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« Reply #2730 on: Oct 18, 2012, 06:50 AM »

October 18, 2012

Greek Workers Walk Out in National Strike to Protest Austerity

By LIZ ALDERMAN
IHT

ATHENS — Tens of thousands of Greeks joined a second nationwide strike in three weeks on Thursday, moving to bring the country to a near-standstill in a bid to show European Union leaders meeting in Brussels that fresh austerity cuts being demanded by Greece’s lenders would cripple society and further depress an already battered economy.

Protest rallies began peacefully but were disrupted when demonstrators broke away from the crowd near Syntagma Square outside Parliament and threw rocks, bottles and firebombs at the police, who responded with tear gas. A crowd estimated by the police at around 15,000 people thinned out, some with tears streaming from their eyes. A rally by the Communist Party drew another 7,000 people, according to a police spokeswoman.

Unions said the turnout was about 40,000 people, double the official estimate.

Many demonstrators shouted abuse at the rows of the riot police. “You’re criminals, selling out your country for 600 euros a month,” one man screamed at a group of officers. “Why are you doing it? Why?”

It was the latest in a wave of protests that appear to be gaining steam in southern European countries weary of austerity, particularly Portugal and Spain, where citizens have come out en masse to push against grinding cuts as their economies spiral lower.

The action comes as Greece’s so-called troika of lenders — the International Monetary Fund, the European Central Bank and the European Commission — press Prime Minister Antonis Samaras to seal a package of austerity cuts of 13.5 billion euros, or almost $18 billion. Those include new cuts in salaries and pensions as well as demands to streamline rigid labor laws that are seen hurting the country’s competitiveness.

The package, which is needed to unlock a 41.3 billion loan installment that Greece needs to stay solvent, has been delayed several times in the last two months as the government butted heads with the troika, citing concerns that those at the margins of Greek society, and the rising numbers of people who are falling out of the middle class, cannot take much more. Leaders hope to agree to final details of the austerity plan in coming days.

“Agreeing to catastrophic measures means driving society to despair,” said Yannis Panagopoulos, the head of Greece’s largest private sector union. “The consequences as well as the protests will then be indefinite,” Mr. Panagopoulos said.

About 4,000 police officers fanned out in central Athens and near the Parliament, where clashes broke out three weeks ago during in the last nationwide strike.

Transportation disruptions were expected throughout the country, with the subway in downtown Athens and taxi drivers halting service for much of the day. Flight delays were possible at as air traffic controllers planned to halt work, joining workers in government ministries and the private sector, including lawyers, pharmacists and doctors.

The main retailers association called on shopkeepers to close their doors to protest a drastic fall in income, a sharp rise in taxes and a plunge in demand that they said had destroyed thousands of businesses and jobs.

************

October 17, 2012

Greek Negotiations Hit Snags, From Inside and Out

By LIZ ALDERMAN
IHT

ATHENS — The latest make-or-break moment for Greece has turned into yet another wait-and-see.

The Greek government had hoped to sew up a €13.5 billion, or about $17.7 billion, austerity budget package this week, before a summit meeting of European officials begins Thursday in Brussels. There, leaders were prepared to consider granting Athens more time to fix its finances and cement assurances that Greece could and should stay in the euro currency union.

Instead, the Greek prime minister, Antonis Samaras, will show up at the gathering with something short of an agreement. His budget-crunching negotiations have hit new snags within his fragile coalition government and with the so-called troika of international lenders over the scope and details of the austerity plan. Until there is an agreement, the troika is unlikely to unlock a €31.5 billion loan tranche that debt-wracked Greece needs to keep from defaulting by the end of next month.

Without an austerity blueprint, what was supposed to be a fast-track European effort this week to support Greece seems to have slowed, even as European leaders are distracted by the expansion of the euro crisis to Spain. For Greece, the delay means European officials may have to hold an extraordinary meeting sometime in November, perhaps not before the U.S. presidential election on Nov. 6, to debate further relief for Greece.

Whatever happens in Brussels, Greece is bracing for another nationwide strike Thursday, when employees in the public and private sectors plan to halt work to protest the prospect of further salary and pension cuts. Trains from the airport to central Athens are not expected to run; air traffic controllers are to walk off the job from 10 a.m. to 1 p.m., disrupting flights. A strike two weeks ago began peacefully but was marred by small-scale clashes in Athens between protestors and the police.

The Greek delay has sent European Union leaders scrambling to cast things in a positive light, heading into the Thursday-Friday summit meeting.

An E.U. diplomat said Wednesday that leaders might issue a statement to encourage Greece and the troika “to close the deal.” But another official, who spoke anonymously because talks were continuing, added that any statement might serve to play down the slow pace of the negotiations with Athens, while also lending support for Mr. Samaras, whom many E.U. leaders consider the last best hope for turning Greece around.

Indeed, the German chancellor, Angela Merkel, yet again underscored her desire to keep Greece in the euro, saying Tuesday night in Panama that Greece should remain. “But the work on that is not complete,” Ms. Merkel said, “and there is still a lot that must be done in the coming days and next few weeks.”

While an agreement, like so many others, is expected to come down to the wire, as Europe’s leaders convene for what was supposed to be a debate over further integrating the European Union, at least part of the discussion could nonetheless be distracted by questions about whether Greece will be able to sustain its place within the euro zone.

Ms. Merkel has recently had to admonish several times officials from North European countries, and from within Germany, to stop publicly casting doubt on Greece’s place within the union.

The protests in Greece are expected to gain steam in the coming months — as politicians in Mr. Samaras’s fragile three-party governing coalition are acutely aware. The Greek leaders have been fighting demands by the troika — the International Monetary Fund, the European Central Bank and the European Commission — for new, steep salary cuts and tax increases that could risk deepening a five-year recession or adding to Greece’s staggering 25 percent unemployment rate.

The negotiations have stumbled before, including a few weeks ago when tensions ran so high that the troika left Athens temporarily. On Tuesday night they once again appeared to have hit a wall. Two influential members of Mr. Samaras’s coalition warned they would not vote for troika demands that Greece abolish an automatic 9 percent wage increase that is given every three years to private-sector workers, among other changes to labor laws.

In an apparent bid to soothe nerves, Poul Thomsen, who heads the I.M.F.’s negotiations with Greece, declared in a rare public statement late Tuesday that the parties had reached an agreement on “most policy issues.” And the troika issued a statement from Brussels Wednesday declaring that the way had been paved for “the completion of the review,” which they hoped would lead to an agreement “over the coming days.”

Still, the negotiating tensions in Athens this week underscore the realpolitik that has frustrated Greece’s lenders — and that has characterized Greece’s efforts at reform ever since Athens helped ignite Europe’s debt crisis three years ago, when it admitted to falsifying its financial accounts to gain euro membership.

Since then, lenders have pressed Greece time and again to whittle its outsized government and streamline impediments in the private sector so the country can operate more like a modern, well-functioning business, restoring growth and jobs.

But the three governments that have run Greece in the past three years have been loath to fire any of the nation’s 700,000 public workers, an influential voting bloc. And now, with unemployment at 25 percent, it is considered anathema to accede to the troika’s demands to fire at least 15,000 government employees. Although those jobless would get unemployment benefits for about a year, they would face almost impossible odds against being rehired — a situation that politicians fear would lead to further unrest.

As it is, anger over austerity and government corruption have fueled a rise in the popularity of extreme leftist and rightist parties in Greece. Those groups are biding their time in the event that Mr. Samaras’s government falls, when they would hope to sweep into a power vacuum. For the rest of Europe, yet another change of government would raise doubts anew over Greece’s ability to stay in the euro union.

Greek officials also don’t want to cut automatic private-sector wage increases that had been negotiated under a centrally bargained national collective labor contract, for fear of stoking social unrest.

Labor costs here have already fallen by an average of 15 percent in the past three years, a trend that economists argue is necessary to make Greece competitive again. And yet, investors have still not been willing to venture back into Greece.

In fact, multinational companies continue to leave. Last week, Coca-Cola Hellenic, which constitutes more than 16 percent of the Athens Stock Exchange, said it was moving its headquarters to Switzerland and shifting its listed shares to London. During the summer, Moody’s investor service had downgraded the company’s Greek operations, citing concerns about a possible Greek exit from the euro; the downgrade lifted the company’s borrowing costs. And Credit Agricole, one of France’s largest banks, beat a retreat from Greece this week by selling its Emporiki Bank unit here at the symbolic fire sale price of €1.

Investors say that despite pledges by Mr. Samaras to enhance Greece’s cumbersome business environment, red tape and corruption linger, creating uncertainty and high costs that are deterrants to starting new businesses. Structural reforms meant to improve the functioning of the economy will take years to bear fruit.

Greek banks are barely lending into the economy, helping to stoke the demise of tens of thousands of small and medium-sized businesses. The banks are supposed to get 85 percent of the forthcoming €31.5 billion loan tranche to replenish depleted capital, but whether they will then lend easily again is an open question.

Meanwhile, there is the lingering question of how Greece can sustain itself financially. Mr. Samaras will try to persuade his European partners in Brussels to give Greece a total of four years to implement the €13.5 billion austerity package, once it comes together. The thinking: spreading out the pain will allow the economy, which is now suffering a 6.4 percent contraction, to move toward a slow recovery, bringing more money into the state’s coffers.

But efforts by Mr. Samaras to persuade lenders to help out by reducing the amount of money the country owes them seem to be going nowhere. The European Central Bank, for instance, is resisting pleas that it reduce the interest payments that Greece must make on Greek government bonds already held by the E.C.B. “If you were to reduce Greece’s debt it would give Greece more time to implement long term reforms,” Megan Greene, director of economic research on Western Europe at Roubini Global Economics, said. “The problem is that more time means more money, and I’m not sure where money is going to come from.”

Niki Kitsantonis contributed reporting. James Kanter contributed reporting from Brussels.
« Last Edit: Oct 18, 2012, 07:04 AM by Rad » Logged
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« Reply #2731 on: Oct 18, 2012, 06:55 AM »


Moody’s downgrades world’s oldest bank to ‘junk’

By Agence France-Presse
Thursday, October 18, 2012 7:40 EDT

Moody’s credit rating agency on Thursday downgraded the world’s oldest bank, Italy’s Banca Monte dei Paschi di Siena, to “junk” status on worries government recapitalisation plans will prove insufficient.

The lowering of BMPS’s rating by two notches to “Baaa3″, a non-investment grade, reflects Moody’s view that “there remains a material probability that the bank will need to seek further external support,” the agency said.

Critically exposed to the eurozone debt crisis, in June BMPS was forced to accept a government bailout, borrowing roughly 1.5 billion euros ($1.87 billion) in order to pay off debt and shore up its capital.

The bank has also said it would reduce its workforce by 4,600 people by 2015.
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« Reply #2732 on: Oct 18, 2012, 06:58 AM »

October 17, 2012

Denial Is Slipping Away as War Arrives in Damascus

By JANINE DI GIOVANNI
IHT

DAMASCUS, Syria — Rifa was growing frantic. Her husband had called to say that he and her brother were stuck on their way home from work outside the Syrian capital, normally a 25-minute drive. There was fighting in a northern suburb, he said, and traffic was frozen.

Tensions rose as the hours passed. It is never good to be out after dark in Damascus now, especially trapped in a traffic jam, unable to flee. Finally, Rifa’s husband called again. They had escaped and returned to their workplace to pass the night, another concession to their changing world.

War has come to Damascus. Not on the scale of Aleppo or Homs, at least not yet. But the difference from just a few months ago is unmistakable. With sandbagged checkpoints every half-mile and soldiers methodically searching vehicles for weapons, simple movement is becoming impossible.

“Where is Damascus headed? Are we the next Aleppo?” Rifa asked a few days later. “How soon before our city, our markets, are destroyed?”

This is the center of Bashar al-Assad’s power, the stronghold he tried for months to shield from a popular uprising that has inexorably been transformed into a bloody civil war. As his troops battled insurgents all around the country, Mr. Assad was determined that here, at least, he would preserve an air of normalcy, of routine, of certainty that life would go on, as it had before.

Such illusions are no longer possible. The reality of war has crept into daily life, and there is a sense of inevitability. Even supporters of the government talk about what comes next, and rebels speak of tightening the noose around this city, their ultimate goal.

Damascus was once known for its all-night party scene. Now, few people venture out after dark, and kidnappings are rampant. Gasoline is increasingly scarce, and as winter approaches, people are worried about shortages of food and heating oil. Streets are closed at a moment’s notice, traffic diverted, bridges shut down. Even longtime residents and taxi drivers get lost and have to weave in and out of parking lots to avoid barriers and dead-end streets. Shelling and machine-gun fire are so commonplace, children no longer react.

As recently as summer, while war raged in various neighborhoods surrounding the city, Damascus existed in a bubble of denial. War, people seemed to feel, was happening elsewhere — and the residents of Mr. Assad’s stronghold were determined to live their lives as if nothing had changed. There were garden parties and fashion shoots, and the Opera House hosted Italian tenors. There were elegant dinners at embassies — before the ambassadors fled, that is.

But as summer faded, the strangulation of Damascus began. More checkpoints appeared. The shabiha — Arabic for ghosts — progovernment paramilitary forces who are often held responsible for the most violent crimes, were defiantly visible in foreign hotels.

Now, suicide bombings are more frequent, and the rebels of the Free Syrian Army say they are slowly establishing control of the suburbs that ring the city, with the aim of slowly strangling the government. Some families say they are taking their children out of school and teaching them at home, because the drive to school is too dangerous.

Discussions among friends are no longer “of the real world,” as one writer put it. Talk turns more naturally to the fate of the homeless in the city’s parks, or the traumatization of the children.

“People,” one woman said, “talk of death.”

