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« Reply #7290 on: Jul 03, 2013, 07:37 AM »

July 2, 2013

Myanmar’s Muslim Minority Confronts Fear and Mistrust


YANGON, Myanmar — Night can be very dark in Yangon, a city where street lamps, when there are any, flicker on and off with the uneven electricity supply. For a group of Muslim men guarding their neighborhood until dawn, it is never clear what is lurking down the potholed roads and alleyways.

“The government cannot guarantee our safety,” said U Nyi Nyi, a businessman who sat on a plastic chair with a half-dozen of the 130 men he has organized for an improvised Muslim neighborhood watch program.

After decades of peaceful coexistence with the Buddhist majority in the country, Muslims say they now constantly fear the next attack. Over the past year, they say several violent episodes across the country led by rampaging Buddhist mobs have taught them that if violence comes to their neighborhood, they are on their own.

“I don’t think the police will protect us,” Mr. Nyi Nyi said.

The neighborhood watch program, a motley corps of men who check for any suspicious outsiders and keep wooden clubs and metal rods stashed nearby, is a symbol of how much relations have deteriorated between Buddhists and Muslims in Myanmar, formerly known as Burma.

About 90 percent of the country’s population of 55 million is Buddhist, with Muslims making up 4 to 8 percent.

Since British colonial days, Yangon, formerly Rangoon, has been a multicultural city where Buddhists live cheek by jowl with Muslims, Christians and Hindus. Mosques and Buddhist pagodas are literally in each other’s shadows.

Now fear and suspicion taint dealings between the two communities, Muslims say.

“We are losing trust with each other,” said U Aye, a Muslim used-car salesman. “Any business transaction between a Buddhist and a Muslim can turn into an incident.”

The root of the violence, which has left around 200 Muslims dead over the past year, appears partly a legacy of colonial years when Indians, many of them Muslims, arrived in the country as civil servants and soldiers, stirring resentment among Burmese Buddhists. In recent months radical monks have since built on those historic grievances, fanning fears that Muslims are having more children than Buddhists and could dilute the country’s Buddhist character.

So far, Yangon, which is by far the country’s largest city, has mainly escaped the violence. But there have been some minor clashes in the city that intensified worries here, fueling rumors about pending attacks in both the Buddhist and Muslim communities.

Days after Buddhist mobs tore through the central city of Meiktila in March, two trucks filled with men showed up in Mr. Nyi Nyi’s neighborhood and hurled stones at the night watchmen with slingshots.

Some Muslims with means have fled to Malaysia or Singapore. Muslim-owned businesses are losing Buddhist customers. A growing Buddhist movement known as 969 that has the blessing of some of the country’s leaders is campaigning for a boycott of Muslim products and businesses and a ban on interfaith marriages.

The movement says it is not involved in violence, but critics say that, at the least, hate-filled sermons are helping to inspire the killings.

“This is the first time we experience this in our lifetime,” said U Maung Maung Myint, who runs an import-export company and is one of the trustees of the Bengali mosque, which is only a few hundred paces from a Buddhist pagoda, a Christian church and a Hindu temple. He was referring specifically to the mistrust between communities.

After a lifetime of feeling that he was Burmese, Mr. Maung Maung Myint said he felt “betrayed.” At least twice during the decades of military rule, Muslims joined protesters calling for political change, he said. “We marched in front of the American Embassy and chanted, ‘We want democracy!’ ” he said.

“We hoped our lives would be more peaceful — we didn’t expect this,” Mr. Maung Maung Myint said in an interview after Friday Prayer on the third floor of the mosque, which installed security cameras last year to guard against arson.

Myanmar is now ruled by a nominally civilian government, but new freedoms have amplified old animosities.

Much of the violence has made headlines inside the country and beyond. But smaller incidents have gone largely unreported. In one such case, a grocery store owned by U Khin Maung Htay, 59, was attacked in February by a Buddhist mob in Hlaing Thaya Township, directly across the Hlaing River from Yangon.

Mr. Khin Maung Htay was the headman of the neighborhood, and some of his Buddhist friends had warned him that trouble was brewing.

“I called police, but they said, ‘Don’t worry, there’s no problem,’ ” Mr. Khin Maung Htay said.

When the Buddhist mob attacked, the police arrived, but left after failing to persuade the crowd to disperse, he said. Mr. Khin Maung Htay’s shop was destroyed, and everything inside was looted.

He fled his home and is now a refugee in his own city, crammed in a two-bedroom apartment in central Yangon with 22 other relatives.

He tried to return to the neighborhood, he said, but angry residents, some of them former customers, shouted abuse and threatened him.

“They said: ‘Go back to India! Go back to Bangladesh!’ ” Mr. Khin Maung Htay said.

The suggestion that Muslims leave the country has been a common refrain during the violence, which bewilders many Muslims who have always considered themselves Burmese. Mr. Khin Maung Htay, his father and his grandfather were all born in Myanmar.

Myanmar’s Muslims are a diverse collection of ethnicities and appearances. In some families, women wear head scarves and men grow out their beards. But many say they have made an effort to blend into Burmese society.

“We have a Myanmar lifestyle,” said U Maung Maung Myint, the owner of a desktop publishing business who is not related to the head of the import-export business. “We are Myanmar citizens. We went to Myanmar schools.”

Ninety percent of his customers were Buddhists, but early this year many of them stopped coming. It was the first time he had felt discrimination, he said.

Buddhists in Myanmar are often candid about their dislike for Muslims.

U Soe Nyi Nyi, the owner of a successful restaurant business that includes the flagship brand Feel, a popular chain in Yangon, said he generally avoided hiring Muslims because “there are so many differences — their attitude, their manners, their behavior.”

Among his 1,800 employees are only two Muslims, a parking attendant and a man who makes a type of Indian ice cream.

In real estate, Buddhist building owners do not want to sell apartments to Muslims, Mr. Soe Nyi Nyi said, adding, “If you sell one apartment to a Muslim family, all the prices in the building will go down. ”

U Myint Thein, who owns a business selling cooking-gas stoves imported from India, said he found it difficult to explain the violence to his children.

“I did my best to make sure they didn’t hear about these horrible things, but they heard,” he said. “I never thought about leaving this country before. But I don’t want my kids to live through more of this.”

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« Reply #7291 on: Jul 03, 2013, 07:41 AM »

July 2, 2013

Beijing Increases Security in Xinjiang


BEIJING — The Chinese authorities tightened their grip on Tuesday on the far western region of Xinjiang, where two clashes left dozens dead last week, by confiscating knives and offering rewards for information about possible separatist attacks, according to the state news media. The police also issued arrest warrants for 11 people said to be wanted for murder, bombings and other acts of violence.

The security drive, described by one senior official as a “people’s war,” has been accompanied by accusations in official media that shadowy extremist groups have orchestrated unrest among Uighurs, a Turkic ethnic group. One state-run newspaper sought to link an increase in violence in Xinjiang to Uighurs who were said to have trained in war-ravaged Syria.

On Monday, the newspaper — The Global Times, a populist tabloid owned by The People’s Daily, the main newspaper of the Chinese Communist Party — claimed that about 100 Uighurs had gone to Syria to join rebel forces there who are fighting the government of President Bashar al-Assad.

The newspaper quoted an unidentified Chinese security official as saying that the Uighurs went to Syria to “improve their fighting skills and gain experience in carrying out terror attacks.” Uighur exile groups and experts on the region have rejected government claims that the unrest in Xinjiang was the work of foreign-trained militants.

The intense security comes days before the fourth anniversary of ethnic rioting in the regional capital, Urumqi, that killed nearly 200 people. The attacks last week included an assault Wednesday on a local police station and government offices in Turpan Prefecture that left 35 dead, including 11 rioters shot by the police. Two days later, the state media reported a violent confrontation in Hotan Prefecture; details remain murky.

In a speech published Tuesday, the Communist Party secretary of Xinjiang, Zhang Chunxian, said officials must “fully grasp that violent terrorist activities have become a real and major threat to stability in Xinjiang,” according to Tianshan Net, the official Internet news site for Xinjiang.

State media have reported that in the recent bloodshed, rioters were armed with primitive weapons, mostly knives, and many foreign experts have said much of the ethnic violence in Xinjiang is spontaneous discontent that does not show the hallmarks of international planning and support.

But The Global Times suggested that Xinjiang was also under broader threat from skilled separatist fighters hardened by combat in Syria. The report said a Uighur man who had fought in Syria returned to Xinjiang, where he was captured. On Tuesday, the paper quoted Syria’s ambassador to Beijing as saying that at least 30 Uighur militants had traveled to the Afghanistan-Pakistan borderlands and then to Turkey for the purpose of fighting in Syria.

The accusations have exposed a murky international dimension to Beijing’s claims that bloodshed in Xinjiang has been orchestrated by Uighur militants seeking an independent homeland, which they call East Turkistan.

But it is unclear whether the Chinese government endorses the allegations of a link to Syria. No other Chinese news outlet has independently confirmed the allegations in The Global Times, and a Foreign Ministry spokeswoman, Hua Chunying, did not directly respond to the report. Still, when asked Tuesday whether China believed that separatist organizations were behind the violence, Ms. Hua said, “Please don’t harbor any doubt about the nature of the recent violent terrorist acts in Xinjiang.”

The East Turkistan Education and Solidarity Association, a Uighur exile group based in Turkey, denied The Global Times’s accusations that it had helped Uighurs travel to Syria. In a telephone interview from Istanbul, Abdulehed Er, the association’s vice president, said the report was part of a Chinese government effort to smear opponents as terrorists.

Rohan Gunaratna, a professor at the Nanyang Technological University in Singapore, said some Uighurs appeared to have gone to Syria to fight with opposition groups, but not in the numbers cited by The Global Times. He estimated that a dozen had tried to enter Syria but was unsure how many had succeeded.

Andrew Jacobs reported from Beijing, and Chris Buckley from Hong Kong. Patrick Zuo contributed research from Beijing.


July 2, 2013

A Chinese Virtue Is Now the Law


BEIJING — They are exemplars from folklore who are familiar to Chinese schoolchildren. There is the Confucian disciple who subsisted on wild grass while traveling with sacks of rice to give to his parents. There is the man who worshiped wooden effigies of his parents.

But Chinese officials apparently think it is not enough these days to count on tales and parental admonitions to teach children the importance of filial piety, arguably the most treasured of traditional virtues in Chinese society.

The government enacted a law on Monday aimed at compelling adult children to visit their aging parents. The law, called “Protection of the Rights and Interests of Elderly People,” has nine clauses that lay out the duties of children and their obligation to tend to the “spiritual needs of the elderly.”

Children should go home “often” to visit their parents, the law said, and occasionally send them greetings. Companies and work units should give employees enough time off so they can make parental visits.

The law was passed in December by the standing committee of the National People’s Congress. It does not stipulate any punishments for people who neglect their parents. Nevertheless, that officials felt the need to make filial duty a legal matter is a reflection of the monumental changes taking place throughout Chinese society.

Many aging parents in China, as in other industrialized nations, complain these days about not seeing their children enough. And the children say the stresses of daily life, especially in the rapidly expanding cities, prevent them from carving out time for their parents.

“China’s economy is flourishing, and lots of young people have moved away to the cities and away from their aging parents in villages,” Dang Janwu, vice director of the China Research Center on Aging, said in a telephone interview on Tuesday. “This is one of the consequences of China’s urbanization. The social welfare system can answer to material needs of the elders, but when it comes to the spiritual needs, a law like this becomes very necessary.”

Mr. Dang said the law had already been successful in prompting significant discussion of the issue.

Others have been more skeptical. On Monday, Guo Cheng, a novelist, told the 1.3-million followers of his microblog: “Kinship is part of human nature; it is ridiculous to make it into a law. It is like requiring couples who have gotten married to have a harmonious sex life.”

Nevertheless, the issue of abandoned aging parents is a real one across China. In 2011, Xinhua, the state news agency, ran an article that said nearly half of the 185 million people age 60 and older live apart from their children. People residing in a different city from their parents, including legions of migrant workers, usually find time to go home only during the Lunar New Year holiday.

On the same day the new law went into effect, a court in the eastern city of Wuxi ruled that a young couple had to visit the wife’s 77-year-old mother — who had sued her daughter and son-in-law for neglect — at least once every two months to tend to her “spiritual needs,” as well as pay her compensation, Chinese news organizations reported.

“Mental support is an important aspect in the protection of old people’s rights and interests,” said the head of the court, Yuan Ting, according to Xinhua.

The classic text that has been used for six centuries to teach the importance of respecting and pampering one’s parents has been “The 24 Paragons of Filial Piety,” a collection of folk tales written by Guo Jujing. Last August, the Chinese government issued a new version, supposedly updated for modern times, so today’s youth would find it relevant. The new text told children to buy health insurance for their parents and to teach them how to use the Internet.

Guangzhou Daily, an official newspaper, ran an article in October about a 26-year-old man who pushed his disabled mother for 93 days in a wheelchair to a popular tropical tourist destination in Yunnan Province. The article called it “by far the best example of filial piety” in years.

Shi Da and Patrick Zuo contributed research.

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« Reply #7292 on: Jul 03, 2013, 07:44 AM »

Iran's president signals softer line on web censorship and Islamic dress code

Newly elected Hassan Rouhani, an opponent of segregation by gender, says Iranians' freedoms and rights have been ignored

Saeed Kamali Dehghan, Tuesday 2 July 2013 18.28 BST   

Two weeks after his sensational victory Iran's president-elect, Hassan Rouhani, has expressed relatively progressive views about civil liberties, freedom of expression and the internet.

Social networking sites such as Facebook were, he said, a welcome phenomenon.

In his most outspoken interview in the Iranian media, Rouhani told Chelcheragh – a popular youth magazine – that he is opposed to segregation of sexes in society, would work to minimise censorship and believes internet filtering is futile.

"In the age of digital revolution, one cannot live or govern in a quarantine," he said as he made clear he is opposed to the authorities' harsh crackdown on Iranians owning satellite dishes, which millions have installed on rooftops for access to foreign-based TV channels illegal in the country.

Rouhani, who has promised to put the Islamic republic back on the path of moderation after eight acrimonious years under the outgoing president, Mahmoud Ahmadinejad, warned that citizens' rights had been neglected.

