATO

UN, NATO candidates submitted to Parliament Nominations for the permanent representatives of Geor-gia to the UN and NATO have been submitted to Georgia’s Parliament, The Messenger and Trend reported. Kakha Imnadze, former spokesperson of ex-President Eduard Shevardnadze, has been nominated for the Permanent Representative of Georgia to the United Nations. First Deputy Minister of Defence of Georgia, Levan Dolidze, has been nominated for the position of the Permanent Representative of Georgia to NATO. The candidacies are to be discussed at a joint meeting of the Parliamentary Committees on Foreign affairs and European integration scheduled for 11 June.

GEORGIA|DIPLOMACY

Georgian MPs strive to solve problems of Javakhk Georgia’s Deputy Speaker Eduard Sharmazanov said that there are no problems between Armenia and Georgia that cannot be solved through talks. Armenian News-NEWS.am quoted him as saying that the Armenian parliamen-tary delegation participated in the festivities marking the founding of Damala, an Armenian-populated village in Georgia, The Messenger reported. The ceremony was attended by Georgian MPs, including Deputy Speaker Zviad Dzidziguri. Sharmazanov said that during the meet-ing with his Georgian counterpart they discussed the socio-economic situation in Javakhk. “The Georgian side stressed the importance for Armenians of Javakhk to set up a fund to help address social and economic issues. In this regard, a number of agreements were reached,” he added.

GEORGIA|ENERGY

JSC ENERGO-PRO Georgia re-metering of villages JSC ENERGO-PRO Georgia continues the individual re-metering of villages. Individual re-metering has been completed in 4 more villages, IPN and The Messenger reported. European standard individual meters were in-stalled for 127 customers in the Akhaltsikhe region in the village of Somkhuri Tsinubani, 24 customers in the Oni re-gion in the village Chordi, 41 customers in Nigvznara and 142 customers in the Ambrolauri region in the village of Tsakhi. By the end of June the company plans to complete re-metering in five more villages. In 2015, all of Georgia will be individually re-metered.

ARMENIA|DEFENCE

Russia deploys advanced missiles to ArmeniaRussia has deployed an advanced new missile system to its base in Armenia, news agencies reported. A source in Armenia’s Defence Ministry confirmed to RFE/RL’s Ar-menian service the deployment of several Iskander-M systems. The Iskander-M is a relatively new Russian mo-bile (truck-mounted) theatre ballistic missile system. The Iskanders will be stationed at Russia’s base in Gyumri. Cit-ing an unnamed Russian military source, the Russian news agency Regnum reported on 15 May that Moscow is likely to deploy the advanced surface-to-surface missiles as part of the ongoing modernization of its base in Armenia.

Georgian and European Union repre-sentatives discussed implementation of activities in improving EU-Georgia co-operation in economy and trade, in-cluding the macroeconomic situation in Georgia and the EU, co-operation for the promotion of investment, as well as taxation and customs areas.

The 12th meeting of the subcom-mittee of the EU-Georgia on legal issues related to trade and the economy was hosted by Georgia’s Ministry of Foreign Affairs, Trend reported.

The EU side positively evaluated the progress achieved in the negotiations within a short period of time with re-gards to harmonisation of the text, and welcomed efforts by the Georgian side, aimed at the implementation of reforms related to this agreement.

In related news, Georgian Interior Minister Irakli Garibashvili said the Georgian Ministry of Internal Affairs should carry out a number of reforms towards visa liberalisation.

During the conference on the path to European integration and the role of law enforcement agencies, which is being held in Tbilisi, he said that in February of this year, “we received a visa liberali-sation action plan. This two-day confer-ence is being organised by the EU jointly

with the Ministry of Internal Affairs of Georgia. This conference is very impor-tant because our ministry should carry out a series of visa reforms. We have in-vited representatives of 20 countries to acquaint themselves with the reforms carried out by us and to share informa-tion and experience on such important issues as the fight against corruption, il-legal migration, and so on”

Gharibashvili said also expressed his gratitude to the EU Delegation to Geor-gia, with the funding of which the con-ference is being held.

