new europe print edition issue 992

NEWEUROPE19th Year of Publication | Number 992 | 24 - 30 June, 2012 | € 3.50 www.neurope.eu

FRANCEAfter the PS victory in theFrench parliamentary elec-tions, what are the nextmoves for President Hollandenow that his hand has beenstrengthened? ·Page 4

TRADEThe European Parliament’sinternational trade committeehas voted to reject the contro-versial Anti -CounterfeitingTrade Agreement (ACTA)...

·Page 6

ENERGYThe European Commissionerfor Energy said during EUSustainable Energy Week thatthe ‘Public sector is to lead theway towards energy efficiency'...

·4

ENVIRONMENTDuring the United NationsConferenceon SustainableDevelopment, or Rio+20,US Secretary of StateHillary Clinton deliveredremarks focusing... ·Page 12

KASSANDRAScience: It’s a sexismthing! After producing aracist video, theCommission releases asexist one...

·Page 31

GULFThirty-one years have elapsedsince the establishment of theGCC it continues to be arobust organization that pre-serves the interests of its citizens

·Page 7

ECONOMYDuring the first day of the StPetersburg Economic Forumon 21 June, deals worthalmost $2bn were signed inthe aviation, energy andbanking sectors... ·Page 4

American cult

Page 15

FASHION & STYLE

· Page 3

Euro

Make or break time

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ANALYSIS | New Europe NEW EUROPE24 - 30 June, 2012

NE 15 YEARS AGORight, if anyone brings up the Eurozone crisis, blame it all on the Americans, got that?|AFP PHOTO / RIA-NOVOSTI /POOL/ ALEXEI NIKOLSKY

The Shooting Gallery

The photo illustrates just how underdeveloped Eastern Europe was after decades of Communist rule and a centrallyplanned economy. It was a huge challenge to bring the Eastern nations into the European Union because not only was theeconomy ruined, the political and civil society sectors were nowhere near European standards. Romania and Bulgaria wereadmitted into the union a decade later, in 2007, but there are still grave concerns in Brussels over these two countries asces-sion, with many privately saying it was a blunder.

The lone musketeerBatten down the hatches, Europe is in crisis once more.Ahead of next week’s European Summit, which gatherstogether all 27 EU government leaders, there is muchscrambling around, as word spreads that the single curren-cy is about to crash and burn. Even the efforts of the Greek electorate to elect a stable,pro-European government haven’t quite stemmed the tideof chaos. Now, he are told, if nothing is done speedily tosolve the problems of the Eurozone, it is only days beforethe whole thing collapses.But Europe, it seems, doesn’t do thing with great haste;something that was put to Jose Manuel Barroso at therecent G20 summit, and which the European Commissionpresident took umbrage with, testily denying such a falla-cy, while European Council President, Herman VanRompuy, kept quiet beside him. The Italian Prime Minister, Mario Monti, no doubt stungby speculation over the future of his country’s economy,has of late been establishing his pro-European, sensibly-spending credentials, and convened a meeting withGerman Chancellor Angela Merkel and French President,Francoise Hollande, as well as Spanish Prime Minister,Mariano Rajoy to emphasise the need for dramatic action.We only have, says Monti, one week to save the euro. He,for one, wants more Eurozone integration and a bankingunion, and he wants it sooner rather than later. Not every-one thinks this is achievable. The German Finance Minister, Wolfgang Schäuble, hasalready queried the idea of “market-friendly policy mecha-nisms” (in effect, eurobonds), as envisaged by the ItalianPM. Conditions, he says, will have to be met, and theGerman position on this is well known. Despite the crisisin the single currency, which has severe knock-on effectsfor Eurozone and non-Eurozone countries, member statesremain split. Some, as IMF chief, Christine Lagarde hassaid, want ‘mutualisation’, others, to steer a wide berth.Some are even prodding at the supposedly dying embersof the German Chancellor. In a widely-circulated column, Josef Joffe said that her cur-rent opposition to other economic plans means that “MrsMerkel's Germany is Europe's one musketeer”; the maximof ‘one for all and all for one’ is redundant. Speculation ismounting that the IMF, Monti, and, possibly, even VanRompuy are mobilising against the chancellor. With hisparty’s victory in legislative elections, Hollande, championof growth over austerity, will also be in combative mood.Meanwhile, UK Prime Minister, David Cameron, hostageto his party’s right and big city bankers, threatens vetoafter veto.While the Eurozone crisis is the single most obviousthreat to the European project, other disagreements quiet-ly undermine the integrity of the EU, such as theSchengen treaty, which, having been taken away from thescrutiny of the European Parliament, is back in the handsof national-only interests. UK Labour Party leader, Ed Miliband, for one, who hasdecided his country let in too many immigrants from east-ern Europe. That is, people from another part of theEuropean Union.If solidarity, economic, political and social, is not practicedby European leaders, can we legitimately say that a unifiedEurope exists? To the summit...

EDITOR

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Kostis Geropoulos (Energy & Russian Affairs)

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Andy Carling (EU Affairs)

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Ivan Delibasic (EU Affairs)

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Ariti Alamanou (Legal Affairs)

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Louise Kissa (Fashion)

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ISSN number: 1106-8299

ANALYSISNew Europe |NEW EUROPE

24 - 30 June, 2012

All the ingredients for a repetition of the1929-33 crisis are here and this week, afterthe 28 June summit we will know if we willcontinue with the euro or not. Italian PMMario Monti, practically speaking, gave tothe euro, one week, and invited FrancoisHolland, Angela Merkel and MarianoRajoy to discuss the situation in view of thesummit.

At the same time, Moody’s downgraded15 major financial institutions. 1929 is anteportas, not for Europe, but for the entireworld.

Things are terribly simple. The crisis issystemic and is affecting the entire world,of which Europe is only a sub-system. Inthis context, Europe is not the determiningelement for a solution of the problem but itremains one of the major components,greatly responsible for the derail.

The Pick of the CrisisThe European crisis has come to the

point of no return, and for Europe this verysummit, is the one and only chance to makeit or break it. EU leaders, either they mustproceed with the fiscal and banking union,or after the summit, the euro may well behistory.

The European Commission, an institu-tion, which par excellance has the “right ofinitiative,” in the past four years was only aspectator of the European crisis because ofthe British influence and the lack of politi-cal leadership in its institutions. It is silly toremind that in the past two years and untiltoday, the European Commission has beingkept busy with futile exercises that have noresults to “save” Greece (less than 3% of theEurozone).

Barroso TimeOn the real battlefield, the deepening of

the European institutions, we have seen theCommission doing nothing. Now, it is timefor Jose Manuel Barroso to prove his lead-ership abilities, ignite his machine and takebold political initiatives. Otherwise, he islikely to become part of history, as well.

The world is running out of time. ForEurope to survive, provided the world sys-tem does not collapse, it should take twoimmediate decisions; a fiscal union and abanking union. At the same time, a sane andsafe Europe is cardinally important for theworld system, as it is highly interdependentwith Europe.

A Fiscal Union implies the adoption ofthe Eurobond concept as the GermanChancellery has visualized it, a RedemptionGuarantee Fund. The Banking Union re-quires the establishment of a EuropeanBanking Authority with supervising au-thorities, to oversee the 50 systemically im-portant European financial institutions. AEuropean Resolution Authority should bealso established in the same context.

The British VetoDavid Cameron will highly likely veto

any such progress. Indeed, Britain cannotafford any of those provisions. Yet, thisveto may be the golden opportunity forthe European Union to marginaliseBritain.

So far, Britain is producing practicallynothing living from the tax-free commis-sions earned by the City on financial trans-actions. London is, and will remain, anoffshore hedge fund.

As long as we continental Europeansallow this situation to continue, Europewill go deeper into the spiral of the eco-nomic crisis, now turning into politicaland social, the European Union will col-lapse in no time and Britain will continueto live parasitically, thanks to the City.

The SolutionAt this Summit, the European Union has

the chance to begin “cleaning” its house.The only actions it has to take is to disre-gard the veto of David Cameron and pro-ceed multilaterally with the Fiscal andBanking Unions, moving from London toFrankfurt the European Banking Agency,replacing the British Director General ofInternal Market (in charge of the euro!)with a Spaniard, and pass the External Ac-tion Service, now controlled by Britain, toan Italian.

This, I am afraid is our one and onlychance. If we fail, we will then enjoywatching the most beautiful catastropheever! BC

EUROPEAN UNION

Make it or Break it!London is, and will remain, an offshore Hedge Fund

Spanish Prime Minister Mariano Rajoy, French President Francois Hollande, German Chancellor Angela Merkel and Italian Prime Minister Mario Monti take

place for a joint press conference following their meeting on 22 June at Villa Madama in Rome. The top four eurozone countries met to tackle the relentless

debt crisis with France, Italy and Spain pressuring Germany to accept new growth and intervention measures. |AFP PHOTO / ALBERTO PIZZOLI

www.greenpowerconferences.com+44 (0)20 7099 0600

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| New Europe NEW EUROPE

ANALYSIS24 - 30 June, 2012

After the Socialist Party’s (PS) com-manding victory in the second roundof France’s parliamentary elections,the question is, what are the nextmoves for President Hollande nowthat his hand has been strengthened?

The PS took a total of 314 of the577 seats in a decisive voting swingthat leaves the left dominant in par-liament, and in the upper house aftergains made in the senate elections lastyear. So far, the recently electedFrench President’s socialist govern-ment have put forward proposals toincrease the marginal rate of tax to75% on incomes of over €1million,and will also impose an extra tax oncompany dividends, it is also thoughtto have plans to raise taxes on em-ployers. In terms of any fresh nationalstimulus plans that the socialists mayhave in place, the conditions are hardlyripe to implement any further statesponsored growth programmes.Which may result in targeted fiscalpolicy response to the economy, in thesame vein as has been suggested up tonow. Eurostat figures place theFrench national debt at the end of

2011 at 85.8% of GDP, a currentdeficit of 5.2%, leaving them in theworst half of indebted nations out ofall of the EU countries.

While they may point to an infla-tion rate of 2%, 0.4 lower than the av-erage of the Euro Area, andemployment growth in a state of in-ertia at 0%, the EU average for firstquarter of 2012 according to Eurostat,the sheer weight of the public debtalone may be enough to deter themfrom any major increase of govern-ment spending plans.

Francesco Saraceno, a senior econ-omist for the Paris based ObservatoireFrançais des ConjoncturesEconomiques,said: “I would say thatthere is not much room for manoeu-vre for France as a individual country,the socialists must not be in denialabout the situation in France and needto have spending constraints.”

“However the election of Hollandecan be a game changer in providingan alternative to the conservative aus-terity supported by the EU and An-gela Merkel, the socialists can proposedifferent policies.”

There should be no fears that Pres-ident Hollande’s victory will result ina glut of spending plans, he has a his-tory of being more a moderate social-ist rather then being a member of the

far left. Despite his power in theFrench parliament whether he reallywill put forward a radical mandate re-mains to be fully seen, a spirit of com-promise is thought to be in Hollande’snature, but what is clear is that there islikely to be a increased tax burden onthe upper class in comparison to themiddle class.

What the socialists should do is fol-low a more free market path saysThomas Klau, head of the EuropeanCouncil of Foreign Relations’ Paris of-fice. “The Socialist Party should belooking to create the conditions to im-prove competitiveness for French in-dustry, to correct the obstacles in placenow of having a regulatory environ-ment that promotes entrepreneurial-ism.” “I don’t think its going to be amatter of national stimulus pro-gramme, but more of a Europeanstimulus framework, this is high-lighted by Hollande favouring Eu-robonds that have been met with alukewarm response by other parties.”

An intriguing fallout could resultfrom the socialist victory in the Euro-pean Union leaving an effect on theeuro. This could come in particularfrom any future commitments to in-crease spending, that would defy thefiscal stability pact due to take effectin January 2013, that limit’s the euro-

zone countries to a 3% current deficitto GDP, which was implemented inthe final weeks of the Sarkozy reign.

Germany’s ruling coalition hasnow agreed with its opposition toratify the fiscal pact after severalround of negotiations.

“There is no doubt the oppositionto the Angela Merkel style of auster-ity remedies for the economy couldbecome a big shift in momentum inBrussels.” argued Francesco Saraceno.

“The current policies are a disaster,although the continued opposition tothem from countries such as Greeceand Portugal are not credible. What isdangerous for the conservatives inBrussels is that Hollande’s positioncould become a magnet for morepowerful players, leaving a coalitionthat could not be ignored in Ger-many.” “There is not a single countryto blame for the situation, the prob-lems are structural, some countriesneed austerity and others such as Ger-many that benefited from export ledgrowth should increase their demand,for example improving wages withmore public investment that will as-sist countries like Greece.”

After receiving 3.7% of the votesthe far right National Front is cele-brating victory winning two seats, ofwhich one of them will be occupied

by Marion Maréchal-Le Pen, the 22-year old niece of leader Marine LePen and granddaughter of partyfounder Jean-Marie Le Pen.

Although fears of a rise of the farright may be a little premature as thepercentage of the votes they received isin a range that they have been previ-ously used to, so cannot be viewed asa knee jerk reaction to the depressingeconomic situation resulting in turn-ing to an extreme far right party.

Figures released from the FrenchMinistry of the Interior from the par-liamentary election reveal an apathy,as opposed to a frothing at the mouthopposition to mainstream parties,with a turnout of 46.42 %, just over3% less than the corresponding elec-tion five years ago.

Thomas Klau concluded “Its is asuccess for them, but only a moderateone and does not really change therules of the game, the parliament is inplace for five years now and the Na-tional Front’s impact will be minimal.”

Peter Taberner has previously writtenfor Financial News, Investment andPensions Europe, Utility Week,EGOV Monitor, European Pensions,Suite101.com, PPP Bulletin, GlobalPensions Weekly, Tobacco Journal In-ternational, IPS and Seeurope.net.

POLITICS

Hollande’s choiceAfter the slogans, come the details

During the first day of the St PetersburgEconomic Forum on 21 June, deals worth al-most $2bn were signed in the aviation, energyand banking sectors.

Justin Urquhart Stewart, Director of SevenInvestment Management in London, toldNew Europe on 22 June that these dealsshow that investment climate has probablyimproved. “[Russian President Vladimir]Putin has a lot to prove to try and encouragepeople back in. But I’m surprised franklythere has been such a take up. Because afterwhat’s happened with BP and the general air,there is relatively little confidence that it is stilla good place to invest in,” he said, referring tothe British oil major’s announcement that it isseeking a buyer for the stake amid tensionswith its billionaire partners in joint ventureTNK-BP. “But corporates seem that they can,unless they think they are getting an excep-tionally good deal. But I can’t see that any-thing has especially changed with regard tocorporate governance and independence inRussia,” Urquhart Stewart said.

Russia's second-biggest airline Transaero

has signed an agreement to buy four AirbusA380 superjumbo planes. Transaero alsoagreed to buy six Sukhoi Superjet-100 planesand signed an option to acquire 10 more.

Russian oil giant Rosneft reached an agree-ment for co-operation with US company

General Electric (GE). Rosneft also signedagreements with Norway's Statoil and ENIto form joint ventures to explore Russia'sArctic offshore zones.

Sberbank of Russia and HSBC Bank PLCsigned a Framework Loan Agreement for

$2bn to provide Sberbank with short,medium and long term trade finance ad-vances including advances to be covered byExport Credit Agencies.

Putin said Russia was primarily interestedin private investment. “Russia should positionitself as an exporter of innovative goods andservices. New jobs are created, in the firstplace, by investment. We need to build up itsvolume to 27% of GDP by 2018. I believethis is an absolutely realistic goal and task,” hesaid. Putin also said Russia was going to stickto its previously announced plans to create25mn jobs by 2020. “We need to edge out thearchaic and ineffective employment in the na-tional economy,” he said.

Putin also sought to reassure investors on21 June that he is committed to building anew economy through liberal reforms andprivatisation. “This might part of the policyfrom Putin to try and encourage greateropenness and if it’s the start of a new policy,then that’s to be welcomed,” UrquhartStewart said, adding that the Russian Pres-ident has to reverse the negative attitudethere is towards confidence in investing inRussia.

RUSSIA|INVESTMENT

Putin ushers billion-dollar deals

By Peter Taberner

By Kostis Geropoulos

Russia's President Vladimir Putin speaks at the annual St Petersburg Economic Forum, 21 June 2012.|AFP PHOTO/KIRILL KUDRYAVTSEV



The European Parliament's International tradecommittee voted on 21 June on the highly con-troversial international Anti-Counterfeiting TradeAgreement (ACTA). Following months of pub-lic outcry, the outcome was inevitable; recom-mendation to the plenary to withhold its consentand effectively annul years of negotiations on acomplex set of trade issues.

The vote took place twice, since the first timesomeone voted both Yes and No and gave a con-clusive, yet not overwhelming result 19 to 12against the agreement.

However, both the vote and its outcome wereovershadowed by an online war between politicalgroups for the primacy and ownership over thisACTA 'success', with the Greens and Liberals(ALDE) attacking the centre-right groups of theEuropean People's Party (EPP) and EuropeanConservatives and Reformists (ECR).

The barrage of accusations started on 20 Junewhen a Dutch ALDE MEP, Marietje Schaake,announced that the EPP group would demandsecret vote on the amendment asking for post-ponement of vote on ACTA until the EuropeanCourt of Justice (ECJ) delivered its verdict onACTA's legal compatibility with EU legislation.She accused the EPP group of trying to keepACTA alive in a non-transparent manner.

The Greens, following the ALDE offence, in-sisted that they had learnt the EPP group wouldtry to secretly ensure postponement, being “typi-cally on the side of special interests”, not “respect-ing democratic process”, and “looking to hide itsshame with a secret ballot”.

In the end, there was no secret vote on theamendment 3 (postponement until ECJ opinion)and New Europe was told by sources from theEPP group that some of their members were ap-proached by their colleagues from other groups,who wanted the vote postponed, and asked to putthe motion for a secret vote on the amendment. Inan open vote, EPP and ECR MEPs voted infavour of waiting for the ECJ decision, but theEPP withdrew its other amendments.

In addition to what New Europe learnt, therewere some clear indications of divisions withinpolitical groups in the committee. Schaake, whostarted the 'desant on ACTA' on behalf ofALDE, questioned whether their group mem-bers from the Swedish People's Party from Fin-land are against ACTA. Also, for the first timesince, belatedly, opening discussion on ACTA,Socialists and Democrats (S&D) remained quieton the subject and their chairman of the com-mittee was absent from the voting.

With the groups in the Parliament up to theirelbows in mud, trying to prove to citizens andpundits that they be credited for killing ACTA,

and the others be blamed for trying to keep it alive,two things are important to be understood.

Firstly, ACTA has not been killed yet, and, sec-ondly, all major players in the European Parlia-ment are guilty for the situation with ACTA weare facing now.

How come ACTA is not dead when we allcelebrated killing it on 21 June? Well, that is justthe first step towards rejection by the parliament.With a close 19-12 vote against it in the com-mittee, and, as New Europe was told, fears thatit could have been much closer, the vote in theplenary, though it should be mere formality, isnot given. And even if rejected by the parliament,it is still open for member states to ascend to it ifthey wish.

Now, how come that ALDE, S&D, EPP andECR are all guilty, when the Socialists were 'thefirst to openly stand against ACTA', ALDE por-trayed itself as the champions of anti-ACTA,while the EPP and ECR were the ones whovoted against the motion to reject the agreement?

ACTA was negotiated by the European TradeCommissioner Karel De Gucht, a Flemish lib-eral who comes from the same party as ALDEchairman, Guy Verhofstadt, the Open FlemishLiberal Democrats. So, the initial mistake wasmade by a European Liberal.

The course of negotiations, reports on theagreements and concessions De Gucht had

made, was followed by an S&D rapporteur onACTA, Kader Arif, in the INTA committeechaired by an S&D MEP, Vital Moreira. Foryears, neither of them reported anything suspi-cious about ACTA, let alone raised a flag ofwarning. The Socialists, who were in charge ofscrutinising ACTA, therefore, thought there wasnothing wrong with it.

The EPP and ECR were in favour of ACTAat the beginning of the process, and basically noneof the major groups in the European Parliamentdid anything about it until the SOPA/PIPA out-cry from the US spilled over to Europe, causingmillions to sign an anti-ACTA petition.

With the popular opinion throughout the con-tinent resolutely swinging against the ACTAagreement, major groups in the Parliament basi-cally started a PR race to spin their lack of timelyreaction. MEPs opened a conflict with the Euro-pean Commission and completely neglected thepositive aspects of what essentially is not an agree-ment on the internet freedom, but rather a com-prehensive set of international norms againstcounterfeiting.

Most importantly, ACTA could have poten-tially been salvaged and modified to maintain itsinitial purpose to protect the intellectual rights,without compromising the freedom of the inter-net if only the European Parliament, and MEPsin charge, did their job properly from the outset.

TRADE

Scramble for ACTA

The European Parliament’sinternational trade committee asvoted to reject the controversialAnti-Counterfeiting tradeAgreement (ACTA), leading theway for a rejection by the full par-liament at the beginning of July

The committee rejected theagreement on 21 June by 19 votesto 12.

ACTA has proved highly con-tentious, with protests against itsterms in several EU memberstates. The European Parliamenthad previously referred the agree-ment to the European Court ofJustice (ECJ), leading to a splitbetween MEPs that want toreject ACTA outright, and thosethat want to defer ratificationuntil after the court has deliveredits judgement.

The committee vote ultimatelypaves the way for a full rejection,something acknowledged by parlia-ment rapporteur, David Martin, fol-lowing the vote. He also expressedsurprise at the margin of victory. Theprevious evening, following an inter-vention in committee by tradeCommissioner Karel De Gucht,

there was talk amongst the variousparties that the vote would be aclose-run thing.

In the end, said Martin, “not oneperson in the committee could comeout in favour of ACTA”, and addedthat the rejection amounted “to apolitical decision, not a legal deci-sion”. As with some other politicalfactions, Martin’s group, the Pro-gressive Alliance of Socialists andDemocrats (S&D) acknowledge theneed for legal clarification in certainaspects of the intellectual property(IP) sector, and, says Martin, thisvote “should not be seen as an anti-IP vote. It was a vote against the

contents of ACTA”.Speaking in committee in

response to De Gucht on theevening prior to the vote, Martinsaid the agreement should be reject-ed as its terms would force internetservice providers into acting “like apolice force”. He also says that cer-tain terms of the act, such as the def-inition of ‘commercial scale’ are notproperly defined, and that the sanc-tions for abuse of copyright are notproportional.

De Gucht spoke to the commit-tee on the evening of 20 June, inwhich he urged MEPs to vote infavour of ACTA, arguing that it was

vital to upholding the “rights andfreedoms” of European citizens. Healso said that if the trade committeedelivered a negative vote, the com-mission would still be bound to con-tinue on its current legislative path,regardless of MEPs concerns. How-ever, he did suggest that the com-mission was willing to re-examinecertain provisions in the act, such asthe definition of ‘commercial scale’and ‘information-sharing’.

This last point was not taken wellby MEP Daniel Caspary,spokesperson for the European Peo-ple’s Party (EPP), whose groupfavoured waiting until the ECJdelivered its judgement before mak-ing a decision in parliament.

“For my group, we regret this”, hesaid after the committee vote, arguingthat the agreement could help protectEuropean jobs and consumers, if itwas legally watertight. He lamentedthe intervention by the trade com-missioner the evening before the cru-cial vote, saying that it was frustrat-ingly last minute, and too late toaffect change. “What the EuropeanCommission said yesterday – theyonly said it yesterday – that theywould bear our points in mind. Theycould have come out and said this

weeks or months ago. The debatewould have been different”. He saidthe EPP did not vote for ACTa onthe grounds that legal uncertainty stillsurrounds the agreement. He saidthat the European Parliament shouldbe allowed to “think again” aboutACTA, and that the ECJ decisionshould inform possible commissionthoughts on revision of its terms.