He said he stood in the June presidential election as a candidate critical of the current situation and also because he felt the country was at peril.

"Today the republican [nature] of our country is overshadowed by a specific interpretation of its Islamic [character]," he said.

Rouhani's reference to the republican character of Iran's ruling system is a hint that the Islamic republic's legitimacy is meant to come from the popular vote. Rouhani is scheduled to be sworn into office in early August.

"Some of the principles of our constitution have been emphasised while others were neglected and this is why we are facing an imbalance as a result," he said.

"The freedom and rights of people have been ignored but those of the rulers have been emphasised … Restricting [people's right] to criticise will only stifle and lead to inefficiency."

Of internet filtering, Rouhani said some of the measures taken by the authorities to restrict users' access online was not done in good faith and was instead politically motivated.

"There are political reasons. They have fears of the freedom people have in online atmosphere, this is why they seek to restrict information. But filtering is incapable of producing any [useful] results," he said.

"Supporters of internet filtering should explain whether they've successfully restricted access to information? Which important piece of news has filtering been able to black out in recent years?"

He added: "Filtering has not even stopped people from accessing unethical [a reference to pornographic] websites. Widespread online filtering will only increase distrust between people and the state."

Access to hundreds of thousands of websites is blocked in Iran, including Facebook and Twitter, but millions of Iranians use them via anti-filtering software or virtual private network (VPN) services.

Despite the filtering, Rouhani's campaign was active on both sites at election time.

"The virtual space is a tool and it can be an opportunity or a threat," said Rouhani.

"I remember that [former president] Ayatollah Hashemi Rafsanjani once called social networking websites such as Facebook a welcome phenomenon. Indeed they are."

Since Rouhani's win, web users in Iran have reported a relative easing of online censorship and say revoked access to VPN accounts has been restored.

Rouhani also pledged to minimise censorship of artistic and cultural works and said the state – instead of interfering in the affairs of artists and cultural figures – should provide them with security.

"We should not tighten the red lines all the time, we should show that censorship is not our goal," he said.

On the question of women wearing the hijab, a contentious issue in a country with millions unhappy about the mandatory religious code, the president-elect said he was against the crackdown against women with loose clothing – but he stopped short of saying it should be left as voluntary.

Each summer, as the heat bears down and makes it difficult for women and men in Iran to stick to their forced Islamic dress code, the religious police go out on to the streets to watch out for loose hijabs, inappropriate dress or hairstyles.

"I'm certainly against these actions," said Rouhani, saying a women without a hijab is not necessarily without virtue.

"If a women or a man does not comply with our rules for clothing, his or her virtue should not come under question … In my view, many women in our society who do not respect our hijab laws are virtuous. Our emphasis should be on the virtue."

In his interview, Rouhani said he opposed segregation of men and women, including at universities, and criticised the politicians who are against allowing women to enter stadiums to watch football matches along with men.

Iran's state television, IRIB, the mouthpiece of the country's ruling system, also came under attack from Rouhani.

"A large population of our youth are ignoring the [state] television because in it they haven't seen the honesty, morality, justice that it merits," he said.

"When the state TV shows a programme about the birth of a panda in a Chinese zoo but doesn't broadcast anything about workers staging a protest because they haven't been paid for six months … it's obvious that people and the youth will ignore it. The solution is to have freedom of expression.

"If a day comes that our television shows more news coverage than foreign networks such as BBC, then people will reconcile with it."

Rouhani has previously criticised the IRIB. During his first post-election speech at the weekend, he said a country which receives its legitimacy from its people should not fear free media.

He also said: "Injustice is an injustice … it's a double standard to call an injustice in an unfriendly country as an injustice but to label the same thing in a friendly country as not … human rights is same in any place around the world."

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« Reply #7293 on: Jul 03, 2013, 07:47 AM »

July 2, 2013

Two of Pluto’s Moons Get Names From Greek Mythology’s Underworld


For an astronomical body that circles the Sun but is not officially a planet, Pluto has a lot going on, out there four billion miles from the Sun where comets and other icy bodies roam. Among other things, Pluto has a retinue of at least five — count ’em, five — moons circling it.

On Tuesday the International Astronomical Union announced names for two of these moons, the fourth and fifth to be discovered. Moon No. 4 is now Kerberos, after the many-headed dog that guarded the entrance to the underworld in Greek mythology. Moon No. 5 is Styx, named for the river that souls had to cross over to get to Hades, or the underworld, and the goddess who ruled over it.

Those names, of course, are familiar ones in the Plutonian family. In Greek mythology, Pluto, also known as Hades, was the lord of the underworld, a place that was also sometimes called Hades. Pluto’s other moons are Charon, named for the ferryman who carried dead souls across the river Styx; Hydra, a multiheaded monster that helped guard the entrance to the underworld; and Nix, the mother of Charon.

In 2011 and 2012, Kerberos and Styx were discovered by a team led by Mark Showalter of the SETI Institute, which searches for extraterrestrial life, using the Hubble Space Telescope. Each is estimated to be 20 or so miles in diameter, making them the smallest of Pluto’s moons so far.

By astronomical tradition, the discoverer of a new planet or moon is entitled to suggest names for it to the International Astronomical Union, which has about 11,000 members in 93 countries and was founded in 1919 to promote international scientific cooperation.

Dr. Showalter, however, said he thought it would be more fun to throw it open to the public, and held an Internet contest in which people could vote for names for the moons. He was impressed, he said in an e-mail, by the amount of thinking and creativity that went into the suggestions.

“There were a lot of weird names,” he wrote. “A few suggested ‘Potato and Potahto,’ which I thought was pretty funny. Lots of children wrote in to suggest their siblings as ‘minions of Hades.’ ”

The favorite name turned out to be Vulcan, which is both the Greek god of fire and, perhaps more significantly, the home planet of Mr. Spock, the “Star Trek” character played by Leonard Nimoy. Dr. Showalter submitted the names Vulcan and Cerberus — which was later changed to the Greek spelling Kerberos to avoid confusion with an asteroid — to the Working Group for Planetary Nomenclature and the Committee on Small Body Nomenclature of International Astronomical Union.

The astronomical union rejected Vulcan because it had already been used as the name for a hypothetical planet between Mercury and the Sun, and it had no connection to the mythological underworld. Instead the moon-namers chose Kerberos and the next runner-up, Styx.

It was not the first time that citizens with stars in their eyes had been disappointed by the astronomical union, which has a tangled history with Pluto. It was the union that, back in 2003, tossed Pluto out of the club of planets, after years of debate that reached into classrooms and planetariums.

In an election at the union’s triennial meeting, in Prague, the group voted to define a planet as an object that was round, orbited the Sun, and had cleared everything else out of its orbital path. Pluto is round and circles the Sun but its region of the solar system is cluttered with thousands of small icy objects.

And so Pluto was demoted to being a “dwarf planet.”

Tell it to Kerberos, Styx, Charon, Nix and Hydra.

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« Reply #7294 on: Jul 03, 2013, 07:51 AM »

U.N. report confirms: World gripped by climate extremes over past decade

By Reuters
Wednesday, July 3, 2013 7:42 EDT

By Environment Correspondent Alister Doyle

(Reuters) – The world suffered unprecedented climate extremes in the decade to 2010, from heatwaves in Europe and droughts in Australia to floods in Pakistan, against a backdrop of global warming, a United Nations report said on Wednesday.

Every year of the decade except 2008 was among the 10 warmest since records began in the 1850s, with 2010 the hottest, according to the study by the World Meteorological Organization (WMO). The number of daily heat records far outstripped lows.

It said many extremes could be explained by natural variations – freak storms and droughts have happened throughout history – but that rising emissions of man-made greenhouse gases also played a role.

“Rising concentrations of heat-trapping greenhouse gases are changing our climate, with far-reaching implications for our environment and our oceans, which are absorbing both carbon dioxide and heat,” WMO Secretary-General Michel Jarraud said in a statement.

The study said damaging extremes included Hurricane Katrina in the United States in 2005, Cyclone Nargis in Myanmar in 2008, floods in Pakistan in 2010, droughts in the Amazon basin, Australia and East Africa and a retreat of Arctic sea ice.

Deaths from extreme events totaled 370,000 people, up 20 percent from the 1990s, the Geneva-based WMO said, though the world population also rose sharply over the period, from 5.3 billion in 1990 to 6.9 billion in 2010.

The jump in the death toll was caused mainly by a heatwave in Europe in 2003 which killed 66,000 and a heatwave in Russia in 2010 in which 55,000 people died.

However, casualties from storms and droughts fell, partly because of better preparedness for disasters.

The study said that 44 percent of nations recorded the highest daily maximum temperature of the past half-century in the decade 2001-10 but only 11 percent reported a new low.

It also said that the decade “continued an extended period of accelerating global warming” with average decadal temperatures 0.21 degree Celsius (0.4 F) warmer than 1991-2000, which was in turn 0.14 C warmer than 1981-1990.


Other reports have found that the rate of temperature rises has slowed this century.

“Global mean surface temperatures have not increased strongly since 1998″ despite rising greenhouse gas emissions, according to a draft report by the U.N.’s panel of climate scientists due for release in September.

Some experts say the apparent rise from the 1990s is magnified because a volcanic eruption in the Philippines in 1991 dimmed sunlight and cut temperatures.

The WMO also said it was hard to link any individual extreme events to climate change rather than to natural variability.

However, warmer air can hold more moisture, raising risks of downpours – the study said that 2010 was the wettest year since records began. And sea levels have risen about 20 centimeters in the past century, increasing risks of storm surges.

One 2004 study, for instance, said that climate change had at least doubled the risks of the European heatwave in 2003.

Peter Stott of the UK Met Office who led that study said scientists were now trying to see if there was a human fingerprint behind other extremes in 2012, such as Superstorm Sandy or drought in Australia.

“You can’t just take a record-breaking event and say ‘that’s climate change’,” he said.

(Editing by Gareth Jones)

[Image: Earth's airglow is seen with an oblique view of the Mediterranean Sea area, including the Nile River with its delta and the Sinai Peninsula, in this October 15, 2011 NASA handout photograph taken by a crew member of Expedition 29 aboard the International Space Station. REUTERS/NASA/Handout]

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« Reply #7295 on: Jul 04, 2013, 05:46 AM »

Mohamed Morsi ousted in Egypt's second revolution in two years

• President ousted as army suspends constitution
• Deposed leader 'being held by authorities in unknown location'
• At least 14 people killed in clashes after announcement
Live updates on day two of Egypt's revolution

Patrick Kingsley and Martin Chulov in Cairo
The Guardian, Thursday 4 July 2013   

A polarised Egypt is facing the most critical phase of its post-revolutionary life after Egypt's army ousted the country's elected president, Mohamed Morsi, and scheduled fresh elections in a what was labelled by the presidency as a "full coup".

The chief of the armed forces, General Abdel-Fatah al-Sisi, announced that he had suspended the constitution and would nominate the head of the constitutional court, Adli Mansour, as interim president on Thursday. Both presidential and parliamentary elections would follow shortly afterwards and a transitional cabinet would be named.

A statement on the former president's Twitter and Facebook accounts labelled the military move a "full coup", after Morsi was officially deposed from office at 7pm.

In the early evening, a presidential aide told the Guardian Morsi was still free, but late on Wednesday night a Muslim Brotherhood spokesman said Morsi was being held by the authorities in an unknown location.

A security official said the head of the Muslim Brotherhood's political party and the Brotherhood's deputy chief had been arrested. State media said authorities had issued arrest warrants for 300 other Brotherhood members.

At least 14 people were killed when Morsi opponents and supporters clashed after the army's announcment, state media and officials said. Eight of those reported dead were in the northern city of Marsa Matrouh Three people were killed and at least 50 wounded in Alexandria, state news agency MENA reported. A further three died in the southern city of Minya, it said.

Sisi strove to paint the coup as the fulfilment of the popular will, following days of vast protests against Morsi's rule.

"We will build an Egyptian society that is strong and stable, that will not exclude any one of its sons," he said.

He spoke of his "historic responsibility" in front of a panel of Egyptians representing what was intended to be full spectrum of Egyptian life, including the Coptic pope, the country's most senior Muslim cleric, and leading secular politician Mohamed ElBaradei.

Symbolically, the panel also included a representative of the Tamarod campaign, the mass movement that inspired the millions-strong protests on Sunday that prompted Morsi's departure.

Sisi's televised statement was met by rapturous applause and a spectacular fireworks display at the centre of the anti-Morsi revolt in Cairo's Tahrir Square. The streets of downtown Cairo became a raucous carnival that lasted into the small hours, with many waving flags, blasting horns, and dancing. One or two could be seen drinking in the same streets that four days ago were jammed with frustrated drivers queuing for hours for petrol.

But five miles in east Cairo, the mood could not have differed more. A rally of Morsi supporters booed Sisi's speech, chanting "Down with military rule" – in scenes that epitomised Egypt's divisions. While secular Egyptians blame Morsi for autocratic policies that have failed to build consensus, Islamists are furious that Egypt's first democratically elected president should have been deposed after just a year in office.

Sisi's statement came several hours after his ultimatum for Morsi to solve the political crisis had passed without agreement. The delay confused all parties, who wondered whether a coup would actually take place. But the creeping presence of the military who set up barricades in parts of the capital where pro-Morsi supporters had gathered, followed by the release of a strongly-worded statement by Morsi's national security adviser, Essam Haddad, seemed to confirm to both camps that the military was taking a new role in post-revolutionary Egypt. "For the sake of Egypt and for historical accuracy, let's call what is happening by its real name: military coup," said Haddad.

The momentous events capped a harrowing week for Morsi and his key support base, the Muslim Brotherhood, which had won the presidency in a democratic election held a year ago. Morsi's support had been steadily whittled away over the past four days, first being abandoned by the military, then the powerful police force, and yesterday the state media.

Earlier in the week, police failed to intervene after the headquarters of the Muslim Brotherhood in east Cairo was besieged for 12 hours and later burnt down. Yesterday, the interior ministry, which runs the police force, confirmed it was backing the military.