The representatives of the Interior Ministries of 20 EU and Eastern Part-nership countries as well as the EU Del-egation to Georgia and the Embassies of the EU Member States have also at-tended the event.

EU, Georgia discuss co-operation in Tbilisi

Georgia’s former Prime Minister Vano Merabishvili, right, attends a preliminary hearing of his case at the court in Kutaisi, some 250 kilometres west of the capital Tbilisi, 22 May 2013. A conference on the path to European integration and the role of law enforcement agencies was held in Tbilisi on 6 June.| AFP PHOTO/IRAKLI GEDENIDZE

The total turnover of Georgia’s economy in the first quarter of 2013 was around 8.6 billion lari, while the amount of pro-duction was 4.3 billion lari, according to data from the National Statistics Office of Georgia (Geostat) on the development of Georgia’s economy. Large businesses produced more than 82% of the country’s output, medium-sized businesses – 6%,

whereas small businesses – 10%, Georgia’s The Messenger newspaper reported.

Investments based by different com-panies also have an unequal proportion. Large businesses invested almost 69%, whereas small business – only 29%. Al-together there are 485, 000 people em-ployed in the businesses, with around 40% being females and 60% males. 59% of

these people are employed in large busi-nesses, around 15% – in medium-sized businesses and 26% – in small business.

Georgia’s new government claimed before the Parliamentary Election that it would facilitate an increase in share of small businesses in Georgia’s economy. However, the situation has not changed much so far, according to the newspaper.

Large businesses produce more than 82% of Georgia’s output

On 5 June, Armenia’s Minister of Energy and Natural Resources Armen Movsisy-an said his country will be able to import nearly 1 billion cubic metres of natural gas from Iran annually by mid-2014, ARKA reported.

During the 2012 budget implemen-tation talks on 5 June, the minister was asked by Dashnaktsutyun MP Artsvik Minasyan why Armenia imports three times less gas from Iran than it is indi-cated in the bilateral agreement which foresees 1.1-billion-cubic metre annual import.

Movsisyan said Armenia should

provide Iran with electric energy in ex-change for the gas.

“However, our electricity powers don’t allow us to export the energy in big volumes without harming the system,” the minister clarified.

“Also, the new high-voltage power transmission line Armenia-Iran is not ready for commissioning yet, it is to have started functioning by mid-2014, and at that time we will be able to im-port about 1 billion cubic meters of gas from Iran exporting 3-3.5 billion KW of electricity in exchange,” the minister said.

In 2004, Armenian government ini-tiated construction of Iran-Armenia gas pipeline to extend the gas supplies and create a second gateway to the country. The pipeline was launched in 2007.

Iranian gas is to be converted to en-ergy for exporting back to Iran, 3 KW hours per cubic metre of natural gas. Under the agreement, Iran is to supply 36 billion cubic metres of gas to Arme-nia over 20 years.

The agreement has a provision for possible extension for another five years, with the volume of gas supplies to be increased to 47 billion cubic metres.

Armenia to import about 1 bcm of gas from Iran

GEORGIA|EU AFFAIRS

GEORGIA|bUSINESS

ARMENIA|ENERGY

29EASTERN PARTNERSHIPNEWEUROPEwww.neurope.eu9- 15 June, 2013

Belarus urges the improvement of the sys-tem of multilateral co-operation in the area of green technology, a representative said in context of seminars held in New York on 30-31 May and were organized at the initiative of the President of the UN General Assembly

Belarus was represented by deputy head

of multilateral diplomacy at the Foreign Min-istry Yury Yaroshevich, BelTA reported. As one of the keynote speakers in the segment on further steps to improve the system of multilateral co-operation in the area of green technology, Yaroshevich argued the need for the scientific and technological assistance to

middle-income countries, including Belarus. The lack of tangible results in the transfer of advanced technologies through the United Nations Framework Convention on Climate Change and the Kyoto Protocol are one of the reasons behind the need for new ele-ments of such assistance, he said.