Also critical of De Gucht, as wellACTA as a whole, was SwedishPirate Amelia Andersdotter. Likethe S&D group, as well as the Lib-erals, she hailed citizen pressure inmember states as being instrumentalin informing MEPs attitudes to theagreement. “This is an epic momentfor EU citizens”, she said, and waskeen to remind people that, as wellas IP issues, ACTA also affects theproduction of generic medicines, theaccess to which, she says, is “a matterof life and death”.

She was particularly critical of theEuropean Commission’s attitude tothe parliamentary procedure. “DeGucht even turns up to tell us howto vote”, she said, saying it shows a“lack of respect”. Hopefully, sheadded, the commission “will leave usalone when we go for our plenaryvote, where we will also reject it”.

Supporters of the Greens protest against ACTA outside the European Parliament

in Strasbourg on 14 February 2012 | European Parliament

By Cillian Donnelly

By Ivan Delibasic

TRADE

MEPs reject ACTADe Gucht heavily criticised for last minute intervention

ANALYSISNew Europe |

NEW EUROPE24 - 30 June, 2012

Thirty-one years have elapsed since the es-tablishment of the Gulf CooperationCouncil (GCC) during which it has been,and continues to be, a robust organizationthat preserves the interests of its citizens,supports the causes of member states andplays a leading role in the region and in-ternationally. Although these latter roleshave become more visible in recent times,they are not new. Since its inception, theGCC has always concerned itself withlocal, regional and international issues,thus assisting the promotion of securityand stability in the region and globally.Based on the firm conviction that close co-operation, coordination and even integra-tion among its member states best servethe goals and interests of GCC citizensand Arab nations, the Council hasachieved success through adopting com-mon stances, taking on important projectsand making momentous decisions.

In November 1981, the GCC countriessigned a Joint Economic Agreement thatled to the consolidation of economic poli-cies, integration of financial markets and thecreation of economic citizenship that guar-anteed equal treatment for all GCC citizensin economic transactions. The creation of aCustoms Union in 2003 and a CommonMarket in 2008 came as a natural conse-quence of this integration and contributedto the elimination of barriers to the flow ofinvestment and intra-trade exchange, and tothe achievement of considerable economicprosperity. On another level, GCC coun-tries are taking important steps towardseven closer integration with the construc-tion in 2009 of a joint electric power gridand currently with ambitious plans for theconstruction of a unified railway network.Finally, serious consideration is being givento the launch of a common currency as anadditional means to promote economic in-tegration and interconnection.

All these achievements have enabled theGCC to meet challenges over the last threedecades with its priorities and regional andinternational role naturally adapting tochanging internal and external circum-stances. This flexibility and the ability tocope with change have undoubtedly as-sisted the Council’s continuity and im-pacted on its progressive evolution. Theevents of recent years have demonstratedthe GCC’s ability to meet grave regionalchallenges and to react positively and withresponsibility to political, military and se-curity issues, including counter-terrorism.Much was achieved internally by promot-ing cooperation among member states, aswell as through cooperation externallywith the EU and the international com-munity. In particular the GCC has sup-ported the legitimate aspirations of the

Arab people towards justice and humandignity, where no effort has been spared ingiving regional advice in some cases, or intaking the initiative in others, in order toprovide solutions to national, regional andinternational crises.

During the crisis in the Kingdom ofBahrain (and once foreign intentions andinterference were identified), GCC nationsdeployed the Peninsula Shield Force in ac-cordance with the Joint Defence Treaty, toprotect vital facilities against external ag-gression.

The crisis in Yemen saw the Counciladopting “the GCC initiative for peacefultransition in Yemen” and witnessed its ef-forts crowned with success with the sign-ing of the initiative in Riyadh and itssubsequent implementation. This initiativeis considered a model for responding to in-cidents of this nature, in particular the wayin which the GCC achieved successthrough acceptance from all parties. TheGCC also managed to keep the interna-tional community, including the EU, in-formed at all stages and involved them inthe efforts to convince appropriate partiesto accept and adhere to the Agreement.

Traditionally, the GCC and the EU arebound by historic relations and close co-operation that go back decades, in thesame way as they are governed by commonpolitical and economic interests. Indeed,on June 15 1988, both sides signed theJoint Cooperation Agreement which, forthe first time, laid down an official frame-work for a bilateral relationship and cov-ered various areas of cooperation. Underthis Agreement, a Joint Ministerial Coun-cil was established with meetings held an-nually, in addition to the Joint CooperationCommittee and Regional Directors’ Dia-logue meetings which are held regularly toassess progress in bilateral relations, par-ticularly after the launch of the “Joint Ac-tion Program for 2010-2013”. Thisrepresented a roadmap for the promotionand expansion of cooperation between

both sides.Today, acknowledging the political and

economic significance of both regions foreach other, and the fact that there is twoway trade between EU and GCC worth €129 billion, there is a joint determinationto foster and deepen relations at all levels.On the one hand, economically, the EUneeds access to the GCC countries’ im-mense reserves of energy resources (repre-

senting more than 20% of the world’s totalcrude oil production), while the ever-ex-panding and prosperous GCC market of-fers increasing investment opportunitiesfor European companies. On the otherhand, security challenges such as terrorism,maritime piracy and organized crime findthemselves on the agendas of joint meet-ings and require continuous dialogue, co-operation and close coordination. Suchoperational and political discussions serveto assist attempts to achieve peace and sta-bility in the region and around the world.

The GCC will continue to promote rela-tions with the EU by taking initiatives andexchanging visits by high officials from bothsides to enhance cooperation in all fields.

It is hoped, therefore, that a further ex-pansion of EU-GCC relations will be builton enhanced coordination between ourtwo blocs, founded on the principles of in-tegration and interconnection and servingthe interests and aspirations of our nationsand citizens in the face of common chal-lenges.

H.E. Dr Abdul Latif Bin Rashid Al Za-yani is Secretary General of the Gulf Co-operation Council for the Arab States ofthe Gulf

DIPLOMACY

Deepening ties between the Gulf and the EU

By H.E. Dr Abdul Latif Bin Rashid Al Zayani

Leaders of the Gulf Cooperation Council (GCC) countries during their annual summit in Riyadh, SaudiArabia, 19 December 2011. EPA/STRINGER

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The CompetitiveEurope

We need a Competitive Europe. We want a CompetitiveEurope. In a time of uncertainty and uncontrolled globalfinancial crisis, Europe must focus more and more its at-tention on launching the basis for a New CompetitiveAgenda centered in the drivers of high growth rate andcivil society capacity of creating and developing added valuefor the international market. More than ever, we need todevelop colectively aa agenda of change in Europe.The Competitive Europe demands a stronger coordina-tion among the different partners towards action . It isessential to develop active policies towards the participa-tion of SME in global networks, reinforcing by this waythe role of “Clusters of Innovation” as Centers of Excel-lence for new areas of knowledge (biotech, renewablesenergies, new communications). At the same time it willnecessary to reinvent the role of Universities as activeplayers in the development of a culture of competitivenessamong civil society.We need more and more the enabling context of theStates to progressively eliminate obstacles to investmentand innovation. The development of the New Europe2020 Agenda is a good example of this new strategic vi-sion for a new agenda of excellence. But it´s not enough.It must be effectively complemented with an active par-ticipation of policymakers in disseminating the new mes-sage for the future. The Competitive Europe will be aneffective and strong enabler to the social and economicaldevelopment of the institutions and the citizens. That´swhy we need new programs, new answers, new solutions.In this way, the extremely positive experience of inte-grated projects like the “Poles of Competitiveness” andClusters of Innovation across the different regions shouldbe replicated in other European countries. It allows – asit can be confirmed by its results – a very strong com-mitment between the implementation of a global na-tional economic strategy and specific areas of regionaldevelopment, which is now considered by the EuropeanUnion as a key enabler for the future.This new economic strategy demands an effective Partner-ship Contract between all the actors , in order to build a realStrategy of Confidence in the implementation of the dif-ferent policies. The focus on Innovation and Knowledge asthe drivers of creating added value with international dis-semination is a unique challenge that may be the answer toa new way of interaction between those who have the re-sponsibility of thinking and those that have the responsi-bility of producing goods and services.It´ s time to believe in a new cycle for Europe. Focusingin the New Horizon 2020 Agenda and giving the Euro-pean Actors (States, Universities, Enterprises, Civil Soci-ety) the opportunity of developing new challengesfocused on innovation and creativity is in a large sensegiving a central contribution to the reinvention of Eu-rope. The Reinvention of Europe will be possible if basedin a Competitive Europe concept. For that, all of us willhave to give our individual and collective contribution.

Francisco Jaime Quesado is the General Manager of theInnovation and Knowledge Society in Portugal, a publicagency with the mission of coordinating the policies forInformation Society and mobilizing it through dissemi-nation, qualification and research activities. It operateswithin the Ministry of Science, Technology and HigherEducation

New Europe content partner

By Francisco Jaime Quesado

An EU-India Trade Ministerial will takeplace in Brussels on the 25th of thismonth between Indian Minister ofCommerce and Industry Anand Sharmaand EU Trade Commissioner Karel deGucht. The Indian Minister is travellingto the EU capital for comprehensive dis-cussions on the impending EU-IndiaFree trade Agreement (FTA) despiteheavy political upheavals back home,which could eventually even see him pro-moted to the position of India’s FinanceMinister. Clearly the EU-India FTAmatters. It has become even more crucialas emerging India’s GDP growth rate re-cently fell to 5.3% (the lowest in 9 years)and the EU continues to remain em-broiled in serious financial turmoilamidst a heaving Eurozone crisis; withboth sides starving for growth.

This meeting will decide whether bothsides can make significant progress onconcluding negotiations this year. It hasbecome imperative for the agreement tobe concluded before the end of 2012 fora variety of reasons. Not only will this ac-cord boost much needed growth on bothsides, but it will also restore market con-fidence in the EU as a platform, in theEuro as a currency, and in emerging Indiaamidst its recent downgrade by the creditrating agency Standard and Poor’s. Theagreement will be an important sign thatthe EU-India strategic partnership re-mains viable. It will also bolster the globalcase for economic cooperation againstprotectionism.

There remain important roadblocksahead for negotiators. Issues regardingthe services sector, agriculture, Intellec-tual Property Rights, automobiles indus-

try and wines and spirits are amongstthose which persist.

Political will is in great demand to over-come these obstacles. Political contacts andsynergies between large businesses enter-prises must be boosted. Contacts betweenEU officials and Indian politicians andyoung leaders must be enhanced consid-erably. At the moment, such contacts arelimited and understanding of the EU isstill quite low amongst many Indians. In-dian parliamentarians rarely travel to theEU’s capital or its institutions to talk onEU-India matters.

A friendship group for relations with theEU is still missing in the Indian Parlia-ment. Likewise, efforts must be stepped upby the EU to reach out to politicians inIndia. Contacts must also be developed atthe state level in India’s federal system. TheFTA will need much more political en-dorsement to be able to sail through India’schoppy political waters.

India’s multinationals keen on expand-ing trade with EU member states willgreatly benefit from the FTA. Likewise,large European firms which have tappedinto the booming Indian market will reaphuge dividends from trade liberalisationwith India. It is these enterprises thatcould make a great difference, enablingthe EU and India to bypass as well as ad-dress economic disparities and politicaldeadlock. Leading companies on bothsides can be the driving force to break thestalemate on the FTA. Businesses sup-porting the deal should endorse it in amore visible public way.

Exactly five years since negotiationsbegan in June 2007, the EU-India FTAmust move forward from a very longdrawn out ‘final stage’ towards a rapidconclusion. It must be understood that

the FTA will not be a magic wand. Itwould only set the framework for com-mercial relations. The potential to boosttrade would still depend on the currentshape and competitiveness of both Eu-ropean markets and that of India. Newprojections would be needed too as dou-bling current bilateral trade which standsat 86 billion Euros by 2015 seems ratherdifficult to achieve.

But a failure to conclude five years ofnegotiations would engender a deep lackof confidence in the India-EU relation-ship. The FTA is still one of the biggestundertakings of the EU-India partner-ship. It would add great momentum tolethargic relations. Slow paced relationsincur a higher cost. A successful conclu-sion would contribute greatly towardsstrengthening the EU’s role and com-mercial hold in Asia, especially as Chinais unseating the EU from its position asleading trade partner to a number ofAsian economies. It would boost job cre-ation on both sides, as well as growthnecessary to sustain these largeeconomies. It would also advance inter-national efforts towards trade liberalisa-tion by creating another stepping stoneto a multilateral break-though.

While India has genuine concerns overwhat free trade will do to vulnerable poorcommunities (subsistence farmers for in-stance) in overall terms trade liberalisa-tion with Europe will be beneficial.Striking the FTA would bring the EU-India strategic partnership to a new level.Failure to do so would set the stage forthe partners to drift apart.

Gauri Khandekar is Researcher atFRIDE and Head of its Agora Asia-Europe Programme

TRADE

EU-India: Breaking the Stalemate

By Gauri Khandekar

A child is photographed between two placards during a rally by people living with HIV, New Delhi, India on 2 March 2011. The protesters urged

the Indian government to stand strong against pressure from the European Union to accept provisions in a free trade agreement (FTA) that would

restrict access to affordable medicines. |EPA/ANINDITO MUKHERJEE

ANALYSISNew Europe | NEW EUROPE

24 - 30 June, 2012

Europeanson

In 1977, to mark the occasion of the Queen’s silver jubilee,

the popular beat combo, the Sex Pistols hired a barge and

sailed down the Thames blaring out music until they police

stopped the show. The stunt became so much a part of pop-

ular culture that, on the occasion of her diamond jubilee she

recreated the journey on the Royal Barge, although this time

there was more ceremony and less strong lager and the music

was as dull as Thames water, which was a shame, not least

because Lydon and co had substantially improved the na-

tional anthem.

In another mark of respect towards the punk pioneers,

the London Olympics organizers wanted the Pistols to

perform at the closing ceremony. I pity the poor intern

who had to call Lydon, who swiftly rejected the idea to

nobody’s surprise. Still, at least the British government

is trying to get in the spirit by recreating the spirit of

Britain in the 70s, increasing poverty, unemployment

and filling their friends’ pockets with as much public

loot as possible.

It’s important to recall how awful a lot of Britain was in the

late 70s and 80s. The Conservatives were basically at war

with the poor, Labour was at war with itself and each July,

the schools closed and another swarm of youngsters were

sent straight to the unemployment line.

While many think of the movement being but nihilism, in

fact for those who got involved it was anything but. The core

was the liberating feeling of putting yourself in charge of

your own creativity, a cultural do it yourself society that re-

ally did bring about a revolution.

The music business never recovered from the punk assault

on its business, people set up their own labels, who formed

an alternative network, the media was threatened as photo-

copied fanzines began appearing, one of the first, the ele-

gant Sniffing Glue, had a cover of three chord diagrams, for

A, E and G, with the instruction “Now form a band”.

And they did

There were two other attributes to mention. Women and

race. The egalitarianism of punk not only gave space for

women to have a more meaningful role in music, they were

regarded more equally. The other issue was race. From the

beginning, punk embraced ska and reggae, then little known

musical forms, standing up against the Clapton’s and

Bowie’s, who were appearing to champion fascism as a fu-

ture for Britain.

For many, punk was also a political awakening.

Today, there’s more than a few old bands recycling their ma-

terial for jaded audiences on a voyage down grubby mem-

ory lane and there are some who have changed, evolved but

remained true. John Lydon is one. Now an unofficial na-

tional treasure, he has kept his band going and is still the

prickly, uncomfortable presence, the man who can’t enter a

room without noting, and loudly commenting on, the ele-

phant therein. I can’t help feeling he’d make a fantastic Com-

missioner.

So, over three decades after the event, a phenomenon that

lasted around a year made permanent change. It’s easier and

cheaper to be an artist or just to indulge your creative side,

but the real revolution was only just beginning, the advent of

technology. The punk ethos matched to the possibilities of

a free internet has opened up creativity on a scale unseen by

humanity.

Yeah, we were young once, but we danced, we danced.

[email protected]

Constructive Ambiguity

By Andy CarlingWe would speak in hushed toneswhenever a Rolls-Royce pulled inacross from the house where I grew up.It could only mean one thing. TonyO’Reilly, one of Ireland’s richest men,was visiting his aunt, who ran the localpost office. To the best of my recollec-tion, the vehicle was pale green. I wastoo young to understand that O’Reillyhad amassed a fortune from newspa-pers and baked beans. But the stir cre-ated by his arrival made me feel I wasin close proximity to greatness.

The Rolls-Royce is a symbol ofshock and awe. By driving one – orbeing driven around in one - its owneris asserting a sense of superiority overthe rest of us mere mortals. How fit-ting, then, that the Rolls-Royce cor-poration is assisting the US militaryestablishment to perfect its tactics ofshock and awe (as Donald Rumsfeldcalled them) and assert its sense of su-periority over the rest of the world.

In March, Rolls-Royce announcedit had won contracts worth $275 mil-lion to provide “service support” forthe engines of America’s warplanes,among other things. This followed itsprovision of “back shop support” to theTyphoon bombers used by the Britishair force in last year’s offensive againstLibya.

Given its stated desire to grow themilitary side of its business, it mightseem odd that Rolls-Royce has helpedprepare a new European Commissionstrategy on “key enabling technolo-gies” for industries of the future. SinceI started writing about the EU’s scien-tific research activities in 2009, theCommission’s representatives have re-peatedly told me that they only autho-rise funding for projects of a civiliannature. I don’t trust them.

Rolls-Royce was one of several firmsheavily involved in the arms trade totake part in a “high-level” group thatidentified the priorities listed in theCommission’s new “strategy”. It fo-cuses largely on nanotechnology, themanipulation of matter at a size so tinyit is measured in nanometres. (Ananometre is one billionth of a metre).

A strong indication that nanotech-nology is being used to developweapons for future wars came after Is-rael’s 33-day attack on Lebanon in2006. Shimon Peres, then Israel’sdeputy minister, wrote a syndicatedopinion piece after the attack in whichhe seemed to be aroused about the po-tential killing power of “miniaturisedarms” and “remote-controlled robots”.Given how Israel frequently tests itsweapons on Palestinian women and

children, there is no reason to think itwould behave any differently withnanotechnology in its arsenal.

Intel, another corporation takingpart in the Commission’s “high level”group, has a major production facilityat Kiryat Gat, a site built on Palestin-ian villages ethnically cleansed whenthe state of Israel was founded in thelate 1940s. This crime scene is todaybeing used for the development of a22-nanometre processor called IvyBridge for the computers of tomorrow.Intel already uses Kiryat Gat for themanufacturing of Atom processors; abrochure available on the corporation’swebsite promotes these processors asvital to “leading-edge commercialtechnology for the defence and gov-ernment agencies”.

QinetiQ, too, belongs to the Com-mission’s “high level” group. This com-pany was formed as a result of reformsto an agency run by the British Min-istry of Defence in 2001 and has num-bered George Tenet, former head ofthe CIA, among its senior figures. Aswell as “working closely” with the USarmy (in the company’s own words), itis providing equipment to Britishtroops fighting a war of aggression inAfghanistan. Last year, QinetiQgloated at how it was supplying almost100 Dragon Runner robots to that wareffort. While the firm’s announcementemphasised that these small robots canbe used to detect landmines and otherunexploded devices, it acknowledgedthey can also be used for surveillance.

It is significant that the Commis-sion’s 27-strong “high-level” group didnot contain a solitary individualknown to be critical of the arms in-dustry or nanotechnology. This makes

a mockery of claims from the EU ex-ecutive that it is open to dialogue fromall sides.

A report that the group has pre-sented to Antonio Tajani, the EU’s in-dustry commissioner, depictsnanotechnology as beneficial tohuman health and the environment.With potential applications in solarenergy, it is sold as “crucial in the bat-tle against climate change”.

It is notable that green activists donot share this faith. The EuropeanEnvironmental Bureau has voicedconcerns that about the idea the prob-lems relating to global warming can besolved with a “technological fix”, whensocial and political changes are neededto address underlying questions of re-source exploitation and how energy isgenerated.

The EEB, a broad coalition of cam-paign groups, has cited studies whichindicate that the ecological costs ofproducing nanomaterials may out-weigh any eventual benefits. Theirproduction involves high levels of en-ergy and water use, as well as toxicchemicals and solvents like benzene.

The jury might still be out on theenvironmental effects of nanotechnol-ogy. But it is certain that the way theEU is approaching this issue is anti-democratic. Private companies likelyto be recipients of the EU’s researchsubsidies are invited to set the priori-ties for this research; alternative per-spectives are ignored. The EuropeanCommission relies on taxpayers to payits bills, yet its policy-making has beencaptured by corporations. And besides,when the arms industry says that smallis beautiful, there’s a strong likelihoodit’s telling a big lie.

By David Cronin

TECHNOLOGY

Shock and awe is back: arms dealers set EU technology agenda

Dutch prince Willem-Alexander looks at a glass chip in the cleanroom of the MESA + institute for nan-

otechnology at the University of Twente in the Netherlands, November 2010. | EPA/ROBIN VAN LONKHUIJSEN

TECHNOLOGY

|New Europe NEW EUROPE24 - 30 June, 2012

Securing data information and trans-actions is both an important andgrowing challenge for governments,businesses and individuals in today'sdigital society. During the conferenceSecurity and Privacy in the DigitalWorld, organized by Eurosmart on20 June, different experts attemptedto gave solutions on the best way todefend privacy and combat fraud.

Many citizens are not confidentwhen they make a payment withtheir smartphones, and are also con-cerned that their digital identitycould be stolen and used illegally. Ac-cordingly, according to the orgabis-ers of the conference, Europe needsto point out the importance of digi-tal information and processes to bemodern and innovative, but it has toface malicious human activities anddata breaches. As a solution, the Dig-ital Agenda for Europe establishes a

legal framework to prevent cyber-crime, eliminate fragmentation and alack of interoperability, while en-hancing digital citizenship.

“The digital single market is es-sential to drive in growth in Europe”,stated Megan Richards, actingDeputy Director General, of Infor-mation Society and Media DG, “weneed to integrate research and inno-vation, particularly in the actual eco-nomic situation.” Richards explainedthat European institutions, govern-ments and companies have to worktogether and that we “need security'sconcern at European-level.”

The European Union is workingin several international cloud securityinitiatives, said the member of Eu-rosmart, Detlef Houdeau. The needto develop an EU-wide strategy onCloud Computing is highlighted inthe Digital Agenda, besides the Eu-ropean Network and InformationSecurity Agency (ENISA) launched

its “Cloud Computing: benefits, risksand recommendations for informa-tion security” and the EuropeanCommission co-financed 62 publicfunding projects, with a total budgetof €600 million.

On April, the European Commis-sion launched the program 'Internetof Things' (IoT), an environmentwhere everything is connected andwhere a technology called M2M(machine to machine) allows com-munication between two or moredevices. The rapid development ofthe IoT makes necessary to create se-curity measures to stop fraudstersand criminals that attack technolog-ical infrastructures.

Within these tips, Eurosmart rec-ommends to support research in en-hanced security technologies, deeperanalysing security requirements, as-suring security with certifications andregulations and integrating smart de-vices. After following these advices,

M2M and IoT technologies will savehuman lives, will help companies tobe more competitive, will open newbusiness opportunities and will makeour world safer and simpler, statedJean-Pierre Delesse, Eurosmartmember and President of LFoundryRousset.

In the other hand, mobile deviceshave been conquering the marketover the past five years and PC-basedtransactions, such as shopping, bank-ing and data storage, have beenmoved to these products. To makethese operations in a safest way, thedigital security industry has devel-oped solutions for identification, au-thentication, access control anddigital signature.

Jan Eicholz, Eurosmart member,said that security industry has to “se-cure that the environment is pro-tected and that nobody interferes.”Attacks to different devices are in-creasing and “protect data is our main

objective”, like in ePayment andeGovernment, he said.

According to Eicholz, secure mo-bile payment can be achieved byusing the phone to emulate a pay-ment card and by remote payment,such as websites performing credittransfer or for the purchase of goodsor services. Regarding the eGovern-ment, citizens can use the eID, whichcreates secure channels to sign docu-ments online or make use of theeVoting.