While many on the street saw Morsi's removal as the continuation of Egypt's 2011 revolution, the ex-president's Islamist allies viewed it as a coup, and a betrayal of democracy. Thousands of Morsi supporters gathered in the streets to back him, many fearing that his departure would mark a return to the repressive treatment of Islamists under Mubarak.

Last night, the army shut down five Islamist TV channels, while there was factional fighting in Alexandria. State media said last night that three people had been killed in Alexandria. Police also raided the offices of the pan-Arab TV network al-Jazeera in Cairo.

Sisi had spent much of of Wednesday locked in meetings with his key generals and with senior religious and opposition figures, including the opposition leader Mohamed ElBaradei, the country's leading Sunni cleric, Sheikh Ahmed Tayeb, and the Coptic pope, Tawadros II. He did not meet Morsi, but had spent four hours with him on Tuesday discussing a power-sharing plan.

The opposition has long maintained that Morsi was never interested in consensus. But in recent days, Morsi repeatedly claimed he was willing to share power with his opponents and, after Sisi's deadline had passed, again reiterated that he would agree to a national unity government and parliamentary elections within months. But Haddad, Morsi's chief aide, made clear that the president was in the process of being ousted, and warned of its dire consequences.

"Today only one thing matters," he wrote in a dramatic Facebook post that he noted would probably be his last in office. "In this day and age no military coup can succeed in the face of sizeable popular force without considerable bloodshed. Who among you is ready to shoulder that blame?" He added: "There are still people in Egypt who believe in their right to make a democratic choice. Hundreds of thousands of them have gathered in support of democracy and the presidency. And they will not leave in the face of this attack.

"To move them, there will have to be violence. It will either come from the army, the police, or the hired mercenaries. Either way there will be considerable bloodshed. And the message will resonate throughout the Muslim world loud and clear: democracy is not for Muslims."

The gradual nature of Sisi's actions seemed to confirm the army's desire to be seen to be answering the will of the people, rather than enacting a unilateral coup.

Events indicated a rehabilitation of not just the army – whose chequered 15-month tenure in office between February 2011 and June 2012 prompted unprecedented criticism of the military – but the police, whose reputation took a battering in the aftermath of the 2011 uprising. The police piggybacked on the popularity of the protests, releasing two statements backing the protests against the president.

Islamists saw Morsi's removal as a betrayal of democracy. But for many in Tahrir it was a victory for people power. Opposition to Morsi had floundered until the founding of the Tamarod campaign in April. But the leaderless Tamarod, which gathered millions of signatures calling for Morsi's removal in recent weeks, built momentum for 30 June's street protests, setting the stage for Morsi's departure.

On Wednesday evening Barack Obama urged Egypt's military to hand back control to a democratic, civilian government without delay, but stopped short of calling Morsi's ouster a coup. In a carefully worded statement, Obama said he was "deeply concerned" by the military's move to topple Morsi's government and suspend Egypt's constitution. He said he was ordering the US government to assess what the military's actions meant for US foreign aid to Egypt $1.5bn a year in military and economic assistance.


Egypt's military issues arrest warrants for Muslim Brotherhood

Up to 300 members sought as Adli Mansour is sworn in as interim of head of state

Martin Chulov and Patrick Kingsley in Cairo, Thursday 4 July 2013 10.21 BST   

Egypt's new military rulers have issued arrest warrants for up to 300 members of the Muslim Brotherhood hours after ousting the elected president, Mohamed Morsi, and taking him and his aides into military custody.

The morning after a momentous night in Cairo has revealed the full extent of the military overthrow, with key support bases of the Muslim Brotherhood, including television stations, closed down or raided. A focal point for Morsi's supporters in the east of the city was approached by troops who fired into the air near angry Brotherhood members on Wednesday night.

The dramatic events have been welcomed by many in the capital, where most state institutions, including the security establishment, had steadily abandoned Morsi since Sunday.

Adli Mansour, the head of the constitutional court, was sworn in as interim head of state on Thursday.

The epicentre of the latest revolt, Tahrir Square, was teeming with up to one million revellers until well past midnight. The crowds were reportedly the largest the square had seen at any point since the first stirrings of revolution in February 2011, spilling over two bridges across the Nile and into the west of the city.

Elsewhere in Egypt, where backing for the Brotherhood had remained solid despite Morsi's political tribulations, the reaction to his ousting has been far from celebratory. Up to 10 people died in clashes, and more than 400 were reported wounded, in the hours following the military chief Abdul Fattah al-Sisi's announcement that he had ended Morsi's presidency. Rallies are expected in many parts of the country throughout Thursday and are likely to be met by a prominent military presence.

The international response to the coup has so far been muted. Barack Obama is expected to make a statement at some time on Thursday. The US president had been supportive of the democratic ballot that elected Morsi in June 2012. Arab world leaders are understood to be considering how to deal with yet another seismic shift in the political landscape at a time of profound and ongoing regional instability.

The coming days are likely to prove crucial across Egypt, as the military strives to assert itself in a transition it will guide, with nominal civilian leadership, towards new parliamentary and presidential elections.

The Muslim Brotherhood will also find itself under pressure to react to the ignominious ousting of its chief patron, and the man who guided it to political legitimacy eight decades after the group's inception throughout the rule of the former president Hosni Mubarak when it remained outlawed.

Muslim Brotherhood leaders have pledged to conduct peaceful protests in response to Morsi's ousting. However, before the coup two of the former president's aides said no political leader could control the anger of the people.

"In the space of one night we are back 60 years," said Amr Darrag, a senior Muslim Brotherhood member and former minister for international co-operation. "All of our leaders are being arrested in the middle of the night. Their houses are being stormed. Their children are being scared. All of our remaining leaders are banned from travel and this is just the start.

"Yesterday we were part of the government doing what we thought was best for Egypt. Even if you don't agree with us, this has gone too far."

Mansour's installation as interim of head of state caps a rapid rise for the head of the supreme constitutional court, who was appointed chief justice only on Sunday – timing that coincided with the first day of mass protests against Morsi.

Egypt's civilian opposition as well as senior Muslim and Christian leaders are likely to play prominent roles in a transition period. The military has cast itself as a reluctant overlord and has not yet specified how long it will remain in effective control.

Wednesday's coup followed several weeks of attempts by Morsi to reach out to opposition groups. The ousted leader's aides insist he had been prepared to enter into power-sharing arrangements, but had been rebuffed at every turn.


Tahrir Square celebrates coup, but Morsi's camp warns of clashes to come

President's opponents hail 'saviours of Egyptian democracy', while his angry supporters prepare for martyrdom and civil war

Martin Chulov and Patrick Kingsley in Cairo
The Guardian, Wednesday 3 July 2013 22.53 BST   

It dawned on Tahrir Square softly at first, just as the military chief had wanted. First came the lapsed deadline, then a pregnant silence.

It took the gathering until dark to reveal a clear reality; the military coup against president Mohamed Morsi, foreshadowed all week, had crept up on everybody. Egypt's first democratically elected president had lost his fight to keep any semblance of the office he has held for 12 fraught months.

The country's most powerful institution, like it or not, was now at centre stage. And large numbers of Egyptians, who after the fall of the dictator Hosni Mubarak saw the military as a roadblock to democracy, were casting it as its champion.
Link to video: Cairo bodyguard volunteers 'protect women protesters'

On a momentous day in post-revolutionary Egypt, the latest fight for the country's destiny had earlier become a staring contest; Morsi and his supporters holed up on one side of town and those who wanted him gone surging and dancing around the now familiar stomping ground of dissent near the Nile.

Then, with the clock slipping steadily past the 4.30pm deadline that the military gave two days ago to solve the crisis, Morsi appeared to blink. A short post on his Facebook page just before 5pm said he was working on ways to share power and would prepare for parliamentary elections within months.

Word spread slowly at first, the inevitable whispers turning the snippet on social media first to a resignation, arrest by the military, then back to ambiguity. No one in Tahrir Square seemed to know quite what to make of it.

"It's very good – we have won," said Shaymah Gemal, 21, a student from Cairo University. "He can't continue as leader after this." Fireworks cracked on a hazy sky and thousands of Egyptian flags were waved with more vigour than usual as Morsi's statement circulated. A military helicopter circled overhead in an apparent show of support for the electrified throng below.

Even amid the euphoria though, some in the crowd remained sceptical. "He has been calling for weeks for this," said another anti-Morsi demonstrator, Issam Ahmed. "This doesn't actually say anything new."

Indeed, Morsi's concessions had been among his key talking points for the past few weeks. A willingness to compromise featured briefly in his defiant late night address to the nation on Tuesday and featured in meetings with the Supreme Council of the Armed Forces chief, Abdul Fattah al-Sisi, earlier in the day.

The timing of what Morsi said on Wednesday afternoon appeared to be far more pertinent than the substance. So too was a statement an hour later, also on Facebook, by his key adviser, Essam Haddad, who said: "For the sake of Egypt and for historical accuracy, let's call what is happening by its real name: military coup."

Haddad's words seemed more an assessment of the past four heady days, than a reaction to anything new on Wednesday. But for some they were seen as a warning of trouble ahead. Haddad added: "In this day and age no military coup can succeed in the face of sizeable popular force without considerable bloodshed. Who among you is ready to shoulder that blame?

"There are still people in Egypt who believe in their right to make a democratic choice. Hundreds of thousands of them have gathered in support of democracy and the presidency. And they will not leave in the face of this attack.

"To move them, there will have to be violence. It will either come from the army, the police, or the hired mercenaries. Either way there will be considerable bloodshed. And the message will resonate throughout the Muslim world loud and clear: democracy is not for Muslims."

Across town, not far from where Morsi and his inner court are believed to be bunkered down, a sizable but subdued rally of the president's supporters stood near the Rabaa mosque. There was no celebration here, but there was confusion.

As night drew near, the military, which had readied itself for the past three days in a giant car park in nearby Nasr City, edged ever close to Rabaa. Barricades were erected near Morsi's presidential palace and in parts of eastern Cairo. This was no storming of town squares and state institutions though. The scale and presence of the forces deployed spoke of a reluctant creep.

As news of the military movements trickled through, senior Muslim Brothers and Islamic clerics voiced their outrage.

"I'm very afraid," said Mohamed Abdel Rahman, a sheikh at Cairo's al-Azhar mosque, Sunni Islam's highest seat of learning, whose calm demeanour belied the urgency of his words. "Any Egyptian, any nationalist, should be worried about our country's future. Killing the democratic process means that any successor will share the same fate."

Mohamed Marouf Mahomed, the chief imam of Minya, a rural city, was even more stark. "Egypt is entering a very dark tunnel," he said, standing motionless backstage at the rally. "It's going to be a civil war – and it's going to be very bad in particular for the church in upper Egypt, because everyone knows they have spearheaded this campaign against the Islamic project."

Down in the crowd, the mood was charged. "We are the true revolutionary youth," chanted thousands, many carrying photographs of a grinning Morsi.

Others were clad in a motley selection of hardhats, cycle helmets, homemade shields and martial arts vests – in case of attack. Some carried sticks and improvised clubs. "Seculars will never rule Egypt again," some shouted, carrying white funeral clothes that gave the impression they were willing to be martyred for their cause.

A few seemed phlegmatic – not least an outspoken Brotherhood official, Essam el-Arian, smiling and greeting supporters as if he was at a victory rally. "We feel these days are another expression of the 25 January revolution," he said. Business as usual, in other words.

But his colleagues did not share his calm. "There are millions who are determined to remain here until the military regime stops," said senior Muslim Brother, Mohamed Beltagy, as he left the rally. "We will have many martyrs."

When asked if he himself sought martyrdom, Beltagy said: "I'm willing to be a martyr for the democratic national project." And what about an Islamic one? "A national democratic project."

On a day that appeared to clarify little and edge Egypt closer towards trouble rather than away from it, one key theme remained true: this is a nation that has learned the power of the street and its capacity to test authority.

Nightfall had brought arguably the biggest crowds yet to amass on the streets of Cairo since the January 2011 revolution that toppled Mubarak and paved the way for Morsi's difficult 12 months as a democratically elected leader.

"We've gotten used to it out here," said Suad Haddad as green lasers swirled around her. "This is a real democracy. The Brotherhood hijacked what the people gave them. Now we are taking it back."

Apart from his Facebook post, Morsi was neither seen nor heard throughout the day, grist for the mill for rumour-mongers who speculated he was under house arrest, or in exile. The reality, according to several of his key aides, is that the besieged leader is trying to find new ways to be heard.

"He is all for inclusiveness, he is all for power-sharing," one aide said. "National unity is the only way forward. But if they want to oust him, they need to do so at the ballot box."

Offering what almost amounted to a plea for mercy at the end of a bruising and still uncertain four days, Gehad al-Haddad, a Muslim Brotherhood spokesman said: "The current leadership of the Brotherhood was young [one year ago] – and they've learnt their lesson. They're not going to leave the streets. And we're not going to fight, we're just going to take a beating."


07/04/2013 11:38 AM

Egypt's Cunning General: How the Military Plans to Keep Power

By Raniah Salloum

Egyptian President Morsi has been toppled, and a judge will be the country's new interim leader. But in reality, he's just a puppet. Behind the scenes, General Abdel-Fattah el-Sissi and his military apparatus will continue to call the shots.

Adly Mansour's rise to power has been a rapid one. On Monday, the career judge was sworn in as chief justice of Egypt's Supreme Constitutional Court. By Wednesday night, President Mohammed Morsi had been deposed, the constitution suspended, and Mansour was declared the country's new interim leader, set to be sworn in on Thursday. Along with a cabinet of technocrats, he'll govern the country until new elections.

But no one knows if and when these elections might take place. And Mansour won't be Egypt's most important man, even if the justice, who served in the country's top court under deposed autocrat Hosni Mubarak, now calls himself head of state. That's because behind the scenes, the military, led by General Abdel-Fattah el-Sissi, plans to continue running the show.

Since it took power in a coup in 1952, the military has remained the most important political player in Egypt. Neither Mubarak's fall in 2011, nor the short rule by Morsi, a member of the Muslim Brotherhood, have changed this. El-Sissi demonstrated just how powerful the influence of the military's generals is on Wednesday night, when, after giving Morsi 48 hours to leave office, he summarily informed the president that he was no longer the leader of the country. No matter that Morsi was the country's first democratically elected head of state.