MOLDOVA|TRADE

Belarus-Moldova trade up 13.1% in January-AprilIn January-April 2013 the trade between Belarus and Mol-dova totalled $129 million, up 13.1% in comparison with the same period a year ago, the Embassy of Belarus in Moldova said. Over the first four months of 2013 Belarus’ exports to Moldova rose by 13.3% to $101 million, imports of Molda-vian products increased by 12% to $28 million. Belarus’ trade surplus made up $73 million. Over the period under review Belarus considerably increased supplies of dairy products to Moldova, including butter, as well as supplies of potato, malt, tires, fiberglass, woodworking products, furniture and phar-maceutical drugs. Further strengthening of production coop-eration is among the promising areas of economic partner-ship between Belarus and Moldova. In 2013 there are plans to assemble up to 60 units of horticultural tractors Belarus-921 in Moldova. The total fleet of Belarusian tractors in Moldova is close to 35,000 vehicles). The plans also include the assem-bling of 60 trolleybuses Belkommunmash (112 Belarusian trolleybuses ply across Chisinau, ten of them were assembled in the Moldavian capital in 2012).

BELARUS|ENERGY

Gazprom to supply up to 23 bcm to Belarus in 2014Russian gas monopoly Gazprom plans to supply up to 23 billion cubic metres of natural gas to Belarus in 2014, BelTA reported, citing papers compiled for the annual meeting of shareholders of the company scheduled for 28 June. The ceil-ing amount of gas supplies to Belarus has been determined at $4.255 billion. In line with the contract approved by the pre-vious meeting of Gazprom shareholders in 2013 Belarus may get 23 billion cubic metres of natural gas worth $4.1 billion. In 2012 Belarus bought 20.3 billion cubic metres of natural gas from Gazprom for $3.4 billion. The contracts suggested for approval by the Gazprom shareholders also envisage that in 2014 OAO Gazprom Transgaz Belarus will render gas transit services via Belarus in the volume of at most 50 billion cu-bic metres (at most 60 billion cubic metres in 2013). In 2014 Gazprom will have to pay at most $600 million for the service of gas transportation via Belarus.

BELARUS|AGRICULTURE

Exports unaffected by Russia’s WTO membershipRussia’s accession to the World Trade Organization (WTO) has not negatively affected the export of Bela-rusian agricultural products, Belarusian Agriculture and Food Minister Leonid Zayats said at the agricultural expo Belagro 2013. The expo opened in Minsk on 4 June, BelTA reported. Zayats said last year’s agricultural export growth rate was 125% as against 2011. “In January-April 2013 ex-port rose by 19.9%, he said. “Therefore, we have lost neither this export nor this segment. On the contrary, we now dare to offer our products in non-CIS states such as Indonesia, Bolivia, Vietnam, and so on where we are trying to set up joint ventures with our partners to process Belarusian raw materials so that we could present Belarusian products the way our citizens consume it”. Speaking about the overall market situation, the Agriculture and Food Minister agreed that the market is a bit crowded these days, with one prod-uct available from a number of enterprises from various countries. He said he thinks the products that demonstrate the best quality and lower prices can hold on to the market position. “We are aiming to do that,” Zayats said.

ASTANA - Last week, in Kazakhstan’s capital Astana, the Presidents of five countries – Russia, Belarus, Kazakhstan, Ukraine and Kyrgyzstan – met for the first meeting of the Supreme Eurasian Economic Council.

Originally, the heads of only three member states were scheduled to par-ticipate in the meeting. However, just a week before the event, it became known that the Kyrgyz and Ukrainian presi-dents would join them.