To a reporter based in Paris who has been granted three visas in recent months to report freely in the country, Damascus seems now like a city under siege, where for most people danger is a wearying companion — so much so that the last names of those interviewed for this article are being withheld for their protection.

Kidnapping of wealthy Syrians is on the rise, sowing fear in the city’s finest precincts. In Mezze, a politically and ethnically mixed neighborhood once known as the Beverly Hills of Damascus, people talk of the daughter of a local businessman who was kidnapped three weeks ago and ransomed for about $395,000. She was returned to her family, according to local residents, sexually abused, tortured and traumatized.

Residents say the kidnappers are from either the Free Syrian Army or renegade offshoots of radical groups or are, in the government’s catchall phrase, “foreign terrorists.”

One man, an Armenian Christian — “a minority within a minority,” he joked — said he was wary of laying blame on any one group.

“I am not aware of a unified opposition,” he said. “People call themselves groups — F.S.A., Salafists.” In the past, he added, neighbors lived so close together — Druze, Christians, Muslims — that “when something happened, we all offered condolences.”

“We went to each other’s funerals,” he said. “We did not have a feeling that one was different than the others.” Now, the man, a professor of linguistics, says, “I have a lump in my throat when I think about it.”

While people will openly complain of government corruption — even in Alawite pro-Assad regions like Latakia — they also fear what will come if and when Mr. Assad falls. Many are painfully aware that the breakdown of society into sectarian groups has echoes of earlier tragedies, in Bosnia and neighboring Iraq. As Samir, a resident of a Christian neighborhood, Baba Touma, said, “No one knows who is who anymore — what side they are on.”

Rifa supports the government and is the only one in her family who is pro-Assad. In her affluent Sunni clan, the political persuasions run from a brother who supports the opposition to a sister who simply wants to keep her 10-year-old son in school and run her business. A third sister said she was slowly “waking up to the reality of what is happening here — though I tried to deny it.”

In addition to growing shortages, cash flow is a problem. The sanctions have made it impossible to wire money into the country, and the price of food has risen drastically. “A kilo of tomatoes has doubled in price in six months,” one of Rifa’s sisters said.

It is common to go to at least four gas stations before finding one that is open; at night, groups of men come selling “bootleg” gasoline in tin canisters.

Abu Khalil, a Free Syrian Army commander in Douma, a suburb south of Damascus that saw heavy fighting and is now controlled by the rebels, said the “dream plan” was to eventually encircle Damascus, throttling commerce and disrupting utilities. His “office” was littered with shards of broken glass, weapons, mattresses on the floor and a group of “shabab” — young fighters — loitering around, smoking.

While he said the opposition forces do not have enough weapons — “The government has MIGs and howitzers, which we fear the most” — it does have the manpower “to squeeze Damascus from neighborhoods like Midan.”

“We take orders from ourselves,” he said, “not like the Aleppo fighters, who take orders from Turkey.”

For the future, said Abu Khalil, a former shop owner, there must be free and fair elections. “But we must have a Sunni leader,” he says, “a guy who knows about God. And everyone now who is carrying a gun must throw it away.”

Still, he added optimistically, “It won’t become Sarajevo.”

Friday, the Muslim day of prayer, is dreaded for its outbreaks of bloody violence, and even more roadblocks go up. Even one month ago, people escaped to the countryside to relax, or went out to smoke water pipes and watch soccer on large-screen televisions. Now people stay home. Shops are shuttered. The Old City is closed.

In Baba Touma, a shopkeeper in the popular Ted Lapidus boutique said business was down by 50 percent. “Maybe someone buys a suit for a wedding or a special party,” he said. “That’s it. No impulse spending.”

Tarik, a lawyer, was buying cologne at an ancient perfumery. “People only buy the absolute necessary,” he said. “In my profession, I have to smell good.” But even with that, he said, his business is down 40 percent. “Even the biggest lawyers in Damascus are suffering,” he said.

Last week, an impromptu Saturday salsa evening was organized by a group of young people. “It’s our attempt to keep living normally,” said Roni, a 27-year-old marketing executive. But the dance floor was clear before midnight — in a country where the people usually stay up till dawn.

“We used to dance till 5 or 6,” Roni said. “But everyone is worried about driving at night. And there are very few taxis going around that late.”

Roni said that for her generation, life had frozen. Relationships are breaking down under stress. University degrees have been put off. People cannot afford the elaborate weddings Syrians love to host.

“My fiancé and I were together for three years, but he lost his job — no money — and has left for America,” she said. “I refused to go because I support my own family.”

Even so, Roni’s salary has been cut by 10 percent. A few months ago, her rent went up: “The landlady just called and apologized that this is war and everything is so expensive.”

She sits at her desk every day in the Kafersouseh district of Damascus hearing guns and explosions. “What can I do?” she said. “I get up and take a taxi to work and pray one doesn’t hit me.”

For many Damascenes, what is most difficult is coming to terms with the harsh reality of a civil war, of Syrians against Syrians. Under the law, Syrians are required to donate blood when they graduate from high school or college, or receive a driver’s license.

“It means we all shared the same blood in some ways,” Roni said. “Now when these guys kill each other, they might be killing someone whose very blood is in their veins. It’s crazy.”

But perhaps the thing that everyone fears most is expressed in graffiti in the Old City rebel stronghold of Zabadani: “We don’t like you,” it reads. “Soon we will be in the middle of Damascus.”

***************

U.S. still undecided on no-fly zone for Syria

By Agence France-Presse
Wednesday, October 17, 2012 18:02 EDT

WASHINGTON — The United States is still mulling ways to stop the fighting in Syria, including a no-fly zone, as the Syrian regime is “ratcheting up the brutality of their tactics,” a US official said Wednesday.

“We continue to look at all of the ideas out there for trying to end the violence,” State Department spokeswoman Victoria Nuland said.

Secretary of State Hillary Clinton continues “to talk to partners about how, what, why exactly — the elements that might go into some of these things that people have proposed, including a no-fly zone,” she told journalists.

“But we haven’t made any decisions at this stage.”

US Acting Under Secretary for Arms Control Rose Gottemoeller met Tuesday with Turkish officials in Ankara to discuss bilateral cooperation on arms control, non-proliferation, disarmament and other security issues.

Her visit came after Turkey forced a Damascus-bound Syrian airliner from Moscow to land in Ankara last week, after receiving intelligence that it was carrying military cargo.

Turkish officials have declined to reveal by whom, or which country, the intelligence had been provided.

UN and Arab League envoy Lakhdar Brahimi, who is visiting Lebanon, has warned that Syria’s 19-month conflict could set the entire region ablaze, as President Bashar al-Assad battles to stay in power.

Washington has restricted its aid and support to the Syria rebels to non-lethal help, and has refused calls to arm the opposition.

But reports say weapons are being secretly shipped to the opposition by Saudi Arabia and Qatar, amid some fears that they are ending up in the hands of hardline Islamic rebel groups.

Nuland said the United States was working to ensure that “there be good vetting of who” all the support is going to, including weapons from other countries.

The US was also working with allies to “compare notes on what we are seeing, because it’s not just a matter of individual leaders; it’s also a matter of ensuring that the groups that are working there are not becoming infiltrated.”

She warned the conflict was continuing to escalate.

“We’ve seen horrific reports of barrel bombs, of cluster munitions used against civilians,” Nuland told journalists, but added Washington had not been able to independently verify such reports.

Any no-fly zone over Syria would be implemented for humanitarian reasons to help Syrians displaced inside the country as they seek to escape the conflict that has claimed an estimated 33,000 lives, Syrian rights monitors say.

But experts have warned that setting up such a no-fly zone will be much more complicated than the zone patrolled by NATO in Libya last year.
« Last Edit: Oct 18, 2012, 07:05 AM by Rad » Logged
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« Reply #2733 on: Oct 18, 2012, 07:00 AM »

October 17, 2012

Russia Arrests Opposition Leader, Threatening Terror Charges

By DAVID M. HERSZENHORN
IHT

MOSCOW — Russian authorities on Wednesday arrested one of the country’s most prominent political opposition leaders, accused him of plotting to organize mass riots and said he could face terrorism charges.

The arrest of Sergei Udaltsov, the buzz-cut, black-clad leader of the Left Front, a radical socialist group, seemed to sharply accelerate the government’s efforts to bring serious criminal cases — with the prospect of long prison terms — against critics of President Vladimir V. Putin.

Mr. Udaltsov is a fixture at antigovernment rallies, is arrested frequently and has had numerous short stays in prison, often for administrative offenses like disobeying the police.

But the new accusations are far more serious, stemming from a recent documentary on the pro-government NTV channel that appeared to show him discussing efforts to topple the Russian government with an official from neighboring Georgia, as well as appealing for financial support.

A spokesman for Russia’s top federal investigator, Aleksandr I. Bastrykin, even raised the prospect of life imprisonment.

“I would like to draw the attention of those who thought that in our country it is possible with absolute impunity to organize mass disorders, to plan and prepare terrorist acts and other actions threatening the life and health of Russians,” the spokesman, Vladimir Markin, said in a televised statement. “You underestimate the professionalism of Russia’s special services.”

He added that Russian law “envisages for such offenses punishment up to life imprisonment.”

Although many of the best-known political opposition leaders in Russia have come under the pressure of criminal investigations in recent months — notably, the corruption fighter Aleksei Navalny and the television personality Kseniya Sobchak — there has yet to be a major prosecution. That seems about to change.

Mr. Udaltsov poses a particular threat to the Kremlin because his views are popular among members of the Communist Party, which retains a strong nationwide infrastructure and often finishes second to the governing party, United Russia, in major elections.

In a nod to Mr. Udaltsov’s popularity on the left, the longtime leader of the Communist Party, Gennady A. Zyuganov, demanded Wednesday that the authorities show that their case is not just a matter of political retribution based on a sensational documentary.

“I would like for the prosecutor and the investigative bodies not to present this fake of NTV, which smells rotten,” Mr. Zyuganov said, “but to present real facts.”

After the documentary was released this month, Mr. Udaltsov immediately denounced it in a Twitter post as “dirt and lies,” calling it a “provocation whose ultimate objective is to justify my arrest.”

On Wednesday, his arrest was carried out in theatrical fashion. Mr. Udaltsov was escorted from his apartment by a squad of commandoes in black masks, though they did not bother to handcuff him.

Video showed Mr. Udaltsov flashing a victory sign as he emerged from the building, walking past two elderly women, seated on a bench with their hands folded in their laps, whose faces did not register the least bit of surprise.

Mr. Udaltsov has previously cooperated with the authorities by appearing for questioning when summoned and, on one occasion, notifying them in advance that he would not appear as requested because the appointed time conflicted with a large protest of the government that he was helping to lead. He said he needed to fulfill duties set forth in the event permit.

But if the dramatic nature of his arrest seemed unnecessary, it was not unusual for Russia and appeared intended to underscore the seriousness of the authorities in pursuing the new criminal case.

Nevertheless, the police released Mr. Udaltsov on Wednesday after barring him from traveling outside the country, a common restriction on subjects under investigation. They said a decision would be made shortly on what formal charges, if any, will be brought.

An aide to Mr. Udaltsov, Konstantin Lebedev, who was shown with him in the NTV documentary, was also arrested Wednesday.

The authorities said they also planned to question a third man shown in the documentary, Leonid Razvozzhaev, who is an aide to Ilya V. Ponomarev, a member of the lower house of Parliament. Mr. Ponomarev is also a leader of the Russian political opposition.

In the documentary, called “Anatomy of a Protest — 2,” Mr. Udaltsov and the other men are shown, apparently recorded by a hidden camera, meeting with a man identified as Givi Targamadze, the chairman of the defense committee in the Georgian Parliament.

Mr. Markin, the spokesman for the federal Investigative Committee, said that the authorities had used “phonoscopic research” to confirm the identities of Mr. Udaltsov and the other men. He said the meeting took place in June in a residential neighborhood of Minsk, the capital of Belarus.

Mr. Udaltsov’s wife, Anastasiya, posting on Twitter, urged his supporters to speak out against his arrest. She also noted that Mr. Bastrykin, the chief federal investigator and a close ally of Mr. Putin, had been accused earlier this year of threatening to kill a newspaper editor in response to an article that he did not like. Mr. Bastrykin apologized, but there was no formal investigation of the episode.

Andrew Roth contributed reporting.
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« Reply #2734 on: Oct 18, 2012, 07:06 AM »

October 17, 2012

Iran Media Officials Castigate Europe Over Satellite Blackout

By THOMAS ERDBRINK
IHT

TEHRAN — Denouncing what they called a hypocritical Western suppression of free speech, Iranian media officials expressed outrage on Wednesday over a decision by Europe’s largest satellite providers to cease transmission of Iran’s 19 state-operated satellite television and radio channels that broadcast to Europe and parts of the Middle East.

The decision, announced Monday by the French company Eutelsat and the British company Arqiva, came as the European Union expanded its list of sanctions against Iran over its disputed nuclear program. The satellite blackout has deprived the Iranian channels of an audience abroad that represents 200 million households.

The blocked channels include Iran’s flagship English-language Press TV news service and the Arabic-language Al Alam, both among the Islamic republic’s most powerful outlets for disseminating the government’s political and religious viewpoints.

Without mentioning Iran’s censorship of many Western media outlets, the official Iranian reaction on Wednesday was that Europe had attacked its own values of freedom of speech.

“They must understand the time of censorship is over,” said Ezzatollah Zarghami, the head of Iran’s state-run radio and television organization, known as Voice and Vision. “They want to prevent our views from being heard, but they will fail.”

Several of the blocked Iranian channels are now streaming over the Internet.