Now Morsi and most of his aides are under house arrest. In addition, two leading politicians with the Muslim Brotherhood's Freedom and Justice Party (FJP) have been arrested. According to the state newspaper Al-Ahram, another 300 members are wanted.

Morsi Failed to Weaken Military

The Muslim Brotherhood, the region's most influential Islamist movement, has fallen into disfavor. In 2011 the army let Mubarak, who was one of their own, be deposed. This time they wanted to get rid of the disagreeable Morsi. It happened despite the fact that el-Sissi was at least nominally dependent on the president, who appointed him to lead the military in August 2012, after he fired the powerful Mohammed Hussein Tantawi. At the time, some feared the Muslim Brotherhood would form an alliance with the military.

El-Sissi is known to be devout, though he sees himself as a follower of the late, secular, authoritarian Gamal Abdel Nasser, the father of modern Egypt and a critic of the Muslim Brotherhood. Morsi had probably assumed that by making El-Sissi its leader, he had weakened the military. Apparently, he was wrong.

At 58, el-Sissi is the country's youngest general. He has never fought in a war, and only knows about conflicts with Israel from the stories of others. He belongs to a generation that was invited to receive military training in the West. In 1992 he was in Britain, and in 2006, the United States.

He made international headlines in 2011 when he justified the degrading "virginity tests" conducted by soldiers on Egyptian women who had taken part in the revolution. But el-Sissi learned from the debacle of 2011, when the military itself formed the government after Mubarak was toppled. The military leadership was openly pulling the strings, which quickly made it subject to the scrutiny of the public.

Behind the Scenes

This time the head of the military has been trying from the outset to stay in the background. The events of Wednesday night are clearly a coup -- the army has deposed a democratically elected president and suspended the constitution. Yet Sissi acted as if the generals had been compelled by the Egyptian people to intervene.

Indeed, many Egyptians have welcomed the coup. The military envisions a power-sharing setup where civilians will hold primary authority. That way, they will be the ones to draw the ire of the population as they slave away to solve the country's disastrous economic situation and mend deep political divisions.

Behind the scenes, Sissi and his colleagues set the tone, especially in two areas: Security policy is traditionally their domain, but the government should also keep clear of the generals' monetary privileges. The army is one of the most important economic power brokers in Egypt.

It remains to be seen whether this power-sharing structure will actually work. This is exactly what the military already tried in vain with the Muslim Brotherhood. But Morsi was rebellious. He began to interfere in security policy and didn't take the sharp warnings of the generals seriously. From their perspective, things will work out better this time under the duo of military chief and top judiciary.


July 3, 2013

Ambassador Becomes Focus of Egyptians’ Mistrust of U.S.


WASHINGTON — Her image has been plastered on banners in Tahrir Square, crossed out with a blood-red X or distorted and smeared with insults. She is too cozy with Egypt’s deposed president and the Muslim Brotherhood, the signs say, and should leave the country.

Anne W. Patterson, a press-shy career diplomat who has been American ambassador to Cairo since 2011, suddenly finds herself a target in a dangerous political upheaval, a symbol for angry young Egyptians of America’s meddlesome role in their country’s affairs.

With the Egyptian military ousting President Mohamed Morsi on Wednesday, Ms. Patterson will have to navigate a perilous course between Mr. Morsi’s opponents and his enraged Islamist supporters, both of whom have grievances with the United States.

That she has become such a lightning rod for American policy speaks to the legacy of American involvement in Egypt and to the comparatively low level of attention Egypt has received from the Obama administration since the ouster of Hosni Mubarak two and a half years ago — at least until this week’s turmoil.

As her bosses in Washington struggle to exert even modest influence over the events in Cairo, Ms. Patterson, 63, has been portrayed as a sinister force by pro- and antigovernment protesters alike: a defender of the status quo as well as a troublemaker who schemes with the opposition.

“She’s being lambasted because she’s the face of America,” said Vali Nasr, a former State Department official who worked with Ms. Patterson when she was ambassador to Pakistan. “But the fact that she’s being excoriated instead of the president only represents the fact that the rest of the American administration is absent.”

In his first reaction to Mr. Morsi’s ouster, Mr. Obama warned of the dangers of violence and tried to steer Egypt’s military toward a prompt resumption of democratic rule. But the flurry of White House meetings and phone calls on Wednesday served to underscore the lack of leverage the United States has over Egypt, once a crucial strategic ally in the Middle East but lately just another headache.

Ms. Patterson’s problems started on June 18 when she was invited, at a time of mushrooming demonstrations against Mr. Morsi’s government, to speak to an audience in Cairo about the United States’ relationship with the Muslim Brotherhood. It was, she said, a welcome chance to “set the record straight.”

While the United States supported Egypt’s democratic development, it still had to deal with those in power, Ms. Patterson said, adding, “I don’t think the elected nature of this government is seriously in doubt.” Moreover, she said she was “deeply skeptical” that “street action will produce better results than elections.”

Even as Ms. Patterson sought to distance the United States from the Muslim Brotherhood, those words marked her as an enemy of the crowds in Tahrir Square, reviving memories of Mr. Obama’s early reluctance to cut loose Mr. Mubarak, a longtime ally of the United States.

“She manipulates people and secretly governs the country,” Mona Mohammed, 52, a bank employee said of Ms. Patterson at an antigovernment rally. “The ambassador is part of a conspiracy against Egypt and its people,” Ms. Mohammed added, clutching a poster with a caricature of Ms. Patterson and the slogan “Hayzaboon, Go Home.” (Hayzaboon is Arabic for ogre.)

At a pro-Morsi demonstration across town, Mohammed Amr-Alla, a professor at Al-Azhar University, said: “The ambassador meets with the opposition and supports them. She should not interfere; she needs to watch from a distance.”

Both perspectives belie the reality that the United State has far less influence in Egypt than it did a generation ago.

A spokeswoman for Ms. Patterson at the American Embassy in Cairo said she was not available for comment. On Wednesday, hours after Mr. Morsi’s ouster, the State Department ordered the evacuation of all nonessential personnel from the embassy.

Secretary of State John Kerry on Wednesday described Ms. Patterson as candid, tough and committed to democratic change in Egypt. In a statement, Mr. Kerry said she “does her best work in the most challenging places.”

In a 40-year career, those assignments have taken Ms. Patterson from the guerrilla-infested jungles of Colombia to the shadowy drone wars of Pakistan, where she gained experience dealing with a weak civilian government and a restive military with a penchant for coups.

In Islamabad, colleagues said, Ms. Patterson cultivated ties to Pakistani military and intelligence officials, as well as to the Pentagon and Central Intelligence Agency. She became a strong proponent of the C.I.A.’s covert drone strikes on suspected terrorists, as well as of American training of Pakistani troops in counterterrorism operations.

With a son who was then serving in the military in Afghanistan, “she really understood the military dimension,” said Col. Barry Shapiro, a retired Special Forces officer who advised Ms. Patterson on military affairs. “We were all in this together.”

Soft-spoken and even shy, Ms. Patterson has nevertheless built a network of contacts in Washington through regular meetings with senators like John McCain, the Arizona Republican; military commanders like Gen. David H. Petraeus; and administration heavyweights like Leon E. Panetta, who served as C.I.A. director and the secretary of defense.

Ms. Patterson, who has been widely expected to be nominated as assistant secretary of state for Near Eastern Affairs, arrived in Egypt four months after Mr. Mubarak’s ouster. She worked closely with the Supreme Council of the Armed Forces, which had seized power, to develop a timetable for elections, and met regularly with Mr. Morsi and the Muslim Brotherhood after he was elected president.

She pushed for an early visit to Cairo by Hillary Rodham Clinton, then the secretary of state, which happened, and a return visit by Mr. Morsi to the White House, which did not.

Her ties on Capitol Hill positioned her to help steer $1.3 billion in military aid through Congress. Lawmakers on Wednesday threatened to cut off the aid, however, saying that it could not lawfully go to a country that had overthrown its government.

With the White House preoccupied by the war in Syria, several officials said Ms. Patterson took on a large role in dealing with the Egyptian government. Some critics said she did not speak out against troubling early moves by Mr. Morsi, like packing his cabinet with allies.

“Over the last six months, you’ve seen Ambassador Patterson articulate more clearly concerns about Egypt’s trajectory,” said Tamara Cofman Wittes, a former State Department official who is director of the Saban Center for Middle East Policy at the Brookings Institution.

But Ms. Wittes said that given the political tensions, Ms. Patterson’s recent remarks about the Muslim Brotherhood “were seen as an unbalanced and ill-timed American intervention into Egyptian domestic politics.”

Ms. Patterson also came under fire from some Republicans after the attack on the American diplomatic facility in Benghazi, Libya, that killed Ambassador J. Christopher Stevens and three other Americans. Her embassy, which also came under attack, initially issued a statement apologizing for a derogatory video about the Prophet Muhammad.

As Ms. Patterson faces the fraught days ahead, some former colleagues said her reputation for being unflappable was as important as her long experience.

“If you had to pick someone for a time like this,” said Cameron Munter, who succeeded Ms. Patterson as ambassador to Pakistan, “you’d be hard pressed to find a better choice.”

Sarah Mousa contributed reporting from Cairo, and Thom Shanker from Washington.


Egypt: Hague condemns military but says UK will work with new regime

Foreign secretary says 'political reality' dictates that UK maintain ties, because Britain 'recognises states not governments'

Haroon Siddique and Patrick Wintour, Thursday 4 July 2013 11.23 BST   

William Hague has condemned the intervention by the military in Egypt, where the armed forces have toppled Mohamed Morsi's government and suspended Egypt's constitution, but said the UK will recognise the new administration.

The foreign secretary said on Thursday that "political reality" dictated that the UK maintain ties with the new regime and insisted that the UK "recognises states not governments".

"We don't support military intervention as a way to resolve disputes in a democratic system," the foreign secretary told BBC Radio 4's Today programme. "If one president can be deposed by the military then of course another one can be in the future. That's a dangerous thing."

But he also indicated that his sympathy for Morsi and his Freedom and Justice party (the political wing of the Muslim Brotherhood) may be limited, as he acknowledged the anger at the government that brought millions of Egyptians on to the streets, prompting the intervention by the military.

"It's a popular intervention, there's no doubt about that," the foreign secretary said. "We have to recognise the enormous dissatisfaction in Egypt with what the president had done and the conduct of the government over the past year."

Morsi has been arrested and is being held by the army at the defence ministry, while his aides are being detained at the republican guard barracks, according to a Muslim Brotherhood spokesman.

It has also been reported that 300 arrest warrants have been issued for Brotherhood members. There has been a crackdown on media reporting with at least four television stations that were covering the growing demonstrations of Brotherhood supporters shut down. They included the al-Jazeera offshoot al-Jazeera Misr, which was raided and its journalists arrested.

The Foreign Office has advised against all but essential travel to Egypt except for resorts on the Red Sea in South Sinai and those resorts on the Egyptian mainland in Red Sea governorate. Hague said the presence of UK citizens and businesses in Egypt made it imperative that ties were not severed.

"The important thing is for political leaders and others in Egypt to work together in a way they have not done over the past year," he said.

Nick Clegg, the deputy prime minister, said the toppled Egyptian government had failed to deliver stability, but added: "We don't support coups; we support democracy."

Speaking on LBC's Call Clegg phone-in, he said: "We want to see a return to peaceful democratic government in Egypt as rapidly as possible." His remarks underline the unease in British government circles about the role of the army in toppling Morsi, but also his failure to unify the country.

"Hopefully we will look back on this as a very, very painful phase of change for a country not accustomed to democracy and the democratic transfer of power from one government to the next," Clegg said. "Morsi had a democratic mandate but a very worrying degree of instability and chaos ensued on the streets of Cairo."

He said "the cruel dilemma" for Egypt was that democracy had not delivered stability, adding that he supported democracy being administered in a stable way, not in a way that led to chaos on the streets.

"Democracy is about learning to disagree peacefully and that is not happening in Egypt."

Other world leaders have also expressed concern about events in Egypt but refrained from describing it as a coup, including the US president, Barack Obama, who has ordered a review of US foreign aid to Egypt, the UN secretary general, Ban Ki-moon, and the EU's high representative for foreign affairs, Lady Ashton.


July 4, 2013

ElBaradei Tops List to Head Egypt Government: Sources


CAIRO — Mohamed ElBaradei, a former U.N. nuclear agency chief, is favorite to head a transitional government in Egypt after the military overthrew Islamist President Mohammed Mursi, military, political and diplomatic sources said on Thursday.

ElBaradei, 71, was mandated by the main alliance of liberal and left-wing parties, the National Salvation Front, and youth groups that led anti-Mursi protests as negotiator with the armed forces and was present when armed forces commander General Abdel Fattah al-Sisi announced the military takeover on Wednesday.

"ElBaradei is our first choice," a source close to the military high command said, speaking on condition of anonymity because of the sensitivity of the situation.

"He's an international figure, popular with young people and believes in a democracy that would include all political forces. He is also popular among some Islamist groups," the source said.

Political sources said ElBaradei, who won the Nobel peace prize for his work as head of the International Atomic Energy Agency (IAEA), would also be acceptable to Western governments that have bent over backwards to avoid calling the removal of Mursi and his Muslim Brotherhood a military coup.

Political sources said other figures under consideration were veteran ex-prime minister Kamal al-Ganzouri, who headed a transitional government in 2011-12 after the uprising that ousted Hosni Mubarak, and Farouk El-Okdah, a respected former central bank governor.

A decision was likely later on Thursday, the sources said after constitutional court chief Adli Mansour was sworn in earlier in the day as interim head of state.

ElBaradei has long pressed for Egypt to sign a $4.8 billion loan deal with the International Monetary Fund, which Mursi's government initialed last November but never ratified or implemented.

The deal would help kick-start an economy severely battered by the collapse of tourism and foreign investment due to political uncertainty since the 2011 revolution. But it would also mean implementing potentially unpopular cuts in fuel and food subsidies, and tax increases.