This fact is indicative of a possible expansion of the Eurasian Union into a serious organisation in the post-Soviet space. The main item on the agenda of the Supreme Eurasian Economic Coun-cil was the prospects of expansion of the Customs Union and of the future Eura-sian Union. The parties also discussed the possible future participation of Kyr-gyzstan and of Ukraine in the work of the Customs Union.

“Integration should be beneficial for all members. Countries choose integra-tion to receive what they cannot get on their own, and to create something new together,” Kazakhstan’s President Nur-sultan Nazarbaev said in his opening speech.

The Eurasian Union is scheduled to launch on 1 January 2015. To do so, draft

documents must be provided for review by the heads of the member states by 1 May 2014. With reference to the criti-cal comments from some Western ex-perts and political analysts in a number of foreign media, Kazakhstan’s president emphasised that the forming of a com-mon economic space involved strictly economic, not political, integration.

Speaking on the outcomes of the

meeting, Nazarbayev informed the journalists that Kyrgyzstan had already submitted an application to join the Customs Union. He also advised that a working group had been set up to pre-pare a necessary roadmap.

As for Ukraine, it has expressed its interest in a status of an observer in both the Customs Union and the future Eura-sian Economic Union.

Russian-backed Eurasian Union to expand

Russia's President Vladimir Putin, second right, Belarus President Alexander Lukashenko, second left, Kazakh President Nursultan Nazarbayev, centre, Ukrainian President Viktor Yanukovych, left, and Kyrgyz President Almazbek Atambayev at a meeting of the Supreme Eurasian Economic Council, Astana, Kazakhstan, 29 May 2013.|AFP PHOTO/ILYAS OMAROV

Belarus and Laos are setting up a joint in-tergovernmental commission for bilateral co-operation, BelTA reported. On 4 June, Belarus’ Foreign Ministry hosted the sign-ing ceremony of the memorandum of un-derstanding on the establishment a joint commission for bilateral co-operation between the governments of Belarus and Laos. The document was signed by Bela-rus’ Foreign Minister Vladimir Makei and Laos’ Vice Premier, Minister of Foreign Af-fairs Thongloun Sisoulith in Minsk.

The diplomatic relations between Be-larus and Laos were established in 1994.

The development of the legal framework of the bilateral relations is underway. In 2012 the trade between Belarus and Laos totalled $11.1 million, Belarus’ exports made up $11 million and imports from Laos reached $92,900.

In January-March 2013 the trade be-tween Belarus and Laos totalled almost $190,000.

Laos imports industrial products and consumer goods, which creates good pros-pects for the Belarusian export, first of all, of agricultural, automobile and quarry equipment, diesel generators and pumps,

tires, foodstuffs and alcoholic beverages. MAZ conducted negotiations with a Lao company on the supplies of Belarusian vehicles and component parts. The two countries are mulling over a number of promising areas to develop cooperation in trade, economic, science-technology and humanitarian areas. The parties also mull setting up a joint company in Laos to produce baby food from the Belarusian raw material, registration and supplies of pharmaceutical products to Laos as well as direct supplies of tractor equipment, under leasing schemes.

Belarus, Laos set up inter-governmental commission

Belarus calls for green technology co-operation

BELARUS|DIPLOMACY

BELARUS|ENERGY

UKRAINE|TRADE

By Kulpash Konyrova

30 EURASIA NEWEUROPEwww.neurope.eu

9- 15 June, 2013

On 3 June the signing ceremony of the Memorandum on Cooperation between PSA Peugeot Citroën, ‘AgromashHolding’ JSC and the Ministry of Industry and New Technologies was held in Astana.

The launch of industrial production of Peugeot cars and commercial vehicles in Kazakhstan is planned to begin from July 2013. The distribution will be realised by the group of automobile companies Allur-Group that owns ‘AgromashHolding’ JSC.

The assistance in realisation of the joint project has been rendered by the «Kaznex Invest» National Export and Investment Agency under the Ministry of Industry and New Technologies of Kazakhstan .