Due to the very large number ofmobile transactions within differentfield applications, to domain mobiledevices is very attractive for attackersto violate the systems. New tech-nologies like the Open Mobile APIand the Trusted Execution Environ-ment, which manages and adminis-trates over the air the different secureelements and trusted services withina mobile, will also facilitate system-wide security in Europe.

SECURITY AND PRIVACY

Europe to face attacks in the digital world

A leading technology company has hit back atallegations it is engaged in practices that runcontrary to EU trade rules, and has offered theEuropean Commission the opportunity to en-gage in dialogue concerning a potential caseagainst it.

Global ICT company, Huawei, is facingclaims that it is heavily subsidised by the Chi-nese sate bank, and is also dumping cheapproducts onto the European market.

A spokesman for Huawei told New Europethat the company is “very concerned about thecurrent situation”, which sees the companyunder investigation by the European Commis-sion’s DG Trade. According to the company,information from the DG, headed by Com-missioner Karel de Gucht, has not been forth-coming about the potential scope of theirinvestigation into the practices of the Chinesetelecoms sector. Huawei has offered full co-op-eration with any such inquiry.

“So far, we have received nothing about thecase from DG Trade”, says the spokesman,“especially the concerns about Huawei. In thepast few months we have tried to re-engagethe discussions with DG Trade, and provideinformation and data to resolve these con-cerns”. So far, he says, discussions “have notbeen effective”.

While Huawei is not entirely sure whatspecifics the commission is investigating, therehave been reports in the media that the com-pany is being subsidised by the Chinese satebank, and that it receives favourable rates fromthe China Development Bank (CDB). “WEstill alck information, but we think they believewe are using subsidies”, says the spokesman,who denies the allegations.

Outlining the financial set-up of the com-pany, he says that Huawei’s funding comesprimarily from three sources. “The first is ourshareholders, which include approximately65,000 of our 140,000 employees. SinceHuawei’s establishment, the company haslargely been funded by equity funds from theemployee stock option plan. The secondsource is from the financial liabilities andnon-financial liabilities generated from busi-ness operations, including accounts payable,accrued salary, etc. The third source is fromexternal bank financing”.

“Huawei receives loans from both local andforeign banks based on normal commercialloan terms, of which the majority of these loansare from foreign banks. In 2011, Huawei re-

ceived $4.6 billion from external bankingsources, representing 15% of financial liability.Of the $4.6 billion, approximately $3.4bn fromoverseas banks and 26% is from Chinesebanks”. According to the spokesman, interna-tional banks offer better terms and conditionsfor the company. In this way, he says, “Huaweifollows the very basic commercial practice; whowill give us the best deal”, something, he says,the CDB has not done.

He adds that media reports that Huaweihas received $30bn in credit from the CDB isuntrue, and represents part of a non-bindingmemorandum of understanding between thetwo. According to the company, “the CDBconducts direct negotiations with operatorsand makes an independent commercial deci-

sion on the financing structure and pricing ofa project based on the credit standing of theoperator, credit structure of the project andinternal pricing strategy. For many projects,the CDB cooperates with local and foreignbanks to provide loans to operators in theform of syndicated or joint loans (where asingle price is agreed on for the same project).Such banks include CITI, HSBC, BayernLB, IFC, Export-Import Bank of China,Bank of China, SMBC, Bank of Tokyo-Mit-subishi UFJ, and Barclays. Under the sameconditions, the loan interest rates offered byCDB are not lower than the interest rates ofinternational commercial loans and in 2011there is only one European customer has se-lected offer from the CDB”.

Regarding the suggestions of dumping, theHuawei spokesman says that these cannot betaken seriously. “Our price in the Europeanmarket is very similar to other markets, in-cluding China”, he says. “Our growth in theEuropean market is really a combination oftechnology, innovation and quality of service.We do not see any fact that supports justifi-cation of the dumping complaints”. Regard-ing the possibility of an ongoing investigationinto the sector by the EU, the Huaweispokesman said the company “would like toopen more information for the commissionto address their concerns. We told them thatif they do have more concerns, then we wel-come them to raise these questions and askus for the information”.

“We do not want to see the EU and Chinaengage in any trade war, especially in the tele-coms sector, which is a good example for anopen market and fair competition. We shoulduse this opportunity to engage instead in posi-tive dialogue”.

By Cillian Donnelly

By Nerea Rial

TRADE

Huawei denies funding, dumping allegations

Visitors gather at the Huawei booth during the CommunicAsia telecom expo and conference in Singa-

pore on 19 June, 2012. The company has been accused of running practices in Europe contrary to EU

regulations. | AFP PHOTO/ROSLAN RAHMAN

EU WORLD New Europe | NEW EUROPE

24 - 30 June, 2012

ICT is working its way into many aspects ofhealthcare. Doctors and patients have startedcorresponding by email, people search theweb for specific medical or dietary informa-tion before going to their physician, onlinecommunities share health information, andsmartphones see an increasing number ofhealth themed apps. The spectacular adop-tion by medical professionals of tablet deviceslike iPads demonstrates how quickly themedical community can embrace novel tech-nologies and implement them into their dailyworkflow. Tablets keep physicians up-to-datewith new clinical information through onlinevideos and greatly improve the communica-tion with their patients by allowing interactiveexplanations of for instance physiology orshowing and clarifying test results.

What these ICT solutions have in com-mon is that they are mostly successful at theindividual level, where patients or doctors orat best single hospitals can decide to test orimplement a new technology. It is a differentstory altogether for modernizing healthcareat a larger scale. Nowadays, securely search-ing and accessing modest amounts of med-ical data is of course not too complicated froma technological perspective. As a matter offact, electronic health records have beenaround for decades, with many hospitals andclinics having their own systems for storingand interfacing with medical data. The prob-lem is that these are local solutions. Whenhealth records need to be crosschecked or in-

tegrated with medical data that is sitting else-where, the process is hampered by the absenceof standards.

Several countries have now started to ex-plore and develop standardized electronichealth records. This is a positive developmentthat will surely make the healthcare systemmore efficient, but when considering patientdata we may need to think some extra movesahead while we are doing so. We are on theeve of a biomedical data surge that we couldharness to our great benefit if we do it well.We need to develop and implement the ICTto allow data-rich and, moreover, computa-tion-driven medicine. This will not only makehealthcare more efficient, but could improvethe actual core business of healthcare: mak-ing people better and keeping them healthy.

This data surge comes from the hugeprogress in analytical techniques, allowing usto analyze individual patients in great bio-medical detail. From a data perspective, we arenow able to know more about an individualpatient than we knew only a few years agoabout human biology in general. The cost ofsequencing a full genome has dropped byclose to a million fold since the humangenome project started in the late 80s and isstill dropping at a phenomenal rate, allowingthe use of deep sequencing as diagnostic toolin medical practice. Similarly, other high-throughput data gathering technologies (pro-teomics, metabolomics, etc.) could becomeuseful for diagnostic applications for individ-ual patients. Add to that the large data streamsfrom advanced biomedical imaging tech-

niques and safely storing, accessing and rap-idly querying these large bodies of data is sud-denly an ICT challenge that goes way beyondagreeing on data standards. But there is aneven bigger challenge: making the data useful.If we want to find, for example, the optimalmedical treatment for an individual patient,we need to be able to somehow integrate andanalyze all the relevant biomedical data. Andthese amounts of data are simply too vast foreven the most brilliant doctor to interpretwithout powerful computational assistance.These data have to be integrated such that wecan analyze human health via computer sim-ulations. Scientists and engineers already usesimulations everywhere, for instance to pre-dict tomorrow’s weather or to test cars and air-planes before building them. The lattersimulations are faster, less expensive and –most importantly – less dangerous than try-ing it in reality first. Even though human bi-ology is much more complex than an airplane,ongoing rapid developments in ICT havebrought performing simulations for personalhealth and medical treatment within ourreach. This decade we will see the dawn of Ex-ascale computing that will allow such compu-tationally heavy modelling. But many moreICT challenges have to be tackled, includingmaking intuitive interfaces for patients anddoctors so that they can run health simula-tions and interpret the outcomes of the math-ematical health models, with appropriatestatistical underpinning, and so on.

We have to anticipate these advances. TheEuropean Flagship program IT Future of

Medicine (ITFoM) that hopes to be fundedunder FP7/Horizon 2020 is proposing to de-velop and implement the required ICT to de-liver such health models to achieve trulypersonalised medicine. The 10-year roadmapof ITFoM proposes to develop the basic in-frastructure required to generate integratedcomputer models for individual patients,spanning from biochemistry up to cells, tis-sues and the full body. This should lead tofewer trial-and-error therapeutic trajectoriesthan at present. We are currently bad at treat-ing complex diseases like cancer, diabetes,Alzheimer’s, Parkinson’s, osteoporosis andcardio‐vascular diseases. It has become clearthat the reason for this is that these diseasescan only be understood by looking at full bi-ological networks, since it are the networks asa whole that are failing and almost never asingle component. Moreover, the networkanalysis needs to be personalized from patientto patient to design the optimal treatment,since our networks, or the network failures,have differences. Using computer models inmedicine could dramatically reduce the costof healthcare and improve care at the sametime. ICT is working its way into many as-pects of healthcare. Europe could spearheadthe development and implementation of ICTthat allows computer simulations for virtualpatients to give truly personalised healthcare.

Dr Martijn J. Moné and Prof Dr Hans V.Westerhoff are both from the Department ofMolecular Cell Physiology, VU UniversityAmsterdam (VU).

TECHNOLOGY

Computer simulations for health and diseaseBy Martijn J. Moné & Hans V. Westerhoff

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During the United Nations Conferenceon Sustainable Development, or Rio+20,US Secretary of State Hillary Clinton joi-ned leaders from 192 other nations at abig United Nations environmental confe-rence in Rio de Janeiro in Brazil.

Clinton delivered remarks focusing onrenewable energy and outlining the USstance on sustainable development.

World leaders attending the UN sum-mit in Rio weighed steps to root out po-verty and protect the environment asthousands of activists held several proteststo denounce Amazon rainforest defore-station, the plight of indigenous peoplesand the "green economy" being advocatedat the UN gathering.

The Rio+20 conference was expected toend on 22 June after three days of high-level talks among delegations. A final do-cument that was finished by negotiatorsjust hours before the summit began wasexpected to be approved.

Activists say it is an unambitious state-ment making few advances on environ-mental protections beyond what wasagreed upon at the original 1992 EarthSummit held in Rio.

However, delegates roundly say thatgetting any agreement is a success, giventhe lack of appetite to tackle environmentissues amid a global economic crisis.

On 22 June, UN officials were expectedto detail pledges worth billions of dollarsto curb the use of fossil fuels, conservewater and encourage wider use of renewa-ble energy, part of a global effort to pro-mote economic growth that doesn’t strainthe planet’s resources.

With UN Secretary General Ban Ki-moon and world leaders including FrenchPresident Francois Hollande disappointedthat the 49-page official, non-bindingagreement produced at the Rio+20 sum-mit doesn’t do more to protect the Earth,the voluntary pledges indicate that indi-vidual commitments may go further to-ward achieving sustainable development.

The pledges include at least $2bn fromthe US and projects from PepsiCo Inc.(PEP) and billionaire Richard Branson’sCarbon War Room group. The UNcounts at least 517 commitments from

companies, organizations and nations, andwill put a value on them at a briefingtoday in Rio de Janeiro, according to Pra-gati Pascale, a spokeswoman for the UNConference on Sustainable Development.

Ban expects the voluntary pledges to bethe legacy of the Rio+20 meeting. Theevent marks two decades since the firstEarth Summit in Rio led to treaties onglobal warming, deserts and biodiversity.

Meanwhile, new research released inlight of the conference shows how climatechange will likely exacerbate hunger.

The number of undernourished women

and young children could increase 20%and affect one of every five within a de-cade because of climate change's impacton food production, according to an ana-lysis by the World Health Organizationand other groups. Today, one in seven or495 million women and children underage 5 lack sufficient food, the report says,adding population growth will worsen theproblem.

Food security is a top issue at theRio+20. The WHO analysis shows that ofthe 495mn women and children under agefive who are undernourished, 150mn livein Africa, 315mn in Asia and 30mn inLatin America and the Caribbean. It ex-pects about 465mn more will live in de-veloping countries by 2020, boosting fooddemand.

The report says climate change will alsoaffect food prices. Citing World Bankdata, it says those prices jumped 8% in thefirst quarter of 2012, partly due to extremecold in Europe that affected wheat cropsand excessive heat in South America thatlower production of sugar, maize and soy-beans.

Another report, published in the jour-nal Energy and Environmental Science,suggests several solutions to climatechange and food shortages: farm effi-ciency, food waste recycling and lowermeat consumption.

These changes could reduce the amountof land needed for farming, despite popu-lation growth, and leave sufficient land toproduce bio-energy, according to thestudy from the University of Exeter in theUnited Kingdom.

ENERGY & CLIMATE


A two-lane provincial road bounded by lush lowland forest and cleared forest land in Central Kalimantan province

in Borneo island of Indonesia, home to the world’s third-largest area of tropical forests. World leaders attending a

UN summit in Rio weighed steps to root out poverty and protect the environment while indigenous peoples from

five countries told the UN Rio+20 summit that the green economy is a "crime against humanity" that dollarises

Mother Nature and strips communities of their rights, 21 June 2012. |AFP PHOTO / ROMEO GACAD

CLIMATE|RIO+20

World leaders weigh steps to root out poverty and protect the environment

A provisional deal with the Council tostrengthen the hand of EU countriesnegotiating bilateral energy agreementswith non-EU ones and pave the wayfor a common EU energy policy wasendorsed by the Energy Committeeon 19 June.

The legislation should strengthenthe hand of EU Member States in ne-gotiating such deals by fostering coop-eration among them. It would alsoenable the European Commission tosupport them in cases like that whicharose in 2010, when the EuropeanCommission backed Poland's requestfor access to the Polish section of theYamal natural gas pipeline (partlyowned by Russian gas monopolyGazprom). Rapporteur KrisjanisKarins from said: "This is an importantfirst step in moving towards a commonEU energy policy, which is ultimatelyin the best interests of EU citizens and

consumers of energy. This legislationwill increase transparency in energysupply agreements with third countries,thereby ensuring that EU law is ad-hered to. It will also create a base for co-ordinated action by Member States inthe field of energy". The committeeapproved the legislative resolution with35 votes in favour, 19 against and noabstentions. The S&D and the Greenshad already warned that they wouldvote against the agreed text, becausethey deem it insufficiently ambitious.

The legislative proposal, tabled bythe European Commission last Sep-tember, would require the creation ofan information exchange mechanismbetween the Commission and theMember States on all inter-govern-mental agreements between MemberStates and third countries affecting theinternal energy market and the EU'ssecurity of energy supply.

ENERGY|EU AFFAIRS

Council backs EU countries’ dealsEuropean Employment Forum

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ENERGY & CLIMATENew Europe|NEW EUROPE

24 - 30 June, 2012

On 22 June, Brent crude hovered below$90, up slightly after previous session'ssteep losses, but was headed for it biggestweekly loss in about a year. On 21 June,Benchmark US crude fell to $78.50 perbarrel, below $80 that analysts consider akey psychological number.

Signs of a slowdown in manufacturingin China, Europe and the United Statesdelivered the oil market another blow on21 June. China's oil demand rose lessthan 1% in May, the second-smallest in-crease this year.

Moreover, the US Central Bank of-fered only mild stimulus measures to in-crease waning economic growth and UScrude stockpiles rose unexpectedly.

Justin Urquhart Stewart, Director ofSeven Investment Management in Lon-don, told New Europe that at the mo-ment there is going to be furtherweakness. “Until you can see confidencecoming back in terms where demandcomes from that oil price is still going toremain weak,” he said.

Shrinking business activity across theeurozone, already roiled by a debt crisis,and a downgrade to the credit ratings of15 of the world's biggest banks by ratingsagency Moody's added to the gloom andweighed on commodities.

On 18 June, a resolution of the Greekgovernment crisis and the election of theconservative New Democracy party tem-porarily boosted prices but the increasewas only temporary.

On 19 June, negotiations in Moscowto defuse the dispute over Iran's nuclearprogramme led to plans for technicaltalks to be held in Istanbul on 3 July,which also weakened oil prices. A dealhad not been widely expected and al-though experts said the sides were farapart, they welcomed the fact talks had atleast not broken down completely. If talks

do eventually collapse, financial marketscould be hit by fears of war and of higheroil prices because Israel has threatened toattack Iranian nuclear sites if diplomacyfails to stop Tehran getting the bomb,something Tehran denies it is seeking.

Meanwhile, Saudi Arabia has pledgedto boost production if the situation in-volving Iran deteriorates.

Tehran also wants relief from intensi-fying economic sanctions, and faces newUS and EU sanctions in the next twoweeks. “The oil market is currently evenlybalanced between the factors that aremore likely to drive the price lower andthe risk factors that can sustain it aroundcurrent levels over the short term. Re-gardless of the short-term factors, whichwere added to over the weekend withnews of the death of the Saudi Arabianinterior minister and crown prince, therenow appears to be greater coordinationbetween the Saudis and the US, whichshould lead to Brent at $90 per oil barrel,rather than much above $100 per oil bar-rel in the coming weeks,” Chris Weafer,chief strategist at Troika Dialogue inMoscow, wrote in a note to investors ear-lier last week.

For now, crude markets seem ready tocope with any loss of Iranian oil. It alsocame as no surprise that the Organiza-tion of Petroleum Exporting Countries(OPEC) retained the previous produc-tion quota at its meeting on 14 June.Saudi Arabia can live with $90 per oilbarrel Brent through the second half of2012, Weafer wrote. “Oil is heavily influ-enced by the expectations for global eco-nomic growth, so any move by the Fed orthrough some G-20 coordination willprovide a positive knee-jerk boost to allrisk assets, including oil. But that is likelyto be very short-lived, as Saudi Arabiaappears very intent on keeping the aver-

age price for Brent for this year at nomore than $100 per oil barrel,” Weaferwrote. He noted that Riyadh is reportedto have built up crude inventories that itcan release either in the event of concernsover Iran or simply to keep the priceheading toward $90 per barrel, he wrote.

There is currently huge uncertaintyover the current and future impact ofsanctions on Iran’s oil production, theCentre for Global Energy Studies(CGES) in London said in a June report.

Iran’s Oil Minister Rostam Qasemidenied that the embargo was havingany impact, asserting that “our exportsremain as before”. Reported imports ofIranian oil by its major customers havefallen by around 1mn barrels per daysince the beginning of the year, butwhat has happened to this oil? JulianLee, CGES senior energy analyst,writes that there are three possibilities.“Either it is still being exported, as theminister contends, either to other un-known buyers, or to Iran’s usual cus-tomers, who are simply mis?reportingtheir imports,” he wrote. “The secondpossibility is that the oil Iran is unableto sell is being produced and stored.This certainly appears to have been thecase when sanctions first began to bite,with reports of large volumes stored inidle VLCCs,” Lee added.

However, Iran does not have the ca-pacity to add unsold oil to storage indef-initely, which leads to the third possibility,that Iran’s production has begun to fallmuch more sharply than most observershave realised. “The CGES believes thewidespread mis?reporting of oil importsfrom Iran to be unlikely and, as a result,we have cut our assessment of Iran’s Mayoil production to just 3.07mn barrels perday, its lowest level since early 1990,” Leeconcluded.

ENERGY|OIL PRICES

Falling oil prices highlight economic slowdown

Putin puts on

the charm for

foreign oil majors

Russian President Vladimir Putin tried to lure the headsof Anglo-Dutch group Shell, US major ConocoPhillips,British Petroleum and Italy’s ENI to boost foreign in-vestment to develop Russia’s untapped resources whileurging them to grant Russian companies access to inter-national assets.At the St Petersburg International Economic Forum, Rus-sia's annual economic showcase, Putin, who is now back atthe Kremlin, tried to convince US and European oil and gasgiants that Russia is one of the most welcoming countries forenergy investments.Putin is trying to improve Russia’s investment image afterBP, which owns half of Russia’s third-largest oil producer,announced that it is seeking a buyer for the stake amid ten-sions with its billionaire partners in joint venture TNK-BP.The biggest foreign energy investment in Russia, TNK-BPaccounts for about a quarter of BP’s output.“[But] the fact that BP is planning to leave Russia is not setin stone,” Moscow-based oil & gas analyst at Alfa BankMaria Yegikyan told New Europe on 22 June, referring topress reports on 21 June, which cited sources close to gov-ernment as saying that BP is considering taking part in Ros-neft’s privatisation. “BP leaving TNK-BP doesn't signal toa worsening of the investment climate in Russia, but is rathera consequence of the long-term dispute with AAR. BP'sparticipation in Rosneft's privatisation would show the com-pany's confidence in Rosneft's growth potential and stabil-ity in Russia, which would improve general sentimenttowards Russia and become a major growth trigger for Ros-neft itself.” On 21 June, Igor Sechin, the head of state-run oil producerRosneft and Putin’s former deputy prime minister for en-ergy, signed agreements with Norway's Statoil Chief Exec-utive Helge Lund and ENI CEO Paolo Scaroni to formjoint ventures to explore Russia's Arctic offshore zones. Thedeals also grant the Russian state firm access to their proj-ects in other countries. Statoil will get the right to help de-velop five fields with resources in the Stavropol region ofsouthern Russia, Sechin said.The companies also agreed in May to co-operate in the re-gion and West Siberia, as well as four blocks in Russia’s partof the Barents Sea and in the Sea of Okhotsk, as well as inNorway’s offshore.Rosneft will grant ENI access to resources in the Arctic off-shore and Black Sea, in exchange for stakes in refining andNorth African production assets, Sechin told reporters afterthe signing.Rosneft has formed alliances with Exxon Mobil, ENI andStatoil this year that grant access to potentially billions ofbarrels of offshore and hard-to-recover resources in ex-change for stakes in projects abroad.Putin singled out Shell, which has been in talks with Russ-ian gas monopoly Gazprom about international deals, prais-ing the company on its joint ventures within Russia andsaying he supports their expansion.Yegikyan reminded that the deals signed on 21 June be-tween Rosneft and the foreign oil majors are nothing newbecause the agreements were announced previously and“that the accords signed formalise earlier announcedagreements and are simply the next step towards their re-alisation. The only novelty here was specifying what Ros-neft would be getting in exchange for the rights toco-operate in Russia’s Arctic projects”.

[email protected] on twitter @energyinsider

Energy Insider

By Kostis Geropoulos

Traders work on the floor of the New York Stock Exchange on June 21, 2012 in New York City. As signs that the global economy may be growing increasingly sluggish,stocks fell on Tuesday with The Dow Jones industrial average losing over 250 points, or 1.96%. |Spencer Platt/Getty Images/AFP

The European Commissioner for Energy,

Günther Oettinger, said during the opening

session of the EU Sustainable Energy Week

that ‘Public sector is to lead the way towards

energy efficiency'.

‘It is the public sector that should set the ex-

ample’, he said.

According to the commissioner, not enough

resources were put in the assuring energy ef-

ficiency of public buildings in the past

decades.

In addition, Oettinger said that very few

sectors have experienced a change equal to

the one in the energy sector. He explained

that energy efficiency was not only about

energy savings, but also about intelligent use

of energy.

The commissioner said that at the moment

the EU economy was dependent on external

materials in order to meet the energy demand

of its 27 member states. He highlighted the

importance of decrease of this dependence.

Oettinger also outlined the importance of

investments in better buildings, the need for

better coordination of policies and stronger

harmonisation of the efforts on EU level.

Siim Kallas, Vice-President of the Euro-

pean Commission responsible for transport,

stated that sustainable transport was part of

the sustainable energy debate. He added:

‘boosting clean and energy efficient vehicles

together with the right mix of infrastructure

creates more resource efficient economy’.

The statement made by Oettinger was sub-

stantiated by the presentation of the Danish

Presidency representative, who pointed out

that the renewable market was a big business

opportunity for Europe and there was a global

market potential for ‘green technology’.

Additionally, the representative involved

the European societies in the energy debate,

by stating that it was necessary to commu-

nicate right the message on sustainable en-

ergy and involve everyone in the transition

period leading to general use of sustainable

energy.