In July, Mr. Zarghami, who is directly appointed by Iran’s supreme leader, Ayatollah Ali Khamenei, was added to a list of sanctioned individuals by the European Union over what it called “human rights violations” by his channels.

Iran, which says it is fighting a Western cultural invasion, routinely blocks the transmission of the Persian services of Voice of America and the BBC, which it has labeled opposition channels. While satellite receivers and dishes are considered technically illegal in Iran, they are widely available across the country, where people have turned to channels offering Turkish and Latin American soap operas dubbed in Persian.

A spokesman for Eutelsat said that following orders by French authorities in the past, certain individual channels had faced similar measures, but it is the first time that all state television and radio channels of a country had been stopped.

Press TV, a 24-hour English language news channel started in 2007, said there had been “a chorus of harsh criticism” from viewers worldwide against the decision to stop its broadcasts.

The channel, popular among groups of Muslim immigrants in Europe, was blocked from transmitting on another European satellite service, Astra, in September.

A petition on Facebook, which is illegal in Iran, started by the channel, asking to keep Press TV on air in Europe, was liked by around 2,600 people as of Wednesday.

“Our contracts with Eutelsat and Arqiva have been terminated upon the orders of the Council of Europe, the same Europe that won the Nobel Peace Prize last week,” said Hamid Emadi, Press TV’s newsroom director. “We think this suspension is suppressive and illegal; the E.U. wants to decide what its people should see, read and hear.”
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« Reply #2735 on: Oct 18, 2012, 07:09 AM »

October 17, 2012

Iran Media Officials Castigate Europe Over Satellite Blackout

By THOMAS ERDBRINK

TEHRAN — Denouncing what they called a hypocritical Western suppression of free speech, Iranian media officials expressed outrage on Wednesday over a decision by Europe’s largest satellite providers to cease transmission of Iran’s 19 state-operated satellite television and radio channels that broadcast to Europe and parts of the Middle East.

The decision, announced Monday by the French company Eutelsat and the British company Arqiva, came as the European Union expanded its list of sanctions against Iran over its disputed nuclear program. The satellite blackout has deprived the Iranian channels of an audience abroad that represents 200 million households.

The blocked channels include Iran’s flagship English-language Press TV news service and the Arabic-language Al Alam, both among the Islamic republic’s most powerful outlets for disseminating the government’s political and religious viewpoints.

Without mentioning Iran’s censorship of many Western media outlets, the official Iranian reaction on Wednesday was that Europe had attacked its own values of freedom of speech.

“They must understand the time of censorship is over,” said Ezzatollah Zarghami, the head of Iran’s state-run radio and television organization, known as Voice and Vision. “They want to prevent our views from being heard, but they will fail.”

Several of the blocked Iranian channels are now streaming over the Internet.

In July, Mr. Zarghami, who is directly appointed by Iran’s supreme leader, Ayatollah Ali Khamenei, was added to a list of sanctioned individuals by the European Union over what it called “human rights violations” by his channels.

Iran, which says it is fighting a Western cultural invasion, routinely blocks the transmission of the Persian services of Voice of America and the BBC, which it has labeled opposition channels. While satellite receivers and dishes are considered technically illegal in Iran, they are widely available across the country, where people have turned to channels offering Turkish and Latin American soap operas dubbed in Persian.

A spokesman for Eutelsat said that following orders by French authorities in the past, certain individual channels had faced similar measures, but it is the first time that all state television and radio channels of a country had been stopped.

Press TV, a 24-hour English language news channel started in 2007, said there had been “a chorus of harsh criticism” from viewers worldwide against the decision to stop its broadcasts.

The channel, popular among groups of Muslim immigrants in Europe, was blocked from transmitting on another European satellite service, Astra, in September.

A petition on Facebook, which is illegal in Iran, started by the channel, asking to keep Press TV on air in Europe, was liked by around 2,600 people as of Wednesday.

“Our contracts with Eutelsat and Arqiva have been terminated upon the orders of the Council of Europe, the same Europe that won the Nobel Peace Prize last week,” said Hamid Emadi, Press TV’s newsroom director. “We think this suspension is suppressive and illegal; the E.U. wants to decide what its people should see, read and hear.”


 
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« Reply #2736 on: Oct 18, 2012, 07:12 AM »

 SPIEGEL ONLINE
10/17/2012 03:49 PM

'You Get What You Pay For': The Hidden Price of Food from China

By SPIEGEL Staff

In recent years, China has become a major food supplier to Europe. But the low-cost goods are grown in an environment rife with pesticides and antibiotics, disproportionately cited for contamination and subject to an inspection regime full of holes. A recent norovirus outbreak in Germany has only heightened worries.

Qufu, the city in China's southwestern Shandong Province where Confucius was born, isn't exactly an attractive place. But its fields are as good as gold. A few weeks ago, a shipment of strawberries left those fields bound for Germany.

The air above the cities of the Chinese heartland is blackened with smog, as trucks barrel along freshly paved roads carrying loads of coal from the mines or iron girders from the region's smelters. Fields stretch to the horizon, producing food to feed the world's most populous country.

The chili pepper and cotton harvests have just ended, the rice harvest begins in two weeks, and garlic will be ready in April. Thousands of female farm workers are kneeling in the fields planting the next crop of a particularly profitable plant in the international food business.

"Garlic is eaten everywhere," says Wu Xiuqin, 30, the sales director at an agricultural business called "Success." "We sell garlic all over the world, and increasingly to Germany." The going price of a ton of white garlic is currently $1,200 (€920). The Germans, says Wu, insist on "pure white" product, and they want the garlic individually packaged.

Well over 80 percent of the garlic sold worldwide comes from China. The "Success" farm produces 10,000 metric tons a year. Based on what she's seen at food conventions in Berlin and elsewhere, no country on Earth can compete with China. Her company supplies peeled, flaked, granulated and pulverized garlic, says Wu, and it has now added ginger, chili peppers, carrots, pears, apples, sweet potatoes and peanuts to its product line.

China, which already sews together our clothes, assembles our smartphones and makes our children's toys, is now becoming an important food supplier for Germany. Since China, as a low-wage country, doesn't exactly have a good reputation among consumers, the food industry usually doesn't mention the origin of the products it sells. Many Germans only realized how much of the food on their plates is harvested and produced in China when thousands of schoolchildren in eastern Germany were afflicted with diarrhea and vomiting two weeks ago in an epidemic thought to have been triggered by Chinese strawberries contaminated with norovirus.

A Growing Global Supplier of Food

There are some bizarre aspects to the global flow of food products. In some parts of China, the population still doesn't have enough to eat. To address the problem, the country is buying up farmland in Africa and importing massive quantities of powdered milk, chicken and pork. EU-based companies sold 393,000 metric tons of pork to China last year, an increase of 85 percent over the previous year. Food companies see China as an attractive growth market.

Conversely, China is also selling far more food products to Europe than it used to, as the world's top exporter recognizes a profitable growth market in Europe. From 2005 to 2010, the value of Chinese food exports worldwide almost doubled, increasing to $41 billion. And Germany, which imported €1.4 billion worth of food from China last year, is becoming an increasingly important customer. Although the country only accounts for about 2 percent of all German food imports, "China has moved into this market with surprising speed and momentum," says a food industry expert.

As always, the country has quickly adapted to the market's needs. While it was mostly Chinese specialties that were sold in German grocery stores in the past, there is now a growing market for cheap staple goods and prepared ingredients, such as the sliced strawberries in 10-kilo (22-pound) buckets that ended up in German school cafeterias.

Two things make China appealing for large companies such as Nestlé, Unilever or Metro: price and volume. "Of course we could buy our onions or mushrooms from 10 different suppliers, but that would entail a huge effort," says a food industry executive. Food companies have to familiarize each supplier with the market and then manage and monitor them.

China's farmland is as vast as its supply of cheap labor. "Picking, washing and cutting up strawberries is labor-intensive because using machines is almost impossible," says Felix Ahlers, the head of Frosta AG, a German frozen food company. This makes it more expensive to buy fruit from Europe, as his company does. But, as Ahlers points out, there are producers that only pay attention to price.

The diversity of products China has to offer also seems to be unlimited. For example, the country has become the world's largest exporter of honey. It is also starting to produce more and more finished products, a market with even bigger profit margins than food commodities. A significant portion of the world's salmon haul is processed in China, into smoked salmon, for example. The country famous for Peking Duck is now making frozen pizzas for the global market -- at a fifth of German prices.

Farmers Who Don't Eat Their Own Food

From an environmental standpoint, the production of pizzas on a global scale isn't all that worrisome. According to calculations by the Institute for Applied Ecology in the southwestern German city of Freiburg, shipping frozen products has only a minor adverse effect on our environmental footprint. Of course, it's "always best to eat regional and seasonal food," says Moritz Mottschall, a researcher at the institute. But if someone has a taste for strawberries in the fall, he adds, transporting 10 tons of product by ship from China generates only 1.3 tons of CO2 emissions. When trucks carry the same amount of product from the Spanish city of Alicante to the northern German city of Hamburg, they emit 1.56 tons of CO2 into the atmosphere.

The biggest problem with Chinese food products is the local production environment, which includes the excessive use of toxic pesticides for crops and of antibiotics for animals, sometimes coupled with a complete lack of scruples. In 2008, some 300,000 infants in China were harmed by milk and baby formula products adulterated with the chemical melamine. Chinese producers had added the substance, which is especially harmful to the kidneys, to powdered milk.

Chinese producers have also sold peas dyed green, which lost their color when cooked, fake pigs' ears and cabbage containing carcinogenic formaldehyde. Then there was the cooking oil that was captured in restaurant drains, reprocessed, rebottled and resold. The government newspaper China Daily has even reported on fake eggs.

Wu Heng has risen to become a prominent food-safety advocate in China. Last spring, Wu read about a strange powder that dealers were adding to pork so that they could sell it as beef, which is more expensive. Wu quickly developed an aversion to noodle dishes listed as containing beef.

He put together a website that includes a map pinpointing Chinese food scandals reported in the media. Wu called his website "Throw it Out the Window," an allusion to former US President Theodore Roosevelt, who is said to have thrown his breakfast sausage out the window in disgust after hearing about the appalling conditions in Chicago's slaughterhouses.

Animal products are the most questionable, says Zhou Li, a lecturer at Beijing's Renmin University who studies food safety. Meat is more profitable than vegetables, which only increases the incentive to maximize profits.

Zhou notes that farmers used to eat the same foods they sold. But now that they are aware of the harmful effects of pesticides, fertilizers, hormones and antibiotics, they still produce a portion of their farm products for the market and a portion for their own families. The only difference is that the food for their families is produced using traditional methods. In fact, many wealthy Chinese have bought their own farms so as not to be dependent on what's available in supermarkets. There are also reports of special plots of land used to produce food exclusively for senior government officials.

A Porous Inspection Regime
The Chinese government introduced a new food safety law in 2009 and established a food safety commission in 2010. In addition, consumers who report illegal activities will reportedly receive monetary rewards.

But there are still many problems, as evidenced by an early warning system in Brussels designed to detect contaminated food and animal feed products for all EU countries, which disproportionately flags products originating in China. By last Friday, 262 reports on Chinese products had been received in Brussels for 2012 alone. They included noodles infested with maggots, shrimp contaminated with antibiotics, foul-smelling peanuts and candied fruit with an excessively high sulfur content (see graphic).

Ulrich Nöhle is very familiar with food production in China. A professor of food chemistry, Nöhle has worked for many years as an independent auditor in China, where he inspects products for quality on behalf of German retailers. He says that "you get what you order" from China, explaining that German retailers have to "specify how the product is to be grown or what standards are required to label a product as organic, for example." But, he adds, those who order products from China that are the cheapest possible and have not been inspected have only themselves to blame when they don't receive the goods they expected.

In one case, Nöhle discovered that sweeteners ordered in China by German customers had a strong odor of solvents. But when he spoke to the Chinese producers about it, they said: "It always smells like that." Nöhle had to have the production facilities reorganized until the product was up to German standards.

Once products are on their way to other countries, they are subject to very little inspection. At the port of Hamburg, which handles a large share of overseas food products destined for the European market, more than 15 percent of shipments containing animal products and 20 percent of those containing plant products are now from China.

In the case of fish, meat, honey and dairy products, an importer is required to report the products to the veterinary and importation office at the Hamburg port prior to arrival as well as to submit import manifests. The office then decides whether the products can be imported without being inspected. Sealed containers are only opened when there are doubts about their contents. When they are opened, veterinarians examine the containers to make sure that the refrigeration is working and that the contents were shipped at the correct temperature. Subsequent inspections are the responsibility of local food-inspection agencies, which are more knowledgeable about fast-food restaurants and farms than about global flows of commodities.

Plant-based food products are subject to even more lax monitoring, and they usually enter the EU without any inspection, whether fresh, frozen or preserved. The exceptions are only a small number of special food products that have attracted negative attention in the past or are currently under suspicion, and many of these products are now from China: peanuts, soybeans, rice, noodles, grapefruit and tea. These products are frequently inspected and, on rare occasions, individual countries even impose import bans.

Losing Faith in Inspectors

The inconsistent inspection regimen also complicates the search for the causes of problems. In about half of the 3,697 cases in which the EU issued warnings last year, consumer advocates "could no longer trace the products to the original producers," says Höhle, the food inspector. At least the supplier of the strawberries behind the recent norovirus outbreak in eastern Germany is now known. The fruit was grown, harvested and frozen in Shandong Province. And a Chinese company shipped it from the port in Qingdao to Hamburg.