The assembly of Peugeot automobiles using disassembled knock down) tech-nology will commence on industrial plat-forms of ‘AgromashHolding’ JSC located in Kostanay city. At the first stage of the project the model line will include mod-els such as Peugeot 301, Peugeot 3008, Peugeot508 and Peugeot Partner. The average level of production is expected to reach up to 4,000 units per year. An ex-pected repercussion of this being the pos-sible future sales of Peugeot in Kazakhstan could exceed 10,000 cars per year. Along-side the models wich will me assembled locally, Peugeot will present the Peugeot 408 model in Kazakhstan that is being pro-duced in the full-cycle mode at the factory of PSA Peugeot Citroën located in Kaluga city, Russia.

Within the project 150 new jobs will be created in Kazakhstan. The commercial launch of the project when the first cars of local assembly will reach the dealers net-

work of Peugeot in Kazakhstan is planned on September of 2013.

The launch of the project will signal-ize a new stage of the presence of Peugeot brand name in Kazakhstan market where the company will execute the industrial and commercial operations.

The especial pleasant aspect is the fact that 2013 is The Year of France in Kazakh-stan. In light of this significant event the signature of the memorandum between PSA Peugeot Citroën, ‘AgromashHolding’ JSC and the Ministry of Industry and New Technologies signal the strengthening of re-lations between the France and Kazakhstan.

The industrial activities will develop within the partnership of PSA Peugeot Citroën and ‘AgromashHolding’ JSC. The distribution of cars will be realised by the Kazakhstan Group of automobile companies AllurGroup. The partnership with PSA Peugeot Citroën will assist to development of the domestic automobile industry of Kazakhstan and its integration within the Customs Union.

Due to the Presidential program of industrialisation the domestic auto-mobile industry has began to develop dynamically. At the present time seven enterprises on production of cars are functioning in Kazakhstan. More than 20 models of passenger cars beginning from budgetary mini cars up to premium class cars, 20 models of trucks and com-mercial machines are being produced. Several projects on full scale automobile production are under realisation.

“I am sure that the arrangement between PSA Peugeot Citroën and ‘AgromashHold-ing’ JSC will enter the history of Kazakhstan

industry in the capacity of one more suc-cessful joint project within the Program of Forced Industrial and Innovative Develop-ment», said Asset Issekeshev, the Deputy Prime minister – Minister of Industry and New Technologies of the Kazakhstan.

This project is a new phase of develop-ment of automobile industry of Kazakh-stan. The plant of ‘AgromashHolding’ JSC is putting efforts to create all neces-sary condition that are mandatory for global automobile producers. And we are sincerely glad to take a part in the project jointly with PSA Peugeot Citroёn because we can see the perspective of development of the brand in Kazakhstan. The Group of automobile companies AllurGroup is extending its model line of cars that are ob-tainable for Kazakhstan citizens,” said An-drey Lavrentyev, President, of the Group of Automobile Companies, AllurGroup.

The economy of Kazakhstan is dem-onstrating stable growth of 5 -8% during the last several years. The automobile mar-ket is developing at a high paces and has shown 140% growth in 2012. The income per capita is rising (13 000 USD in 2011) while the level of provision by auto vehicle is remaining low.

The group PSA Peugeot Citroën considers the CIS countries as one of priority zones for business development. The group is actively working in Russia, Ukraine, Azerbaijan, Belarussia, Moldova. And very soon the production of Peugeot cars for Kazakhstan market will start on industrial platforms of AgromashHolding. During last several years the automobile market of Kazakhstan is demonstrating impressive tempo of growth.