(Reporting by Yasmine Saleh and Paul Taylor; Writing by Paul Taylor, editing by Peter Millership)

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« Reply #7296 on: Jul 04, 2013, 05:53 AM »

Mandela children’s remains to undergo forensics

By Agence France-Presse
Thursday, July 4, 2013 5:12 EDT

The exhumed remains of three of Nelson Mandela’s children at the centre of an ugly family feud were due to undergo forensic tests Thursday before reburial in the ailing anti-apartheid hero’s childhood village.

The tests — to confirm that the remains are those of the three children — were expected to take about two hours in the city of Mthatha, police and a family member said.

“The remains will be taken for forensic tests and then after that they will be transported to Qunu for re-burial,” police spokesman Lieutenant Colonel Mzukisi Fatyela told AFP.

In dramatic scenes that unfolded in front of the world’s media on Wednesday, a sheriff forced open the gates to the estate of Mandela’s grandson Mandla with a pickaxe to allow three hearses to enter the property, where the disputed remains were moved in 2011, allegedly without the family’s consent.

The new twist in the macabre saga came hours after a court in the nearby city of Mthatha ordered Mandla, 39, to immediately move the graves back to Qunu, where Mandela grew up, from the grandson’s estate in the village of Mvezo about 30 kilometres (20 miles) away in the Eastern Cape province.

Judge Lusindiso Pakade described the grandson’s actions as “scandalous”.

A family member told AFP the relatives would meet on Thursday to discuss the reburial.

“While we are waiting for the forensic tests, as a family we are going to meet to come up with the date of reburying these bones of our family members,” Phumlani Mandela, another grandson of Mandela, told AFP.

The rift comes as the 94-year-old former political prisoner, who became South Africa’s first black president, lies critically ill in what is now his fourth week in hospital.

Mandela has expressed his wish to be buried at his rural homestead at Qunu, and his daughters wanted the children’s remains to be returned so they can be buried together.

More than a dozen relatives of the revered leader, including his wife Graca Machel, two of his daughters and several grandchildren, took Mandla to court over the dispute.

According to court documents submitted by the family on June 28 to support their case, Mandela is in a “perilous” condition on life support, local media reported.

The disputed remains are of Mandela’s eldest son Thembekile, who died in 1969, his nine-month-old infant Makaziwe, who died in 1948, and Mandla’s own father Makgatho, who died in 2005.

Mandla was due to hold a news conference on Thursday to answer “allegations and dirt thrown in his direction,” his spokesman said.

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« Reply #7297 on: Jul 04, 2013, 06:02 AM »

07/03/2013 01:47 PM

Snowden Search: Bolivia Irate over Forced Landing

Bolivia is furious that a plane carrying President Evo Morales was forced to land in Vienna on Tuesday night after false rumors circulated that NSA whistleblower Edward Snowden was on board. The country has called it a "direct attack" on the leader.

Bolivian President Evo Morales hadn't intended to spend Tuesday night enjoying the comforts of the VIP lounge in Vienna's international airport. But he apparently had little choice. Just after midnight, his government plane -- heading back to South America after attending an energy conference in Moscow -- was forced to land in the Austrian capital.

Several European countries had allegedly denied the Bolivian aircraft overflight rights after rumors began flying that National Security Agency whistleblower Edward Snowden was on board.

Morales resumed his flight home shortly before noon on Wednesday, but the incident is almost sure to have diplomatic repercussions. Bolivian officials are furious and several South American leaders have likewise voiced anger at the treatment meted out to the head of state.

"We don't know who invented this lie," Bolivian Foreign Minister David Choquehuanca told reporters in La Paz of the allegations that Snowden was on Morales' plane. "We want to denounce to the international community this injustice with the plane of President Evo Morales." The country's vice president, Alvaro Garcia, went even further in a midnight press conference in La Paz. He said that Morales had been "kidnapped by imperialism" in Europe.

French Denials

Snowden is wanted by the United States for having revealed the degree to which the American intelligence agency NSA keeps tabs on international Internet traffic and telecommunications. Documents seen by SPIEGEL from Snowden's leak also showed that the US bugged European Union diplomatic missions in Washington, DC, and New York as well as installing electronic eavesdropping equipment in EU communications systems. Snowden, who is believe to still be in the transit area of the Moscow airport, applied for asylum in 21 countries on Tuesday. Many of those countries, including Germany, have denied his application.

According to initial reports, France, Portugal and Italy had denied Morales' plane overflight rights. Bolivia also said that Spain had offered to allow the plane to stop in the Canary Islands to refuel, but only on the condition that Spanish officials be allowed to inspect the plane. But on Wednesday morning, both France and Spain denied the claims, saying that the plane had permission to fly over their countries. There was no comment offered as to why Bolivia claimed otherwise.

It is also unclear why European countries would withdraw overflight rights, if indeed they did so. A European Commission spokeswoman on Wednesday said Brussels was still trying to figure out exactly what happened. She told Reuters that it is up to individual member states to make decisions about their airspace, but added: "At the moment it is not entirely clear what happened this morning, why the French and Portuguese decided to divert the flight."

'Direct Attack'

South American leaders appear to be taking the incident seriously, with Ecuador and Argentina having called for an extraordinary meeting of the Union of South American Nations (UNASUR) to address the issue. The Venezuelan government added that it was a clear violation of the diplomatic immunity that all heads of state enjoy.

Bolivia too has not been shy about using aggressive rhetoric to voice its displeasure. The country's ambassador to the United Nations, Sacha Llorenti, said that Austria's decision to search the plane was an act of aggression and in violation of international law. He added that La Paz will be addressing the incident through United Nations channels. Llorenti added that he had no doubt that "the orders came from the United States" to force Morales' plane to land and suggested that the move had put the president's life at risk.

Bolivian Defense Minister Rubén Saavedra, who was also on board the plane, told journalists in Vienna that the forced landing was a "direct attack on the president."

Deputy Austrian Chancellor Michael Spindelegger said that Morales had agreed to an inspection of his plane on a voluntary basis. "Our colleagues from the airport had a look and can give assurances that no one is on board who is not a Bolivian citizen," he told reporters in Vienna. Austrian President Heinz Fischer went to the Vienna airport on Wednesday morning to meet with Morales. The pair gave an impromptu joint press conference.


Diversion of Bolivian president’s plane enrages Latin American leaders

By Reuters
Wednesday, July 3, 2013 21:26 EDT

By Louise Egan and Hugh Bronstein

BUENOS AIRES (Reuters) – Latin American leaders slammed European governments on Wednesday for diverting Bolivian President Evo Morales’ plane on rumors it was carrying a wanted former U.S. spy agency contractor, and announced an emergency summit in a new diplomatic twist to the Edward Snowden saga.

Bolivia said Morales was returning from Moscow on Tuesday when France and Portugal abruptly banned his plane from entering their airspace due to suspicions that Snowden, wanted by Washington for leaking secrets, was onboard. Italy and Spain also banned the plane from their skies, it said.

The unusual treatment of the Bolivian military aircraft touched a sensitive nerve in the region, which has a history of U.S.-backed coups. Regional leaders, particularly from the left, rallied behind Morales, Bolivia’s first indigenous president and a former union leader of the country’s coca farmers.

“(These are) vestiges of a colonialism that we thought were long over. We believe this constitutes not only the humiliation of a sister nation but of all South America,” Argentine President Cristina Kirchner said in a speech in Buenos Aires.

Heads of state in the 12-nation South American bloc Unasur denounced the “unfriendly and unjustifiable acts.” The grouping issued a statement late on Wednesday saying the presidents of Ecuador, Bolivia, Venezuela, Argentina, Uruguay and Surinam had agreed to attend a summit in Cochabamba, Bolivia, on Thursday.

“Latin America demands an explanation,” tweeted Ecuadorean leader Rafael Correa. “If what happened to Evo does not merit a Unasur summit, I don’t know what does.”

Dilma Rousseff, president of regional economic powerhouse Brazil, issued a statement repudiating the European countries that denied Morales access to their airspace based on what she called the “fanciful” notion that Snowden might be on board.

The Chilean Foreign Ministry issued a statement saying it “lamented” what happened to Morales and that more clarity was needed on the facts.

Much more blunt was the statement from Mexico’s Congress condemning what it called the “disgraceful and discriminatory” treatment Morales had received in Europe.

A spokesman at France’s Foreign Ministry blamed the flap on “an administrative mishap,” saying France never intended to ban Morales from its airspace and that there were delays in getting confirmation that the plane had fly-over permits.

International agreements allow civilian airplanes to overfly countries without obtaining permission ahead of every flight. But state aircraft including Air Force One, the plane that carries the U.S. president, must obtain clearance before they cross into foreign territory.

Government aircraft, whether carrying diplomats or missiles, always require approval before they can enter foreign airspace, legal experts said.

“Every state on the basis of state sovereignty has the right to deny overflight to state aircraft,” said John Mulligan, a research fellow at the International Aviation Law Institute at DePaul University in Chicago.


Bolivian officials were quick on Tuesday to accuse the United States of strong-arming the Europeans into denying access to their air space in an “act of intimidation” against Morales for suggesting that while attending an energy conference in Moscow he would consider granting asylum to Snowden if requested. Morales said earlier this week no request had been made.

The White House declined to comment on the assertion that it was behind the plane scandal.

President Barack Obama has warned that giving Snowden asylum would carry serious costs.

Morales was expected back in Bolivia on Wednesday night.

Snowden is believed to be still in the transit area of a Moscow airport, where he has been trying since June 23 to find a country that will offer him refuge from prosecution in the United States on espionage charges.

The Bolivian government said it had filed a formal complaint with the United Nations and was studying other legal avenues to prove its rights had been violated under international law.

Morales has yet to restore full diplomatic relations with the United States after expelling the U.S. ambassador in 2008.

In May of this year, Morales expelled a U.S. development agency from Bolivia in protest after U.S. Secretary of State John Kerry referred to Latin America as Washington’s “backyard.”

The comment was a stark reminder of the United States’ history exploiting South America’s natural resources and supporting some repressive right-wing governments.

This week’s diplomatic mess was bad news for American expatriates planning to celebrate the Fourth of July at the U.S. Embassy in La Paz. The embassy said late on Wednesday that its Independence Day party had been put off “until further notice.”

(Additional reporting by David Ingram in Washington, Daniel Ramos in La Paz, Marco Aquino in Lima, Brian Ellsworth in Caracas, Anthony Boadle in Brasilia, Miguel Gutierrez in Mexico City, and Alexandra Ulmer in Santiago; Editing by Xavier Briand and Peter Cooney)


Ecuador says London embassy bug hidden in socket

Foreign minister says Ecuador is to ask for Britain's co-operation in investigating hidden microphone

Haroon Siddique and agencies, Thursday 4 July 2013 09.48 BST   

Ecuador's government says a microphone found in its London embassy, where the WikiLeaks founder Julian Assange is staying, was hidden inside an electrical outlet in the office of the ambassador.

The foreign minister, Ricardo Patino, told a news conference in Quito the bug was found in mid-June when Ecuadorean technicians reviewed the embassy's wiring.

He named a British company he accused of being responsible for installing it.

"We have reason to believe that the bugging was carried out by The Surveillance Group Limited, one of the largest private investigation and covert surveillance companies in the United Kingdom," he said.

In response, The Surveillance Group, based in Worcester, in the west Midlands, posted a statement on its website denying the allegation.

"We have this morning heard an accusation the source of which is apparently Ricardo Patino, the Ecuadorian foreign minister, suggesting that we have bugged the Ecuadorian embassy. This is completely untrue," it said.

"The Surveillance Group do not and have never been engaged in any activities of this nature. We have not been contacted by any member of the Ecuadorean government and our first notification about this incident was via the press this morning. This is a wholly untrue assertion."

Holding up a picture of the purported bug, Patino said the purpose of the hidden microphone was to listen to the conversations of the ambassador, Ana Alban, in her office. Assange lives and works in a different room in the embassy.

The foreign minister said Ecuador was going to ask for the co-operation of Britain's government in investigating the alleged bugging.

The system worked with a sim card and could be activated by a call from any cellular of fixed-line phone, he said.

Assange was granted asylum by Ecuador last year. He has been living inside the South American country's embassy in London to avoid extradition to Sweden to face allegations by two women of sexual assault, which he denies. Britain will not give him safe passage if he leaves the embassy.


July 3, 2013

Ecuador, Possible Snowden Haven, Is High on Beauty but Low on Tech


QUITO, Ecuador — The only authorized dealer for Apple computers here, where the intelligence leaker Edward J. Snowden had hoped to take refuge, is called Mundomac. The name means WorldMac, but it is a pretty small world indeed. There are only three laptops and two desktop computers on display at the store in one of Quito’s top malls, plus two iPads, an iPad mini and a couple of iPods. The tiny shop is nowhere near the size of one of Apple’s flagship emporia in New York or other major cities.

“Computers, cellphones, Internet, all of those things, they’re four or five years behind,” Lars Pedersen, a Danish Web site designer who lives here, said of the state of technology in Ecuador. Then, standing outside the Mundomac store in the Quicentro Mall, he issued the ultimate techie put-down: “They still think BlackBerrys are cool.”

The chances that Mr. Snowden will end up here — or any other country, for that matter — are growing more fleeting by the day. Of the 21 countries Mr. Snowden asked for asylum, only Venezuela and Bolivia appeared to offer him hope of escaping the international airport transit lounge at Sheremetyevo airport in Moscow, where he has been ensconced out of public view for nine days. Ecuador has said it will consider granting him asylum if he can get here, or to one of the country’s embassies abroad.

In truth, however, this was never the ideal refuge for a technology geek addicted to his laptop — Mr. Snowden was said to be horrified by the prospect of being imprisoned without access to a computer. He would very likely find life in tiny, beautiful, impoverished Ecuador a bit of an adjustment.

Internet speeds are not what they are back home. You can forget about smoothly streaming that cool new video on your iPhone. And there are no Starbucks.

“This Snowden guy is going to be very bored,” said Mr. Pedersen, who runs a company that creates Web sites. But he offered a diversion: “I’ll give him a job if he comes here.”

And yet, while Ecuador may not be the Silicon Valley of the Andes, it has many things going for it, according to Americans and other foreigners who have settled here.