In Hamburg, a German distributor, Elbfrost Tiefkühlkost, took delivery of and paid duties on the 44 tons. The next day, the company trucked the strawberries to Mehltheuer, a town in the eastern state of Saxony. Elbfrost's main buyer was Sodexo, an international catering company headquartered in France, which operates 65 regional kitchens in Germany. Officials with the Federal Institute for Risk Assessment, together with prosecutors in Darmstadt, near Frankfurt, are now conducting a painstaking investigation to find out where the strawberries were contaminated.

Elbfrost management says that it will no longer buy products from China because it cannot guarantee that Chinese suppliers are shipping "product of flawless quality." But if quality is so uncertain, why did Elbfrost order products from China in the first place? The company, which is based in Saxony, has sourced strawberries, mushrooms and asparagus from China. Elbfrost claims that it is dependent on imports, and its management emphasizes the "attractive pricing" of Chinese products. Last year, Germany imported more than 31,000 tons of processed strawberries from China, at an average price of €1.10 per kilogram.

The world's largest retail chains, Walmart, Carrefour, Tesco and Metro, as well as producers like Coca-Cola, Unilever, Barilla, Campbell's and Nestlé, have recognized that they cannot rely on inspections from suppliers or governments. But they also can't afford to sell contaminated food products, given the potentially immense harm to their image. This is why the biggest companies in the industry have joined forces to form the Global Food Safety Initiative, with the aim of developing their own quality controls. "Together with our suppliers, we set certain standards that we believe to be correct," says Peter Overbosch, deputy head of global quality management at Metro AG.

The initiative doesn't include smaller companies, such as those that supply caterers and restaurants. In the end, however, the consumer also bears some of the responsibility. In general, China is certainly capable of producing high-quality products, says a food inspector from Hamburg, "but you get what you pay for."

BY SUSANNE AMANN, CHARLOTTE HAUNHORST, UDO LUDWIG, MAXIMILIAN POPP, SANDRA SCHULZ, ANDREAS ULRICH AND BERNHARD ZAND

Translated from the German by Christopher Sultan

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 SPIEGEL ONLINE
10/17/2012 03:24 PM

Food From Nowhere: Producers Reject Calls For Stricter Labels

By Charlotte Haunhorst

Shoppers in the EU have a hard time determining exactly where processed food products come from. The industry is just fine with that, since such information might sometimes hurt sales. But attempts by consumer watchdogs to tighten labeling requirements have met with little success.

When you buy a tomato in a German supermarket, the sign above it tells you where it came from. But if you buy a can of peeled tomatoes in the same store, you can't determine where the tomatoes were grown. Unlike suppliers of fresh produce, producers of so-called processed food products in the European Union are not required to specify the country of origin. The term "processed" applies to all cooked and pureed products, and even to all frozen products.

In theory, one could call the manufacturer and ask where its canned tomatoes come from. A manufacturer's contact information must be included on every product so that producers can ensure that the ingredients of their products are traceable, at least according to European Union regulations. But even if a consumer does take the trouble to call, he or she isn't always likely to get much information -- because information is precisely what some companies are reluctant to hand out. Besides, the words "produced for discounter XY" are generally all the information that's required.

Labels Would 'Only Confuse'

The term "place of origin" is also open to broad interpretation. Under current regulations, tomato juice that comes from Spanish tomatoes but is bottled in Germany can be labeled as "tomato juice from Germany."

German food producers, who for years have bristled at clearer labeling requirements, warned in a statement from their lobbying organization that labels indicating a food's origins would only confuse consumers.

Besides, they argued, detailed labeling would be much too complex. "A frozen pizza consists of various ingredients, some of which have to be bought fresh every day. This can't be reflected on labels on a daily basis," says Matthias Horst of the German Federation of Food Law and Food Science, the umbrella organization for the German food industry.

Failed Attempts

Of course, industry representatives know that a label that says "made with ingredients from China" isn't exactly good for sales. So far, however, they've had no reason to fear having to provide such information on their products. Attempts by consumer advocates in Berlin and Brussels to tighten labeling requirements have usually failed.

Last year, for example, the European Parliament adopted only a watered-down food labeling regulation. Under the original draft, products containing only one ingredient, such as canned tomatoes, also had to include country-of-origin information in their processed state. Instead, the new legislation only requires producers to provide information about the source of fresh meat. It also doesn't apply to processed animal products, such as yoghurt, ham and cold cuts.

Referring to the Brussels decision, the consumer organization Foodwatch wrote: "The food industry has had its way." Foodwatch is calling for more detailed food-labeling requirements. "If a package contains processed strawberries from China, that's what it should say," says spokesman Martin Rücker.

By December 2014, the EU intends to examine whether the current labeling rules should be expanded, a move that food producers and retailers continue to oppose.
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« Reply #2737 on: Oct 18, 2012, 07:18 AM »

Scientists: Giant smashup created the Moon

By Agence France-Presse
Wednesday, October 17, 2012 15:12 EDT

A chemical quirk found in lunar soil backs a 37-year-old theory that the Moon was born from an apocalyptic collision between Earth and a huge space rock, scientists said on Wednesday.

Way back in 1975, astronomers proposed at a conference that billions of years ago, our satellite was created through a smashup between the infant Earth and a Mars-sized body they named Theia, in Greek mythology the mother of the moon, Selene.

The collision melted and vaporised Theia and much of Earth’s nascent mantle, and the rock vapour condensed to form the Moon.

This would explain why the Moon is so big — it is about a quarter the size of Earth and the fifth biggest satellite in the Solar System — and so near to us.

For years, the “Giant Impact Theory” lingered in the margins until computer simulations showed that it could be true.

Sifting through precious grains of lunar soil brought back by the Apollo missions, researchers say they have now found chemical proof to validate the concept.

It lies in a minute excess in a heavier isotope, or atomic variant, of the element zinc.

This enrichment would have happened because heavier zinc atoms would have been condensed swiftly in the vapour cloud rather than lighter ones.

The tiny but telltale difference is called isotopic fractionation.

“The magnitude of the fractionation we measured in lunar rocks is 10 times larger than what see in terrestrial and martian rocks,” said Frederic Moynier, an assistant professor of Earth and Planetary Sciences at Washington University in St. Louis, Missouri.

“It’s an important difference.”

The fractionation was sought in 20 samples of lunar rocks from four Apollo missions, which explored different areas of the Moon, and from one lunar meteorite.

These were matched against 10 meteorites that have been identified as being martian in origin, including one that was in collection at the Vatican, and against rocks found on Earth.

Analysis by a mass spectrometer — in which light from a vaporised sample points to the elements in it — showed that zinc in general was severely depleted on the Moon, but bore the signatures of heavier isotopes.

Large-scale evaporation of the zinc points to a mega-event like the collision, rather than localised volcanic activity, the researchers contend.

“You require some kind of wholesale melting event of the Moon to provide the heat necessary to evaporate the zinc,” said James Day of the Scripps Institution of Oceanography in California.

With this success, say the researchers, the Great Impact Theory could be the key to understanding another mystery: why is Earth so endowed with water but the Moon so dry?

“This is a very important question, because if we are looking for life on other planets, we have to recognise that similar conditions are probably required,” said Day.

“So understanding how planets obtain such conditions is critical for understanding how life ultimate occurs on a planet.”

The study appears in the British journal Nature.


* Moon-NASA-screenshot.jpg (40.3 KB, 615x345 - viewed 15 times.)
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« Reply #2738 on: Oct 18, 2012, 07:39 AM »

In the USA...

October 17, 2012

Libya Singles Out Islamist as a Commander in Consulate Attack, Libyans Say

By DAVID D. KIRKPATRICK
NYT

CAIRO — Libyan authorities have singled out Ahmed Abu Khattala, a leader of the Benghazi-based Islamist group Ansar al-Shariah, as a commander in the attack that killed the American ambassador to Libya, J. Christopher Stevens, last month, Libyans involved in the investigation said Wednesday.

Witnesses at the scene of the attack on the American Mission in Benghazi have said they saw Mr. Abu Khattala leading the assault, and his personal involvement is the latest link between the attack and his brigade, Ansar al-Shariah, a puritanical militant group that wants to advance Islamic law in Libya.

The identity and motivation of the assailants have become an intense point of contention in the American presidential campaign. Republicans have sought to tie the attack to Al Qaeda to counter President Obama’s assertion that by killing Osama bin Laden and other leaders his administration had crippled the group; Mr. Abu Khattala and Ansar al-Shariah share Al Qaeda’s puritanism and militancy, but operate independently and focus only on Libya rather than on a global jihad against the West.

But Mr. Abu Khattala’s exact role, or how much of the leadership he shared with others, is not yet clear. His leadership would not rule out participation or encouragement by militants connected to Al Qaeda in the Islamic Maghreb, an Algerian Islamic insurgency that adopted the name of Bin Laden’s group a few years ago to bolster its image, but has so far avoided attacks on Western interests.

Like the other leaders of the brigade or fighters seen in the attack, Mr. Abu Khattala remains at large and has not yet been questioned.

The authorities in Tripoli do not yet command an effective army or police force, and members of the recently elected Parliament have acknowledged with frustration that their government’s limited power has shackled their ability to pursue the attackers.

The government typically relies on self-formed local militias to act as law enforcement, and the Benghazi-area militias appear reluctant to enter a potentially bloody fight against another local group, like Ansar al-Shariah, to track down Mr. Abu Khattala.

Asked last week about Mr. Abu Khattala’s role, an American official involved in a separate United States investigation declined to comment on any particular suspects, but he indicated that the United States was tracking Mr. Abu Khattala and cautioned that the leadership of the attack might have been broader than a single man.

“Ansar al-Shariah is not only a shadowy group, it’s also quite factionalized,” the official said. “There isn’t necessarily one overall military commander of the group.”

It was not immediately clear if that assessment might have changed with new information from Libyan witnesses. The New York Times reported Tuesday that Mr. Abu Khattala was a leader of the brigade, but withheld accounts of his specific role in the attack to protect witnesses. On Wednesday, The Wall Street Journal reported that three witnesses had seen him during the Sept. 11 attack on the mission and that the Libyan authorities were focused on his role.

The Journal reported that Mr. Abu Khattala had been seen at large in the Leithi neighborhood of Benghazi, known for a high concentration of Islamists. But his exact whereabouts is unclear. Libyan border security is loose, so it is possible that he will flee or has already left the country.

Mr. Abu Khattala was a member of the Islamist opposition under Col. Muammar el-Qaddafi and was imprisoned in his notorious Abu Salim prison. Unlike most of the other Islamist prisoners, however, Mr. Abu Khattala never renounced violence as a means for seeking political change. He was let out of prison only last year, along with a batch of other political prisoners released in a futile bid by the government to appease the nascent uprising.

Mr. Abu Khattala fought Colonel Qaddafi along with the rest of the Libyan opposition and the current leaders of the big militias in eastern Libya. But as those groups lined up behind the transitional government and the democratic process, Mr. Abu Khattala and a small core of like-minded Islamists formed Ansar al-Shariah, which now includes 100 to 200 fighters. Its name means “supporters of Islamic law,” and it opposes electoral democracy as a substitute.

It has staged displays of armed might intended to deter Western-style secular liberals whom it suspects of moving to liberalize Libya, where alcohol is currently banned, polygamy is legal and a vast majority of women wear an Islamic head covering.

But Ansar al-Shariah also guarded a local hospital and engaged in preaching and charitable work, before popular anger at the group for its role in the mission attack forced it to scatter and hide out of sight.

Suliman Ali Zway contributed reporting from Tripoli, Libya, and Eric Schmitt from Washington.

This article has been revised to reflect the following correction:

Correction: October 17, 2012

The headline with an earlier version of this article misidentified the source of the identification of Ahmed Abu Khattala as a commander in the attack that killed Ambassador J. Christopher Stevens. Libya has named Mr. Abu Khattala, not the United States.

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October 17, 2012

Clearing the Record About Benghazi

By SCOTT SHANE
NYT

The dispute over how the Obama administration has characterized the lethal attack on the American diplomatic compound in Benghazi, Libya, last month boiled over once again in the debate on Tuesday night between President Obama and Mitt Romney. But questions about what happened in the attack, and disputes over who said what about it, have left many people confused. Here are some of the facts as they are now known:

When did Mr. Obama first talk about the attack on Sept. 11 in Benghazi, which killed Ambassador J. Christopher Stevens and three other Americans, as terrorism?

Mr. Obama applied the “terror” label to the attack in his first public statement on the events in Benghazi, delivered in the Rose Garden at the White House at 10:43 a.m. on Sept. 12, though the reference was indirect. “No acts of terror will ever shake the resolve of this great nation, alter that character or eclipse the light of the values that we stand for,” he said. “Today we mourn four more Americans who represent the very best of the United States of America. We will not waver in our commitment to see that justice is done for this terrible act. And make no mistake, justice will be done.”

Was that the only time Mr. Obama used the “terror” label?

No. The next day, Sept. 13, in a campaign appearance in Las Vegas, he used similar language. “And we want to send a message all around the world — anybody who would do us harm: No act of terror will dim the light of the values that we proudly shine on the rest of the world, and no act of violence will shake the resolve of the United States of America,” he said.

If the president referred to the attack as an “act of terror” twice in those two days, why has there been such a controversy over what Republicans call the administration’s deep reluctance to label the attack terrorism?

The “act of terror” references attracted relatively little notice at the time, and later they appeared to have been forgotten even by some administration officials. In the vice-presidential debate, for instance, Representative Paul D. Ryan declared, “It took the president two weeks to acknowledge that this was a terrorist attack.” Vice President Joseph R. Biden Jr. did not directly contradict the charge. What attracted more attention was a series of statements by administration officials, notably Susan E. Rice, the ambassador to the United Nations, that appeared to link the Benghazi attack to a protest against a crude anti-Islam video made in the United States that was circulating on the Web.

What exactly did the administration officials say that prompted the Republican response?