Peugeot drives into Kazakhstan production

TAJIKISTAN | DEFENCE

Helicopters from India on the cards India will soon provide medium-lift choppers to Tajikistan and dedicate a hospital there as part of efforts to build on the strategic ties between the two countries against the backdrop of US-led troops preparing to pull out from Af-ghanistan in 2014. The 50-bed hospital would be inaugu-rated by Defence Minister A K Antony who is expected to visit there next month, Defence Ministry officials said. The decision to provide the Russian-origin Mi-series choppers and build a hospital in Tajikistan were taken dur-ing the visit of its President Emomali Rahmon's visit to In-dia last August, they said. The hospital was airlifted by the Indian Air Force recently which would help in providing specialist care to the local Tajik population in the southern part of the country. India had earlier also built a hospital in Tajikistan in Farkhor there in the late 90s on the Tajik-Afghan border to treat wounded Northern Alliance fight-ers battling against the then ruling Taliban regime. India has also developed the Ayni airbase near the Tajik capital Dushanbe, which provided it a foothold in the Central Asian region. India had deployed its Army and Border Roads Organisation personnel to upgrade the airbase by extending its runway, constructing an air-traffic control tower and perimeter fencing around the base. The Ayni airbase was completed by India in 2008 after encountering minor problems there and had deployed over 100 person-nel there for facilitating operations there.

TURKMENISTAN | TRANSPORT

Inter regional railway construction begins

Work on the construction of railway to connect Turk-menistan, Afghanistan and Tajikistan would begin today and the presidents of mentioned countries would inau-gurate the work in a ceremony BNA reported. The 400 km lengthy railway starts from Atamurad Imamnazar area of Turkmenistan passing through Aqina border of Afghanistan and ended at Dazhdar area of Tajikistan. Leaders of the above countries had inked the agreement for the project last year, they began working on its pro-duction on 5 June.

The production line of the new PSA Peugeot Citroen car factory in Trnava, Slovakia, Thursday 19 October 2006. The French car maker invested more than 700 million euro in this new factory which will produce 300,000 cars in 2008. | EPA/TOMAS HUDCOVIC

Railway lines connecting three neighbouring countries will aid the regions logistical needs. |AFP

KAZAKHSTAN |AUTOMOBILE

31RUSSIANEWEUROPEwww.neurope.eu9- 15 June, 2013

Russian President Vladimir Putin wants to stop gas pipelines from transiting Syria and keeping President Bashar Assad in power is his best bet, a leading Russian expert told New Europe on last week.

Konstantin Simonov, head of Rus-sia’s National Energy Security Fund (NESF) in Moscow, noted that Rus-sia is not involved in Syrian oil and gas production but Syria is extremely im-portant as a possible transit country for hydrocarbons.

Simonov reminded that there are

plans for a pipeline to Europe from Qa-tar and Saudi Arabia through Syria and Turkey. A new pipeline for transporting gas from Qatar could directly challenge Russia’s South Stream.

“That is why for Russia this story with Syria is extremely important be-cause if you’ll see the change of the re-gime of Assad, if you see the destruction of his regime, in nearest future we can see the pipeline from Qatar to Europe and it can be much more dangerous than the pipeline from Azerbaijan, Nabucco and so on,” the Russian expert told New Europe, referring to the EU’s planned

southern gas corridor, bypassing Russia.Russia is one of few allies of Assad,

keeping its commitment to existing weapons contracts.

“That is why we try to support As-sad; that is why we try maybe to give him these S-300 missiles; and that is why we have this dialogue with Israel, Great Brit-ain. Everybody is trying to press on Pu-tin. But Putin also wants to have a clear understanding of what will be the energy situation in this area because in my opin-ion is very nervous to see Syria as a tran-sit country if you are speaking about gas from Qatar,” Simonov said.

Putin backs Assad over gas route

RUSSIA|TRANSPORT

Thousands evacuated after Moscow Metro fireA fire broke out at the Okhotny Ryad Metro station near the Kremlin, injuring several people, the capital’s emergencies service reported. The fire prompted an evacuation of more than 4,000 commuters. Some trains were stopped inside a tunnel when the flames erupted. All stranded passengers and Metro employees have been rescued, and the evacuation end-ed about an hour after the fire started, according to the emer-gencies service. The fire broke out at approximately 9:04am Moscow time (05:04 GMT). The facilities affected by smoke are being ventilated. The cause of the fire is yet to be deter-mined, but a preliminary investigation indicates a power line failure inside a tunnel, according to the emergency service. The fire seriously disrupted transportation in Moscow during morning rush hour. The Moscow Metro is one of the world’s mostly heavily used rapid transit systems with an extensive network and deep sections that offers reliable transportation to Moscow’s crowded streets.