Lastly, the discussion was joined by the

Vice-President of the European Investment

Bank (EIB), Simon Brooks, who outlined the

advantages of EIB presence in energy projects,

one of which was support for the participa-

tion of other investors as well. Brooks said that

the EIB financial instruments ‘should be com-

plemented by EU budget funds and private

sector funds’.

EU Sustainable Energy Week is a key an-

nual event of the Sustainable Energy Europe

campaign. This year, it includes more than 900

energy events in 52 countries, with almost 150

taking place in Brussels.

EUSEW 2012


Interview with Patrick Willems,Program Manager, IFC RussiaRenewable Energy Program

Can you tell us something moreabout the IFC Russia RenewableEnergy Program (RREP)-mainactivities, challenges and resultsso far?

The International Finance Cor-poration (IFC) is a member of theWorld Bank Group, focused onprivate sector development. Ourmission is to attract private sectorinvestment to sectors which webelieve are crucial to mitigatingclimate change, creating jobs andalleviating poverty. Since we havea strong expertise in climatechange in the regions of Europeand Central Asia, we started theRussia Renewable Energy Pro-gram two and a half years ago. Itis financed by the Global Envi-ronmental Facility (GEF) and ouraim is during the five years of du-ration of the program to create anincentive framework to start thedevelopment of renewable energyin Russia.

As an outcome, we want to seesome projects on the ground, gen-eration connected to the green, in-dustry in place withcapacity-building and some fi-

nancing instruments. The last oneis of a particular importance be-cause, as you know, renewable en-ergy requires specific financemechanisms due to its nature ofup-front capital. In addition, IFCis involved in this work becausethe reduction in global greenhousegas emissions is a priority for us inEastern Europe and globally.

Could you comment on themain challenges before RREP,like corruption for example?

When we talk about challengesbefore RREP, corruption is notthe first thing which comes tomind. Russia is relatively new inthe area of renewable energy andthere are a lot other barriers whichneed to be tackled first. I considerthe biggest barrier before RERPnot corruption, but the vested in-terest.

There are a lot of people whowant things to continue as theyare. For example, in quite someareas of Russia electricity is pro-duced by diesel generators. So, thecost for transportation of thediesel to these remote places isquite high. Well, in some of theseplaces, we have advocated for theconstruction of windmills. Ofcourse, one cannot reply on thewind all the time, but if windmillsare backed up with diesel genera-

tors when there is no wind, onecould get a much cheaper andmore reliable energy production inthese areas. Unfortunately, somepeople would not like to see sucha change because they makemoney on diesel.

In relation to the examplewhich you just gave, how doessustainable energy and renewableenergy fit into that? Do they posea threat to Russia’s established po-sition as a leader in gas and oilproduction?

Renewable energy is not yet onthe forefront of Russia's policyagenda. This allows us to operateoutside the conflict situation, as itis the case with organizations op-erating in the oil and gas industry.Interestingly, Russians may nothave a renewable energy agenda,but they do have an agenda formodernization, for innovation, fordiversification of their economy.The renewable energy legislationor better say initiative fits underthis already existing framework.So, renewable energy is not themost urgent issue for Russia rightnow, but Russian policymakers,companies and the general publicdo understand that it creates op-portunities for jobs, cleaner air,new technology and new type ofindustry.

In that sense, sustainable energyand renewable sources are not onlycomplementary to the already ex-isting market, but are a possibilityto earn more than when using tra-ditional sources.

The more Russia produces itsown energy on its own territorywith renewable sources, the morethey will have available for exportto Europe. It is not a secret thatthe gas prices in Europe are stillhigher, compared to the domesticprices. Keeping this in mind, therecould truly be a win-win situation.

Talking about prices, and con-sidering that one of the main aimsof the IFC Russia Renewable En-ergy Program is increase the scaleof private sector involvement inrenewable energy, to what extentis the private sector in Russia in-volved in renewable energy?

Nowadays, everybody is waitingfor the proper regulatory frame-work to come into place. This,however, is not limited to havingonly export mechanism -it is alsorelated to licenses for land use, ac-cess and recognition. Apart fromthat, the situation in Russia is as itis everywhere else: renewable en-ergy in its early years needs somekind of a support.

However, this support is still alot less than the support given

today to traditional players in theenergy market.

Which are the biggest opportu-nities for EU-Russia cooperationin the field of renewable energy?

I am going to reply from an eco-nomic angle. The projects whichwould have the most immediateresults for the Russian economyare the biomass projects because ofthe big qualities of wood and biowaste in some regions. In addition,biogas installations would be abetter and cheaper alternative toecological fines.

In relation to cooperation withEurope, there is an untapped po-tential of hydropower projects be-cause many of the already todayabandoned hydro stations were ac-tive during the Socialist times andjust need some minor reconstruc-tion work.

Last but not least, we believethat it is economically wise to pro-duce wind in the northern parts ofRussia and to build new transmis-sion lines to Europe where wecould offer member states to reachtheir 2020 targets and beyond.

You would summarize theRussian renewable energy marketas…..

…. A green giant which hasremained untapped

INTERVIEW | PATRICK WILLEMS

The Russian renewable energy market-a green giant which remained untapped

ENERGY

Oettinger: public sector to lead on energy efficiency

EU commissioner for Energy Günther Oettinger presents a new type of weather forecast on a huge TV screen

showing how much solar and wind energy has been produced in the past week and how much fossil fuels have been

saved, on June 20 2012 at the Silken Berlaymont hotel in Bussels. |AFP PHOTO/GEORGES GOBET

By Stanislava Gaydazhieva

By Stanislava Gaydazhieva

FASHION & STYLE

New Europe |

NEW EUROPE24 - 30 June, 2012

The U.S.A’s ethnic diversity, fed by

successive waves of immigration,

has given rise to a national iden-

tity that is far more mythical

than historical. These myths were made

popular by the American film industry,

which created characters whose attire was

considered indisputably American, around

the world. The jazzman’s zoot suit, the

‘Marlon Brando Bad boy style’ Perfecto mo-

torcycle jacket, the Hawaiian Aloha shirt, or

Levi, Lee and Wrangler legendary jeans are

just a few examples.

Indeed, one of America’s most famousfolk heroes is certainly the highly romanti-cized cowboy figure whose chivalric idealwas popularized by Western movies and ac-tors like John Wayne in the stereotypicalrole of the free-spirited, wise, virtuous, andbrave farmer. Cowboys tell the story of the‘Old West’ when the American frontiermoved westward in search of new farmingland. Cattle raising, horse riding and rodeotradition required functional dress: sharp-toed boots with cut-away heels, long-sleeved canvas shirts, denim work pants, a

broad brimmed high-crowned hat, a cottonkerchief tied around the neck and leatherprotection gear or ‘chaps’ for the legs. Theoutfit took a more sophisticated turn forrodeo contests and cattle auctions when thecowboy would be expected to wear biggolden or brass belt buckles, and impressiveSpanish-inspired embroidered jackets.

Today, the ‘ranch costume’ is still an ele-ment of recognition and national pride insome American states like Texas, Okla-homa, Kansas and New Mexico. Despite itsdemocratic roots, the cowboy style, with itsuse of leather, jeans and metallic nail-buckle-star and ‘sheriff ’ embellishments, re-mains a constant source of inspiration tohigh-fashion brands, year after year.

For his spring 2012 Balmain collection,Olivier Rousteing brilliantly re-interpretedthe rodeo theme by presenting falsely strictbuttoned-up shirts, sumptuously embroi-dered short, long-sleeved Toreador jackets,huge golden buckles, denim with metallicappliqué and pointed leather boots.

In American tradition, the cowboy or‘white settler’s complementary figure is def-initely the ‘trapping’ and buffalo ‘hunting’Indian, as seen in Hollywood movies, whichendlessly depict the Native Americans’ re-sistance to the building of the transconti-nental railroad and to the taking over oftheir lands.

The Red skins, Apache and other Sioux cul-tures, have always inspired jewelry, accessoriesand fashion designers. This season, the ‘squaw’look could be found on the runways of AnneValerie Hash and BCBG Max Azria. Both la-bels referred to the characteristic geometricpatchwork motifs and earthly terracotta colors

of Indian tribal art.Another important element of Ameri-

can culture is its devotion to team sports,baseball, basketball and ice hockey, andcollege athletics. Alexander Wang paid histribute to this aspect by presenting a sym-bolical sportswear Spring collection. Rec-ognizable team colors contrast the white‘magic’ number or letter inscribed on falsechampion T-shirts.

Moreover, Anna Sui revived the all-timefavorite pin-up girl, whose posters were sentto American troops stationed overseas dur-ing World War II. High-waisted shorts re-veal perfect long legs and mini brassieresemphasize opulent busts. The red lips, curlyhair and attitude all express the sex appealand glamour of 1940’s Hollywood actresses,while the overseas cap cleverly winks at USNavy tradition. Louise Kissa

[email protected]

American movie poster, 1930

ANNE VALERIE HASH

photo: Dan Lecca

© Anne Valerie Hash

BCBG MAX AZRIA

© Bcbg Max Azria

SPRING/SUMMER 2012 TRENDS

American cult

ALEXANDER WANG

© Alexander WangANNA SUI

© Anna Sui

BALMAIN

© Balmain

BRUSSELS AGENDA | New Europe | NEW EUROPE24 - 30 June, 2012

BRUSSELS AGENDA

New Europe | Page 17NEW EUROPE 24 - 30 June, 2012Welcome to NE’s Brussels Agenda. All you

need to know for a complete professionaland personal life in Brussels.

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Zappa plays Zappa19 November, Ancienne Belgique €35Dweezil Zappa is making another tour, performing hisfather’s music for old and new fans. Since Frank Zappadied in 1993, his son has been taking to the road, keep-ing his father’s music alive, and Frank was a greatbeliever in live music.But nobody can accuse Dweezil of living off his father’sreputation, as the young guitarist worked and playedalongside Frank and after his passing, assists his moth-er in preserving the legacy of the guitar legend.Although Frank Zappa was famed for the names he gavehis children, Dweezil’s name was originally listed as IanDonald Calvin Euclid, as the hospital refused to record aneccentric name. A few years later, Dweezil discovered thechange and insisted on a legal name change to Dweezil.It comes as no surprise that the young Zappa has hadan unusual life, from appearing in the 80’s cult classicteen film, Pretty in Pink, co-hosting a cookery pro-gramme with his first wife and appearing in a sitcom

with his sister, Moon Unit, called Normal Life.As a musician, Dweezil has excelled. He has beenworking on a long musical piece since the early 90s,based on guitar solos by leading musicians. Well, afterall Frank did issue three album boxed sets of nothingbut guitar solos, more than once.In a nod that his father would approve of, Dweezil alsoperformed the guitar break in Spinal Tap’s immortalanthem, Break Like The Wind.Apart from his father’s talent, Dweezil also has hisdad’s old guitars, some of them adapted, one describedas “heavily modified with various onboard effects, thefunctions of some being a mystery.”But even more importantly, Dweezil is the guardian ofhis father’s massive library of recordings, of whichthousands of hours remain unreleased.With that in mind, there’s no telling what exactly isgoing to be performed, but it will be a performancethat his father would be proud of, and that’s why youshould go!

Couleur than ever

Couleur Café29 June - ! July, tour & Taxis, BrusselsOver the years Couleur Café has transformed itself into festivalthat proposes a full array of music styles coming from all over theworld. With more than 50 concerts on 5 stages over three days(29 June to 1 July), Couleur Café offers the best of r&b, hiphop,world, dubstep, afro, soul, funk, reggae, dub, dancehall, reggaeton,latin, salsa, rock, electro… under three huge tents.Held in Tour & Taxis, one of the most beautiful industrial sitesin Europe, the festival is an apt reflection of the city it callshome, Brussels. Although today it welcomes almost 75,000 people over threedays, Couleur Café maintains a human scale. Independentlyorganized and managed by Zig Zag, a non-profit organization,Couleur Café preserves its vibrant party atmosphere. This year,it will also inform its public about renewable energy. This newtheme forms part of the ‘International Year of SustainableEnergy for All’, declared by the General Assembly of the UnitedNations.

TAKE A LOOKThe Stockel metro station (Stokkel) is the easternterminus of line 1 on the Brussels Metro, but whatmakes this station different is the two bas-reliefs,both 135 m long, on which more than 140 char-acters are represented from no less than 22 Tintincomic strips. . The Stockel station, which openedon 31 August 1988 is located in the municipalityof Woluwe-Saint-Pierre. The sketches for thework, which are on both of the walls of the singleline platform, were sketched by Hergé just beforehis death in 1983 and the figures were drawn byStudio Hergé and Bob de Moor, a comic creatorwho had collaborated with Hergé on several vol-umes of The Adventures of Tintin. Conveying theimage of Brussels as the "capital of comic strips",the mural characters are executed in life size for-mat and juxtaposed in order to create all sorts ofamusing effects and unexpected situations.

Some events may require registration25-27 June- How to work with the EUInstitutions: A Winning Strategy. APractical Guide to Effective Influence 8.30-13.00, West Midlands EuropeanCentre.The European Institute of PublicAdministration (EIPA) is offering a semi-nar directed at civil servants from all acrossthe EU and for anyone interested in theEU. The seminar will point out ways inwhich to effectively influence the EU deci-sion-making process. It will provide its par-ticipants with the knowledge and tools toconfidently and successfully engage in theprocess.

26 June- Global Sustainability Leaders:How Do They Do It? 12:30-14:00, FTI Consulting, 3rd floor.The British Chamber of Commerce willhost an event providing participants withthe opportunity to understand the impor-tance of corporate investment choices,responsible investment, and the consequentbenefits these choices can have on a posi-tive corporate image.

26 June- Unleashing Competition inFinancial Market Infrastructure13:00-15:00, CEPS Conference room.The Center for European Policy Studies

(CEPS) will host a discussion with XavierRolet, and other speakers, about the impor-tance of financial market infrastructure as akey promoter of competitiveness and mar-ket efficiency.

27 June-The 2012 European Summit forGovernment Transformation 14:00-16:45, Concert Noble.The Lisbon Council will host a discussionand provide several lectures on governmenttransformation in the context of foreignand security policy.

28-29 June- 2nd Annual EuropeanSustainable Chemical ManagementConference, Central Brussels.Forum Europe will host the 2nd AnnualEuropean Sustainable ChemicalManagement Conference in which severalspeakers will discuss, among others, suchtopics as how to address the combinationeffects of chemicals, the assessment ofEndocrine Disruption in the chemicalsmarket, and the next steps for the EUEDC Strategy.

Brussels Agenda

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Back to the sixties, baby!Calling all nostalgia buffs. If you yearn for the1960s, the era of flower power, love andpeace, then a newly-opened ´museum´ couldbe just for you. You can now relive the age of The Beatles etal at the Bokrijk open-air museum at Genkin Limburg province, just a short one-hourdrive from central Brussels.Until now, the museum has focused just onBelgian rural life from a bygone age, in theshape of houses from Antwerp which weretransferred to Bokrijk and rebuilt.But a new section at the museum has nowopened which is devoted to the 1960s.For anyone over the age of 45 a visit to "TheSixties" will be a leap back in time.As Jean-Paul Peuskens, chairman of theBokrijk Domain, said, "The 60s expo takesBokrijk back to its own past, to the slightlylonger time period between the world expo of1958 in Belgium and the 1973 oil crisis."The emphasis is on reliving life as it was backin an age when mini skirts were all the rage.

All visitors are given a "passport" at theentrance and, by scanning this on touch-screen tables throughout the exhibition, youwill receive a unique personal story of some-

one who was raised in the 60s.Many of the items on show, including old TVsets, radios, record players, electrical appli-ances and suchlike, were loaned from various

local venues.It all makes for a great day out, especially forthose who like a trip down Memory Lane!Further details from www.bokrijk.be

Son of my father For more on events in Brussels checkwww.agenda.be29 June-1 July - Couleur Café FestivalTour & TaxisCouleur Café is a festival that proposes a fullarray of music styles coming from all over theworld. With more than 50 concerts on 5 stagesover three days, Couleur Café offers the best ofr&b, hiphop, world, dubstep, afro, soul, funk,reggae, dub, dancehall, latin, salsa, rock, elec-tro… under three huge tents. There is also adance floor featuring electronic music wherefestival goers can feel the force of the musicalmix.

4 July-Tiziano FerroForest National 20.30h-23.00hTiziano Ferro is the pioneer of a new genera-tion of Italian songwriters and is consideredone of Italy’s biggest pop stars. At the end ofNovember 2011 he released his long awaitednew studio album. "L 'Amore E' Una CosaSemplice "

3 and 5 July- Folklore. OmmegangGrand-PalaceThe Grand-Palace will relive the 1549 proces-sion organized for Charles V and his sonPhilippe II. More than 1,400 extras will bringa whole period of history back to life. The fes-tivals will include: actors, folk and historicgroups, horses, puppet and theaters.

5 July- Gilberto GilCentre for Fine Arts/Henry Le Boeuf Hall20:00Gilberto Gil will perform an exclusive concert

with his quintet. His innovative blend ofBrazilian music genres (such as bossa nova,samba, and forró) and blues, reggae, pop, androck, continues to excite audiences all over theworld. Gilberto Gil is much more than just amusician. His political and social commitmentgot under the skin of the military regime inBrazil and, as one of the leading lights of theTropicalismo movement, he was imprisonedin 1969, In 2003 he became Minister ofCulture in President Lula da Silva's govern-ment.

5 July- Ludo VandeauMusic Village 20:00Ludo Vandeau receives his inspiration throughthe great French chanson tradition, withoutimitating the past. He adds a new twist on tra-dition and creates a worthy show to watch.

30 June- It’s ShowtimeBFN Music Hall 16:00-01:00IT'S SHOWTIME is known for combininghigh-level martial arts and pure entertainment,which earned its success with audiences of allages. The French Jerome Le Banner is consid-ered by many as "the best fighter never to havewon the final K-1." He will face RustemiKreshnik , known for its strength and tenacity,the game promises to be exciting!

GERMANY· SPAIN · PORTUGALNew Europe | Page 18 THE EUROPEAN UNION24 - 30 June, 2012

PORTUGAL|ECONOMYHouseholds’ housing expenditures increasedThe household annual mean consumption expenditure was€20,391 in 2010/2011, according to the final results of theInquérito às Despesas das Famílias 2010/2011. Housing,transport and food products accounted for 57% of thehousehold annual mean consumption expenditure. Theconcentration in these classes of expenditure kept the pat-tern already observed in the previous decade, despite theincrease of the weight of housing expenditures (19.8% in2000 and 29.2% in 2010/2011) and the reduction of ex-penditures with food products (18.7% in 2000 and 13.3%in 2010/2011). The average net total annual income byhousehold was €23,811 in 2009, corresponding to a mon-etary income of €19,811 (80.6%) and a non monetary in-come of €4,910 (19.4%).

PORTUGAL|ECONOMYRain affects cereals, cherryEarly estimates on May 31 point to a decline in yield ofgrain cereal, softened by the rainfall occurred in the last twomonths. Still, the reductions in yield should range between15% in barley and 30% in triticale, Statistics Portugal re-ported. Also the cherry should show a decrease in pro-ductivity; more clear in the early varieties, and supposed tobe around 15%. The sowing/planting of summer cropshave progressed smoothly. The maintenance of the surfaceof maize, rice and sunflower, and decreases in processedtomato and irrigated potato are expected.

GERMANY|ECONOMYDebt crisis reaches GermanyPrivate sector firms had their worst month since June 2009,and most affected were manufacturers. Exports were hit, aswas business confidence. At the same time, Markit's Eu-rozone Composite Purchasing Managers' Index, which isused by business to estimate growth, stayed at 46 indicat-ing a contraction. A mark above 50 is seen as an sign ofgrowth. Chris Williamson, chief economist at Markit said,“"It is a worryingly steep downturn we are seeing and it isspreading from the periphery, which has been falling at anincreased rate, through to Germany. It is becoming deeperand more broad-based," adding that the forecast was for a0.6% contraction in the second quarter. Focusing on Ger-many, the index said, “By country, output fell in Germanyfor the second month running, dropping at the fastest ratein three years. Marginal growth in services was offset bymanufacturing output falling at a rate only slightly belowthe near three-year record seen in May.” Williamson said,“By country, output fell in Germany for the second monthrunning, dropping at the fastest rate in three years. Mar-ginal growth in services was offset by manufacturing out-put falling at a rate only slightly below the near three-yearrecord seen in May.”

SPAIN|ECONOMYBorrowing costs riseThe medium term cost of borrowing for the Spanishgovernment has risen, as officials gather to discuss theexact requirements of a Eurozone bailout, estimated tobe €100 billion. Spain did sell €2.2 billion of mediumterm bonds, and although the bonds had a stronger de-mand than May’s bond auction, but the yields on 5year bonds rose to 6.07%, too high for sustainabilityand less than 1% below the level where repayments areregarded as unpayable.

German power giant RWE, will buildno more nuclear power stations - notonly in Germany, where nuclear poweris to be phased out by 2022 - but any-where in the world, the company an-nounced, The local reported.

RWE "will not build any nuclearpower plants abroad," a companyspokeswoman said, confirming a corre-sponding report in the SüddeutscheZeitung daily.

At the end of March, RWE and itsbigger rival E.ON decided they wouldpull out of their British nuclear powerjoint venture, Horizon Nuclear Power,the spokeswoman pointed out.

The Süddeutsche Zeitung newspa-per said the management of Germany'ssecond biggest energy company held asecret meeting in an exclusive hotel inIstanbul the previous Friday and Satur-day to discuss the major strategychange.

Peter Terium, RWE's incoming

CEO, who is to take over the companyin July, told the company's 200 mostsenior managers that he was planning amajor overhaul of the company, thepaper said.

The new plan is to pull out of the nu-clear power business completely, and in-vest heavily in solar, in Germany andelsewhere, the paper said.

The news is a significant change ofcourse for a company previously con-sidered one of the most vehement de-fenders of nuclear power. RWE made astatement in March announcing thatGermany's transition from nuclear torenewable energy, announced last year,had cost it a third of its net profits.

Previous week, German power sup-pliers also said they were suing the Ger-man government for €15 billion in lostincome.

The Süddeutsche Zeitung saidRWE had decided that the financialrisks of building new nuclear power sta-

tions in those countries where the po-litical will remained in favour, were toogreat. Huge delays in such constructionprojects in France and Finland have ap-parently convinced the company thatnuclear power is not worth the finan-cial risk.

Recent international ratings agencyassessments have also threatened todowngrade nuclear power as an invest-ment option if further nuclear safetyrisks are revealed, the paper said, citingunnamed company sources. This coulddo huge financial damage to RWE, acompany currently working to pay offlarge debts.

Incoming CEO Terium also an-nounced that RWE could face largejob cuts in the mid- to long-term."RWE will also have to make sometough decisions," he warned, sayingthe company faces major restructur-ing. "In three years time, the com-pany will not have the same

Energy giant pulls plug on nuclear powerGERMANYENERGY

EU assists redundant construction workersOn 18 June, the European Commissionproposed to provide Spain with €1.3million from the European Globalisa-tion Adjustment Fund (EGF) to helpre-integration into the labour market of320 redundant workers in the construc-tion sector.

The Employment, Social Affairs andInclusion Commissioner, László Andor,pointed out that the construction sectorin Spain has been severely affected bythe effects of the financial and economiccrisis and that workers in that field arefacing particular difficulties in findingnew employment. He stressed that the

funding “from Europe's GlobalisationAdjustment Fund would help maketheir transition to new jobs faster andeasier”.

Spain applied for the EGF supportconcerning 836 redundancies in theconstruction sector in the Aragón re-gion, where construction companies aremajor employers.

The package of measures for theirreintegration into labour market en-visaged vocational education, one-on-one counselling, skills assessmentand coaching, entrepreneurshipcourses and on-going advice and

mentoring for entrepreneurs, job-search allowances and outplacementincentives, and other necessary sub-sistence allowances.

Out of the estimated €2 million costof the package, the EGF would provide€1.3 million. In addition, the Commis-sion has already paid to Spain €1.6 mil-lion from the EGF to help 1,138former construction workers in the re-gion of Comunidad Valenciana.