Most talked about the gorgeous landscapes and natural diversity, which ranges from Pacific beaches to snow-covered Andean peaks, green mountain valleys and the jungle of the Amazon basin, all packed into a country a little bit bigger than the state of Texas, with 15.4 million people.

In recent years, Ecuador has become a favorite of American retirees on a budget looking for a place to while away their golden years, and some of the same features that appeal to them may also be attractive to Mr. Snowden, the former National Security Agency contractor who is wanted in the United States on espionage charges.

International Living magazine has listed Ecuador as the top destination several years in a row for retirees looking to live abroad, citing its low cost of living, including inexpensive real estate and rents, and good, affordable medical care.

There is also plenty to make a homesick American feel more at home. Ecuador uses the dollar as its currency, having “dollarized” its economy in 2000 and dropped the national currency, the sucre, after a banking crisis and a period of high inflation in the 1990s.

While Quito has beautifully preserved colonial churches and other historic buildings, the country is chock-full of American chains. Sitting in Bigoté, a tea shop frequented by Americans in Cumbayá, a well-off suburb of Quito, one can look out at a panorama of shopping malls that include a McDonald’s, a K.F.C., T.G.I. Friday’s, a Payless Shoe Source, a Nike store and a Chevrolet dealership.

And despite the fact that he is wanted for espionage crimes by the United States and some politicians there have called him a traitor, if Mr. Snowden were to gain asylum here he seems likely to get a warm reception from many Americans.

“I would give him a high five and invite him to my house for dinner,” said Robin Fink, 25, who is from California but has lived for about three years in Quito and volunteers for a group that advocates for women’s health issues. “What he did was heroic.”

“The less secrets the better,” said Ronny Lane, 53, an Air Force veteran who did duty during the first Persian Gulf war and the war in Afghanistan, and came to live in Ecuador seven years ago after retiring from his job as an assistant fire chief in Mississippi. “What is it he’s outed? That the C.I.A.’s monitoring people? You’d have to be in a coma not to know that.”

Drinking with pals in a dark wood-paneled Cumbayá bar called St. Andrews, a copy of many suburban watering holes in the United States, Mr. Lane said that the American community in Ecuador tended to be fairly liberal, including a lot of “retired college professors and nature-type people.” Of Mr. Snowden, he said, “No doubt in my mind, he’ll fit in.”

Sipping from a glass of mineral water, Mr. Lane offered some advice for newcomers.

“When you come here, throw that gringo mentality out of your head,” Mr. Lane said. He said the hardest thing for many new arrivals to accept was the pervasive corruption, like police officers soliciting bribes for minor traffic stops.

“Life here is not easy like it is in the United States,” said Cody Leigh Brown, 30, the owner of the Bigoté tea shop, who is from Montana and has lived for four years in Ecuador (she would give Mr. Snowden a free lunch and coffee). “You’re going to miss a lot of the first world concepts. We’re used to big highways and people who obey traffic signals.”

But many Americans were also skeptical about Mr. Snowden’s potential protector, President Rafael Correa, who will ultimately decide his asylum request and who recently signed a law that critics say restricts press freedom.

“It’s just that he wants to put his finger in the eye of the U.S.,” Mr. Lane said. “It’s hypocritical is what it is.”

As for Mr. Snowden’s technological needs, the government has ambitions to make Ecuador a technology and science powerhouse. It plans to build a City of Knowledge, a large research center near Quito. But that is still years away.

In the 2013 Networked Readiness Index of the World Economic Forum, a measure of countries’ development of the Internet and other technological capabilities, Ecuador ranked 91 of 144 countries, although it was ahead of many of its South American neighbors, including Argentina, Bolivia and Venezuela (another country increasingly mentioned as a possible destination for Mr. Snowden).

Mr. Pedersen, the Web site designer, said that he takes frequent trips home to Denmark to immerse himself in technology culture, an option that presumably will not be available to Mr. Snowden. “He’d have to stay here forever, and that’s not supercool,” Mr. Pedersen said. After a moment, he added, “It’s better than a U.S. jail, I guess.”

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« Reply #7298 on: Jul 04, 2013, 06:13 AM »

Barack Obama agrees to talks with Germany to explain spying on allies

US president tries to allay concerns of Angela Merkel, insisting he takes European concerns about surveillance seriously

Staff and agencies, Thursday 4 July 2013 02.30 BST   

Barack Obama has conceded to high-level talks between US and German security officials after Angela Merkel demanded a detailed explanation about revelations of widespread American spying on European allies.

The US president agreed to the talks during a telephone call with the German chancellor on Wednesday, in an attempt to allay the concerns of her government.

Germany was furious at the revelations in Der Spiegel of US surveillance on European officials. In an interview earlier this week, Merkel said it was "not on". The European Union described the disclosures as shocking.

A White House statement said Obama and Merkel had spoken by phone and agreed to the meetings. The two leaders held face-to-face talks in Berlin two weeks ago.

"The president assured the chancellor that the United States takes seriously the concerns of our European allies and partners," the White House said, noting US and EU officials would discuss intelligence and privacy issues as early as 8 July.

The reports came to light after the former US spy agency contractor Edward Snowden leaked details of surveillance activities by Washington. He is in limbo in a transit area of Moscow's airport as the US pressures Russia to extradite him.

Earlier this week, Merkel expressed anger at the US spying. "If these reports are confirmed in the course of our investigations, we will be looking at an extremely serious incident," she said, in an interview with the Guardian and five other European newspapers.

"Using bugs to listen in on friends in our embassies and EU representations is not on. The cold war is over. There is no doubt whatsoever that the fight against terrorism is essential, and it needs to harness intelligence about what happens online, but nor is there any doubt that things have to be kept proportionate. That is what guides Germany in talks with our partners."

On Monday, at a news conference in Tanzania, Obama promised to supply all the information requested by European allies about the spying allegations, which he said Washington was still evaluating.

"Every intelligence service, not just ours, but every European intelligence service, every Asian intelligence service, wherever there's an intelligence service, here's one thing they're going to be doing: they're going to be trying to understand the world better and what's going on in world capitals around the world from sources that aren't available through the New York Times or NBC News," Obama said.


July 3, 2013

Lawmakers Question White House Account of an Internet Surveillance Program


WASHINGTON — When the existence of a vast Internet surveillance program run by the National Security Agency was disclosed last month, Obama administration officials quickly took credit for having shuttered the effort in 2011. But two Democratic senators who have been longtime critics of the N.S.A.’s domestic surveillance operations are now challenging the administration’s version of events, and say the program was abandoned only after they repeatedly questioned its usefulness and criticized its impact on the privacy of American citizens.

In a lengthy statement issued late Tuesday, Senators Ron Wyden of Oregon and Mark Udall of Colorado said the Internet surveillance was discontinued only after administration officials were unable to provide evidence to them, in closed-door hearings in 2011, that the program was useful.

Last week a spokesman for the director of national intelligence, James R. Clapper Jr., issued a statement saying that the program was abandoned “by the executive branch as result of an interagency review.” The statement omitted any mention of a closed-door controversy in the Senate over the program in 2011, and seemed to be part of an administration effort to defuse yet another controversy stirred up by leaked documents from Edward J. Snowden, a former N.S.A. contractor.

The issue underscored the criticism over the Obama administration’s inconsistent statements about N.S.A. surveillance operations, and also suggested growing restiveness within Congress about the scope of domestic spying programs.

Late Tuesday, Mr. Clapper released a letter of apology to the chairwoman of the Senate Select Committee on Intelligence for what he said were “clearly erroneous” statements during public testimony before the panel in March. At that time Mr. Clapper denied that the N.S.A. collected private data on millions of American citizens, but his statements were proven wrong by the disclosures made by Mr. Snowden.

Mr. Clapper’s apology, made in a June 21 letter to the committee chairwoman, Senator Dianne Feinstein, Democrat of California, came after he admitted, in a television interview earlier in June, that in his testimony he had used the “least untruthful” way to answer a question about domestic surveillance. Mr. Clapper’s statement was made in response to a question from Mr. Wyden, who has made it clear he already knew the answer and was trying to force Mr. Clapper into a public admission on the scope of the domestic collection.

In their letter on Tuesday, Mr. Wyden and Mr. Udall said that before the Internet data collection program was discontinued, American intelligence officials had repeatedly exaggerated its value in classified statements made both to Congress and to a secret court that oversees national security surveillance.

The Internet surveillance program was originally part of a Bush administration program that included the warrantless wiretapping of the phone calls of Americans. But in 2004, the legality of the Internet data collection program so concerned top Justice Department officials that it led to a showdown between the department and White House officials in the hospital room of ailing Attorney General John Ashcroft. After the confrontation the program was briefly stopped, then resumed under a new legal framework. It continued into the Obama administration.

Mr. Wyden and Mr. Udall wrote in their letter that their experience in sparring with intelligence officials over the Internet data program in closed door hearings “has also led us to be skeptical of claims about the value of the bulk phone records collection program in particular.” They said, “It is up to Congress, the courts and the public to ask the tough questions and press even experienced intelligence officials to back their assertions up with actual evidence, rather than simply deferring to these officials’ conclusions without challenging them.”

Last week, Mr. Wyden and Mr. Udall were part of a group of 26 senators who wrote to Mr. Clapper raising questions about how broadly the N.S.A. has used the Patriot Act to collect the private data of American citizens. Given the fact that as members of the Senate intelligence committee they have been fully briefed on the surveillance operations, the questions in their letter suggest they are simply trying to force intelligence officials to provide answers for the public record.

For example, Mr. Wyden and Mr. Udall know whether the N.S.A. has collected “or made plans to collect” the cell-site location data from the cellphones of millions of Americans. In trying to force a public response to that question, Mr. Wyden and Mr. Udall appear to think that the answer is yes.

They also asked whether there have been any violations of the court orders permitting bulk data collection, which is another issue on which they would have already been provided answers in classified hearings.

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« Reply #7299 on: Jul 04, 2013, 06:22 AM »

Why centralisation does not guarantee Europe prosperity

Centralised economic decision-making, especially through the eurozone crisis, cannot underpin a prosperous and powerful EU

Otmar Issing, Wednesday 3 July 2013 15.45 BST   

For many European leaders, the eurozone crisis demonstrates the need for "more Europe", the final aim being to create a full-fledged political union. Given the continent's history of war and ideological division, and today's challenges posed by globalisation, a peaceful, prosperous, and united Europe that wields influence abroad is surely a desirable goal. But major disagreements about how to achieve that goal remain.

Historically, monetary union was regarded as the route to political union. In the 1950s, the French economist Jacques Rueff, a close adviser to Charles de Gaulle, argued that "L'Europe se fera par la monnaie, ou ne se fera pas" (Europe will be made through the currency, or it will not be made). Germany's president Richard von Weizsäcker echoed this view almost a half-century later, declaring that only via a single currency would Europeans achieve a common foreign policy. More recently, German chancellor Angela Merkel asserted that "if the euro fails, Europe will fail".

But the crisis confronting "Europe" is not so much about political union as it is about European economic and monetary union. If anything, efforts to hold EMU together may have taken us further from the goal of a common foreign policy by reigniting within member states (regardless of whether they give or receive financial aid) nationalist resentments that we hoped had died long ago.

Politicians launched monetary union in 1999, despite warnings that the constituent economies were too diverse. It wasn't long before several states violated the Stability and Growth Pact. Later, the eurozone's "no bailout" principle was abandoned. The response to these failings, however, was a demand for greater economic integration, including such intermediate steps as the creation of a "European finance minister" or an EU commissioner with sweeping powers to facilitate closer integration.

Such ideas, of course, ignored the central issues of national sovereignty and democracy, and specifically the privilege of nationally elected governments and parliaments to determine their own taxes and public spending. The fact that sovereign member states did not deliver on their European commitments is hardly a convincing argument for giving up sovereignty now.

In short, all of the measures that would implicitly support political union have turned out to be inconsistent and dangerous. They have involved huge financial risks for eurozone members. They have fuelled tensions among member states. Perhaps most important, they have undermined the basis on which political union rests – namely, persuading European Union citizens to identify with the European idea.

Public support for "Europe" depends to a large degree on its economic success. Indeed, it is Europe's economic achievements that give it a political voice in the world. But, as the current crisis indicates, the best-performing EU economies are those with (relatively) flexible labour markets, reasonable tax rates, and open access to professions and business.

Moreover, the impetus for economic reform has come not from the EU, but from national governments, one of the most successful examples being "Agenda 2010", launched a decade ago by then-German chancellor Gerhard Schröder. Numerous academic studies, following the work of the American economic historian Douglass North, support the notion that it is competition among states and regions that lays the groundwork for technological progress and economic growth. The total failure of the Lisbon Agenda, launched in March 2000 to make the EU "the most competitive and dynamic knowledge-base economy in the world" demonstrated the weakness of a centralised approach.

Arguably, in earlier centuries, it was competition within Europe that generated unparalleled dynamism and prosperity across much of the continent. This was also a time of wars. However, this does not mean that centralisation is the best – much less the only – way to guarantee peace.

But, once again, EU leaders responded by concluding the opposite: the Lisbon Agenda's failure was interpreted as justifying still more harmonisation and centralisation of national policies. True to form, in his state of the union" address to the European parliament in September 2012, European commission president José Manuel Barroso called for a more powerful commission.

This approach – harmonisation, co-ordination, and centralised decision-making – continues to be regarded as a panacea for Europe's problems. It is the sort of pretence of knowledge that the economist Friedrich von Hayek denounced as a recipe for constraining freedom and ensuring economic mediocrity. Indeed, the European project should start from the premise that appropriate institutions, property rights, and competition, together with a growth-friendly tax system and solid fiscal policies, are the basis of economic success.

The dangers of a centralising approach can also be seen in the relationship between the 17 current eurozone members and the 11 non-eurozone EU states. As the former press on with greater integration, the adverse economic consequences of doing so are likely to deter the latter from EMU participation (which may be another sign that institutional competition cannot be suppressed forever).

There are plenty of areas in which common action at the EU level is both appropriate and efficient. Environmental policy is clearly one. But centralisation of economic decision-making, as an end in itself, cannot underpin a prosperous and powerful Europe.