RUSSIA|EU AFFAIRS

Jagland, Lavrov agree on CoE office in MoscowThe Council of Europe’s (CoE) Secretary General, Thorb-jorn Jagland, and the Russian minister of foreign affairs, Ser-gei Lavrov, reached an agreement on the establishment of the Council of Europe’s first programme office in Moscow during Jagland’s visit to Russia last week. The information was dis-seminated by Ambassador Torbjorn Froysnes, head of the organisation’s office in Brussels on 31 May during an event on Russia’s internal and external policies organised by the EU-Russia centre.New Europe learnt that this won’t be an entirely new office, but the current information bureau will be turned into a programme office. It is expected that it will work on a considerable number of cooperation projects between the Strasbourg-based organisation and the Russian government. Froysnes sees the upcoming change as a “positive develop-ment” and said that it should be expected “in the near future”. He also said that the office will work in particular towards im-proving the functioning of the Russian judiciary. Two weeks ago, during Jagland’s visit to Russia, Lavrov stressed the need for additional efforts in addressing the challenges to the rights of Russian minorities in Estonia and Latvia.It still unclear who will lead the CoE’s office to Moscow, but Froysnes said that the organisation’s Secretary General Jagland is currently examining a list of names for the post and will make the appointment as soon as possible. (Stanislava Gaydazhieva)

RUSSIA|DEFENCE

Russia wants Steven Seagal to promote weaponsOn 3 June, Russia’s Deputy Prime Minister Dmitry Rogozin said his country is considering offering Hollywood star Ste-ven Seagal a job as promoter of its small arms manufacturers abroad, RIA Novosti reported. Seagal accompanied Rogozin on a visit to the privately owned Degtyarev small arms plant in central Russia. “You are ready to fight Americans [manu-facturers] with your teeth and your intellect, and if Americans are ready to promote and support you, that says a lot, that shows that we’re learning new ways to work on corporate arms markets,” Rogozin said. Russian officials are big fans of Seagal, who met President Vladimir Putin in March and claimed to have set up a meeting with Rogozin for a Congres-sional delegation two weeks ago.

On 4 June, Russian and European Union officials meeting at a summit in Yekater-inburg discussed liberalising visa rules for many Russians but made little pro-gress in their prolonged talks.

At their 31st regular summit, they agreed to boost business and economic co-operation but differed over the Syria crisis. Both confirmed their support for a political solution to end the conflict, but their approaches towards conflicting sides differed a lot.

Citing promising bilateral trade and investment figures in 2012, Russian President Vladimir Putin said at the summit there was a good base for fur-ther deepening the mutually beneficial ties. He also called for closer contacts to build mutual trust, hinting the two sides should prioritise business over differ-ences.

Putin reminded that the EU was the largest investor in Russia, saying it amounted to $276.8 billion, and that

60% of Russia’s accumulated foreign in-vestments are in the EU. About 40% of Russia’s international reserves are de-nominated in euros.

The Eurasian Economic Commu-nity was “taking on an increasing impor-tance for the development of the Russia-EU partnership,” said Putin. He added that Russia sought to build co-operation according to World Trade Organisation (WTO) rules and that “We also take Eu-rope’s experience into account”.

Putin also thanked the EU “for con-structive co-operation and support for Russia’s Presidency”.