Several officials emphasized that the attack appeared to be spontaneous, not planned, and linked it to the protests over the video that had taken place in Cairo and other cities. Jay Carney, the White House spokesman, said on Sept. 14 about the Benghazi attack, “We have no information to suggest that it was a preplanned attack.” On Sept. 16, Ms. Rice said, “What this began as was a spontaneous, not a premeditated, response to what happened, transpired in Cairo,” where protesters angered by the video stormed the grounds of the American Embassy. Hedging her remarks by saying that her information was preliminary, Ms. Rice also said, “We believe that folks in Benghazi, a small number of people, came to the embassy to — or to the consulate, rather — to replicate the sort of challenge that was posed in Cairo.” That initial protest, she said, “seems to have been hijacked” by “extremists who came with heavier weapons.”

When did administration officials begin consistently to use the “terrorism” label?

On Sept. 19, Matthew G. Olsen, the director of the National Counterterrorism Center, said about the killings in Benghazi during a Senate hearing, “Yes, they were killed in the course of a terrorist attack on our embassy.” The next day, asked about Mr. Olsen’s testimony, Mr. Carney declared, “It is, I think, self-evident that what happened in Benghazi was a terrorist attack.”

What were American intelligence agencies saying about the attack?

Administration officials later explained their statements by saying they had repeated preliminary information they had learned from intelligence briefings. The director of national intelligence, James R. Clapper Jr., lent some support to the administration’s claims by approving the release of an unusual public statement on Sept. 28 about the evolving conclusions of the intelligence agencies. His spokesman, Shawn Turner, said intelligence analysts who at first believed that the attacks were part of a spontaneous protest revised their initial assessments “to reflect new information indicating that it was a deliberate and organized terrorist attack carried out by extremists.”

What do eyewitnesses say about the events in Benghazi? Were they related to the insulting video, or is that a red herring? And was the assault planned for the anniversary of the Sept. 11, 2001, attacks, or was it spontaneous?

According to reporting by David D. Kirkpatrick and Suliman Ali Zway of The New York Times, eyewitnesses have said there was no peaceful demonstration against the video outside the compound before the attack, though a crowd of Benghazi residents soon gathered, and some later looted the compound. But the attackers, recognized as members of a local militant group called Ansar al-Shariah, did tell bystanders that they were attacking the compound because they were angry about the video. They did not mention the Sept. 11 anniversary. Intelligence officials believe that planning for the attack probably began only a few hours before it took place.

Is it fair to link the Benghazi attack to Al Qaeda?

Only very indirectly. Ayman al-Zawahri, the leader of Al Qaeda, had called on Libyans to avenge the killing of a Libyan-born Qaeda leader, and American intelligence officials have said they intercepted boastful phone calls after the assault from the attackers to members of the Qaeda affiliate in North Africa, Al Qaeda in the Islamic Maghreb.

Why has this event become such a flash point in the presidential campaign?

As the centerpiece of his national security record, Mr. Obama has highlighted his administration’s aggressive efforts against militants in Pakistan and Yemen, as well as the successful raid to kill Osama bin Laden. Some of his top aides have suggested that Al Qaeda has been decimated by the American strikes. Republicans have seized on the Benghazi attack — which resulted in the first killing of an American ambassador in decades — to counter this Democratic line, suggesting that the administration has exaggerated its success against Al Qaeda and has pursued policies that have left the Middle East in chaos.

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Originally published Thursday, October 18, 2012 at 4:09 AM
   
AP source: Obama was considered potential target

A Bangladeshi man snared in an FBI terror sting considered targeting President Barack Obama and the New York City Stock Exchange before settling on a car bomb attack on the Federal Reserve, just blocks from the World Trade Center site, a law enforcement official told The Associated Press on Thursday.

By COLEEN LONG and TOM HAYS
Associated Press

NEW YORK —

A Bangladeshi man snared in an FBI terror sting considered targeting President Barack Obama and the New York City Stock Exchange before settling on a car bomb attack on the Federal Reserve, just blocks from the World Trade Center site, a law enforcement official told The Associated Press on Thursday.

The official, who was not authorized to speak publicly about the investigation and talked to the AP on condition of anonymity, stressed that the suspect never got beyond the discussion stage in considering an attack on the president.

In a September meeting with an undercover agent posing as a fellow jihadist, Quazi Mohammad Rezwanul Ahsan Nafis explained he chose the Federal Reserve as his car bomb target "for operational reasons," according to a criminal complaint. Nafis also indicated he knew that choice would "cause a large number of civilian casualties, including women and children," the complaint said.

The bomb was phony, but authorities said that Nafis' admiration of Osama bin Laden and aspirations for martyrdom were not.

FBI agents grabbed the 21-year-old Nafis - armed with a cellphone he believed was rigged as a detonator - after he made several attempts to blow up a fake 1,000-pound the bomb inside a vehicle parked next to the Federal Reserve Wednesday in lower Manhattan, the complaint said.

Nafis appeared in federal court in Brooklyn on Wednesday to face charges of attempting to use a weapon of mass destruction and attempting to provide material support to al-Qaida. Wearing a brown T-shirt and black jeans, he was ordered held without bail and did not enter a plea. His defense attorney had no comment outside court.

Nafis is a banker's son from a middle class neighborhood, and family members said Thursday that they were stunned by his arrest.

"My son can't do it," his father, Quazi Ahsanullah, said as he wept in his home in the Jatrabari neighborhood in north Dhaka, Bangladesh.

"He is very gentle and devoted to his studies," he said, pointing to Nafis' time at the private North South University in Dhaka.

However, Belal Ahmed, a spokesman for the university, said Nafis was a terrible student who was put on probation and threatened with expulsion if he didn't bring his grades up. Nafis eventually just stopped coming to school, Ahmed said.

Ahsanullah said his son convinced him to send him to America to study, arguing that with a U.S. degree he had a better chance at success in Bangladesh.

"I spent all my savings to send him to America," he said.

He arrived in January on a student visa and studied for one semester at Southeast Missouri State University, but requested a records transfer in January and the University did not know why. Apparently, he instead decided to plot an attack, reaching out for possible conspirators who turned out to be government agents, authorities said.

He had sought assurances from one undercover, posing as an al-Qaida contact, that the terrorist group would support the operation.

"The thing that I want to do, ask you about, is that, the thing I'm doing, it's under al-Qaida?" he was recorded saying during a meeting in a bugged hotel room in Queens, according to the complaint.

Later, Nafis "confirmed he was ready to kill himself during the course of the attack, but indicated he wanted to return to Bangladesh to see his family one last time to set his affairs in order," the complaint said.

But there was no allegation that Nafis actually received training or direction from the terrorist group.

The federal case was the latest where a terrorism plot against the city turned out to be a sting operation.

Four men were convicted in 2009 in a plot to bomb synagogues and shoot down military planes with missiles - a case that began after an FBI informant was assigned to infiltrate a mosque in Newburgh, about 70 miles north of New York City. The federal judge hearing the case said she was not proud of the government's role in nurturing the plot.

A Pakistani immigrant was convicted in 2006 for a scheme to blow up the subway station at Herald Square in Midtown. His lawyers argued that their client had been set up by a police informant who showed him pictures of Iraq abuse to get him involved in an attack against civilians.

The bank in New York, located at 33 Liberty St., is one of 12 branches around the country that, along with the Board of Governors in Washington, make up the Federal Reserve System that serves as the central bank of the United States. It sets interest rates.

Dozens of governments and central banks store a portion of their gold reserves in high-security vaults deep beneath the building. In recent years, it held 216 million troy ounces of gold, or more than a fifth of all global monetary gold reserves, making it a bigger bullion depository than Fort Knox.

As a result, the Federal Reserve is one of the most fortified buildings in the city, smack in the middle of a massive security effort headed by the New York Police Department, where a network of thousands of private and police cameras watch for suspicious activity.

Obama will be in New York City on Thursday night. He will appear with Republican challenger Mitt Romney at the Alfred E. Smith Memorial Foundation Dinner, an annual political event.


*********************

Originally published October 18, 2012 at 6:04 AM | Page modified October 18, 2012 at 6:39 AM   

Miss. says no thanks to Medicaid expansion dollars

Mississippi has long been one of the sickest and poorest states in America, with some of the highest rates of obesity, diabetes and heart disease and more than 1 in 7 residents without insurance. And so you might think Mississippi would jump at the prospect of billions of federal dollars to expand Medicaid.

By EMILY WAGSTER PETTUS
Associated Press

JACKSON, Miss. —

Mississippi has long been one of the sickest and poorest states in America, with some of the highest rates of obesity, diabetes and heart disease and more than 1 in 7 residents without insurance. And so you might think Mississippi would jump at the prospect of billions of federal dollars to expand Medicaid.

You'd be wrong.

Leaders of the deeply conservative state say that even if Mississippi receives boatloads of cash under President Barack Obama's health care law, it can't afford the corresponding share of state money it will have to put up to add hundreds of thousands of people to the government health insurance program for the poor.

"While some people say Obamacare will come as an economic boost with `free' money, the reality is simple: No money is free," said Republican Gov. Phil Bryant. "Since when did the federal government ever give free money without asking for something in return?"

GOP Govs. Rick Scott of Florida, Bobby Jindal of Louisiana, Nathan Deal of Georgia, Nikki Haley of South Carolina and Rick Perry of Texas have said they, too, will reject a Medicaid expansion, calling it too expensive.

While many states are wrestling with the issue, perhaps nowhere but Mississippi are the health issues and the politics so stark.

Some advocates suspect the governors' stand is not about the money at all, but about politics, saying the Republicans are using the Medicaid issue to attack the Obama administration.

They point out that the share the states must contribute is relatively small for the amount of federal funding they would receive, and that politicians from those states have eagerly taken big money from Washington for highways, disaster recovery and other projects that required a contribution of state dollars.

"I think some of this might be posturing before the presidential election," said Michael Doonan, a Brandeis University expert on health care policy and a former aide to Sen. John Kerry, D-Mass.

Supporters of the expansion say turning down the money for doctors' visits, prescriptions and other care would itself be foolish fiscal policy, not only hurting the poor but jeopardizing the jobs of thousands of people at hospitals and other institutions that rely on Medicaid money.

The governor and GOP leaders in the Republican-controlled Legislature have argued that the expansion will foster a culture of dependency on government, that it's impossible to predict how much revenue Mississippi might collect several years from now, and that there is no guarantee future administrations in Washington will follow through on funding promises.

In addition to requiring most Americans to buy insurance, the Obama health care law would expand the number of people on Medicaid by raising the income ceiling for eligibility. A divided Supreme Court this year upheld the law but said the Medicaid expansion would be optional, not mandatory. Some Republican governors are digging in, hoping Mitt Romney will get elected and roll back the law.

Under the law, Washington would pay 100 percent of the costs of expanding Medicaid from 2014 to 2016. Between 2017 and 2020, the federal share would decrease to 90 percent and the states' contribution would rise in stages to 10 percent, and that's where it would stay.

Mississippi's governor said that even in the years when Washington is supposed to cover 100 percent, states would still have to pay millions in administrative expenses.

The nonpartisan Kaiser Family Foundation has projected that between 2014 and 2019, Mississippi would receive nearly $9.9 billion in federal money for Medicaid expansion, while the state would pay $429 million. That's $1 from the state for every $23 from Uncle Sam.

By some estimates, the expansion would add 400,000 people to the state's Medicaid rolls, increasing enrollment from the current 1 in 5 Mississippi residents to about 1 in 3. Mississippi is spending nearly $822 million of its own money on Medicaid in the current fiscal year, or almost 15 percent of the state-funded portion of the overall state budget.

Among the estimated 476,000 uninsured Mississippians who could be added to Medicaid is Wilna Alexander, 54, of Jackson. She said she earned $12,000 to $13,000 last year as a part-time cook. She said was on Medicaid but lost coverage more than two years ago when she began working. She said she has never had a regular doctor.

"Most of the time, when I go to the hospital, I have to be real sick," Alexander said.

She said that during one visit to University of Mississippi Medical Center in Jackson, she was found to have strep throat. She had to borrow money to buy antibiotics. The hospital gave her a list of "free" clinics, but Alexander found that one near her house demanded $80 to see her.

Democratic state Sen. Hob Bryan said turning down the money would be wrong. "It will mean thousands of jobs for the state and it will mean additional revenue for the state general fund and it will mean hundreds of thousands of people will get better health care," he said.

But House Appropriations chairman Rep. Herb Frierson, a Republican, said federal money doesn't fall from the sky: "It comes out of somebody's pocket."

Ultimately, pressure from politically powerful health care groups might make it difficult for Mississippi leaders to reject the money. Hospital administrators worry that without a Medicaid expansion, they could be saddled with rising costs from treating uninsured patients.

"I would at least like to see that our state Legislature has examined how it would work instead of saying, `No, it's not working for us and we don't even want to try,'" said Alvin Hoover, CEO of King's Daughters Medical Center in the small town of Brookhaven.

---

Associated Press writer Jeff Amy contributed to this report.

*************

October 17, 2012

Rising College Costs Pose Test for Obama on Education Policies

By RICHARD PÉREZ-PEÑA

In campaign stops across college campuses, and again in the debate on Tuesday, President Obama has promoted his efforts to make college more affordable. His record, more activist than any recent predecessor’s, includes greatly expanding the federal government’s role in granting college loans, increasing aid to community colleges, and even taking steps to try to stem soaring tuition.

Though none of the questions in the presidential debate were on college affordability, Mr. Obama pivoted to that topic on his own. In answering a question about gender equity, he said, “We’ve expanded Pell Grants for millions of people, including millions of young women.”

But while many education experts laud his efforts, analysts of varying political stripes have also questioned how much impact some of the president’s policies will have, noting that the prices charged by colleges, and student borrowing, continue to climb.