Jean Monnet, one of the EU's founding fathers, once said that, given the chance to start the European integration process again, he would have begun with culture – a dimension in which we neither need nor want centralisation. Europe's cultural richness consists precisely in its diversity, and the basis for its finest achievements has been competition between people, institutions, and places. Its current economic malaise reflects European leaders' prolonged efforts to deny the obvious.

• Otmar Issing, formerly chief economist at the European Central Bank, is president of the Centre for Financial Studies at Goethe University, Frankfurt.

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« Reply #7300 on: Jul 04, 2013, 06:25 AM »

Whoever Portugal's prime minister is, the troika is in charge

Could Pedro Passos Coelho become our second prime minister in two years to be toppled by the backlash against austerity?

Joana Gorjão Henriques, Wednesday 3 July 2013 16.03 BST   

Portugal's government is on the verge of collapse, and the script of its demise couldn't have been more dramatic. On Monday, the finance minister, Vítor Gaspar, the widely criticised architect of the country's €78bn bailout plan, resigned. On Tuesday, minutes before his successor, Maria Luís Albuquerque, was sworn in, news broke of the resignation of foreign minister Paulo Portas, the leader of the centre-right party in the coalition government.

Then came another twist: the prime minister, Pedro Passos Coelho, refused to accept Portas's resignation and gave a public address in which he said he would "not abandon Portugal". In an attempt to block Portas' coup, Passos Coelho also said that he wanted a dialogue with the junior party and to avoid early elections. The collapse of the Portuguese government increasingly resembles a tragi-comedy.

One TV image summed up the awkwardness of the situation: as Albuquerque was signing her ministerial vows, Paulo Portas's parting statement was being shown in the background. Albuquerque, who was previously the treasury secretary, starts her new job still carrying the baggage of a recent scandal relating to swap contracts in state companies. You can't help thinking: for how many hours will she be in her job?

The key question, though, is how long Passos Coelho will be in office. Could he become the second Portuguese prime minister in just two years to be toppled by the backlash against the troika's austerity programme, after José Sócrates in 2011?

Gaspar had announced his departure from the government in a harshly worded letter in which he criticised the conflicts within government triggered by his bailout programme – in effect, he was criticising the opposition he had faced from figures such as Portas, who had spoken out against the pension cuts. Portas was briefly promoted to number two in government after Gaspar's resignation, and had been tasked with overseeing cuts and to plan state reform.

The troika – the European Commission, the Central Bank and the IMF – will visit Portugal in two weeks to assess how the country is managing the €78bn bailout. Many are very worried about whether Portugal's government will be able to hold its own in negotiations. If Passos Coelho stays, he won't be able to run an unmanageable government for too long. The best alternative would be to hold the elections early, and that's what people are crying out for on the streets. The big question now is what the president, Aníbal Cavaco Silva, a supporter of Gaspar's austerity measures and Passos Coelho's government, will decide to do.

If he calls for an election, the alternative to the current coalition government would be António José Seguro, leader of the centre-left party, PS. Though he is generally regarded as a weak leader, overall discontent will probably make him the favourite. If Seguro does become Portugal's next prime minister, though, his task won't be very different from that of Passos Coelho: like Italy and Greece, we live in troikaland, and our real prime minister is the troika. And can anyone topple the troika?


Portugal's soaring bond yields spell end of line for austerity

Portugal bond yields are back to 7.5%, after briefly hitting 8%, as ministers resign and coalition government nears collapse

Nils Pratley   
Wednesday 3 July 2013 22.55 BST The Guardian
Here we go again. The eurozone crisis is stirring, confounding the boasts of various eurogroup leaders that the worst is past. Their claims have usually rested on the observation that governments' bond yields, and thus their borrowing costs, have fallen. The austerity medicine must be working, it is asserted, and a bright new dawn beckons just as soon as the current recession in the eurozone clears. Just look at Ireland, they say, or even Portugal, to see how bailout programmes can give countries time and space to adjust.

But look at Portugal's bond yields now: they are back to 7.5%, after briefly hitting 8% on Wednesday, as ministers resign and the centre-right coalition government edges towards collapse.

It is a radical turnaround from the position in May, when Portugal was able to raise €3bn (£2.6bn) via a ten-year bond issue at a yield of 5.7%. At that point, it seemed credible that Portugal might be able next year to exit, on schedule, its three-year €78bn bailout programme and start to fund itself in the market. If 7.5%, or worse, is sustained, forget it. The numbers don't work for an economy still deep in recession.

The political crisis in Lisbon is the market's cue to look under the bonnet of the economy. Steep tax hikes have allowed the annual budget deficit to fall but the International Monetary Fund predicted last month that public debt would peak at 124% of GDP next year "on current policies and outlook." Others think that it is too optimistic – 134% in 2015, say analysts at Barclays.

One problem is lack of competitiveness. "Improvements in external competitiveness indicators remain limited," said the IMF report, noting that only a quarter of the rise in unit labour costs since 2000 has been reversed. Thus the export recovery is weak, not helped by lack of demand from neighbouring Spain. In the meantime, domestic demand has collapsed amid pay freezes and an unemployment rate of 18%. "Economic recovery is proving elusive," commented the IMF. You bet: output contracted by 3.25% last year.

The IMF's other concern was that the "social and political consensus" behind the bailout programme was weakening. It was right to worry: austerity fatigue is the cause of the current political crisis, with the coalition split over how much reform the economy can bear. It seems highly unlikely any Portuguese administration could deliver the package of cuts and tax rises that the IMF and eurozone leaders are currently demanding.

For now, the crisis is not at boiling point since Portugal can fund its next big debt repayment in September. But even at current temperatures some form of compromise between Portugal and its lenders will be necessary since it should now be clear to all that the austerity programme has run out of road.

Logic says a Greek-style write-off should happen as part of another bailout, this time with softer austerity conditions. But experience says the road to that point will be long – it always is in the eurozone. Complicating factors include: the fact that the terms of the 2011 bailout have already been tweaked twice in Portugal's favour; the IMF's anxiety for the eurozone partners to fill any funding shortfall; and Angela Merkel's election fight in September.

What happened to Mario Draghi's bond-buying pledge? Forget that, too. As the European Central Bank has always made clear, it applies only to countries that can also raise some money from the market under their own steam. Portugal, at present, doesn't fit the bill.

It's the job of the bailout lenders to get it to that point – and it means that the IMF and eurozone leaders should admit that an overload of austerity is a self-defeating strategy in Portugal.

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« Reply #7301 on: Jul 04, 2013, 06:27 AM »

Belgium's King Albert II to abdicate in favour of son

79-year-old monarch, who ascended to throne in 1993, says he feels too old to carry out duties properly

Angelique Chrisafis in Paris
The Guardian, Thursday 4 July 2013   

Belgium's King Albert II announced his abdication from the throne on Wednesday, ending months of speculation about an early end to his 20-year reign which has been marked by political strife between northern Dutch-speaking Flanders and French-speaking southern Wallonia.

The live television announcement by Albert, 79, that he would step down in favour of his son, Crown Prince Philippe, 53, came just months after Hollande's Queen Beatrix handed power to her eldest son, ending the tradition of European monarchs who doggedly cling to their titles into old age.

Reading from notes, a frail looking Albert said his "age and health" no longer allowed him to carry out his functions. He thanked the nation for its "trust, kind gestures and support "and sometimes your criticism."

Albert was sworn in as the sixth king of the Belgians on 9 August 1993, following the death of his childless brother, King Baudouin at the age of 62. The abdication will take effect on Belgium's independence day, 21 July.

The Belgian monarchy is largely a ceremonial position, but Albert had in recent years been forced into playing a mediator role when his increasingly divided kingdom of 10.5m people found itself without a government for a record 541 days during political deadlock between representatives in northern, Dutch-speaking Flanders and southern, French-speaking Wallonia.

Although increasingly frail, he was at times seen as Belgium's sole national figure in a fractured country. "His most important gift is that he provided a sense of stability," historian and author Marc Reynebeau told the Associated Press.

But his family life was much more complex and controversial. His first royal scandal came a few years after he became king when Delphine Boël, a British-educated artist, came forward claiming she was his illegitimate daughter born out of an extra-marital relationship.

This caused a major crisis in his marriage with Queen Paola and made headlines again this spring when Boël filed a court case to demand a paternity DNA test to prove she was his daughter. "A child does not ask to come into the world. Whether king or gamekeeper, you are responsible for the child you have fathered," Boël wrote in a memoir.

Recently the royal family has come under pressure and seen its public popularity shaken by allegations of sleaze and lavish personal spending habits while the rest of the country struggles with financial crisis. Earlier this year when the dowager Queen Fabiola was alleged to have created a family foundation to funnel taxpayers money to her relatives and avoid death duties Albert issued a highly unusual statement confessing he had been "humbled" by the tales of financial impropriety.

The 84-year-old, the widow of his late brother and predecessor, had been paid an annual public stipend of over £1m since the death of her husband in 1993. "Recent events have pained me and dealt a lesson in humility. The royal family has to show an example in all circumstances," Albert said. Le Soir, the main French-language newspaper warned: "He knows how fragile is the institution he represents."

In the wake of the row, the Socialist-led Government announced earlier this month that for the fist time since independence in 1830, members of the royal household would have to pay taxes and have their expenses closely monitored.

King Albert kept his annual tax-free allowance of €11.5m, because the constitution did not allow for changing rules for the reigning royal. But the future king Prince Philippe, a trained fighter pilot, saw his salary reduced and will likely take the throne under much more financial scrutiny.

King Albert is both the oldest Belgian king and the first to voluntarily relinquish his throne. The Belgian prime minister Elio Di Rupo said: "His decision deserves our admiration. Albert II was not born to be king. But thanks to his enthusiasm, empathy, humour, he became for 20 years fully our king."

In March, a poll in Le Soir found 46% of people felt King Albert should abdicate and 54% wanted him to stay.

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« Reply #7302 on: Jul 04, 2013, 06:30 AM »

Pig Putin's Russia...........

July 3, 2013

Russian Mayor, an Opposition Figure, Is Arrested


MOSCOW — The popular mayor of Yaroslavl, an anticorruption activist who is one of the few opposition figures in Russia to hold a major public office, was arrested late Tuesday and charged with bribery and extortion in a case that immediately set off accusations against the Kremlin of political intimidation.

The mayor, Yevgeny R. Urlashov, scored a stunning landslide victory in April 2012 against a Kremlin-backed candidate and transformed Yaroslavl, a city of 600,000 about 165 miles northeast of Moscow, into a symbol of hope for Russia’s political opposition. At the time, the opposition was struggling to sustain its series of big street protests against Vladimir V. Putin.

“We have something to say to Mr. Putin,” Mr. Urlashov said after his victory, standing outside a polling place. “Change is coming. Let democracy spring from the city of Yaroslavl.”

But since then, Mr. Putin was elected to a third term as president, and opposition figures have come under a barrage of criminal prosecutions.

The arrest of Mr. Urlashov along with several senior members of his administration came a day after an announcement that he would top the list of candidates for Civic Platform, a political party created by the billionaire Mikhail D. Prokhorov, in regional parliamentary elections in September.

In a statement, Mr. Prokhorov, who owns the Brooklyn Nets basketball team, said, “The demonstrative seizure of the head of the city elected by the people is a blow to the human rights and freedoms of every citizen of Russia.”

State-controlled television showed video of Mr. Urlashov, wearing a blue dress shirt open at the collar, being detained by armed security agents wearing green camouflage uniforms, bulletproof vests and black ski masks. Television also showed more than $420,000 in cash, being pulled from an attaché case — just a portion of more than $1.2 million in bribes that investigators said Mr. Urlashov and his aides had sought to extort from a contractor who provided cleaning and road repair services.

The authorities deployed riot police officers throughout the city. But by evening the situation appeared calm, with only 150 to 200 people gathered in a square outside City Hall, shouting, “Free Urlashov!”

Mr. Urlashov, speaking on television, denounced the corruption allegations as retribution. “Nothing has been confiscated,” he said. “They looked, made a search in practically all of my deputies’ offices, found nothing.” He said that he had been set up by a man who is a member of United Russia, the party that nominated Mr. Putin for president.

“The man from whom I did not accept city cleaning, road repairs, wrote a report that I extorted bribes from him,” he said. “I was warned that I would be removed one way or another.” He added: “This is a political game, which is linked to the September 8th election. This is very unpleasant to me because I am a patriot of my country.”

But even as Mr. Urlashov issued his forceful denials, federal officials were declaring his guilt. “Testimonies of some suspects confirm the suspicions of extortion and expose the mayor as the criminal mastermind,” Vladimir Markin, the spokesman for the federal Investigative Committee, said. “Besides, one of the suspects has expressed his wish for a plea bargain, which implies the full acknowledgment of one’s guilt and active cooperation with the police.”

Officials said that they had also seized $500,000 from Mr. Urlashov’s apartment, and an additional $200,000 from the office of Mr. Urlashov’s press secretary, Svetlana Yefimova.

Mr. Urlashov was arrested along with a deputy mayor, Dmitry Donskov; the head of the city agency for municipal contracts, Maksim Poykalaynen; and a mayoral adviser, Aleksei Lopatin. They were charged with large-scale extortion and bribery — charges that carry a potential jail sentence of 8 to 15 years.

Mr. Prokhorov, who ran for president last year, said that he would still make a planned trip to Yaroslavl on Saturday in support of Mr. Urlashov’s and Civic Platform’s other candidates in the coming regional parliamentary elections.

In his statement, Mr. Prokhorov said the highly publicized detention of Mr. Urlashov “was staged with one purpose: to intimidate Yevgeny himself as well as all independent political figures and simply active citizens.”

Alexandra Kozlova contributed reporting.

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« Reply #7303 on: Jul 04, 2013, 06:31 AM »

07/03/2013 04:35 PM

Downward Spiral: Southern Europe Remains Stuck in Crisis

For years, EU leaders have been trying to put a stop to the debt crisis that has been tearing apart Southern Europe. They have made little progress. Is it time for a change in strategy? By SPIEGEL Staff

Spanish top models strutted on the stage to the sounds of flamenco music. They were wearing tightly fitting clothes made by their country's most famous designers and presenting plates of bold tapas creations by Spanish chefs.