There were also discussions on ener-gy, which forms 75% of Europe’s imports from Russia. Putin said energy remained a difficult area for both sides. “We are natural partners in this area. Obviously, the energy dialogue can move forward successfully only if the interests of both parties are respected and the predictabil-ity of business operations is ensured,” the

Kremlin leader said.European Council President Her-

man Van Rompuy said relations had developed tremendously over the last 25 years, having turned into a strategic partnership. “We have become first-rate and indeed indispensable economic partners to each other,” he said. “I am glad to say that our co-operation has moved forward in several areas like en-ergy, civil protection, consumer policy and education.”

Turning to human rights, Van Rom-puy said work on values that strengthen democracy and respect for fundamental freedoms and rights are an important, although difficult, element of EU-Russia relations. “I therefore welcome the dia-logue on human rights where we can ad-dress these issues frankly and raise con-cerns,” he said.

By the end of the summit, EU-Russia leaders signed an agreement on anti-nar-cotics co-operation.

EU-Russia seek pragmatic ties

Russia’s President Vladimir Putin, back centre, with Russian and EU top officials attend a Russia-EU summit in the industrial Ural Mountains city of Yekaterinburg, 4 June 2013. | AFP PHOTO/RIA-NOVOSTI POOL/MIKHAIL KLIMENTYEV

RUSSIA|ENERGY

RUSSIA|EU-AFFAIRS

By Kostis Geropoulos

KASSANDRA32

Kassandra@NEurope.eu

NEWEUROPE

Follow me on twitter @Kassandra_NE

It is said that the secret of politics is timing. On the morning that the news broke about the US National Security Agency (NSA) had been given "direct access" to personal data by the world's leading tech companies, European Commission President, Jose Bar-roso and Viviane Reding, the fundamental rights commissioner were nowhere to be seen and their official diaries were blank.

Not all organisations are as opaque as the European Commission on the matter and the Bilderberg Group provided an an-swer in their list of participants for their cur-rent gathering, which showed that Barroso and Reding were in Watford, UK.

Also invited were representatives from several tech firms who stand accused of of-fering open access to people and companies data.

Efforts to contact the commissioner received a simple reply 'Please note that

the Reding cabinet is on a working seminar on 7 June. Your mails will be dealt with on Monday 10 June.'

The day before, Reding attended the Justice and Home Affairs Council, where she vowed "I will fight for a reform of the EU's data protection rules that will strength-en the rights of EU citizens".

Neelie Kroes and the Digital Agenda? New Europe asked "What implications does this have for the citizens and businesses in Europe, all of whose data is almost certain to pass through US servers? What advice do you have for EU citizens and businesses that are concerned over privacy/industrial espionage?

Silence.The spokesman for Cecilia Malmström,

home affairs commissioner said, "We do not have any comments. This is an internal US matter."

9- 15 June, 2013Once upon a time in Brussels...The Chief Scientist and advisor to the President of the European Commission mentioned that she's had to focus her latest research on stress... What of all the 500 million things happening, could be stressing the cabinet?

NSA spying revelations leaves Europe silent

Not whining, but wine-ing

Stop spamming me pleads MEP

Sometimes in the face of adversity, you just have to laugh. Take those jolly Greeks, for example. After their rousing Eurovision anthem, Alcohol is Free, which offered a response to the recession that Dionysus would be proud of; one Greek winemaker has decided that it the country is going down, it may as well do so with licentious

excess, naming a new range of wines Crisis.Of course, despite all the problems, the

Greek wine industry is doing well for itself, with exports rising, including to places like China.

However, recent figures show that the country is not giving as much wine to Ger-many as it once was. Coincidence?

Daniel van de Stoep MEP is getting concerned after being pestered by fellow deputies to vote for them in a MEP award contest.

He sent an email round the parliament begging people to stop.

Dear colleagues,

Congratulations on half the Parliament being nominated for some bogus-award nobody outside this parliament cares about. Could you please stop spamming our mail-boxes with your e-mails in which you ask your colleagues for their vote (which is actually quite sad if you think about it)

EPA/HERWIG VERGULT

An artist's impression of an MEPs mailbox | FREEZELIGHT

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