The proposal for the €1.3 millionpayment now goes to the EuropeanParliament and the EU's Council ofMinisters for their approval.

SPAINEMPLOYMENT

Germany's new Environment Minister Peter Altmaier (L) visits the Asse nuclear waste storage facility on 1 June 2012 in Remlingen, central Germany.A former salt mine in the region, the Asse pit, is used as a deep geological repository for radioactive waste. Environmentalists and residents plead for theclosure of the facility because of the pit's instability and the danger of the hazardous materials stored there. |AFP PHOTO / POOL / JULIAN STRATENSCHULTE

AUSTRIA · SLOVENIA · MALTA

New Europe| Page 19

THE EUROPEAN UNION24 - 30 June, 2012

MALTA|ECONOMY

Employment indices decline A sample survey carried out among construction enterprisesshowed that employment indices declined by 5% over thecorresponding quarter of 2011. When adjusted for working-day effects, hours worked decreased by 1.4% whereas wagesand salaries increased by 1.9%. Year-on-year data reveal thatemployment in construction activities went down by 5%.Construction hours adjusted for working days decreased by1.4%. The decrease in hours worked in specialised construc-tion activities was partially offset by more hours in civil en-gineering and construction of buildings. During the periodunder review, working-day adjusted wages and salaries in-creased by 1.9%. Compared to the fourth quarter of 2011,seasonally adjusted data on employment and gross wagesand salaries declined by 1.5% and 0.5% respectively, whilehours worked edged up by 0.2%.

AUSTRIA|TELECOMS

Telekom Austria deal toCarlos Slim confirmedRumours reported 5 days ago that the world's richest manCarlos Slim Helu, 72, is reportedly interested in increasinghis stake in Telekom Austria have been confirmed, AustrianIndependent reported. With a fortune of €55 billion he isthe world's richest man with €8 billion more than the Mi-crosoft founder Bill Gates. His America Movil company saidthe purchase of shares from investor Ronny Pecik will giveit a stake of around 23% in Telekom Austria, which operatesthroughout central and Eastern Europe. The Mexican groupgave no financial terms. But it is the latest move to expandhis empire into Europe by scooping up the beaten-downshares of distressed telecom companies. It is rumoured thathe was prepared to pay €885 million for the share. It makeshim the second-biggest shareholder after the AustrianÖIAG which has 28.42%. The telecom industry is at thecore of the multi billionaires business empire since 1990when he snapped up the former Mexican telephone com-pany Telmex. The Mexican operator, which is present inroughly a dozen Latin American countries, is establishing abeachhead in Europe where a combination of tough com-petition, regulatory pressure, and recession in many marketshas beaten down some company valuations to near decadelows. Slim has also mounted a raid on Dutch telecoms op-erator KPN via a tender offer for 28% of its shares. KPN op-poses the offer of €8 per share as undervalued and has hiredbankers to try to ward off America Movil via asset sales orother options. The offer expires on 27 June. Slim's arrival inEurope has touched off a period of turbulence in the sector,with industry executives and analysts questioning if it willlead to long-awaited consolidation in some markets likeGermany or Spain.

MALTA|TOURISM

Cruising increasingly popularAccording to figures released by the Malta’s National Sta-tistics Office, cruise passenger traffic during May stood at75,403, up by 27.7% over the corresponding month last year.There were 42 cruise liner calls, 9 more than last year.The number of cruise passengers who were in transitamounted to 59,155, an increase of 39% when compared toMay 2011. The remaining passengers were either embark-ing (8,071) or landing (8,177) in Malta. Most cruise pas-sengers were 60-79 years old and numbered 30,868, or40.9% of total cruise passengers. These were followed bythose aged 40- 59 which totalled 25,569 (33.9%). On a gen-der basis, female passengers amounted to 38,899 while malescounted 36,504. The majority of cruise passengers camefrom EU Member States and stood at 63,237, advancing by24.5% over 2011. Most European passengers came fromGermany (26,391), Italy (10,694) and France (10,385).

Slovenia's biggest bank Nova Ljubljanska Banka (NLB) needsabout €500 million to meet new capital requirements, plus ad-ditional funds to keep operating into the future. Finance Min-ister Janez Sustersic told parliament previous Friday that theamount is higher than an original figure of €320 million set bythe European Banking Authority last December, Balkans re-ported.

NLB is burdened by non-performing loans to local firms andmade a loss in 2011 for the third year in a row. The money isneeded to lift its Core Tier 1 capital ratio from 6% to the re-quired 9%.

Sustersic also told parliament that "in the coming monthsadditional capital will be needed to ensure normal functioningof the bank which includes cleaning up the bank's balance sheetand solving the problem of bad loans and non-banking invest-ments."

On 15 June, parliament adopted new laws allowing the state-

owned bank to issue a contingent convertible (CoCo) bond inJune to meet EBA capital requirements, AFP reported. Thegovernment then hopes to find a strategic investor for the bankby the end of this year and Sustersic told parliament talks withinvestors who would buy the CoCo bond could be completedwithin a week.

Parliament also authorized the government to reduce thestate's 55.6% stake in NLB to 25%.

According to local media, Belgian banking and insurancegroup KBC, which owns 25% of NLB, is the most likely buyerof the bond which could later be converted into stock.

In May, the Bank of Slovenia said Slovenian banks are inneed of fresh capital and must reduce their heavy dependencyon European Central Bank financing, after revealing the sec-tor's 2011 losses spiked. The Slovenian banking system posteda joint loss of €436 million last year versus a loss of €98.1 mil-lion in 2010, mainly due to non-performing loans to local firms.

SLOVENIA BANKING

CoCo is a go go for Banka

Adria Airways is to revive talks with AirIndia in order for the Indian nationalcarrier to launch its once planned flightsfrom Mumbai to New York via Ljubl-jana, Balkans reported.

Last year Air India and Adria Airwayssigned a memorandum of understand-ing which was to see Air India code shareon Adria’s regional flights, while in re-turn the Indian national carrier wouldoperate some of its services to the United

States via the Slovenian capital. Planswere set for flights to be launched eitherduring the 2012 summer season or the2012/2013 winter season.

However, Air India requested lowerfuel prices at Ljubljana Jože Pučnik Air-port and an exemption from paying feesin order to launch services to the Sloven-ian capital, all of which were denied.

The Slovenian government, togetherwith the petrol provider, Ljubljana Air-

port, Adria and Air India are now pre-pared to get back to the negotiating tableto discuss possible cooperation. Talks arealready said to have taken place at the In-dian Embassy in Ljubljana.

Several months ago, the head of Ljubl-jana Airport, Zmago Skobir, commentedon the issue, “I stress that this projectcould be beneficial for both the airportand Adria but it must be approached onan intergovernmental level”.

SLOVENIA AVIATION

Adria Airways to revive talks with Air India

Olli Rehn the European Monetary Affairs Commissioner is hoping for improvements in Slovenia.| EPA/OLIVIER HOSLET

The Austrian subsidiary of the insolvent German chemistchain must find a buyer in order to prevent its own bankruptcy;it was reported.

The search for an investor for the Schlecker Austrian re-mains difficult. In the last weeks, there were chances of findinga buyer. The Austrian MTH Group was said to take overSchlecker Austria. Now, the prospects have deteriorated.

“After the bankruptcy of Schlecker in Germany, the Aus-trian subsidiary is also threatened.” insiders said to the GermanManager Magazin“. Schlecker Germany has not found a sin-gle strategic investor for the 900 branches in Austria. There

would be only one financial investor.The Austrian MTH and the Linz-based financial investor

Recap confirmed their interest and said to be in negotiationswith Schlecker Austria´s management. The insolvency man-ager Arndt Geiwitz underlined that there are still potentialbuyers.

The real problem for Schlecker Austria seems not to be thelack of potential buyers. However, there are not sufficient de-tailed documents on Schlecker Austria, insiders say. It is saidthat the connection between the Austrian subsidiary and theholding company was too close.

AUSTRIA

PHARMA

Schlecker Austria threatened by insolvency

UK · BELGIUM · NETHERLANDS · LUXEMBOURGPage 20 |New Europe THE EUROPEAN UNION24 - 30 June, 2012

BELGIUM|BUSINESS

Manufacturing accounts foraround 15 % of investmentAccording to data from the national accounts released by theNational Bank of Belgium, the manufacturing industry ac-counted for around 15% of total business investment by Bel-gian firms in 2010. The initial findings of the spring 2012survey show that investment in fixed capital – expressed atcurrent prices – is estimated to have risen by 10.1% in 2011.Most branches of activity report an increase in investment forthat year, with the main exception of the paper and board in-dustry and the production of building materials. The new es-timate for 2011 is higher than the 7.5% figure that had beenobtained on the basis of the survey carried out in autumn 2011.According to the results of the spring 2012 survey, investmentis expected to expand further this year, at a rate of 16.8%. Whilethis is less than the 24.6% increase announced earlier on thebasis of the autumn 2011 survey, this expansion is neverthe-less considerable, particularly in view of the current climate ofeconomic uncertainty.

LUXEMBOURG|FINANCE

Assets under management reach historic highAccording to ALFI’s 2011 Annual Report, released on June12, by the Association of the Luxembourg Funds Industry(ALFI), the assets under management by Luxembourg-domiciled funds have reached a historic level at the end ofApril 2012, at €2,225 billion under management. Luxem-bourg remains the largest European fund centre, followedby France and Germany. Marc Saluzzi, Chairman of ALFI,said: “Following a year political uncertainty which has led toturmoil in financial markets, we believe that this growth inassets under management in Luxembourg marks a return ofconfidence in investment funds. “ According to the AnnualReport, the year 2011 was characterised by strong cautionon the part of investors. Despite net inflows of five billioneuro, Luxembourg funds finished the year €102 billion downon the previous year, with €2 096 under management. How-ever, 2011 was an excellent year in terms of creation of newfunds, with 3,845 funds domiciled in Luxembourg at theend of December 2011. This growth confirms the extent towhich specialised investment funds1 have become an essen-tial part of the Luxembourg funds industry, accounting for277 of the 459 new funds created under the Luxembourgdomicile in 2011. In 2011 ALFI continued its global effortsto promote the Luxembourg, and European, funds industry,visiting 25 cities in 22 countries across Europe, the Ameri-cas, Asia and the Middle East, and presenting to 4 500 pro-moters, investors and other professionals. In line with theobjectives set out in its 2011–2015 Ambition Paper, ALFIcontinues its efforts to ensure that Luxembourg remains theglobal centre of excellence for the fund management indus-try creating opportunities for investors, professionals and thecommunity. Commenting on the regulatory environment,Mr Saluzzi said: “ALFI remains concerned by the regula-tory pressure faced by the industry.

BELGIUM|FINANCE

Government debt at €369.73 billionThe Belgian Federal Government Debt amounted to€369.73 billion as of end May 2012. Debt issued or takenover by the federal government amounted to €369.35 bil-lion and the institutions for which the federal governmentsupports the debt service registered a debt of €0.38 billion,the Belgian Debt Agency reported. In net terms (i.e. de-ducting financial deposits and investments, as well as secu-rities owned by the Treasury), the Federal GovernmentDebt amounted to €353.1 billion.

US-based Walgreens said on 19 June it was spending $6.7billion (€5.3 billion) to take a 45% stake in European rivalAlliance Boots.

The deal will create the world's largest retail pharmacychain.

Walgreens said $4 billion of the acquisition would be incash with the rest in shares. It would also have an option tobuy outstanding shares in the British-based high-street chain,which has several stores here.

Already the largest chains in the US and Europe, togetherthe companies would be "the global leader in pharmacy-led,health and wellbeing retail with over 11,000 stores in 12countries," Wallgreens said in a statement.

"This transaction will bring together two great companieswith iconic brands, complementary geographic footprints"which will have "diversified and robust profit pools across theUS, Europe and key emerging markets," it added.

Walgreens estimated the cost of taking complete controlof Alliance Boots at approximately $ 9.5 billion in cash andstock, plus the assumption of Alliance Boots outstandingdebt, given its current share price and exchange rates. Thatwould put the total cost of the transaction at $ 16.2 billion.

US buyout firm KKR paid £11 billion to take over AllianceBoots in 2007.

Walgreens said the boards of directors of both compa-nies had unanimously approved the transaction, which itsaid it expects to take place by 1 September pending reg-ulatory approvals.

According to the figures released bythe Dutch Central Bank De Nederland-sche Bank, the surplus on the current ac-count of the Dutch balance of paymentscame to €19 billion (13% of GDP) in thefirst quarter of 2012, representing an in-crease of €6 billion when compared to thefirst quarter of last year.

At the start of the financial crisis, theDutch current account surplus fell rap-idly to €3 billion in the fourth quarter of2008. Since then the balance has showna trend-based rise. Over the past fourquarters, the surplus amounted to €57billion, 9.5% of GDP. The EuropeanCommission has set a three-year averageof 6% as the upper limit for starting whatis called an Excessive Imbalances Proce-

dure; the average for the Netherlandsover 2009 through 2011 amounted to6.5%. The sharp rise in the surplus seenin the past quarters may in part be relatedto lagging domestic expenditure. Thevalue of goods exports rose 9% year-on-year, while the value of imports increased7%. Price effects also play a significantrole in these gains. The higher current ac-count balance is also attributable to a ris-ing income account surplus, whichparticularly reflects the relatively positivetrend of earnings achieved abroad byDutch multinational companies, such asRoyal Dutch Shell.

The financial account of the Dutchbalance of payments shows that contraryto previous quarters, investors made sub-

stantial cross-border securities invest-ments in the first quarter. The quarterwas characterised by increasing confi-dence among investors, which was alsoreflected in rising share prices. On bal-ance, foreign investors bought Dutch se-curities to an amount of €21 billion,having sold almost double that amountin the last two quarters of 2011. Espe-cially money market and capital marketpaper issued by banks found its way toforeign investors during the first quarter.Dutch investors on their part bought for-eign securities to an amount of €18 bil-lion (the highest level of net purchasesseen over twelve quarters), having sold€11 billion of foreign paper in the twopreceding quarters.

Current account surplus upNETHERLANDS ECONOMY

US chemists fill their BootsUNITED KINGDOMBUSINESS

Britain's biggest retailer Tesco said on 18 June that it had fi-nally struck a deal to exit its Japanese business, RTE Irelandreported. Tesco said it would exit Japan in two stages - firstby selling 50% of its shares in Tesco Japan to Aeon - the Asiancountry's biggest retail group - for a nominal amount.

Once in the joint venture with Aeon, Tesco said it wouldthen invest about £40 million into the Japanese business to fi-nance further restructuring. Thereafter, Tesco said that itwould have no further financial exposure to the Japanese busi-ness. Completion of the transaction was subject to normalregulatory approval, the company said.

Tesco had officially announced 10 months ago that it was

pulling out of Japan and putting its more than 100 small su-permarkets there on sale to focus on other operations in Asia.

"I thank our colleagues in Japan, who have done an excel-lent job for the business - in particular over recent months,"Tesco chief executive Philip Clarke said.

"We are very pleased to announce this deal with Aeontoday, and are confident that this will deliver the best outcomefor our staff, for our customers in Japan and for our share-holders," he added.

Tesco entered Japan in 2003, while the business currentlycomprises 117 small stores - primarily under the Tsurakame,Tesco and Tesco Express brands in the Greater Tokyo area.

Japan plan: Tesco go UNITED KINGDOMBUSINESS

These Boots are made for Walgreens.| EPA/ANDY RAIN

POLAND · HUNGARY · CZECH REPUBLIC THE EUROPEAN UNION

New Europe | Page 21

24 - 30 June, 2012

POLAND|ECONOMY

Imports help trade balanceAccording to the preliminary information on the balanceof payments, published by the National Bank of Poland(NBP), in April 2012, Polish exports amounted to approx.€11.6 billion and were 0.9% higher than the year before.Imports stood at €12 billion, having decreased by 3.9%,which substantially reduced the still negative balance oftrade in goods. The negative income balance was slightlylower than a year before. As in almost every month, a sur-plus was recorded on the service account (€0.5 billion) andon the current transfer account (over €0.5 million), withthe positive transfer balance with EU exceeding €1.4 bil-lion. As a result, current account deficit totalled €0.6 billion,i.e. almost half the amount reported a year before. The totalbalance of the current and capital accounts was positiveagain and reached ca. €0.5 billion.

HUNGARY|AVIATION

Wizz Air launches London-Debrecen flightsHungarian low-fare airline Wizz Air launched its firstscheduled flight between London and the Hungarian cityof Debrecen on 18 June, Budapest Business Journal re-ported. Wizz Air will operate the flight between Debrecenand London-Luton three times a week. Wizz Air has saidit will launch Debrecen-Eindhoven and Debrecen-Milanflights from the autumn.

POLAND|CONSTRUCTION

Building permits upAccording to preliminary data published by the Polish Cen-tral Statistical Office, in the period of January-May of 201256,525 dwellings were completed, i.e. by 23.6% more thanin 2011 (during which a drop by 15.1% was recorded), andby 5.0% more in comparison with the corresponding pe-riod of 2010. In the period of the five months of 2012 for73015 dwellings building permits were issued, i.e. by 5.3%more than in the corresponding period of 2011. The num-ber of dwellings started also grew – to 67,320, i.e. by 5.1%.The highest share (56.4%) in the increase of the new hous-ing stock was attributed to private investors who, in the pe-riod of January-May 2012, constructed 31,873 dwellings,i.e. by 10.1% more than a year before. In this group of in-vestors, in comparison with the corresponding period of2011 there was a decrease in the number of building permitsissued, to 37,481 dwellings, i.e. by 6.0%, and the number ofdwellings started – to 34,986 dwellings, i.e. by 8.3%. De-velopers, in the period of five months of 2012, completed21526 dwellings (constituting 38.1% of the total numberof dwellings completed), i.e. by 49.5% more than in the cor-responding period of 2011 (when a drop by 32.6 % wasrecorded). Investors building for sale or rent obtained build-ing permits for 33,500 dwellings, i.e. by 23.6% more than ayear before, while the number of dwellings startedamounted to 30,069, i.e. by 27.5% more than in 2011.

HUNGARY|BUSINESS

Fonyton projects rising revenue Hungarian electronics and optical sensor maker Fonytonexpects revenue this year to climb 25-30% over last year'sHUF 1.09 billion as partners in the automotive industryrecover from the crisis, managing director Sandor Lukacssaid, Budapest Business Journal reported. Because of highertaxes, Fonyton expects profit to rise at most a few percentover last year's HUF 64 million, Lukacs said. Fonyton isundertaking a HUF 300 million expansion of its ware-house this year.

EIB grants Hungary flood recovery loanThe European Investment Bank (EIB)has announced that it is lending some€63 million to finance emergency, re-construction and preventive measures re-lated to two major disasters that hitHungary in 2010: river floods and thebreaking of a dam holding contaminatedwater with aluminium productionresidues, Portfolio Hungary reported

"I very much welcome the fact that theEIB is financing measures that will notonly restore the situation prior to the nat-ural catastrophes that Hungary has facedin recent years, but will also help to pre-vent similar disasters occurring in the fu-ture by providing better protection ofpeople and property," commented EIBVice-President Wilhelm Molterer.

In the area of flood recovery and pre-vention the EIB loan will finance meas-ures focused on restoring the previousprotection level, with reconstructionand replacement of flood defence infra-structure and buildings, flood risk mit-igation rehabilitation, and the repair andconstruction of dykes, emergency andstorm water reservoirs, etc.

Regarding the damaged red sludgedam, the project will support measureslimiting the impacts of the red sludgein affected areas. These measures com-

prise in particular the prevention of fur-ther red sludge spills, reconstruction andreplacement of public infrastructure, in-cluding a bridge and railway tracks,demolition of 306 houses, reconstruc-tion of 53 houses and construction of111 new houses. Further activities in-clude remediation, excavation andtransport for final disposal of sludge and

contaminated soil, EIB said in a state-ment. Hungary, represented by theMinistry for National Economy, is theEIB loan borrower and project pro-moter, while local governments and el-igible public and private entities,including SMEs, and individuals af-fected by the damage caused, are thefinal beneficiaries of the loan.

HUNGARYFINANCE

The Polish Prime Minister Donald Tusk, declared that in2013 GDP growth is expected to reach 2.9%, inflation willbe 2.7% and unemployment rate will stand at 12.4%. Thestate budget deficit is not to exceed 32 billion Polish zlotyand average remuneration in the national economy is to in-crease by 5.6%.

“As concerns the valorisation of pensions and disabilitypensions, we will propose 20% of actual increase of an aver-age salary in 2012. In simple terms, we intend to retain thisyear’s valorisation rate,” said the Prime Minister.

According to the head of the government, next year will bevery demanding, particularly in terms of public finance dis-cipline. “Surely 2013 will not be a year when we would beable to spend significantly more money,” he emphasised.

He emphasized that the decision on the final shape of thedraft budget will be taken after the election in Greece andthe June session of the European Council. “We would likethe government to approve a responsible draft budget dur-ing the summer and then submit it to the Parliament,” saidthe Prime Minister.

GDP growth expected to reach 2.9% in 2013

POLANDECONOMY

National Bank: Finances stable, Eurozone ‘main risk’“The main risk scenario for the Czecheconomy over the next few years re-mains a sharper slowdown in economicgrowth in Germany and other coun-tries where our major trading partnersare established,” said Marek Petrus,spokesman for the Czech NationalBank (CNB).

The latest Financial Stability Reportcontinues, the tight situation particu-larly in the euro area is accompanied bycommodity and energy price growthreflecting geopolitical uncertainty andthe dynamic growth in demand fromemerging economies. The unfavourableevolution of disposable income owingto the tight labour market conditions is

a risk in the household sector.Credit risk in the banking sector saw

a modest improvement in 2011 and2012 Q1. At the aggregate level, creditrisk can be regarded as sufficiently cov-ered by provisions, but there are quitelarge differences in NPL coverageacross domestic banks. Loan portfolioconcentration is falling steadily, but thecollateralisation of the largest loans isdeclining.

With regard to the risks mentionedabove, the CNB assessed the resilienceof the financial system by means ofstress tests on banks, insurance compa-nies and pension funds using the ex-tended three-year scenarios entitled

“Baseline Scenario” and “Europe inDepression”. The Baseline Scenario isconsidered by the CNB to be the mostprobable.

The Europe in Depression stressscenario foresees a prolonged contrac-tion in economic activity and a relatedsharp fall in property prices, a rise inNPLs and a drop in operating profitsof financial institutions. The variants ofstress scenarios then work with addi-tional adverse shocks, such as write-downs of claims on indebted EUcountries, losses on domestic banks’ ex-posures to foreign parent companiesand the collapse of the largest debtorsof each bank.

CZECH REPUBLICECONOMY

Hungarian Defence Minister Csaba Hende (2-L) and Hungarian Interior Minister Sandor Pinter (2-R)

take part in a commemoration at a memorial in Kolontar, Hungary, 04 October 2011. The service marked

the one year anniversary of the dike of a red sludge reservoir of an alumina factory in Ajka breaking on 04

October 2010 and unleashing a flood of toxic red sludge on three villages. The memorial in Kolontar, one

of the affected villages, was built as a reminder to the industrial catastrophe. |EPA/ZSOLT SZIGETVARY

SWEDEN · DENMARK · FINLAND· IRELAND

Page 22 | New Europe THE EUROPEAN UNION24 - 30 June, 2012

SWEDEN|GREEN TECH

Vattenfall trumpets windenergy investmentSwedish power group Vattenfall said it was movingahead with four new European wind farm projects andwould invest €4.2 billion in the field over the next fiveyears, The Local reported. "During 2012, Vattenfall hasreceived permission to go ahead with planning for fournew wind farms," the company said in a statement --in Germany, Wales, Denmark and the Netherlands.The company said it had received approval for theForst Briesnig project in Germany; a 250-megawattwind farm called Pen y Cymoedd in southern Wales; awind farm at Tamholt in Jutland, Denmark; and a 340-megawatt project in the Netherlands. "Wind power isa prioritized investment area for Vattenfall," AndersDahl, the head of Vattenfall Renewables, said in thestatement. Between 2012 and 2016 the company wouldinvest an additional €4.2 billion and hire another 200people to develop that side of its business, the state-ment added. It already operates some 40 different windfarms with 900 wind power turbines, generating a totalof 3.7 terawatt/hours, or enough electricity to supplyabout one million households, it said. The companyclaims to be the world's second-largest player in termsof offshore wind farms.