“I think the president deserves a lot of credit for putting emphasis on things that weren’t being talked about much — raising educational attainment, expanding community college, cost containment,” said Derek Bok, the former Harvard president who has written extensively on the problems and future of higher education. “But I think the jury’s out on whether it’s effective.”

Some conservatives have pushed that critique further, saying that Mr. Obama’s policies are too costly, often assist the wrong people and could have the paradoxical effect of driving up college costs. The dispute turns not just on different assessments of how policies play out, but on differing philosophical views about the role of government. During his time in office, Mr. Obama has sharply increased aid to low- and middle-income students, notably through the Pell Grant program, which grew from $14.6 billion given to 6 million students in 2008, to nearly $40 billion for almost 10 million students this year. His administration also made it easier to request aid, shortening the complex federal application and allowing people to transfer their financial information electronically from the Internal Revenue Service database.

“On the area of assisting students to gain a college opportunity, President Obama has exerted the most impressive leadership of any president in my memory,” said Molly Corbett Broad, president of the American Council on Education, an association of college and university presidents.

But conservative critics of the Pell Grant program contend that as government pours more money into higher education — whether in grants or loans — the law of supply and demand dictates that it contributes to price increases.

“Could the colleges charge what they’re charging now in the absence of federal aid?” asked Neal McCluskey, an education analyst at the Cato Institute, a conservative policy research group. “The answer is no.”

Mitt Romney has also called the aid expansion unsustainable, and his campaign’s education plan says he would “refocus Pell Grant dollars on the students that need them most.” His stance was widely interpreted as meaning that he would cut the program, primarily by making fewer students eligible — the same approach that his running mate, Representative Paul D. Ryan, took in his proposed budget.

Yet in the presidential debates, Mr. Romney seems to have shifted his position. In the first debate on Oct. 3, he said, “I don’t have any plan to cut education funding and grants that go to people going to college.” He went further in the debate Tuesday, promoting a state aid program he created as governor of Massachusetts, saying, “I want to make sure we keep our Pell Grant program growing.”

College costs have risen dramatically. In the last school year, tuition, fees, room and board averaged $38,589 at private colleges, up almost $15,000 from a decade earlier, according to the College Board. At public four-year colleges, the total bill came to $17,131, up more than $8,000.

But behind the headlines about soaring costs, the reality is more complex and wildly uneven, because a growing number of students receive financial aid, and only relatively high-income families pay those fast-rising sticker prices. Adjusted for inflation, the College Board calculates, the average “net price” changed little over the last decade at private schools, and rose only modestly at public ones.

Defending federal spending, Arne Duncan, the secretary of education, said that for more than 30 years, college prices had risen even when federal aid had not, leading him to believe there was “zero correlation.” And he noted that the big increases under Mr. Obama had come at a time of declining state support for public colleges.

Conservatives have criticized Mr. Obama’s other college affordability programs.

Mr. Obama removed banks as middlemen in making federal student loans, saving billions of dollars a year in lender fees, some of which was used to pay for increased student aid. Mr. Romney has said he would replace that policy with a marketplace approach. The president also strengthened programs that limit the size of student loan payments, based on a debtor’s income, and forgive unpaid loans for some borrowers after 10 or 20 years. So far, few borrowers have taken advantage of such options, and Mr. Obama has directed the Department of Education to publicize them more aggressively.

Scott Fleming, an education policy adviser to Mr. Romney, said those changes would cost the government billions of dollars by increasing unpaid loans. Shrinking monthly payments means extending the life of a loan, he noted, so some borrowers could end up paying much more.

The administration repeatedly makes the case that more people need to go to college — or back to college — and that much of that education should take place at community colleges. Mr. Obama has sought $10 billion in new aid for community colleges over several years, much of it to teach job skills; so far, Congress has approved $2 billion.

Experts from across the political spectrum say expanding college enrollment is not enough, that both quality and price must be addressed. Mr. Obama has taken steps to curb rising prices and link federal assistance to performance.

“We’re not just investing in the status quo; we’re investing in reform,” Mr. Duncan said.

Experts say those attempts are limited, and may not work, but they go well beyond what other presidents have done.

“The idea that the government has put colleges on notice not to just expect a blank check is a huge change,” said Kevin Carey, director of education policy at the New America Foundation.

But Mr. McCluskey, the Cato analyst, said Mr. Obama misses the system’s fundamental flaw: that federal aid and loans are often awarded to mediocre students and schools, with poor odds of producing economically successful graduates.

The president wants to tie some aid to colleges’ efforts to keep prices in check, and he has called for a contest among states to win $1 billion in grants for the best cost-control ideas; both proposals would require Congressional approval. This summer, his administration released a “shopping sheet,” a form allowing students to make apples-to-apples price comparisons among colleges. About 400 schools have pledged to use it.

The administration also imposed what is known as the gainful employment rule, mandating that schools, mainly aimed at for-profit colleges, meet benchmarks for graduation rates, student employment and debt, or risk losing access to federal loans and aid. The rule was struck down in court this year, but the administration is planning a new version.

“Obama has done big things on higher education that just haven’t gotten a lot of attention,” Mr. Carey said. “He’s taken on issues that had been largely neglected.”



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October 18, 2012

Suspect in Libya Attack, in Plain Sight, Scoffs at U.S.

By DAVID D. KIRKPATRICK
IHT

BENGHAZI, Libya — Witnesses and the authorities have called Ahmed Abu Khattala one of the ringleaders of the Sept. 11 attack on the American diplomatic mission here. But just days after President Obama reasserted his vow to bring those responsible to justice, Mr. Abu Khattala spent two leisurely hours on Thursday evening at a crowded luxury hotel, sipping a strawberry frappe on a patio and scoffing at the threats coming from the American and Libyan governments.

Libya’s fledgling national army is a “national chicken,” Mr. Abu Khattala said, using an Arabic rhyme. Asked who should take responsibility for apprehending the mission’s attackers, he smirked at the idea that the weak Libyan government could possibly do it. And he accused the leaders of the United States of “playing with the emotions of the American people” and “using the consulate attack just to gather votes for their elections.”

Mr. Abu Khattala’s defiance — no authority has even questioned him about the attack, he said, and he has no plans to go into hiding — offered insight into the shadowy landscape of the self-formed militias that have come to constitute the only source of social order in Libya since the fall of Col. Muammar el-Qaddafi.

A few, like the militia group Ansar al-Shariah that is linked to Mr. Abu Khattala and that officials in Washington and Tripoli agree was behind the attack, have embraced an extremist ideology hostile to the West and nursed ambitions to extend it over Libya. But also troubling to the United States is the evident tolerance shown by other militias allied with the government, which have so far declined to take any action against suspects in the Benghazi attack.

Although Mr. Abu Khattala said he was not a member of Al Qaeda, he declared he would be proud to be associated with Al Qaeda’s puritanical zeal for Islamic law. And he said that the United States had its own foreign policy to blame for the terrorist attacks of Sept. 11, 2001. “Why is the United States always trying to impose its ideology on everyone else?” he asked. “Why is it always trying to use force to implement its agendas?”

Owing in part to the inability of either the Libyans or the Americans to mount a serious investigation, American dissections of the assault on the diplomatic mission in Benghazi have become muddled in a political debate over the identities and motivations of the attackers. Some Republicans have charged that the Obama administration initially sought to obscure a possible connection to Al Qaeda in order to protect its claim to have brought the group to its knees.

Mr. Abu Khattala, 41, wearing a red fez and sandals, added his own spin. Contradicting the accounts of many witnesses and the most recent account of the Obama administration, he contended that the attack had grown out of a peaceful protest against a video made in the United States that mocked the Prophet Muhammad and Islam.

He also said that guards inside the compound — Libyan or American, he was not sure — had shot first at the demonstrators, provoking them. And he asserted, without providing evidence, that the attackers had found weapons, including explosives and guns mounted with silencers, inside the American compound.

Although Mr. Abu Khattala’s exact role remains unclear, witnesses have said they saw him directing other fighters that night. Libyan officials have singled him out, and officials in Washington say they are examining his role.

But Mr. Abu Khattala insisted that he had not been part of the aggression at the American compound. He said he had arrived just as the gunfire was beginning to crackle and had sought to break up a traffic jam around the demonstration. After fleeing for a time, he said, he entered the compound at the end of the battle because he was asked to help try to rescue four Libyan guards working for the Americans who were trapped inside. Although the attackers had set fire to the main building, Mr. Abu Khattala said he had not noticed anything burning.

At the same time, he expressed a notable absence of remorse over the assault, which resulted in the deaths of four Americans, including J. Christopher Stevens, the American ambassador. “I did not know him,” he said.

He pointedly declined to condemn the idea that the demolition of a diplomatic mission was an appropriate response to such a video. “From a religious point of view, it is hard to say whether it is good or bad,” he said.

In Washington, a Republican member of the House committee investigating the attack scoffed at Mr. Abu Khattala’s account. “It just sounds fishy to say you are on the scene and not participating,” said Representative Jason Chaffetz, a Utah Republican. “It was pitch black at 9:40 at night.”

Mr. Abu Khattala contended that the United States had ulterior motives for helping Libyans during their revolution, and he asserted that it was already meddling in Libya’s planned constitution, even though the recently elected Parliament had not yet begun to discuss it.

He also said he opposed democracy as contrary to Islamic law, and he called those who supported secular constitutions “apostates,” using the terminology Islamist radicals apply to fellow Muslims who are said to disqualify themselves from the faith by collaborating with corrupt governments.

He argued that Islamists like those in the Muslim Brotherhood who embraced elections committed a “mix up” of Western and Islamic systems. And he acknowledged that his opposition to elections had been a point of dispute between his followers and the other Libyan militia leaders, most of whom had protected and celebrated the vote.

Still, he said, “we have a very good relationship” with the leaders of Benghazi’s largest militias — which constitute the only security force for the government — from their days fighting together on the front lines of the revolt against Colonel Qaddafi. He even pointedly named two senior leaders of those big brigades, whom he said he had seen outside the mission on the night of the attack.

Witnesses, Benghazi residents and Western news reports, including those in The New York Times, have described Mr. Abu Khattala as a leader of Ansar al-Shariah, whose trucks and fighters were seen attacking the mission. Mr. Abu Khattala praised the group’s members as “good people with good goals, which are trying to implement Islamic law,” and he insisted their network of popular support was vastly underestimated by other brigade leaders who said the group had fewer than 200 fighters.

“It is bigger than a brigade,” he said. “It is a movement.”

Mr. Abu Khattala said he was close to the group but was not an official part of it. Instead, he said, he was still the commander of an Islamist brigade, Abu Obaida ibn al-Jarrah. Some of its members joined Ansar al-Shariah, but Mr. Abu Khattala said that even though his brigade had disbanded he could still call it together. “If the individuals are there, the brigade is there,” he said.

During the revolt, the brigade was accused of killing a top general who had defected to the rebels, Abdul Fattah Younes. Mr. Abu Khatalla acknowledged that the general had died in the brigade headquarters, but declined to discuss it further.

Almost all Libyans are Muslims, alcohol is banned, polygamy is legal, almost every woman wears an Islamic head-covering. But all of that still fell short, he said, of true Islamic law.

Suliman Ali Zway contributed reporting from Tripoli, Libya, and Michael S. Schmidt from Washington.

This article has been revised to reflect the following correction:

Correction: October 19, 2012

An earlier version of this article described incorrectly a beverage that Ahmed Abu Khattala was drinking at a hotel in Benghazi, Libya. It was a strawberry frappe, not mango juice, which is what he had ordered.

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« Reply #2740 on: Oct 19, 2012, 06:46 AM »

October 19, 2012

As Bombs Fall, Turkey Backs Syria Truce Call

By HWAIDA SAAD and ALAN COWELL
IHT

BEIRUT, Lebanon — Turkey, a major regional player in the Syrian crisis, threw its diplomatic weight on Friday behind a call for a cease-fire “at least” through a three-day Islamic holiday beginning next week.

The appeal by Turkish Foreign Minister Ahmet Davutoglu came as the international envoy on Syria, Lakhdar Brahimi, prepared to visit Damascus, the Syrian capital, news reports said, to press his earlier entreaties for the guns to fall silent on both sides during the Id al-Adha holiday starting Thursday.

Id al-Adha, or the Festival of the Sacrifice, is celebrated by Shiite and Sunni Muslims to commemorate the willingness of Abraham to sacrifice his son Ishmael as proof of obedience to God.

Mr. Brahimi’s planned visit coincided with new reports by rebels opposed to President Bashar al-Assad of government airstrikes against insurgents seeking to encircle a major military base at Wadi Deif in northwestern Idlib Province that has been unfolding for days.

Fresh airstrikes were also reported from the rebel-held town of Maarat al-Noaman in northern Syria pounded a day earlier by Mr. Assad’s air force on Thursday in attacks that claimed scores of lives, according to reports from activists.

In the southern town of Deraa, where the uprising began in March, 2011, as a series of peaceful protests, activists said the authorities had imposed a curfew to prevent worshipers from attendings mosques for the Friday prayer — traditionally a moment of protest.

The fighting offered a grim and bloody backdrop to Mr. Brahimi’s mission, which has already won some support from Iran and neighboring Iraq.

Reinforcing the cease-fire call, Mr. Davutoglu said on Friday: “It is especially important for the Syrian regime, which has launched bombs on its people with planes and helicopters, to halt these attacks immediately and without preconditions.”

“Let’s hope that the Syrian regime listens to this call by the international community and stops these attacks during Id al-Adha,” he said, according to The Associated Press. “In response, we expect the opposition to abide by the cease-fire in the same way.”