DENMARK|TECHNOLOGY

374 mln crowns to 15 high-tech projectsWith financial support from companies, Danish uni-versities and the Advanced Technology Foundation, 15new high-technology initiatives are in the pipeline, ac-cording to daily Danish newspaper BerlingskeTidende, Copenhagen Capacity reported. The invest-ments are targeted at production, bio, IT, energy, envi-ronment, food commodities and construction, and theobjective is to develop technologies and growth poten-tial in a two-four year framework. Device to destroyworn-out satellites and a microchip to map the im-mune system are some of the ideas that will be ex-plored. The Advanced Technology Foundationallocated 193 million Danish crowns, and the Danishenterprises and universities donate 181 million crowns.Among the Danish companies supporting the initia-tives are Abeo, Videometer, Symphogen, GomSpaceand Milestone Systems.

FINLAND|BUSINESS

KONE elevates China dealThe Finnish elevator manufacturer, KONE, has won anorder to deliver 54 elevators to the Suning Rui City phaseE07 high-rise development in Nanjing, China. The mixeduse complex with an area of 150,000 square meters willhouse a luxury hotel, as well as office, and retail space, ScandAsia reported. KONE will deliver 46 KONE MiniSpace 8,and eight KONE MonoSpace elevators. A traffic moni-toring system - KONE E-Link - will help the facility man-agers ensure a high level of service for vertical transportationin the 230-meter-high tower and in the seven-storypodium of which three stories serve as an underground carpark. “We are honoured that the high service level of ourteam has been recognized in providing optimal PeopleFlow solutions in a new commercial real estate project,” saidWilliam B Johnson, Managing Director of KONE China.The order was booked in the first quarter of 2012 and theproject is expected to be completed in 2014. In 2011,KONE had annual net sales of € 5.2 billion and on average35,000 employees.

Bank of Ireland shareholders have voted to back a trans-action which will allow the Government pay theIBRC/Anglo promissory note with a bond instead of cash,RTE Ireland reported. At the EGM in Dublin last Mon-day, the bank's CEO Richie Boucher admitted that it wasnot a riskless transaction. 99.98% of shareholders at themeeting approved the measure.

The Government is giving IBRC a bond, which is

being refinanced with the Bank of Ireland which itself isrefinancing it with the ECB. The transaction avoids theState paying the €3 billion promissory note from the Ex-chequer. The bank will make €36.4m from facilitating thedeal. Bank of Ireland's Richie Boucher said there was arisk from a catastrophic overnight default by the Govern-ment but he added that was why the bank was being paida margin.

Bank of Ireland EGM approves bond deal

IRELANDBANKING

The Competition Commission is toinvestigate Ryanair's near 30% stakein Aer Lingus, RTE Ireland reported.

The UK's Office of Fair Tradinghas referred the case to the commis-sion. It will examine whether the ac-quisition will result in a substantiallessening of competition in airlineservices between Ireland and the UK.

The OFT started an investigationinto Ryanair's stake of 29.8% in AerLingus in October 2010 but its probehas been suspended twice.

The first time was because theOFT had insufficient informationwith which to proceed and the sec-ond time was due to a legal challengeby Ryanair, which was dismissed by

the Court of Appeal in May.The OFT has stated that Ryanair

and Aer Lingus are, by far, the twolargest scheduled airlines operatingbetween the UK and the Republic ofIreland by passenger traffic.

The CC is expected to publish itsfinal report by the end of November2012.

Competition Commission to probe Ryanair's Aer Lingus stake

IRELANDAVIATION

Bank of Ireland shareholders have voted to back a transactionwhich will allow the Government pay the IBRC/Anglo prom-issory note with a bond instead of cash, RTE Ireland reportedon 18 June.

At the EGM in Dublin last Monday, the bank's CEORichie Boucher admitted that it was not a riskless transaction.99.98% of shareholders at the meeting approved the measure.

The Government is giving IBRC a bond, which is being re-

financed with the Bank of Ireland which itself is refinancing itwith the ECB.

The transaction avoids the State paying the €3 billion prom-issory note from the Exchequer.

The bank will make €36.4m from facilitating the deal.Bank of Ireland's Richie Boucher said there was a risk from

a catastrophic overnight default by the Government but headded that was why the bank was being paid a margin.

Bank of Ireland EGM approves bond deal

IRELANDBANKING

Rovio and Lappset are building theirfirst two Angry Birds parks in Chinathis year, one in Haining and anotherone in Chengdun, it was reported.

A Lappset press release stated that allthe equipment for the parks will bemanufactured in Lappset factory inRovaniemi, Lapland. Lappset andRovio have not disclosed the monetaryvalue of the Chinese orders.

The Business Insider website wrotethat Rovio is planning to open hundredsof activity parks in China. The websitequotes Rovio’s marketing manager PeterVesterbacka saying that Rovio is "plan-ning to build hundreds, maybe eventhousands of activity parks" in China.The company’s goal is to incorporatethese smaller parks into local neigh-bourhoods throughout the country.

These orders are important since theyopen the market for Angry Birds themeparks in the Chinese markets. We willinvest lots of resources in developingAngry Birds parks, and our partner

Rovio has announced that it is aimingto build thousands of theme parks inChina, confirmed Lappset CEO JuhaLaakkonen.

The China’s first real Angry Birdsamusement park will be built in Hain-ing and it is expected to be opened al-

ready in September 2012. Haining is lo-cated around 125 kilometres fromShanghai. The second one will be builtin Chendgun as a part of the NordicCity of Living & Learning district. Thefirst part of the park is expected to beopened by the end of this year.

Rovio plans thousands of Chinese amusement parks

FINLAND

BUSINESS

Rovio CEO and maker of Angry Birds Peter Vesterbacka (C) is seen walking through the crowd as hiscompany accepts a Webby award. Rovio hope to feather their nests with a Chinese deal.| EPA/JASON SZENES

GREECE · CYPRUS · FRANCE · ITALY

New Europe | Page 23THE EUROPEAN UNION24 - 30 June, 2012

FRANCE|AIRLINES INDUSTRYAir France to cut more than 5,100 jobs On 21 June, Air France said that it would eliminate10% of its work force by the end of 2013. But theFrench government has pledged to counter rising un-employment by making it prohibitively expensive forcompanies to lay off workers. Air France presented aplan to unions that it said would achieve the cutsthrough attrition and a mix of early retirements, vol-untary departures and reduced working hours. But theairline warned that it could have to resort to dismissalsif labour groups voted next month to reject the pro-posals. “Air France is facing a fundamental choiceabout its future,” Air France CEO Alexandre de Juniacsaid in a statement. “Our business plan has two ambi-tions: to ensure Air France returns to profitability, andto better serve our customers. If we all make the nec-essary, equitably distributed efforts, there will be noforced departures.” The management hopes to returnthe airline to profitability at a time of deepening eco-nomic gloom across Europe. Michel Salomon, aspokesman for the Air France branch of the C.F.D.T.union, said the cuts represented a “heavy toll,” thoughhe welcomed attempts to avoid layoffs. Still, he ex-pressed concern that management’s goals would behard to achieve solely through voluntary means within18 months. “It is a real gamble,” he said. “Globally, Ithink it will be difficult. For certain parts of the com-pany, particularly in the provinces, it will be very diffi-cult.” The Franco-Dutch group unveiled a three-yearplan in January to reduce debt and operating costs by€2bn in an effort to break even in 2014. Air France-KLM, which has a combined 103,000 workers, sayslabour contracts stop it heading off competition fromlow-cost carriers, including Britain's easyJet.

ITALY|REFORMSMonti calls for labour reform ahead of EU summitItaly's parliament will give the green light to a contro-versial labour market reform on 27 June so Prime Min-ister Mario Monti can go to the summit in Brussels withthe document signed on 28 June, political parties said.Monti's government says the reform will help restartgrowth in the troubled economy. It has already beenadopted by the Senate and is expected to get final ap-proval from parliament the day before the EU summitbegins. "The government has asked parliament to ac-celerate its examination of the labour market reform ...so that the European Council on 28 June can take noteof the passage of this important structural reform,"Monti said in a statement. In return, in the same state-ment Monti promised "rapid legislation" to addressother problems raised by the parties related to pensions,welfare benefits and hiring costs for companies. The leg-islation proposes easing firing restrictions, discouragingthe use of temporary contracts and handing out unem-ployment benefits to more people. It has been criticisedby trade unions who fear a rise in lay-offs, by employersconcerned by higher labour costs, and by many econo-mists who say it would make only marginal changes toa rigid labour market that needs a major shake-up.Monti replaced discredited former prime minister SilvioBerlusconi in November as the recession-hit countryteetered on the edge of a Greek-style default, passing atough austerity package to try to restore investor confi-dence. The measures, including €24bn in new taxes forthis year alone, pushed down Rome's borrowing costsfor a time. But concerns over the future of the eurozonehave seen yields return to worrying levels in recentmonths.

Greece’s new coalition government,sworn in on 21 June, declared that itschief goals were “to tackle the crisis, pavethe way for growth and revise the terms ofthe loan agreement without endangeringthe country’s European course and its po-sition in the eurozone.”

The government will serve the fullfour-year term set out in the Greek Con-stitution, the office of the new primeminister, Antonis Samaras of the conser-vative New Democracy party, said in astatement.

The Finance Ministry portfolio wentto Vassilis Rapanos, 65, who is chairmanof the country’s biggest lender, the Na-tional Bank of Greece.

The foreign minister is DimitrisAvramopoulos; Panagiotis Pana-giotopoulos is the new defence minister.Olga Kefaloyianni heads the newly inde-pendent Tourism Ministry, separatedfrom the culture portfolio, which wasmerged with education. Non-politicalfigures, chiefly academics, took portfoliosin administrative reform, environmentand energy, agricultural development andjustice.

Most of the new cabinet was sworn on21 June but Rapanos was not expected totake the oath until 23 June, when thecaretaker finance minister, George Zan-nias, returns from a conference of financeministers in Luxembourg.

Samaras was sworn in as prime minis-ter on 20 June after his party, SocialistPASOK party and leftist DemocraticLeft Dimar agreed to form a coalition.The new government aims at securingmuch-needed funding for the Mediter-ranean country and renegotiating the un-popular the €130bn joint IMF-EUbailout programme. The ND-PASOK-Dimar government will have a 179 seat

majority in the 300 member parliament.The coalition hopes to resist the pop-

ular far-left Syriza party. Soon after thecoalition government was named, Syrizasaid the new government would not beable to renegotiate the country’s loan deal.The new administration has been “builton the basis of continuing the policies ofthe memorandum,” it said, referring tothe debt deal.

After he was sworn, Samaras called for“patriotism, national unity and trust thatwith the help of God we can ensure thatthe Greek people emerge from the crisisas soon as possible.” He said he wouldpress his new cabinet to work hard, withthe aim of giving Greeks “tangible hope.”

“I am fully aware of the critical mo-ments we face as a country,” Mr. Sama-ras said during the handover with theoutgoing caretaker prime minister,Panagiotis Pikrammenos, adding thatthe Greek people were “injured” andneeded “healing.”

Meanwhile, the President of the Euro-pean People's Party (EPP), WilfriedMartens, has congratulated the an-nouncement of the formation of the

three-party coalition government inGreece led by Samaras, who becomes the16th EPP head of state or government inthe European Council. “I warmly con-gratulate my good friend Antonis Sama-ras for successfully concluding thenegotiations to form a strong and stablegovernment. The three parties that com-prise the coalition government, were ableto set aside ideological differences and toagree on a common, pro-European pro-gramme which will keep Greece safelyanchored in the Eurozone,” Martensstated. “Moreover, considering thatGreece has no political tradition of coali-tion governments, I am particularly im-pressed by the speed in which AntonisSamaras concluded the coalition negoti-ations. I sincerely hope that Prime Min-ister Antonis Samaras and hisgovernment will be equally successfulin bringing Greece out of the crisis andon the path of economic growth,” theEPP President added. “I look forwardto welcoming at the June 28 EPPSummit of heads of state and govern-ment, EPP's newest Prime Minister,”Martens concluded.

New government sworn in, faces challenges ahead

GREECEPOLITICS

Greek newly elected Prime Minister, Antonis Samaras, fourth left, gestures as Greece's newly elected ministersare sworn in during a ceremony at the presidential palace in Athens, 21 June 2012. |AFP PHOTO / ANDREAS SOLARO

Cyprus is in negotiations with the European Union for a pos-sible rescue package, while it also looks into the prospect of loansfrom an individual nation, Cypriot government spokesman Ste-fanos Stefanou said, “We are in continuous touch and dialoguewith the European partners and EU’s institutions and work si-multaneously in the direction of securing a bilateral loan fromanother country,” Stefanou said in a statement on the websiteof the Press and Information Office.

“Cyprus’s government continues to implement its decisionsrelated to strengthening the Cypriot economy, which stands onsound foundations and when the time comes, final decisionswill be taken, always in a dialogue, fine-tuning a cooperationwith the EU,” the east Mediterranean island’s governmentspokesman said.

Cyprus, which has been shut out of markets since May lastyear, is pursuing a loan from other nations, including Russia.Cyprus took a €2.5bn loan from Russia last year. It now ur-gently needs at least €1.8bn by the end of June to rescue its

banking sector, plagued by its exposure to Greece. Manyin Cyprus think the only place where the country could findthat kind of cash would be Moscow. Especially if PresidentDemetris Christofias wants to avoid the tight conditions thatBrussels normally attaches to its rescue funds.

Before seeking assistance from the euro area, which wouldcome with strict conditions, Cyprus is approaching countriesincluding Russia for loans, government spokesman StefanosStefanou said last week

On 21 June, a Russian official said no formal request for aidhad been made. Russian Deputy Finance Minister SergeiStorchak told reporters that Russia had not received any re-quest for financial help from Cyprus, which hosts hundredsof Russian firms and banks. He later said any bid would beconsidered. "If they approach us, we will look into it. I havenot yet seen them approach us, there is only talk in newspa-pers," Storchak told journalists on the sidelines of an eco-nomic forum in St Petersburg.

Nicosia looks at Russia, EU for support

CYPRUSRESCUE PACKAGE

NORWAY · ICELAND · SWITZERLAND

Page 24 | New Europe PARTNERS24 - 30 June, 2012

SWITZERLAND|BIOTECH

Merck confirms closure of Geneva HQBiotech firm Merck Serono has confirmed that it will beclosing its Geneva headquarters next year, despite strongopposition from its staff, Radio Switzerland reported.Twelve hundred jobs will be cut from the region in theprocess. In a press release, the firm outlines the decisiontaken by the directors in the wake of planned closure of theGeneva headquarters. According to the press release theclosure of the Geneva and Coinsins sites has now beenconfirmed. Merck Serono said that provisions in its sever-ance package for the jobs to be permanently cut are nowimproved on what was originally planned. It remains tobe seen what exactly those improvements are. MerckSerono originally stated that over 700 employees wouldbe offered job transfers likely to Darmstadt, Boston andBeijing—and while some staff confirm that they have beenoffered positions within the company abroad, MerckSerono says it’s still in discussions to find more transfer so-lutions. During the consultation period when MerckSerono was reviewing the planned closure of the sites, em-ployees submitted alternatives including spin-offs andstartups. Merck Serono said that it will offer €30 millionto employees for such enterprises. The company is con-solidating its head offices in one centre at the global head-quarters, in Darmstadt, Germany, where the Merck Grouphas been located for nearly 350 years. It will also focus itsR&D resources in three hubs located in Europe (Darm-stadt), the USA (Boston) and Asia (Beijing)

NORWAY|BUSINESS

Porsgrunn porcelain factory may shut downThe traditional, Norwegian porcelain factory Porsgrunnwill most likely have to close as a result of poor sales and aloss of 3.5 million Norwegian crowns, Norway Post re-ported. Owner Atle Brynestad has called all 35 employeesinto a meeting last Monday. If the factory closes, all man-ufacturing and product sale of the famous designs will beterminated and so will a long history of tradition. Pors-grunn porcelain factory was founded in Porsgrunn in 1885,on the south-coast of Norway. For more than 125 years,the factory has produced high-quality china, with inspira-tion and designs from several well-known artists. Unionrepresentative Dag Augestad did not want to make anystatements to the press before last Monday. Manager ofsales and operations, Helena Teigen also refused to com-ment on the information.

NORWAY|LABOUR

Oil strike called offThe strike among 114 employees in Baker Hughes, anoilfield services company, was called off late on 15 Juneevening, Norway Post reported. The strike was cancelledjust after 4 a.m., when the union (SAFE) and the Nor-wegian Oil Industry Association (OLF) had reached acollective agreement within the oil service area. "We arevery pleased that we have reached an agreement withSAFE so that a strike ca be called off," said HavardHauan on behalf of OLF. "The new agreement createsa positive foundation for further collaboration." 4,500members within Industri Energi, a union for the oil sec-tor, are currently covered under the collective oil serviceagreement. 114 SAFE members at Baker Hughes willbe in included in the new agreement, which will beidentical to the existing agreement between OLF andIndustri Energi. According to Aftenposten, OLF haspreviously stated that the strike costs 30 million Nor-wegian crowns per day.

Collaboration on F-35 Joint Strike MissileNorway and the USA agree to collaborate on integration ofJoint Strike Missile ( JSM) on F-35. On 15 June, the Nor-wegian Defence Minister Espen Barth Eide announced thatthe Norwegian Government has decided to start the processto finalize the development of Strike Missile ( JSM)and in-tegration on F-35. The decision comes as a consequence ofUS Secretary of Defense Leon Panetta’s confirmation of USsupport for integration.

Through the development of the Naval Strike Missile(NSM), the Norwegian Armed Forces has established Nor-way's major defence contractor and maritime automationsupplier, KONGSBERG and other Norwegian industry inthe top tier as a supplier of long-range, precision strike mis-siles that will meet military requirements in a 20 to 30-year

perspective. “It is of great importance that the US authoritieshave confirmed their support for the integration of the JSMon the F-35. In doing so, the operational needs of the Nor-wegian Armed Forces and international partners will be met.Furthermore, this will be an important contribution to theindustrial content of the F-35 procurement. JSM is the worldleader in its category and further strengthens the F-35's op-erational capacity", states Walter Qvam, CEO of KONGS-BERG.

As part of the JSM development programme, new opera-tional capabilities will be developed and tested for subsequentupgrading of KONGSBERG's Naval Strike Missile (NSM).The NSM is now in production for the Armed Forces ofPoland and Norway.

NORWAYMILITARY

Tau pow! Roche, AC Immune enter pact on Alzheimer's drugSwiss drug giant Roche Holding AG, boosted its investmentin drugs for Alzheimer's disease, buying the rights to a newtype of experimental drug from Switzerland's privately heldAC Immune SA.

The treatment aims to attack the disease by blocking a pro-tein in the human body called tau, which can form twistedfibers inside brain cells that many scientists believe are a causeof Alzheimer's. Roche is already developing another drug dis-covered by AC Immune that targets another believed cause ofthe disease: sticky substances in the brain called amyloid.

Roche said it would pay AC Immune an undisclosed up-front fee and up to 400 million Swiss Francs in additional pay-ments if the development partnership yields a successful drug.AC Immune will also receive royalties on sales of any drugsthat make it to market. Under the deal, Roche and AC Im-mune will together choose several experimental tau-targeteddrugs to put through testing.

Analysts believe that a drug that could combat the underly-ing causes of Alzheimer's--and slow or reverse its course--couldrack up sales as large as $20 billion a year. But many experi-mental compounds to date have failed in testing.

AC Immune's tau drugs aim to prevent the tau protein frommalfunctioning and forming so-called "tangles" in the brain.Other companies investing in tau-targeted drugs forAlzheimer's include Bristol-Myers Squibb Co. (BMY) andprivately held TauRx Pharmaceuticals, based in Singapore.

Roche has traditionally focused largely on cancer drugs but

is targeting Alzheimer's as one of its chief priorities for thecoming years. Alzheimer's is the leading cause of dementia inthe elderly. The World Health Organization this year reportedthat caring for people with dementia currently costs $604 bil-lion a year globally. The WHO estimated that as the globalpopulation ages, cases of dementia will double by 2030 to 65.7million people.

SWITZERLANDPHARMA

Baer offer bait to Bank of AmericaSwiss private bank Julius Baer said itwas in talks about buying Bank ofAmerica's non-US wealth manage-ment operations, reported to be worthup to $2 billion, Economic Times re-ported. "Given the early stage of thesediscussions, the outcome is entirelyopen," Baer said last Tuesday.

A news channel had reported lastMonday that Julius Baer was close to adeal to buy the unit.

Reuters reported in April that Bankof America had put its wealth manage-ment unit outside the United States upfor sale as the business, which manages

$90 billion for rich clients, was not largeenough to generate sufficient income.

Credit Suisse and Royal Bank ofCanada were also believed to be amongthose who put in initial bids to buy thebusiness, sources said last month.

Julius Baer was seen as keen on someof BofA's units in Europe, the MiddleEast, Latin America and Asia excludingJapan, the sources, who had knowledgeof the matter, told Reuters then.

Julius Baer has been on a hunt for ac-quisitions since it missed out in No-vember on buying private a majoritystake in Swiss group Sarasin, which

went to Brazilian-Swiss private bankSafra for $1.1 billion.

A BofA deal would be the biggest inthe wealth management industry sinceDutch group ING sold its privatebanking assets in Europe and Asia in2010 to Julius Baer and Singapore'sOversea-Chinese Banking Corp, re-spectively, for a total of about $1.9 bil-lion. Consolidation in the wealthmanagement industry has been a majortheme since the 2008 financial crisis, asan increase in costs and regulationforces players to sell off units that servethe rich.

SWITZERLANDBANKING

Research director Jens Pahnke looks at a microscopic cut of ahuman brain at the laboratory for neurodegeneration disease ofthe University of Rostock, in Rostock.| EPA/BERND WUESTNECK

CROATIA · ALBANIA · SERBIA · BiH

New Europe | Page 25CANDIDATES24 - 30 June, 2012

ALBANIA | RELATIONS

Priorities of Albanian CoE chair-manship presented to OSCESpeaking in Vienna, Albanian Deputy Prime Minister andForeign Minister Edmond Haxhinasto in his capacity of theChairman of the Committee of Ministers of the Council ofEurope, outlined his country’s Chairmanship priorities andhighlighted areas for further strengthening co-operation be-tween the two organisations. “The continuation of the en-during partnership between the Council of Europe and theOSCE is instrumental to the realisation of a Euro-AtlanticSecurity Community based on the universality of the valuesof democracy and rule of law,” said Haxhinasto. He addedthat to realise the aforesaid vision, concrete measures are re-quired to improve co-operation in the field of elections, inthe protection of national minorities, in combat against in-tolerance and discrimination, terrorism and trafficking inhuman beings, while preserving complementarity and avoid-ing duplication. According to him, assistance to Mediter-ranean countries in democratic transition was another areawhere both Council of Europe and OSCE could cooperateand entail an incredible potential for success and impact.Haxhinasto highlighted “intercultural dialogue and toler-ance, especially for the younger generation,” as a priority forthe Albanian Chairmanship. Other priorities outlined byhim include local and regional democracy, the protection ofhuman rights, including children’s and women’s rights anddeepening regional integration in the Western Balkans.

BiH | EU

EU police mission to leave BiHThe EU decided to bring to an end its police mission inBosnia and Herzegovina (BiH). The mission carried out itstasks in assisting the country to stabilise after the Balkanconflicts and will withdraw on 30 June, according to an EUofficial. "This mission was quite significant, because it wasthe first ESDP mission that we launched and we were learn-ing by doing," said Maciej Popowski, deputy secretary gen-eral of the EU's diplomatic service. The mission in BiH isthe first police mission formed by the EU. It was deployedin 2003 to replace a similar UN operation. One of it's jobswas to train local forces. In 2004, there were up to 880 EUpolice officers in BiH. Now, before departing, the number ofofficers came down to about 80. "We are leaving from Bosniawith the conviction that we did a good job," Popowskiadded. The engagement of the European Union in BiH isnot over yet, the police operation is officially ending, but Eu-ropean military mission will still participate in the country.

CROATIA | DIPLOMACY

Zagreb to help Tirana in EU accessionCroatian Deputy Prime Minister, Branko Grčić, met Euro-pean Integration Minister of Albania, Majlinda Bregu, andoffered help and support in Albania's EU integration. Grčićpledged to share the knowledge and experience gathered inthe Croatian EU accession process. Minister Bregu welcomedthe involvement of Croatian authorities and stressed the co-operation between two countries was exceptionally good. Sheemphasised the importance of participating in and develop-ment of regional projects. Regional development ministerGrčić, presented the activities of his ministry and shared theknow-how on the EU funds, and plan and programme ofstructuring and reforming the system to use EU funds. Bregustressed that all the tips, knowledge and experience of Croa-tia would be extremely important and invaluable for Albaniain overcoming challenges in the accession process. Ministersdiscussed specific programs in which both countries partake,as well as areas of possible future cooperation.

The EU may soon start testing theEuropean commitment of newlyelected Serbian president TomislavNikolić. Following his recent visit toBrussels when he reportedly ex-pressed his willingness to talk withKosovo officials, other than thePrime Minister Hashim Thaci, thereis speculation that the EU is plan-ning a meeting with Kosovo's presi-dent, Atifete Jahjaga.

The European Parliament rappor-teur on Serbia, Jelko Kacin, said thatthe Serbian president might be readyfor a meeting with his Kosovar coun-terpart. However, it remains unclearunder which institutional frameworkwould the meeting take place andunder which designation wouldKosovo be represented there.

The EU mediator in the dialoguebetween Belgrade and Pristina,Robert Cooper, visited Belgrade on20 June and met with the advisor ofthe Serbian minister for foreign af-fairs. Cooper also met with the chiefSerbian negotiator in the dialoguewith Pristina, Borislav Stefanović.

Nikolić announced that negotia-tions with Pristina should be led bythe next Serbian prime minister, andStefanović confirmed that the nextstage of the dialogue would be heldon a higher level of “either the primeministers or presidents”.

There have been numerous specu-lation in Serbian media about thenew, additional conditions the EUhas in place for Serbia, but bothKacin and a spokeswoman of the EUHigh Representative for Foreign Af-fairs and Security Policy, Maja Koci-

jančič, unequivocally denied them.Cooper's visit is unusual in many

ways. He visited Belgrade less than aweek after Nikolić's visit to Brussels,while Serbia still does not have a gov-ernment and its negotiating team amandate to engage in any concretetalks, and while the president is at-tending the Rio+20 conference.

Granted, the EU administrationfaced a barrage of fire from media afteran embarrassing video of CatherineAshton and Cooper both being flab-bergasted not knowing what Serbianpresident looks like, appeared follow-ing Nikolić's visit.

Cooper also visited Kosovo to meetwith Pristina's negotiating team, aswell and to present the same roadmapof task which should be fulfilled by theend of the year, especially realisation ofthe agreements already reached in theframework of the dialogue in Brussels.

Sudden EU interests over the Ser-bian president's involvement in ne-gotiations with Pristina have atwofold effect. Primarily, as a litmustest of Nikolić's dedication to Euro-pean values and his country's inte-gration. It has been his practice toflip-flop on many rather sensitive is-sues in Serbia and present two differ-ent, sometimes even mutuallyexclusive or opposing views at homeand abroad.

Secondly, the direct involvementof Nikolić in relations with Kosovo,and a potential meeting withKosovo's president could facilitatenegotiations on forming a govern-ment in Serbia and strengthen thatgovernment's position for future di-

alogue with Pristina.Though it is obvious that in order

to advance its European integration,Serbia will have to make certain con-cessions regarding Kosovo, Nikolićwon the elections with the policy offull Serbian sovereignty on Kosovo.

With the likely scenario of a polit-ical cohabitation in Serbia, where thegovernment would have the respon-sibility to negotiate both withKosovo and the EU, and the presi-dent would have the moral high-ground to criticise every decision onthis sensitive subject, Nikolić's in-volvement in the dialogue withPristina seems inevitable.

PR adviser to Kosovo's PresidentAtifete Jahjaga confirmed that shewould be ready to meet with Nikolić,as well as with anyone else, as long asit is in her country's interest. Pristinastressed that “the dialogue is the onlyalternative for two countries whichwent through a war”.

As a part of preparations for an el-evated level of the dialogue, Pristinadaily Koha Ditore reported that thedeputy prime minister and chief ne-gotiator with Belgrade, Edita Tahiri,has been sacked by the prime minis-ter, who met with Cooper accompa-nied by EU integrations minister,Vlora Çitaku.

Cooper himself did not have theeasiest visit to Pristina, as he waspelted with tomatoes by a crowedgathered at a rally organised by'Self-determination' group whichobjects the dialogue with Belgrade,insisting on the recognition ofKosovo's independence.

EU to reshape Belgrade-Pristina dialogue?

SERBIA|KOSOVO RELATIONS

Catherine Ashton and Robert Cooper have a new plan for Belgrade-Pristina dialogue? | EPA/SALIH ZEKI FAZLIOGLU

TURKEY · FYROM · MONTENEGRO

Page 26|New Europe CANDIDATES24 - 30 June, 2012

MONTENEGRO|LOANSEBRD delegation meets in MontenegroDelegation from the European Bank for Reconstruction andDevelopment’s (EBRD) Board of Directors recently paid anofficial visit to Montenegro. The visit is part of a regular se-ries of consultations that enable EBRD Directors to obtainlatest information on developments in the countries in whichthe Bank invests. The purpose of the visit is to get an updateon the priorities of the Montenegrin economy and the ex-pected role of the EBRD in the two countries. The delega-tion met with Montenegro's Prime Minister Igor Luksic andFinance Minister Milorad Katnic, Montenegro Times re-ported. At the meeting, Luksic briefed the EBRD represen-tatives on Montenegro's track record related to the economyrecovery, stabilisation of public funds, implementation ofstructural reforms and plans for more balanced developmentof the state. He expressed his confidence that in the previousperiod Montenegro has taken responsible, but tough deci-sions, with the view of renewing economic growth, economydiversification and attracting foreign investments. Ministerfor Foreign Affairs and European Integration Milan Rocenhosted the EBRD delegation. He thanked EBRD for the as-sistance and support to Montenegro in the IntegrationProcess and underlined that the cooperation with the EBRDdirectly corresponds to the Government's core external andinternal priorities and stressed the importance of further de-velopment of this cooperation.

MONTENEGRO|LOANIFC lends €10.7mnto city of PodgoricaIFC, a member of the World Bank Group recently an-nounced a loan of €10.7mn to Podgorica. The fund wouldrefinance a bridge construction loan, supporting the contin-ued development of infrastructure in Montenegro, Mon-tenegro Times reported. This new loan is part of a multi-yearpartnership with the city of Podgorica that includes IFC co-financing road investments, helping refinance debt, and pro-viding advisory services to help the city improve its roadmanagement policies. It was noted that Podgorica took theoriginal loan amid 2009 crisis. Miomir Mugosa, Mayor ofPodgorica said that Podgorica’s top priority is developmentof infrastructure. According to Migosa, joining hands withIFC enables Podgorica to continue working on the devel-opment of road infrastructure during a difficult time in thefinancial markets. “IFC has a strong partnership with thecity of Podgorica and we hope to expand our support inother parts of Montenegro,” said Dimitris Tsitsiragos, IFCVice President for Europe, Central Asia, the Middle Eastand North Africa. The financing provided to Podgorica re-flects IFC’s strategic focus on enabling investments in mu-nicipal infrastructure in the region.

FYROM|DIPLOMACYGruevski discusses economic projects in Moscow A FYROM government delegation led by Prime MinisterNikola Gruevski recently met with Moscow Region Gov-ernor Sergey Shoigu. Gruevski is accompanied by DeputyPrime Minister and Finance Minister Zoran Stavreski,Economy Minister Valjon Saracini and Minister withoutPortfolio in charge of Attraction of Foreign Investments BillPavleski, MRTOnline reported. It was learnt from the talksthat FYR FYROM and the Russian Federation, includingthe Moscow Region, foster excellent relations. Gruevski in-formed his interlocutor about the economic objective of thevisit to Russia and the meetings with Russian companiesthat are potential investors in FYROM, the government saidin a press release.

Speaking at a meeting in Istanbul,Turkish Economy Minister ZaferCaglayan said that General Electric Co.(GE) will invest $900mn in Turkey’saviation, energy, health, transportationand infrastructure sectors, over the nextthree years, Zaman reported. The min-ister said the new investments reflectedinvestors' appetite for Turkey's recentlyintroduced incentive package.

Accompanied by GE Vice Chair-man John Rice, Caglayan met with re-porters to introduce the US giant'supcoming investments. Part of the in-vestments will include the productionof parts to generate wind energy, theminister added. Recalling that Turkey'selectricity demand has increased ex-ceeding expectations, he said it would

be “logical” for GE to invest in thecountry's energy sector. The US com-pany will also boost its strategic coop-eration with state-run locomotivemanufacturer Turkiye Lokomotif &Motor Sanayi AS, known as Tulomsas,Caglayan said, adding that GE willbenefit from a wide-ranging package ofincentives offered to investors to boostlocal production. The incentives are tar-geted at narrowing the country'swidening current account deficit(CAD).GE's Turkey affiliate, GeneralElektrik A.S., could start manufactur-ing turbines and parts in Turkey as well.Turkey's Locomotive and Engine In-dustry Corporation (TULOMSAS)and GE currently jointly manufacturehigh-tech locomotives in Eskisehir.

“We are focusing on infrastructureand innovation in Turkey. The companyis negotiating with universities on plansfor research and development and willprovide specifics in the next fewmonths. It was reported that GE,which sold an 18.6% stake in TurkiyeGaranti Bankasi AS (GARAN) toSpain's Banco Bilbao Vizcaya Argen-taria (BBVA) SA for $3.78bn in 2010,has a 46% stake in Turkish AerospaceIndustries, the Ankara-based maker ofaircraft parts known as Tusas, and ownshalf of Gama Enerji AS, a Turkishpower producer, among its six unitswith 600 employees in Turkey. The UScompany also makes health-care meas-urement and imaging devices, lightingequipment and power turbines.

GE to invest $900mn in Turkey by 2015

TURKEYENERGY

Herbert Ajayi, the President of the Nigerian Association ofChambers of Commerce, Industry, Mines and Agriculture(NACCIMA), was recently represented by the SecondDeputy National President, Bassey Edem at the opening cer-emony of the first Turkish Products expo, Zaman reported.He said at the event that trade volume between Nigeria andTurkey stood at €1.3bn. Citing the continued trade ties be-tween the two countries, he said that trade volume had im-proved to a great extent.

He said that Nigeria's main imports from Turkey wereclothing, food items, engine and automobile parts, whileTurkey was importing sesame seeds, raw and semi-processedleather as well as rubber. The aim of the expo is to boost bi-

lateral ties between the two countries, said Ajayi. Accordingto him, the world was gradually becoming a global village dueto adoption of trade liberalisation policies by nations.

The Turkish Ambassador to Nigeria, Ali Rifat, said the ex-hibition was organised to demonstrate the business opportu-nities offered by Turkey. He noted that Turkey si enticingforeign investors and has become the fastest growing econ-omy among members of the Organisation for Economic Co-operation and Development. He informed "Our per capitaincome increased to over $10bn in 2010. Turkey's GDP isapproaching $1trl level," he said. He assured that businesswith Turkey means that one is in safe hands as it is recog-nised as an emerging economy with global reach.

Ankara, Abuja trade volume up to $1.3 bn

TURKEYTRADE

The Turkish Central Bank recentlyfor the first time hosted the IslamicFinancial Services Board (IFSB)Summit. The summit which wassponsored by Kuwait Finance HouseGroup (KFH Group) garneredrenowned Turkish circles along withChairman of Liquidity ManagementHouse Emad Al-Munaie, officialsfrom subsidiary units in Turkey,

Malaysia and Bahrain and share-holders, legislators and supervisoryauthorities, Zaman reported. Theydiscussed the challenges facing Is-lamic banking.

The aim of the annual is to attractparticipants from all sectors of finan-cial services industry from all overthe world. Speaking at the event, theGovernor of Central Bank of Turkey

underlined the importance of mak-ing structural reformations that canmitigate regular economy turbu-lences; especially amid the economicinstability of the Euro region. CitingIslamic population in Turkey, Istan-bul's Stock Market Exchange Chair-man and CEO said that Islamicfinancing has great potential to pros-per in Turkey.

KFH sponsors IFSB 9th summit at Istanbul

TURKEYBANKING

Rows of wind turbines. GE plans to invest in Turkey’s aviation, energy, health, transportation and infrastructure sectors. |EPA/LARRY W. SMITH

UKRAINE · MOLDOVA · BELARUS

New Europe |Page 27NEIGHBOURHOOD24 - 30 June, 2012

MOLDOVA|EU AFFAIRSChisinau, Brussels to ink free trade deal in late 2013Moldova’s Deputy Economics Minister Octavian Cal-mac has said that Moldova and the European Unionwill conclude the negotiations on the creation of a Deepand Comprehensive Free Trade Area in late 2013. Thedocument is to be subsequently ratified by Moldova andthe 27 member states of the European Union in order toenter into force in late 2014, when the current Agree-ment on Autonomous Trade Preferences expires. Theofficial also spoke about the progress recorded withinthe second round of talks on a Deep and Comprehen-sive Free Trade Agreement between Moldova and theEuropean Union, held in Brussels on 11-15 June. Cal-mac said that the participants in the negotiationsreached consensus on all 13 chapters on the agenda ofthe talks. The participants in the next round of negoti-ations, due in Chisinau in September, will discuss thecommercial protection tools that Moldova will be enti-tled to use in order to protect the local agriculture pro-ducers from imports. The deputy prime ministerdescribed this subject as sensitive, just as the rules on thegoods' origin and the customs fees. Calmac urged theinterested companies to present their stance on the sub-jects that will be discussed in September. The creation ofa Deep and Comprehensive Free Trade Area, the im-plementation of reforms of the judicial system and theanti-corruption measures, which will make it possible tohave a visa-free regime with the EU, are part of the draftAssociation Agreement between Moldova and the EU.

BELARUS|ECONOMYBelarus doesn't abandon issue of EurobondsThe Belarusian authorities are considering the possibilityof entering the markets with Eurobonds next year. FinanceMinister Andrei Kharkovets said on 21 June at the pressconference in the House of Representatives that Belarusmight issue Eurobonds in 2013. He said that in case ofproblems the country will need foreign loans, includingthrough the issuance of Eurobonds. According to theMinister, Belarus intends to enter all financial markets, butwill focus on the more efficient allocation of securities andmore available tools. "We will follow the way of attractingthe least expensive resources in terms of maintenance," saidthe minister, BelTA reported.

BELARUS|DIPLOMACYBelarus ready to expand co-operation with CambodiaBelarus President Alexander Lukashenko met the Presi-dent of the National Assembly of the Parliament of Cam-bodia Heng Samrin, saying the current visit of theCambodian delegation to Belarus is the beginning of anew stage of co-operation between the two countries.Diplomatic relations between Cambodia and Belarus wereestablished 17 years ago. At the moment, Belarusian prod-ucts are supplied to Cambodia via third countries, and thissignificantly increases the final cost of goods and services.Samrin noted the aspiration of Cambodia to further deep-ening and consolidation of the relations with Belarus. Thedelegation was expected to visit a range of enterprises andhold a contact exchange for business circles. The possibil-ity of the creation of a free trade zone between the coun-tries of the Common Economic Space and South-EastAsia, as well as a number of joint investment projects, wasdiscussed. It is planned to get the supply of Belarusianequipment and potash fertilizers to the market of theAsian state going.

The Ukrainian authorities are not going to solve the problem onthe liberation of the former prime minister Yulia Tymoshenko,despite repeated calls by Western politicians. Moreover, Ukrain-ian officials continue to put pressure on the Ukrainian oppositionleader. For example, commenting on the prospects of Timo-shenko’s release, Justice Minister Alexander Lavrynovych said on20 June that she first must apply to Yanukovych with that request.He said the law provided for a minimum term of punishment.“Personal appeal, if it concerns the situation of health or other is-sues, the president has the right to sign a decree to pardon," hesaid, alluding to the fact that Tymoshenko has not asked forYanukovych to pardon her.

Meanwhile, Tymoshenko is threatened with another charge.The General Prosecutor's Office is ready to transfer to a courtcase about the murder of the national deputy of Ukraine EvgenyShcherban back in the 90s, said First Deputy Prosecutor GeneralRenat Kuzmin on 18 June.

"We have sufficient evidence to support the involvement of Ty-moshenko in the murder, and we intend to present her with theaccusations. Her lengthy illness is an obstacle that prevents bring-ing these charges forward. It does not allow us to carry out ap-propriate investigations. We have enough data to demonstrateshe planned to eliminate Shcherban. There is evidence for thetransfer of money from accounts controlled by her, there is directtestimony of witnesses who called her an organiser and financierof the murder. We have a statement of Ruslan Shcherban, whoblame her for the death of his father," Kuzmin claimed.

In turn, supporters of Tymoshenko accused law enforcementofficers that they were ordered by Yanukovych to eliminate theformer prime minister from Ukraine's political life. Thus, herlawyer Sergei Vlasenko on 20 June in an interview with Ukrain-ian media announced that Kuzmin back in 2009 during the pres-idential campaign, warned Tymoshenko that he was ready to raisethe matter Shcherban. Vlasenko noted that the words of Kuzminmade it hard to revive the case against Tymoshenko, includingthe murder of Shcherban.

It became known this week that Tymoshenko will be sum-moned to court on 25 June to be questioned about the activitiesof her former company United Energy Systems of Ukraine. Atthe same time a special committee of the Ministry of Health rec-ommended that the court of Kharkov to provide "adequate and

very comfortable to stay in the room for Tymoshenko during thecourt hearing on the criminal case."

Although it is known that Tymoshenko does not move andalmost always lies in a hospital room and her health is deteriorat-ing. However, a German political expert Alexander Rar, com-menting on the troubles of this trial, in a comment Ukrainianmedia ensured that the European community will not accept acourt in which Tymoshenko will be brought in on a stretcher andwill be tried tied to a bed.

Yanukovych is not going to release Timoshenko

UKRAINE HUMAN RIGHTS

The government of Belarus does notfully comply with the minimum stan-dards for the elimination of trafficking,despite making significant efforts to doso, says the US Department of State inits 2012 Trafficking in Persons Report,cited by BelaPAN.

Belarus is a source and transit coun-try for women, men, and children sub-jected to sex trafficking and forcedlabour, the report says. Belarusianwomen and children are subjected tosex trafficking in Russia, Germany,Poland, Cyprus, Italy, Egypt, theCzech Republic, Lithuania, Spain,Greece, Belgium, Turkey, Israel,Lebanon, the United Arab Emirates,and within Belarus.

"Reports continued of women from

low-income families in Belarus beingsubjected to forced prostitution inMinsk," the report says. "Belarusianmen, women, and children are foundin forced labour, including forced beg-ging in foreign countries, such as Swe-den, as well as in forced labour in theconstruction industry and other sectorsin Russia and Belarus.

Belarusian single, unemployed fe-males between the ages of 16 and 30and without higher education are atthe greatest risk of becoming victimsof human trafficking. Belarusian chil-dren aged 16 and 17 are found in sextrafficking within Belarus and in Rus-sia. Belarusian men seeking workabroad are increasingly subjected toforced labor. Traffickers often used in-

formal social networks to approachpotential victims."

Despite its efforts, the Belarusiangovernment did not demonstrate evi-dence of increasing anti-trafficking ef-forts over the previous reportingperiod, which is why Belarus is placedon Tier 2 Watch List for a second con-secutive year, the report says.

According to the US State Depart-ment, the Belarusian government'semphasis on anti-trafficking effortsshifted from prosecution and protec-tion efforts to prevention during thereporting period. "Over the same pe-riod, there was a continued steep de-cline in victim identification,trafficking investigations, prosecutionsand convictions," the report says.

US: Belarus need to fight human trafficking

BELARUSTRAFFICKING

Jean-Pierre Lecoq, left, mayor of the 6th district of Paris speakswith Eugenia Tymoshenko (C), the daughter of Ukraine’s im-prisoned former prime minister Yulia Tymoshenko and NathaliePasternak, right, head of the representative Committee chair ofthe Ukrainian community in France on the front of the Paris 6thdistrict city hall, 15 June 2012. | AFP PHOTO/JACQUES DEMARTHON

KAZAKHSTAN · TAJIKISTAN · TURKMENISTANPage 28 |New Europe NEIGHBOURHOOD24 - 30 June, 2012

TURKMENISTAN|BUSINESS

US business to expand presence in TurkmenistanTurkmen President Gurbanguly Berdimuhamedov recentlymet with Executive Director of the Turkmen-AmericanBusiness Council Eric Stewart and Vice-President of“Chevron” company Jay Pryor, in Ashgabat, Turkmenistan.rulearnt from the press service of the President of Turkmenistan.In the course of talks, the Turkmen Head said that the coun-try strongly adheres to complete the modernisation of itseconomy by actively attracting the best international practices,with special emphasis to the comprehensive development ofthe Turkmen-American relations. It should be noted that re-lations between the two countries are based on long-standingexperience of fruitful co-operation and tradition friendly ties.He also expressed the interest of Turkmenistan to deepen themutually beneficial business ties with major US companies.According to him, fruitful co-operation with these compa-nies would yield effects on the development of nationaleconomies of the two friendly countries. The parties discussednew opportunities for co-operation in the gas sphere and cur-rent joint projects. They also noted the importance of regularbusiness meetings, business forums and exhibitions of prod-ucts of American companies, organised annually jointly withthe Turkmen-American Business Council. The sides outlinedtrade, economic and energy spheres, information technolo-gies and telecommunications, agriculture and some otherssectors as opportunities for implementing new joint projects.

TURKMENISTAN|DIPLOMACY

Ankara, Ashgabat to boost inter-parliamentary tiesDuring the visit to Ashgabat, Chairman of the Grand Na-tional Assembly of Turkey Cemil Cicek was recently receivedby Turkmen President Gurbanguly Berdimuhamedov, Turk-menistan.ru reported. In course of talks, the parties exchangedviews on the status and prospects of bilateral co-operation.The Turkish guest said that inter-parliamentary co-operationplays an important role in developing positive, equal and mu-tually beneficial relations between the two countries. TheTurkish delegation also had a meeting at the Mejlis and theMinistry of Foreign Affairs of Turkmenistan. The parties dis-cussed ways for further promoting effective co-operation. De-velopment of inter-parliamentary relations is an essentialfactor in strengthening the traditional friendship and co-op-eration between the two countries.

TAJIKISTAN|DRUG TRAFFICKING

US backs Tajik counter-trafficking effortsInternational Organisation for Migration (IOM) in partner-ship with the Inter-Ministerial Commission for CombatingTrafficking in Persons of Tajikistan recently organised a sem-inar, Asia-Plus learnt from the US Embassy in Dushanbe.The financial assistance for the seminar was provided by theUS Agency for International Development (USAID). Theaim of the seminar is to help 30 representatives of Tajikistan’sdiplomatic and consular personnel of the Ministry of ForeignAffairs of Tajikistan, Migration Service and Tajik Diasporaleaders abroad, strengthen their abilities to detect potentialcases of human trafficking, identify victims, and refer them tothe relevant governmental and civil society organisations forassistance was held here on June 9-10. It should be noted thatTajikistan is a country of origin for labour and sex traffickingand it is crucial that embassies, consulates, migration servicesand Diaspora organizations abroad combat the trafficking ofTajik nationals to destination countries. Officials in these or-ganisations are required the necessary skills to co-operate withinternational and local organisations working to combathuman trafficking.