Like others, Mr. Davutoglu said he hoped a truce over the holiday would take root for a longer period.

Turkey’s support may be important because the authorities in Ankara are critical allies of the rebels seeking Mr. Assad’s overthrow. But, for the same reason, Mr. Davutoglu’s appeal, reported by news agencies, is unlikely to sway Mr. Assad.

Before visiting Damascus, Mr. Brahimi has been seeking support for the idea of a temporary cease-fire from the regional powers including Iran, Mr. Assad’s main backer in the area.

A cease-fire would be the first since last April when Kofi Annan, Mr. Brahimi’s predecessor as the envoy of the United Nations and the Arab League, brokered an inconclusive truce that quickly unraveled. A force of 300 United Nations cease-fire monitors was sent to Syria but left as the fighting worsened.

Mr. Annan resigned as envoy in early August.

Earlier this week, the Syrian Foreign Ministry spokesman, Jihad Makdissi, said any initiative “requires commitment by all sides in order for it to succeed.”

Mr. Makdissi said the authorities were awaiting the arrival of Mr. Brahimi to learn about the results of his regional contacts.

Syria has blamed the breakdown of the previous cease-fire on the rebels.

Hwaida Saad reported from Beirut, Lebanon, and Alan Cowell from Paris.

******************

October 18, 2012

Turkey and Egypt Seek Alliance Amid Upheaval of Arab Spring

By TIM ARANGO
IHT

ISTANBUL — With war on Turkey’s borders, and political and economic troubles in Egypt, the two countries have turned to each other for support, looking to build an alliance that could represent a significant geopolitical shift in the Middle East prompted by the Arab Spring, uniting two countries with regional ambitions each headed by parties with roots in political Islam.

Egypt and Turkey are considering plans to lift visa restrictions and recently completed joint naval exercises in the Mediterranean Sea. Turkey has offered a host of measures to bolster Egypt’s economy, including a $2 billion aid package. There is even talk of Turkey’s helping Egypt to restore its Ottoman-era buildings. A wider-ranging partnership is expected to be announced in the coming weeks when the Turkish prime minister, Recep Tayyip Erdogan, whose party shares an Islamist pedigree with Egypt’s leadership, goes to Cairo.

The emerging alliance springs from the earthquake that shook the regional order when Egypt’s president, Hosni Mubarak, was ousted and from the civil war in Syria. Though Egypt’s position had long been compromised by its economic frailty and failing diplomatic might, it remained an anchor of the region in an alliance with Saudi Arabia and Jordan. Egypt often tangled with Turkey as both vied for the hearts and minds of the Arab street, with Turkey increasingly presenting itself as the champion of the Palestinians, often to Mr. Mubarak’s embarrassment.

And Turkey’s close ties with Syria have been severed, undermining its political and economic links to the Arab world.

As a result, each country seems to need the other in an alliance that could shape the region for decades to come and help it emerge from the tumult of Arab revolutions.

“Apparently now Egypt is Turkey’s closest partner in the Middle East,” said Gamal Soltan, a professor of political science at the American University in Cairo, who added that one impetus for the partnership that is taking shape between the two countries was Turkey’s loss of “a major partner in Syria.”

Turkey is trying to firm up its influence in the region at a time of war and revolution by taking with Egypt some of the same measures it used in its opening with Syria just a few years ago, which became the cornerstone of a foreign policy oriented toward the Middle East, rather than Europe.

Meanwhile, a new Egypt is emerging from decades of authoritarian rule with a shattered economy and facing a contest for its future between various sparring ideologies, including Islamists and liberals, a struggle that Turkey’s experience could help guide.

The collapse in relations with Syria may have prompted Turkey to speed up its alliance with Egypt, but the partnership is also rooted in the Islamist politics of the leaders of the two countries and their respective movements: Mr. Erdogan’s Justice and Development Party, or A.K.P., and the Muslim Brotherhood of Egypt’s president, Mohamed Morsi. This connection offers chances for a new Sunni Islamic bloc, even as each country offers a different understanding of how Islam and democracy can coexist.

In coming together, Mr. Erdogan and Mr. Morsi risk alienating their domestic political audiences by engaging so deeply with each another, analysts said. In Mr. Erdogan’s case, he may face criticism from the hard-line secularists who see themselves as the inheritors of the legacy of Mustafa Kemal Ataturk, the founder of modern Turkey, who forcibly imposed secularism. And for all the talk of Turkey’s presenting Egypt with a model for an Islamic democracy, many conservative Muslims in Egypt doubt the Islamic credentials of Turkey, where women who wear head scarves are still banned from working in government or running for office, analysts said.

“The Muslim Brothers are somewhat divided over Turkey as a role model,” Professor Soltan said. Some of the conservative members of the Brotherhood “have a vision for Egypt that is much more Islamic” than Mr. Erdogan’s party, he said.

But while there are some risks, both look out at the world as it is now and see little alternative, experts said.

In forming a partnership on security, economic and diplomatic matters with Egypt, its onetime rival, Turkey is advancing its efforts to shape the affairs of the Middle East while its dream of membership in the European Union, once its most important foreign policy initiative, seems more distant than ever.

Referring to Turkey and Egypt, Shadi Hamid, the director of research at the Brookings Doha Center, said, “Relations are warmer today than they have been in recent years, decades perhaps.” He added, “Turkey has become the effective leader of the Arab world, even though it’s not Arab.”

The scene at the annual convention of Mr. Erdogan’s party in Ankara, the capital, a few weeks ago offered a portrait of a realigned Middle East with Turkey at the helm. Mr. Morsi said at the gathering, “We offer our gratefulness for the support that the Turkish people and its administration has extended and will extend to us in the future.” To a standing ovation, Khaled Meshal, the political leader of Hamas, the Palestinian militant group, declared of Mr. Erdogan: “You are not only a Turkish leader. You are, now, also a leader of the world of Islam.”

Still, Turkey’s assertive role in the region is weighted by a history of Ottoman dominance over the Middle East, and resentments linger over the way the Ottomans treated the Arabs, said Paul J. Sullivan, a Middle East security expert at Georgetown University and a columnist for a Turkish newspaper. So, analysts say, the partnership could just as easily slip back into a rivalry for regional dominance, especially if Egypt can achieve political stability and engineer an economic recovery.

“There is within the Egyptian psyche that belief that Egypt should be the leader of the region,” Mr. Sullivan said.

As a measure of Turkey’s changing role in the Middle East, consider the story of Muhammad Bitar: Over more than two decades, Mr. Bitar, a Syrian, vacationed regularly in Turkey, crisscrossing the country by car and taking, by his count, nearly 8,000 photographs. Back in Damascus, he produced an Arabic tourist guide titled “Turkey, Heaven on Earth,” with a cover photograph of a mosque on the shores of the glimmering Black Sea.

For that, he said, he spent 23 days in prison, accused of being an agent for the Mossad, the Israeli spy agency, because of Turkey’s close ties to Israel at the time, which kept it on the sidelines of Arab affairs.

Mr. Bitar is now among the tens of thousands of Syrians living in Turkey to escape the war at home, and he is setting down roots by opening a restaurant in Istanbul that will offer Ottoman and Arab dishes.

“We respect Turkey because it is going well,” he said. “I am a Syrian, but I want Turkey to lead.”

Sebnem Arsu contributed reporting.

**************

October 18, 2012

Seized by Rebels, Town Is Crushed by Syrian Forces

By ANNE BARNARD and HWAIDA SAAD
IHT

BEIRUT, Lebanon — The town of Maarat al-Noaman in northern Syria was just last week the scene of a major victory for the insurgents, who drove government forces from checkpoints at a crucial crossroads on a major highway, apprehended scores of soldiers, celebrated atop captured armored vehicles and declared the town “liberated.”

On Thursday, jubilation turned to horror as government airstrikes sent fountains of dust and rubble skyward and crushed several dozen people who had returned to what they thought was a new haven in a country mired in civil war, according to reporters on the scene for a Western news agency, and antigovernment fighters and activists who backed up their accounts with videos posted online.

Men stumbled over rubble, carrying single bones nearly shorn of flesh and shredded body parts barely identifiable as human. Amid a swirling crowd of rescuers, two young men embraced and wept. A man in a baseball cap pointed out crumpled buildings that, he said, crushed women, children and elderly people sheltering there. An infant in a pink shirt lay motionless, then opened its eyes. “God is great,” said a rescuer, cradling the baby in his arms.

Maarat al-Noaman’s reversal of fortune highlights the dark turn that Syria’s civil war has taken in recent months, as fighting intensifies and the government and insurgents remain locked in an increasingly bloody stalemate, Syrian residents and military analysts said.

When rebels declare a town liberated, President Bashar al-Assad’s government no longer makes much effort to retake territory, they said. Now, it sends overwhelming force with one objective — to destroy and level all that is left behind.

Regaining and maintaining control requires resources the government, stretched on many fronts by the 19-month conflict, cannot afford, said Emile Hokayem, a Middle East-based analyst at the International Institute for Strategic Studies. “So,” he added, “they actually have no problem completely destroying it.”

Gutting and abandoning towns rather than trying to govern them shifts responsibility for reconstruction and relief onto the shoulders of the underequipped rebels, breeding frustration, Mr. Hokayem said, a tactic that suggests the government has given up on winning the trust of its people.

“They’re not after regaining the hearts of the population,” he said. “The calculation is that what’s needed is for the population to start resenting the rebels, not to start liking the Assad regime again.”

That dynamic — rebel gains, army crackdowns and ensuing resentment against rebels as well as the government — has played out again and again in recent months, most recently in Aleppo, Syria’s largest city. Rebels last month began what they said would be an all-out offensive there. But the result was to spread fighting into previously peaceful neighborhoods and damage the city’s beloved historic center, leaving many residents as angry at the rebels for bringing the fight there as at the government for its harsh response.

In Maarat al-Noaman over the past week, rebels attempted to provide some services. They tried to distribute bread after the government shelled bakeries, activists said, a tactic used in several cities, according to a recent Human Rights Watch report. But some of those efforts appeared ad hoc and rudimentary: an antigovernment video showed boys, girls and adults lining up as men handed out bread from the trunk of a small white sedan.

Abu Ahmed, the commander of a group of fighters from the nearby village of Sinbol, said in a Skype interview on Thursday that kerosene supplies had sunk so low in the town that rebels had to form a committee to keep people from cutting down olive trees for fuel.

An even thornier problem arose that one rebel commander said had left his brigade “seriously confused”: how to manage the scores of government soldiers captured in the rebel offensive.

“We don’t know what we’re going do with them,” the commander, who asked that his name not be used and claimed to be holding 600 prisoners, said in a Skype interview on Tuesday. Even feeding them “one loaf, tomato or potato” a day would be too expensive, he said. “We don’t have food even to feed our families.”

But if the prisoners were released, he said, they might rejoin the army or pro-government militias. He said he was beginning to wish they had died in the fighting.

Yet the battle exposed weaknesses and strengths on both sides.

While the destruction on Thursday renewed questions about the rebels’ tactic of seizing territory, their earlier victory showed their growing capability and the strain on government forces. Rebels claimed they had been able to seize for a time all the checkpoints between Maarat al-Noaman and Khan Sheikhoun, 10 miles to the south along the north-south highway that is the main artery between Damascus and Aleppo.

Lt. Ahmad Haleeb, a rebel officer, said in an interview that he had fought with more than 150 troops and that they had killed 65 soldiers and captured seven in a fight for a checkpoint. In one government-held building, a cultural center, rebels shot video of a dozen dead, shirtless men they said had been security detainees apparently executed as troops fled.

Several units worked together, one attacking government reinforcements en route to the battle, activists and fighters said last week. Videos described as having been made during the battle showed rebels shooting down a helicopter, using small-arms fire in coordinated squads, firing rocket-propelled grenades and heavy-caliber weapons mounted on flatbed trucks, and even appearing to commandeer an armored vehicle.

They surrounded an army base at Wadi al-Deif, near Maarat al-Noaman, where on Thursday, activists and fighters said, government soldiers were still trapped without access to supplies amid new shelling by rebels.

“At a purely tactical level that was a defeat for the regime,” Mr. Hokayem said of Maarat al-Noaman.

On Thursday, the government said it was pushing rebels out of the town. SANA, the Syrian state news agency, reported that the army was “cleaning” the area and had “killed a large number of terrorists.” It said the army had uncovered caves and tunnels storing weapons, and had destroyed heavy weapons as well as 60 bombs weighing hundreds of pounds each.

But Abu Ahmed, the commander, said that rebels still controlled one side of town and aimed to control routes to Aleppo and north to Saraqeb, Idlib and Turkey.

Maarat al-Noaman drew attention because of its strategic location, the rebels’ unusually well-documented gains and the vivid photographs and reporting by Agence France-Presse journalists who were also present during the airstrike on Thursday.

The town, with a prewar population of about 120,000, was an obscure provincial enclave known mainly for the Alma Arra museum, a 16th-century former traders’ inn housing a collection of Byzantine mosaics and pre-Islamic pottery — and, on the entryway floor, a mosaic portrait of Mr. Assad and his father and predecessor, Hafez al-Assad.

But Maarat al-Noaman has broader significance as an archetype of Syria’s neglected midsize towns. The country’s hinterland is dotted with more than 120 towns with populations of more than 20,000, and battles have ravaged many that poverty and resentment made hotbeds of rebellion.

In his effort to win over Syria’s elite with new economic freedoms early in his rule, before the uprising, Mr. Assad courted Damascus at the expense of the periphery that had long been the base of his Baath Party.

“He won Damascus,” said Mr. Hokayem, the strategic studies institute analyst, “but he lost Syria.”

Hania Mourtada contributed reporting from Beirut, and Rick Gladstone from New York.