The Asian Development Bank(ADB) recently announced a grant of$6mn to help Tajikistan build its abil-ity to prepare for and tackle the neg-ative impacts of climate change,Asia-Plus learnt from a press releaseissued by the ADB Tajikistan Resi-dent Mission (TJRM). The grantstems from the Pilot Programme forClimate Resilience of the StrategicClimate Funds. The Committee forEnvironmental Protection and theState Hydrometereological Servicesare acting as the executing agencies.The Programme is expected to becompleted by the end of 2016.

Makoto Ojiro, Director of Envi-ronment, Natural Resources andAgriculture Division at ADB's Cen-tral and West Asia Department saidthat within a short term, the grantwill help develop the technical abil-ity to produce weather forecast andclimate change information and inthe longer term, the improved under-standing of climate change will in-crease people’s and institutions’ abilityto meet any impending threats. It wasreported that climate induced disas-ters in Tajikistan which is most themost climate vulnerable country inCentral Asia, witnessed a rise in pastfew decades. This trend is expected to

continue with rising temperatureswhich are affecting glaciers, snow andice, threatening the communities thatdepend upon them and affecting do-mestic water supply, agriculture pro-duction and infrastructure.

The Building Capacity for ClimateResilience programme will help theCommittee of Environmental Pro-tection formulate a national plan toaddress climate change risks and de-velop a monitoring system to assessprogress towards climate resilience.The State Hydrometereological

Service will also receive support toestablish a climate modeling facilityand produce reliable information onweather and climate that can be eas-ily accessed by national and localusers.

Other government departmentsand agencies will also get assistanceto improve engineering guidelinesand develop policies to avoid lossesfrom climate change. Non-govern-mental organisations and vulnerablegroups will be assisted in formulatinglocal coping strategies.

ADB to help Tajikistan deal climate change

TAJIKISTANCLIMATE CHANGE

An Iranian delegation headed by Deputy Foreign Minister forConsular Affairs Hassan Qashqavi recently had talks at theForeign Ministry of Turkmenistan. The delegation and Turk-men officials discussed consultative contacts between the for-eign ministries of Turkmenistan and Iran, Turkmenistan.rureported.

They also stressed efficiency of partnership in the fuel andenergy and transport and communication sectors. Large scaleprojects in this content were implemented and in progress. Itwas learnt from the talks that Turkmenistan and Iran havegained considerable experience of efficient cooperation in trade,economic, cultural and humanitarian spheres, based on the ageold friendly and neighbourly relations between the two peo-ple. This was possible due to the recent meeting of Turkmen

President Gurbanguly Berdimuhammadov and Iranian Pres-ident Mahmoud Ahmadinejad' during the summit of theShanghai Cooperation Organisation.

Both leaders had discussed state and the prospects ofbilateral cooperation and exchanged views on topical is-sues of regional and international politics. Some projectsimplemented through joint collaboration of Turkmenistanand Iran includes the construction of the Dostluk reser-voir, the Tejan-Sarakhs-Mashad railroad, interstatepipelines and power lines.

At this stage, the implementation project referred to is theNorth-South rail project which takes in part of Kazakhstan.Asian Development Bank and Islamic Development Bankprovided support in construction of the railway.

Ashgabat, Tehran hold ministerial talksTURKMENISTAN DIPLOMACY

The Kazakh Ministry of Agriculture re-cently stated that the country has alreadyshipped 11mn tonnes of grain for exportwith another 3mn to be shipped by Sep-tember of this year, Gazeta.kz reported.It was reported that 7mn tonnes of grainis stored in the three main grain-sowing

regions of the country with local eleva-tors being 64% loaded.

The Ministry of Agriculture also re-ported that the saiga population in Kaza-khstan went up by 51,000 over the pasttwo years to have reached more than136,000 heads, a rise by 35% than last

year the latest aerial survey indicates. Yer-lan Nyssanbayev, Committee Chairman,Kazakh ministry of Agriculture, said thearea of distribution in 10 regions is about100 million hectares. A good indicatorwas contained in a group of 500 saigaswhich appeared in the Ayagoz region.

Kazakhstan to ship more grain by SeptemberKAZAKHSTAN

AGRICULTURE

Girls wash clothes in a river south from Dushanbe. The ADB recently announced a grant of

$6mn to help Tajikistan build its ability to prepare for and tackle the negative impacts of cli-

mate change. |EPA PHOTO EPA-DMITRY KHRUPOV

AZERBAIJAN · KYRGYZSTAN· UZBEKISTANNew Europe | Page 29NEIGHBOURHOOD 24 - 30 June, 2012

KYRGYZSTAN|DIPLOMACYBishkek, Beijing to deepen security co-operationKyrgyz President Almazbek Atambayev recently metwith visiting Ma Xiaotian, deputy chief of the general staffof China's People's Liberation Army in Bishkek. Ma is inBishkek for an official goodwill visit following his atten-dance in SCO anti-terror military exercises in Tajikistan,Irinnews.org reported. The Kyrgyz head said that hiscountry is keen to strengthen co-operation with China invarious fields including security. He stressed that Kyr-gyzstan is willing to strengthen communication and co-ordination with China within bilateral and multilateralframeworks to further strengthen pragmatic co-operationin various fields including defense and security. “We havereceived evidence that China is a country which earnestlywants to see the stability and economic development ofKyrgyzstan,” said Atambayev.

KYRGYZSTAN|PROTESTSOrganisations to resume Osh protest actionsThe members of youth movement from Kochkor-Atatown recently stated that in Kyrgyzstan, microcredit or-ganisations’ borrowers living in the south plan to resumeprotest actions, Irinnews.org reported. They plan tolaunch rallies after completion of mourning events in ho-nour of those dead during the Osh events in June 2010.The organisation members called on to give debtors ex-tension on debt repayment for a month. However, theheads of microcredit companies keep on demanding toreturn loans. It should be noted that rallies against the ac-tivities of pawn shops and microcredit companies havebeen holding in Kyrgyzstan’s south from March.

KYRGYSTAN|ECONOMYEconomic growth need to be restored, says premierSpeaking at recent government session, Kyrgyzstan’s PrimeMinister Omurbek Babanov said that the governmentshould study and approve complex measures of restoringthe Kyrgyz economic growth pace, Irinnews.org reported.Some issues discussed at the session includes economicsituation in Kyrgyzstan, measures of ensuring economicgrowth and eliminating the consequences of the emer-gency situations. Food safety in the country was also dis-cussed. According to the premier proper implementationof all plans and programs are key elements in meeting thecountry's goals. He added that the structure of the Kyrgyznational economy should be diversified to avoid the de-pendence on particular companies. He also suggested es-tablishment of new enterprises in the country.

AZERBAIJAN|DIPLOMACYBaku, Karachi to boost bilateral tiesAzerbaijan's Ambassador to Pakistan, Dashgin Shikarovrecently stated that a comprehensive and concrete planwas being followed to increase bilateral trade opportuni-ties between Islamabad and Baku, news agencies reported.Shikarov said that both countries need to enhance bilat-eral trade. He said that Azerbaijan is willing to help Pak-istan overcome the growing problem of power shortagestressing that Khyber Pakhtunkhwa has a great potentialof power generation. In this regard, he said that Azerbai-jan is ready to assist Pakistan. In addition, Azerbaijan isalso planning to assist Pakistan in others sectors includ-ing oil and gas.

Babanov to visit Russia in July

On Russia day, Prime Minister of Kyr-gyzstan Omurbek Babanov and Headof Russian Government DmitriMedvedev during a phone conversa-tion discussed the visit of the former inJuly, Irinnnews.org reported. In courseof talks, both sides agreed on mutualvisits of experts for effective prepara-tion of the July negotiations. They also

discussed several actual issues of bilat-eral co-operation. Babanov also con-gratulated Medvedev with the Day ofRussia. Recall, earlier Ata Zhurt factionleader Kamchybek Tashiev asked sev-eral times why official Moscow refusedto accept Prime Minister. It was re-ported that official Moscow is going todiscuss issues on Kyrgyzstan’s obliga-

tions on earlier agreements such as sell-ing of 75% Kyrgyzgas OJSC shares,joint hydro energetic projects develop-ment, official Bishkek’s promise to give48% of Dastan Transnational Corpo-ration OJSC shares. Despite Babanov’sassurances, the aforesaid projects workfailed to fulfil. He also asked for a loanof $30m.

KYRGYZSTANDIPLOMACY

NATO and Azerbaijan recently had ameeting at NATO headquarters withinthe planning and review process, Azer-baijan's mission to NATO learnt fromnews agencies. The meeting took placeafter the visit of a group of NATO ex-perts to Azerbaijan on April 9-13. Part-

ner countries in the committee on polit-ical affairs and partnership were alsopresent at the meeting. Other partici-pants include representatives of theAzerbaijani Foreign Ministry, the De-fence Ministry, State Border Service, theInterior Ministry and Azerbaijan's Mis-

sion to NATO attended the meeting.Topics discussed include military re-forms conducted in Azerbaijan, mutualco-operation and issues of compliancewith NATO standards. It was reportedthat Azerbaijan's contribution to NATOoperations was hailed by the participants.

Azerbaijan, NATO discuss co-operation issuesAZERBAIJANDEFENCE

A Swiss delegation headed by Eric Martin, Head of the De-partment of Bilateral Economic Relations of the State Secre-tariat for Economy of the Federal Ministry of Economics,recently paid a visit to Tashkent. Within the framework of thevisit of the delegation, Tashkent hosted the sixth meeting ofthe Uzbek-Swiss Intergovernmental Commission on trade andeconomic co-operation, Uzbekreport.com reported.

At the event, the participants were acquainted with theprospects of bilateral co-operation in various sectors of theeconomy, investment potential of Uzbekistan, including inthe framework of FIEZ Navoi and SIZ Angren. Special em-phasis was paid to the possibilities and prospects of co-oper-ation in small business, chemical, food and pharmaceuticalindustries. The Swiss delegation were briefed with the po-tential of the tourism industry and the banking and financialsector of Uzbekistan. Various bilateral pacts govern trade andeconomic relations between Uzbekistan and Swiss Confed-eration, including "On trade and economic co-operation","On promotion and mutual protection of investments", "On

the avoidance of double taxation and the prevention of fiscalevasion on income and capital", "On the international roadtransport of passengers and cargo". Development of mutuallyadvantageous relations between the two countries is signifi-cantly favoured by the work of the Uzbek-Swiss Intergov-ernmental Commission for Trade and EconomicCo-operation, the last, fifth meeting, which was held in Bernin June 2010.

At the end of the work commissions, the parties signed pro-tocols and outlined the main directions of co-operation. Pref-erential treatment established between Uzbekistan and theSwiss Confederation. In 2011 the trade turnover between thetwo countries reached $107.1m and in first three months ofthis year mutual trade volume stood at $21.4m. Currently 91joint ventures with the Swiss capital operate in the Republic ofUzbekistan, including 25 companies with one hundred percentof Swiss investments, mainly in such sectors as machine build-ing, chemical, textile and food industries, production of con-struction materials and utensils, printing, trade and others.

Uzbekistan, Switzerland discuss investments UZBEKISTANTRADE

Kyrgyzstan President Almazbek Sharshenovich Atambayev (L) chats with Russian President Vladimir Putin in Beijing, 7 June 2012. The Kyrgyz premierplans to visit Russia in July. |AFP PHOTO/POOL/MARK RALSTON

RUSSIA · GEORGIA · ARMENIA

Page 30| New EuropeNEIGHBOURHOOD24 - 30 June, 2012

GEORGIA|MARKETGeorgian products to return in Russian marketAs part of campaign, Bidzina Ivanishvili, leader of Geor-gian Dream opposition coalition accompanied by leader ofOur Georgia-Free Democrats Irakli Alasania, who is incharge of Georgian Dream’s campaign in Samegrelo re-gion met with locals in several villages of Zugdidi district,Civil Georgia reported. He told the villagers that Geor-gian products would soon return to the Russian market,once he comes into power. Ivanishvili’s host complainedthat his family was not able to sell citrus since Russiaclosed its market for the Georgian products, GeorgianDream leader. In response, Ivanishvili said that reopeninga Russian market very soon, is not a problem. He alsoclaimed that Georgia’s President Mikhail Saakashviklicould also secure restoration of exports to Russia but henever had any such political intentions.

GEORGIA|DIPLOMACYUS diplomat comments on Georgia-Iran tiesRelations between Georgia and Iran were the main topicduring US-Georgia dialogue, said US ambassador toGeorgia, John Bass said to an audience at the AtlanticCouncil, Civil Georgia reported. The Washington basedexpert said it was good that Georgia lifting visa require-ments for Iranians to offer them the opportunity to travelto Georgia and see what is happening in neighbouringdemocracy. At same time, Bass said that Washington alsowants to prevent Georgia from becoming a hub wheretargets of international sanctions would find way to evadethose sanctions.

ARMENIA|LOANIMF approves fresh loans to ArmeniaNoting the positive economic outlook for Armenia, theInternational Monetary Fund announced the release of$50.7mn in fresh loan tranches to the authorities in Yere-van, Armenia Liberty.org reported. It was recalled that nJune 2010, IMF had launched in Armenian a three-yearlending programme worth $404mn. The two instalmentsare part of the aforesaid programme. Their disbursementreached $270mn the total amount of low-interest fundsallocated to the Armenian government and Central Bankunder that scheme. IMF hailed the Armenian authoritiesfor strictly adhering to macroeconomic policies favouredby the Washington-based fund, pointing solid growth andfalling inflation. IMF said in a statement, “The outlookfor 2012 and the medium-term is positive, but not with-out risks, particularly stemming from Europe and affect-ing Armenia via Russia.”

ARMENIA|DIPLOMACYYerevan to develop ties with EcuadorArmenian President Serzh Sargsyan recently receivedEcuador’s newly-appointed Ambassador to Armenia,Patricio Alberto Chavez Zavala, whose diplomatic resi-dence is in Moscow, Armenia Liberty.org learnt from thePresident’s Press Office. The President congratulated theAmbassador for commencing his diplomatic mission inArmenia and also wished him success. He also expressedinterest of Armenia to develop ties with Ecuador, expect-ing formation of an active cooperation. In turn, Ambassa-dor Patricio assured that he will do his utmost, during histenure, to develop relations between Armenia andEcuador.

Frowning and wearing a sober expres-sion during their remarks at a press con-ference, US President Barack Obamaand Russian President Vladimir Putinagreed on 18 June on the need for a po-litical process in Syria to prevent civil warin the violence-torn country, but theyshowed no concrete signs of narrowingtheir differences on tougher sanctionsagainst Damascus. "We agreed that weneed to see a cessation of the violence,that a political process has to be createdto prevent civil war," Obama said.

"From my point of view, we havefound many common points on thisissue (of Syria)," Putin said, adding thetwo sides would continue discussions.

Putin has offered little sign of soften-ing his stance on Syria. Though Wash-ington has shown no appetite for a newLibya-style intervention, Russia is reluc-tant to abandon its Syrian ally, a long-time arms customer, and risk losing itslast firm foothold in the Middle East, in-cluding access to a warm-water navybase. In their first meeting since 2009,Obama and Putin shared little eye con-tact and did not appear to express muchpersonal warmth following a two-hour

meeting on the sidelines of the G20summit.

US Ambassador to Russia Mike Mc-Faul said the chemistry between Obamaand Putin was “very businesslike” and“cordial.” McFaul added that there wasnothing extraordinary about the ex-change. “That’s just the way he looks,that’s just the way he acts,” McFaul saidof Putin.

However, Putin ended his brief re-marks before reporters with an invitationfor Obama to visit Moscow. Obama,who faces voters in five months, made asimilar offer. “I look forward to visitingRussia again, and I look forward to host-ing you in the United States,” Obamasaid. Obama has already nixed plans toattend the APEC summit in Vladivos-tok, Russia, in September because of hisre-election campaign.

During a March national securitysummit in Seoul, South Korea, Obamaaccepted an invitation from outgoingPresident Dmitry Medvedev to visit StPetersburg, Russia. Obama said heplanned to make the trip after the 2012campaign. But if he loses re-election, it’sunclear if that meeting will take place.

Putin also appeared pessimistic re-garding the US missile defence shield inEurope, stating that Obama's re-electionwould not end the dispute. He told re-porters that he thinks the missile defenceissue will not be solved regardless ofwhether Obama is elected or not. "Ithink that something can radicallychange only in the case if the US agreeswith our proposal which says that Rus-sia, Europe and US were equal partici-pants of this process," Putin said.

Putin went on claiming that he doesnot see anything that could change USapproach on the issue, as Washingtonhas been following the path of creatingits own missile defence for more thanone year. Putin pointed out that the onlysolution comes from United States whoshould agree to build the missile defencesystem jointly with Russia and the Eu-ropean Union. “This means all three par-ticipants would jointly be building thatsystem, and would be able to jointly as-sess threats, manage that system andmake decisions on its use,” he said. “Butthis does not mean we are unable toagree on some fragments of that jointwork. I think it is possible,” Putin added.

Obama-Putin G20 talks chilly

RUSSIA DIPLOMACY

When Vladimir Putin visits Israel this week, the Iranian nu-clear programme will top the agenda, news agencies reported."The message they [the Russians] will receive is that Israel can'ttolerate a nuclear Iran. Of course we prefer a diplomatic solu-tion, but we will use all means to protect Israel's survival," saidYacov Livne, head of the Russia desk at the Israeli ForeignMinistry. "We expect Russia, as a member of the SecurityCouncil, to demonstrate responsibility and help to prevent theIranian nuclear race," he said. "I think that will be the most im-portant subject, the central subject here next week."

Moscow has benefited from the Iranian nuclear programme,having built a $1bn nuclear reactor in Bushehr. At the sametime, Russia continues to participate in the international dia-logue with Iran. However, no agreement on Iran's controver-sial nuclear programme was reached during the latest round oftalks in Moscow. But technical experts from both sides haveagreed to convene in Istanbul, Turkey, on 3 June, to decide

whether there are grounds for further high-level negotiations.United Nations Secretary General Ban Ki-moon hopes that,

in advance of the forthcoming technical and political meetings,the parties strengthen their resolve to quickly achieve a nego-tiated solution that restores international confidence in an Iran-ian nuclear programme that could be deemed exclusivelypeaceful, Ban's spokesperson said in a statement.

The secretary general called on the six mediators on Iran'snuclear issue - Britain, China, France, Germany, Russia andthe United States - to continue negotiations with Tehran "withrenewed intensity and with the utmost flexibility."

The two-day Moscow talks ended on 19 June without abreakthrough. The European Union foreign policy chief,Catherine Ashton, who heads the group of mediators, andRussian Deputy Russian Foreign Minister Sergei Ryabkovboth said after the talks that there were still "significant differ-ences" between the sides.

RUSSIADIPLOMACY

Tel Aviv to press visiting Putin on Iran

US President Barack Obama, right, gives the floor to Russian President Vladimir Putin to speak after a bilateral meeting on the sidelines of the G20 sum-mit, Los Cabos, Mexico, 18 June 2012. |TOPSHOTS/AFP PHOTO/Jewel Samad

It is clear that the European Commission aretaking an unusual approach to engaging withcitizens. A few months ago DG Enlargementproduced a video that was quickly withdrawnafter thousands of people saw it as sexist, withthree swarthy foreigners looking to ravish awhite European girl.Did the commission learn anything from thatexperience? Of course not.The commission has just released anothervideo, “Science: it’s a girl thing” where threeslinky ladies gyrate and pull every flirty cliché inthe book, concentrating on highly relevant de-tails like their high heels. It looks like a crossbetween a video by Robert Palmer and BennyBenassi.“We want to overturn clichés and show womenand girls, and boys too, that science is not aboutold men in white coats," said Geoghegan-Quinn, European Research, Innovation andScience Commissioner.British scientist, Dr Ben Goldacre told NewEurope, “It's an appalling use of public moneyto promote crass sexist stereotypes. The mes-sage seems to be "women in science shouldwear shorter skirts". People in publicly fundedPR spend huge amounts of money trying topromote science, but what they produce is al-

most always this desperate, dumbed down con-tent, with no broad appeal, while real workingnerds are producing challenging content that isvery commercially successful. People are notstupid, patronising them is not the answer. “The video was quickly derided, although oneperson asked if it was done as an ironic joke, an

idea dismissed by Michael Jennings, EUSpokesman, “Commission doesn't really doirony. Hope was to get young people onto site.That seems to be happening!” To which, oneperson replied, “No. People are outraged andflocking in disbelief.”There were thousands of complaints, on the

video channel, Twitter and Facebook.In response, the entire EU Spokesperson serv-ice disappeared from the social networks.Mariana Delfino-Machín pleaded, “Please re-think your awful, sexist campaign. As a womanand a scientist, I feel insulted. And am sure mypresent and future students would too.”Two psychologists stated the obvious, “if youwant women to take science seriously, it mighthelp if you took women seriously.”There has been one unannounced change. Onthe Facebook page for the project the intro-duction has been altered while people were ex-pressing their anger. It used to say, “Scienceinspires, enlightens and changes our world. Itis the basis for our cosmetics, fashion, music andso much more.It now reads, “Science inspires, enlightens andchanges our world. It is the basis for our med-icine, transport, energy, and so much more.”As with the earlier taxpayer funded video forDG Enlargement, and now this, people have aright to know how on earth, and who author-ized this use of taxpayers’ money? Who thoughtit appropriate?Will the Commission be accountable for thisdisaster, or will they carry on without giving adamn. Again.

KASSANDRAThere is one place in the EU whereGreece and Germany are getting alongjust fine

New Europe | Page 3124 - 30 June, 2012

[email protected]

Once Upon A Time in London...

Follow me on twitter @Kassandra_NE

The bureau of the European Parliamentgathered to discuss the future of the un-watched and unloved channel, costing upto €9 million a year which soft soaps thevanity of MEPs.For many years the publically fundedbroadcaster refused to reveal viewing fig-ures, but privately indications were giventhat it was in the low hundreds.After stinging criticism last month, duringthe 2011 budget discharge process, when areport damned it, “EuroparlTV cannot beconsidered to be a success story in view ofits very low number of direct individualusers,” it said, before continuing, “Furthersubsidy cannot be justified.”This wasn’t good enough for the Bureau,who decided to launch an investigation

into the cost effectiveness of the channel,derided as ‘propaganda’.This is, of course, a face saving exercise.MEPs are acutely embarrassed by thechannel, but not embarrassed enough toput it out of the taxpayers’ misery. There isno need for any such investigation, all thefacts are known.Assisting the case of those who want tosee this waste of money being closed, isthe Head of EuroparlTV. We revealedhow he was lobbying MEPs with a fact-sheet that turned out to be, well, judgefor yourself:

EuroparlTV claim:BBC Parliament is more expensive (€12.5million) and only does streaming

The facts:BBC Parliament costs €9.9 million a yearand can be found on terrestrial TV, the in-ternet, cable and satellite.

EuroparlTV claim:BBC Parliament has “very limited viewer-ship despite the stronger budget.”

The Facts:BBC Parliament reaches 100,000 viewers adayEuroparlTV, in a briefing note for MEPseyes finally admitted their viewing figures,or at least provided some unverified figures.Their own statistics show that 1,612 peo-ple a day view their channel, althoughmany suspect the bulk comes from inside

the EU institutions. As they broadcast in22 languages, this gives an average of 73viewers per language, per day.For €9 million a year.One MEP who might fill the gap left bythe end of EuroparlTV is Nirj Deva, whohas announced his own internet TV chan-nel, The Deva Conversation, which he says,“will play host in the coming months tohigh-level officials of the European Coun-cil, the Commission and Senior Membersof the European Parliament in an openforum / interview style basis.”Helpfully he adds that the programmeswould be “lasting no longer than 30 min-utes,” leaving one wit to wonder aloud ifthat would leave any time for responses bythe interviewees.

EuroparlTV: the last broadcastWho can replace the channel? Nirj Deva!

Science: It’s a sexism thing!After producing a racist video, the Commission releases a sexist one

James Monk made this image to show the commission where they were going wrong

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