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« Reply #2741 on: Oct 19, 2012, 06:48 AM »

October 19, 2012

North Korea Threatens Violent Response to Propaganda Campaign

By CHOE SANG-HUN
IHT

SEOUL, South Korea — North Korea threatened on Friday to attack the South if activists proceeded with a plan to send leaflets north across the border criticizing the Pyongyang regime. South Korea’s military said it would immediately strike back if the North did so.

The exchange of saber-rattling, though hardly unprecedented, comes at a politically sensitive time in South Korea, where a presidential election is to be held in December and parties are highly attuned to how a surprise North Korean move might affect the outcome.

An umbrella group of anti-Pyongyang organizations, mostly led by defectors from the North, has announced plans to release balloons bearing propaganda leaflets on Monday in Imjingak, a South Korean village near the western border with North Korea. Activists have conducted similar balloon launches near the border before.

The statement Friday, released by the North’s official Korean Central News Agency, said that as soon as a balloon launch is detected, the North Korean People’s Army “without warning will start a merciless attack” targeting Imjingak and its surroundings. “The leaflets are a most undisguised act of psychological warfare, a violation of the armistice and an intolerable act of war,” the statement said. It urged South Koreans to leave the targeted area.

The two Koreas are technically at war, the 1950-53 Korean War having ended with an armistice rather than a peace treaty. They have engaged in several skirmishes in recent years.

Speaking to lawmakers on Friday, the South Korean defense minister, Kim Kwan-jin, noted that North Korea had issued similar threats before about leaflets from the South, without following up on them. But he said that if North Korea does strike, “we will eradicate their origin of attack.”

Park Sang-hak, a North Korean defector who is organizing the leaflet campaign, said his group remained undeterred. “We send facts about the North Korean regime to the North Korean people through peaceful means,” he said. “We will send our balloons as planned.”
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« Reply #2742 on: Oct 19, 2012, 06:50 AM »


Kuwait plunges into political turmoil amid crackdown

By Agence France-Presse
Friday, October 19, 2012 7:35 EDT

Kuwait plunged into political turmoil on Friday after the public prosecution ordered the detention of three former opposition MPs for three days with more arrests expected.

The three — Falah al-Sawwagh, Bader al-Dahum and Khaled al-Tahus — were questioned for nine hours on accusations of undermining the status of Kuwait’s ruler before being taken into custody around midnight, defence lawyer Mohammad al-Jumaih said.

The prosecutor also extended the detention for three more days of four opposition activists arrested on Monday during clashes between police and protesters following a huge rally.

The move came as hundreds of supporters of the Islamist and nationalist-led opposition and former lawmakers gathered outside the Palace of Justice in the capital, Kuwait City, in solidarity with the ex-MPs and activists.

Breaking decades-old taboos, speakers directly addressed Emir Sheikh Sabah al-Ahmad Al-Sabah, warning him that any amendment to the electoral law could lead to street protests and chaos.

They also warned Kuwait was becoming an autocratic state, and insisted they would oppose that.

The emirate embraced parliamentary democracy half a century ago, but it is illegal under the constitution to criticise the emir who enjoys extensive authority and must be from the Al-Sabah ruling family, in power for over 250 years.

Kuwait, an OPEC member which says it sits on 20 percent of global oil reserves and has more than $400 billion of surpluses, has been in a virtual limbo since June 20 when the top court anulled an opposition-dominated parliament.

The historical court verdict also reinstated the pro-government parliament elected in 2009 after it was dissolved in December following street protests and corruption allegations.

The house however was dissolved again two weeks ago but the government has so far failed to set a date for next elections amid allegations it is planning to change the electoral law to manipulate the polls results.
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« Reply #2743 on: Oct 19, 2012, 06:53 AM »

 SPIEGEL ONLINE
10/19/2012 09:18 AM

EU Summit Strife: Berlin and Paris Compromise on Bank Oversight

By Carsten Volkery  in Brussels

Ahead of this week's European Union summit in Brussels, Chancellor Merkel and French President Hollande staged a public battle over euro-zone reform. On Thursday night, however, the two quickly reached a compromise on the introduction of banking oversight. But difficult questions remain.

European leaders have reached agreement on the roadmap to a banking oversight regime in the euro zone. Following a public back-and-forth between German Chancellor Angela Merkel and French President François Hollande, the 27 European Union heads of state and government on Thursday night found a compromise at their two-day summit in Brussels.

The agreement calls for the legal framework for financial sector oversight to be completed by the end of the year, but actual implementation won't come until later. The oversight regime will be introduced "in the course of 2013," the summit's closing statement reads.

In a brief press conference following the summit's first night of meetings, Merkel said that an oversight agency takes longer than just two months to develop. She declined, however, to pinpoint a concrete date by which the agency would be operational. "We don't want to disappoint the markets by continuing to make short-term declarations," she said.

The compromise is a victory for Merkel. Both France and Spain had been emphatic that bank oversight begin on Jan. 1, 2013. Berlin, however, insisted that any such regime be thoroughly planned and resisted efforts to move quickly, receiving support from such non-euro-zone countries as Sweden and the Czech Republic. Over a dinner of roast veal and spinach, Hollande and his allies backed down.

After Thursday night negotiations concluded, the French president was eager to stress the New Year's Day deadline for the completion of the legal framework and said it would only take several additional weeks before the agency could begin operations. Merkel, though, emphasized that there would be no direct aid paid out to European financial institutions from the European Stability Mechanism, the permanent euro bailout fund, before the bank oversight system was fully functional.

Tense Atmosphere

Hollande told journalists that the compromise agreement had been reached quickly, belying the tense atmosphere between Paris and Berlin on the eve of the summit. Indeed, as the week progressed, it seemed as though the conflict between Europe's most important protagonists had escalated.

The French president in particular seemed to be on the war path. He gave a joint interview to several European dailies which included what seemed to be a direct attack on the chancellor. "Those who speak most passionately about political union are often the ones who hesitate the most when it comes to making pressing decisions," he said. His feistiness did not abate immediately upon his arrival in Brussels. Before meetings began, he insisted that the summit would be focusing on the planned banking union and not on fiscal union, Merkel's preferred project. He also accused Merkel of dragging her feet on bank oversight due to the approaching 2013 general elections in Germany.

Merkel didn't shy away from confrontation either. During her speech to German parliament on Thursday prior to her departure for Brussels, she threw her support behind Finance Minister Wolfgang Schäuble's proposal, made earlier in the week, for a super commissioner to monitor, and even veto, national budgets of euro-zone member states. Hollande sees the proposal as nothing more than a diversionary tactic. Still, Merkel did send a signal that she was not intent on remaining confrontational by arguing in favor of a euro-zone "solidarity fund" that could be used to support the currency union's weaker members. The word "solidarity" was deliberately chosen: It is one of Hollande's favorite terms when discussing the euro crisis.

Hollande, however, was not to be distracted. A last minute bilateral meeting between the two leaders proved initially unsuccessful in finding a compromise, according to EU diplomats. The French leader continued to insist on a Jan. 1 start date for financial sector oversight.

Difficult Questions

Merkel, for her part, remained stubborn in her view that such a powerful agency could not simply be created from scratch in just a few months. "We are of course working as quickly as we can on the project, but do not believe that the agency will be able to begin its work on Jan. 1, 2013," a German government official told the press during the working dinner in Brussels. Before that can happen, the official said, a number of difficult questions must be answered, including how European Union countries not belonging to the currency union should be treated and how to deal with banks that do business both inside and outside of the euro zone.

Swedish Prime Minister Fredrik Reinfeldt and his Czech counterpart Petr Necas likewise warned against moving too quickly. Reinfeldt said that he wouldn't agree to a bank oversight regime until all of the details had been ironed out. The agency is to operate under the auspices of the European Central Bank and will be responsible for overseeing all 6,000 euro-zone banks. All 27 European Union members, however, must agree to the creation of the agency. Germany had been fighting for a more limited oversight architecture monitoring just the largest of euro-zone banks.

France and Spain are pushing for the quick establishment of a bank oversight system because it is a prerequisite for banks to be able to draw direct aid from the ESM. Spain and Ireland, in particular, had been hoping for a quick resolution so their banks could access such aid.

The roadmap that has now been agreed upon is an advantageous one for Merkel. It gives her the possibility to potentially push back the introduction of the oversight agency -- and thus the controversial provision of direct ESM aid to banks -- until after German elections next September. The delay, however, might create some turbulence on the financial markets. According to analysts, ESM aid for Spanish and Irish banks had already been priced in.

In addition to the tense standoff, the first evening of the two-day summit also had its light moments. European Commission President Herman Van Rompuy told the gathered leaders that he hoped they would all join him in Oslo in December to accept the Nobel Peace Prize. Merkel immediately accepted the invitation and asked her colleagues to do the same. But British Prime Minister David Cameron, an EU skeptic, quickly declined. Instead, he said, one should send 27 children from the EU to accept the prize.
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« Reply #2744 on: Oct 19, 2012, 06:55 AM »

October 18, 2012

Leaders Say They Expect Agreement on Aid for Spanish Banks This Year

By JAMES KANTER and STEPHEN CASTLE
IHT

BRUSSELS — European Union leaders said early Friday that legislation enabling rescue aid to be channeled directly to Spanish banks should be agreed by the end of the year, but they left open critical decisions on how soon it could go into effect.

By leaving the start date vague, Germany could shape the legislation over the next three months to delay any use of a new bailout fund to directly recapitalize Spanish lenders until after national elections in September 2013.

The legislation focuses on improving supervision of banks in the euro area by putting them under the aegis of the European Central Bank, and it is one of the tools developed by Europeans aimed at salvaging the euro. The leaders agreed at their last summit in June that the direct recapitalization of banks could go forward once effective supervision by the European Central Bank is in place.

But such direct aid could be an election issue because German citizens have grown weary of paying most of the bill for bailouts, and they are wary of using more funds to help Spanish banks.

At a news conference Friday morning, Chancellor Angela Merkel of Germany would not give a precise start date for the system nor for the direct recapitalization of banks.

Mrs. Merkel said that Mario Draghi, the president of the central bank, had informed leaders that “it will take some time until this banking supervision is up and running.” Mr. Draghi “didn’t give us specific months, but it is not a matter of just one or two, it will take longer,” she added.

The French government and the European Commission have sought to hasten that legislation in order to allow direct recapitalization of some of the euro zone’s most vulnerable banks to start on Jan. 1, 2013.

But François Hollande, the French president, was also unable to give a date for the start of the system and instead said markets should be confident that direct recapitalization of banks would be able to go forward over the course of 2013.

“Weeks or months will be needed for the mechanism to be implemented” once the legislation was completed at the end of 2012, Mr. Hollande told a news conference.

“The worst is over,” he added, seeking to assure investors and citizens that Europe was keeping up momentum to emerge from its financial crisis.

Mrs. Merkel arrived at a two-day summit here insisting that putting some of the bloc’s most vulnerable banks under the single supervisor by January was too ambitious.

After about five hours of talks, the leaders tweaked language in their final report making it clear that they did not expect the new system of bank supervision to be up and running by Jan. 1.

French leaders have also pressed for speedy adoption of European legislation to tighten budget discipline across the euro zone, as well as measures to pool at least some of the euro zone countries’ debt.

Germany, by contrast, has emphasized a more cautious approach and is seeking even greater powers of intervention to enable the most solvent countries to enforce budgetary discipline in the euro zone.

The differences between France and Germany matter. Agreement between governments in Paris and Berlin is seen as vital to any steps toward further integration in Europe and for ensuring the survival of the common currency for the 17 European Union countries using it.

The creation of a single banking regulator for the euro area was supposed to be a relatively straightforward matter after leaders agreed at a summit meeting in late June to put all lenders in the region under the aegis of the European Central Bank.

The idea was eagerly supported by Ireland and Spain, because it would be a precursor to letting weak banks in those countries tap Europe’s new bailout fund directly, without loading more debt on those countries’ governments.

Since June, though, Germany has balked at proposals by the European Commission and France to put all 6,000 lenders in euro zone countries under the supervision of the regulator in a system that would be phased in starting Jan. 1.

The government in Berlin wants to ensure that the central bank has the capacity to do that job, while some German regional leaders are opposed to greater scrutiny of state and local banks by the central bank.

Last month finance ministers from Germany, Finland and the Netherlands set off new alarms with a joint statement proposing that any bank rescues from the bailout fund go only toward future problems.

Non-euro Eastern and Central European countries have their own concerns about a potential run on their banks, which would not be part of the new central system or backstopped by the European bailout fund.

And then there is Britain, which is a European Union member but has its own currency.

The British are seeking to secure a voting system that would ensure that decisions cannot be imposed on Britain’s banks by the euro zone countries working together as a bloc.

Amid the stalled progress on the banking rules, warnings have been growing louder of a creeping lack of urgency to tackle the most pressing problems still hanging over the euro zone.

A pledge in September by the central bank to buy unlimited quantities of bonds has steadied borrowing costs in some of the most vulnerable euro zone countries like Spain. And while that decision has taken the edge off the crisis, it also could set the scene for a new outbreak of market jitters.

“It is very important that the summit now maintains the momentum of reforming the economic and monetary union including the banking union,” Olli Rehn, the European commissioner for economic and monetary affairs, said on Thursday. “Now the political will of member states is tested.”

In the case of Greece, little was forthcoming at the summit meeting beyond a statement that appeared intended to paper over the slow pace of negotiations with Athens on the release of more rescue money, and that seemed aimed at lending support for Prime Minister Antonis Samaras.

“We welcome the determination of the Greek government to deliver on its commitments and we commend the remarkable efforts by the Greek people,” the leaders said. “Good progress has been made to bring the adjustment program back on track,” they said.
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