Staged in the middle of the European Parliament in June, the show represented a rebirth of sorts. "We have something to offer to the world. We are not just a land of crisis," said Foreign Minister José Manuel García-Margallo. And he hopes to use the blend of fashion show and cooking event to present the Spanish brand name, the "Marca España", to the world. It comes with a promotional video proclaiming that Spain has the "world's best bank," the largest number of installed solar panels of any country across the globe and a big heart. The Iberians, the video notes, are also unbeatable when it comes to the number of organ donors.

But will that be enough to lead Spain and the rest of Southern Europe out of the current crisis? There is plenty of room for doubt on that score.

Aside from the lender praised in the video, Banco Santander, Spain has a weak savings bank sector with an uncertain future, all efforts to rehabilitate it notwithstanding. And despite the many reforms, government debt and unemployment are still on the rise in Spain, while the economy remains stuck in recession. And Spain remains one of the more hopeful of Europe's many troubled economies.

The sovereign debt crisis has been eating its way through the Continent for the last four years, despite the various remedies prescribed by crisis managers in Brussels and Berlin, and at the European Central Bank (ECB) in Frankfurt. The situation in the euro zone eased somewhat after ECB President Mario Draghi's announcement last summer that he intended to do everything possible to preserve the euro. But it is now becoming clear how deceptive this period of calm was. Since US Federal Reserve Chairman Ben Bernanke announced his aim to gradually pump less money into the financial markets, interest rates have gone up considerably in both the United States and Europe.

With the sedative effect of cheap money now diminishing, it is becoming clear what risks still lurk in Europe's debt-ridden economies, and that many problems remain unsolved. Sovereign debt is rising rapidly, not just in Spain, but also in Greece, Italy and Portugal, despite austerity policies and impressive reform efforts. The countries have significantly reduced spending in response to pressure from the so-called troika, consisting of the European Commission, the ECB and the International Monetary Fund (IMF). But the recession has led to a concurrent decline in revenues. In addition, devastatingly high unemployment has led to higher government spending.

'Those Who Exit Will Lose Out'

It has created a vicious downward spiral. And economists have been left to argue over whether and how the countries in question might be able to emerge from it.

Hans-Werner Sinn, head of the Munich-based IFO Institute for Economic Research, favors a temporary withdrawal from the common currency area by crisis-ridden countries. Their products have become so expensive that it is impossible for them to compete within the monetary union, Sinn argues. After exiting the euro zone, the countries could devalue their new currencies, making imports more expensive and reducing the price of exports. It would be a drastic treatment, but in the end, at least according to theory, the patient would return to health and could even re-enter the monetary union later.

Thomas Straubhaar, head of the Hamburg Institute of International Economics (HWWI), calls such talk "cynical" and has made clear that he does not see "devaluation as a cure-all." In what areas, he asks, is Greece supposed to become competitive? Besides tourism and a few agricultural products, he says, the country has little to offer.

"Those who exit will lose out," says Straubhaar, which is why no country will voluntarily leave the monetary union. Straubhaar believes that establishing and developing adequate economic structures is much easier within a common currency area such as the euro zone.

But those efforts have made very little headway so far, and many politicians and economists in the troubled countries believe that this is the result of strict austerity policies, for which they hold German Chancellor Angela Merkel largely responsible.

'Weak Economic Situation'

"Portugal has done a large share of the dirty work, and yet it still has high debt levels and high unemployment," says Pedro Santa Clara, a professor at the Nova School of Business & Economics in Lisbon. "There is only one solution to our problems: growth and investment." Portuguese Economy Minister Álvaro Santos Pereira also wants to see new ideas in crisis management. "Europe has to find its way back to growth and establish confidence to stimulate consumption and investment," says Pereira.

But the German government is determined to stay the current course. "The weak economic situation in the euro zone is no reason to deviate from the dual strategy of ongoing fiscal consolidation combined with structural reforms," reads an internal document from the German Finance Ministry, which argues that the present strategy has been successful.

According to the document, the structural deficit in the euro zone has been reduced by more than half since 2009, and unit labor costs, a key indicator of competitiveness, have "declined significantly." The ongoing weak growth in the common currency zone is an "expression of a deep-seated adjustment process that the euro zone is currently undergoing, and is by no means solely attributable to budget consolidation." This development is "conducive to growth in the medium term." The paper warns sharply against curbing "the necessary adjustment process," saying that a departure from the current austerity policy would "jeopardize the positive development of the last few months."

Klaus Regling, head of the European Stability Mechanism (ESM), comes to Schäuble's defense. "The euro program countries are experiencing what IMF program countries like Brazil, South Korea and Turkey experienced a few years ago." Those affected, says Regling, should consider that these countries are now growing at impressive rates, thanks to structural reform and patience.

Persistent Unemployment

At last week's European Union summit, Merkel also reined in every initiative to quickly free up more money for economic stimulus programs. "First we have to develop a common understanding of what is important for growth," Merkel said. She told fellow European leaders that she wanted to see a more in-depth debate at the next summit in October. Everyone wants growth, but some of her counterparts believe that ramping up government spending is enough to achieve growth targets, Merkel scoffed after the meeting.

The basic elements of agreements between the European Commission and individual EU countries are to be established in December, at which point a sort of solidarity fund will exist among the individual euro-zone member-states. Under Merkel's plan, more money will only be provided in return for reforms that are legally binding and subject to fixed agreements. In Brussels, the chancellor steadfastly refused to even discuss concrete amounts before such agreements are reached.

At the summit, the European leaders did approve €6 billion ($7.8 billion) in new spending to fight youth unemployment and facilitate lending to smaller companies. But this does little to change the underlying problems. A few additional billions are not enough to fix the crisis in the labor market and the financial sector, the recession and political paralysis in a few Southern Europe countries.

The Job Plight
In a sports arena in the northern Tuscan city of Prato, normally a venue for indoor soccer matches or fly fishermen displaying their casting skills, 700 young people from all over Italy recently competed for a very special prize: a job.

Some had come from as far away as Sicily to take the initial test, which consisted of answering 30 difficult questions, to enter the final round. The winner of that round will receive a position as librarian in the nearby town of Poggio a Caiano, population 10,000. It's a 26-hour-a-week position, and the after-tax pay is €900 a month.

Jobs have become rare in Italy, especially for young people. Nationwide, some 40.5 percent of Italians under 25 are unemployed, while in the south the number jumps to 50 percent. Those who do have jobs usually have only limited contracts.

The situation is even worse in neighboring Southern European countries. Unemployment in the under-25 age group tops 50 percent in Spain and Greece and is at 42.5 percent in Portugal. While politicians in Germany somewhat dismissively explain away these devastating numbers, arguing that the economies on Europe's southern edge are just not competitive and need to become cheaper, the southern countries disagree.

"It is part of Spain's character that we work longer than in most European countries," Foreign Minister García-Margallo said on the sidelines of the European Parliament fashion show. And, as Paloma López, in charge of labor policy for the CCOO trade union, points out: "60 percent of Spaniards earn less than €1,000 a month."

In addition, unit labor costs have declined and current account deficits have become smaller in Spain and other countries in recent years. But for skeptics, what some tout as a reform-policy success story is nothing more than a statistical phenomenon. After all, they argue, unproductive jobs are lost in a crisis. From a mathematical standpoint, the productivity of the remaining jobs is bound to increase.

Unskilled and Out of Work

The real problems lie in the way the economy is structured. In the years before the crisis, low interest rates led to growth, especially in the construction sector. "During the real estate boom, many young people discontinued their education and training programs and went into the construction industry, usually with fixed-term employment contracts," says Federico Steinberg, a professor at Real Instituto Elcano in Madrid. These people are now unskilled and out of work.

Nevertheless, Fernando Jiménez Latorre, state secretary for business affairs in Spain, is convinced that labor market reforms are working. "Spain is becoming more flexible," he says. "In the future, 1 percent growth will likely be sufficient to create new jobs."

But where will this growth come from? "Spain has a very restrictive and, therefore, not very business-friendly budget policy. This is good for increasing competitiveness but, when combined with only a moderately expansive monetary policy and a strong euro, it's choking the Spanish economy," concludes economist Steinberg.

The Recession
Signs on the Praça dos Restauradores in Lisbon read "Basta de Exploração," or "stop the exploitation." It's the slogan Portugal's two largest trade unions are using in their call for a general strike. And while European leaders meeting in Brussels last week celebrated their €6 billion commitment to reducing youth unemployment, trams and buses were idle in downtown Lisbon, where thousands protested against the austerity policy imposed by the troika.

Although the Portuguese government is backing the austerity policy, Lisbon is now openly demanding support from Brussels and Berlin in return. "Growth is impossible without solid government finances," says Economy Minister Pereira. "But without growth, it's very difficult to balance the budget."

The minister can cite the most recent IMF diagnosis. "The solid social and political consensus that to date has buttressed strong program implementation has weakened significantly," reads an IMF report released in June. "Economic recovery is also proving elusive." The report notes that the troika program lacks additional instruments to improve competitiveness in the short term, which is why the decline in demand will continue and cannot be offset by more exports.

Increasingly Frustrated

Spain, Greece and Italy are all in a similar position. People in all of these countries are increasingly frustrated over the fact that their sacrifices are ineffective because of the lack of growth. "We need Europe's cooperation to overcome the crisis," says Spanish State Secretary Latorre.

At least €60 billion would be necessary to overcome the current weak growth in Europe, says Guntram Wolff, director of Bruegel, an influential think tank based in Brussels. Wolff believes that stronger domestic demand would also be helpful in Germany. He wants to see the public sector finally invest more in the future, such as for R&D and daycare centers. "A boom would be good for Germany -- and for Southern Europe," says Wolff, which is why he is calling for a change to the German debt limit that would allow for deficit spending to pay for government expenditures once again.

But Brussels and Berlin rebuff such arguments. German Commissioner Günther Oettinger opposes additional economic stimulus programs. "The EU is incurring about €500 billion in new debt this year. Should we now make that €800 billion or €1 trillion?" he asks.

The Banking Crisis
Politicians from the euro-zone member states haven't been as self-congratulatory as they were at last week's Brussels summit in a long time. They agreed on key elements of a European banking union, which provides for joint supervision of the industry and rules for the winding down of ailing lenders.

"We are moving away from taxpayers constantly having to answer for the banks," Merkel crowed. Spanish Economy Minister Luis de Guindos called the agreement an "important step," while politicians in crisis-ridden Ireland even described it as a milestone.

The only problem is that every politician in the euro zone expects something different from the banking union, which is why each one is pleased about something else and the important questions remain unanswered.

Countries suffering most from the crisis hope that the European Stability Mechanism, the euro-zone bailout fund, will share more of the burden for ailing banks in the future. Germany, though, would rather see each individual country continue to be primarily answerable for its own ailing banks. Everyone, of course, wants to see creditors and taxpayers pay for losses in the future -- but they don't want to scare off investors.

In fact, though, it is still unclear who will bear which burdens in the future and who will be responsible for re-supplying struggling banks with urgently needed capital. And that uncertainty means that Europe's zombie banks will continue to inhibit the economic recovery.

Loan Defaults

The lenders' financial difficulties are exacerbating the credit crunch. Banks have been issuing fewer loans in Southern European countries for years, and when they do lend money, it's at higher interest rates than competitors in Germany. In 2012, the volume of credit declined by almost €50 billion in Italy alone.

One reason is that the recession is plunging companies and households into bankruptcy. The resulting loan defaults are tearing new holes into bank balance sheets. In response, lenders are showing a preference for holding onto their money. The problem is especially dire among small and mid-sized companies, which account for more than 90 percent of all jobs in countries like Portugal.

When the banks are asked why they are so reluctant to lend, the competitiveness of Southern European economies is not their top concern. Rather, according to a study by the Association for Financial Markets in Europe (AFME), banks are influenced by a general sense of insecurity over the future of the euro zone and a lack of confidence in the economy. As such, attempts to address the credit crunch in Southern Europe with the help of development banks, like Germany's KfW or the European Investment Bank, are likely to be of only limited use.

Instead, Italy, Spain, Greece and co. are depending on help from the European Central Bank (ECB). "The ECB can play an important role in overcoming the credit crunch, as can the European Investment Bank," says Portuguese Economy Minister Pereira.

The ECB had hinted at the possibility of indirectly buying up corporate bonds. But because such a step is highly controversial within the central bank, ECB President Draghi abandoned the plan. Instead, he is now calling on lawmakers to finally get serious about reforms.

Overwhelmed Politicians
The mood was explosive when Greek Prime Minister Antonis Samaras recently ordered the closure of public broadcaster ERT. The state-owned media empire was a "symbol of waste and corruption," he said bluntly.

His accusation was not inaccurate. But the prime minister's summary act triggered a wave of outrage that almost brought down the entire government. After all, it was the political class itself that was primarily behind cronyism at the broadcaster. After several difficult crisis meetings, Samaras managed to avert the collapse of his coalition. A number of Greece's euro-zone partners breathed a sigh of relief; Samaras is viewed as the first truly reliable reform partner in Greece. The conservative premier has even surpassed a few fiscal goals. For instance, the government now spends 30 percent less than in 2009, and the budget deficit is predicted to be just under 4 percent of GDP this year, bringing it relatively close to European targets. The deficit was still 15.6 percent of GDP in 2009.

The problem, however, is that as soon as it's time to fight cronyism and corruption, and streamline the completely bloated and frustratingly inefficient government apparatus, even the Samaras regime begins dragging its feet in pursuit of the troika targets.

The precipitous closing of the government broadcaster, with its 2,600 employees, was not a kneejerk reaction by a politician tired of corruption. It was an act of desperation. Samaras had promised the troika that he would dismiss 2,000 government employees by this summer. But the minister charged with making the cuts had dragged his feet on compiling the necessary list.

He probably could have come up with a large percentage of the 2,000 slated job cuts if he had simply addressed suspected cases of corruption and fraud in government agencies and public companies and sanctioned the offenders accordingly. In fact, a list of some 2,300 cases had existed since February.

Currently Pending

Such instances are sometimes exasperating for troika envoys, as well as for those in Greece who would like to see the country fundamentally restructured. The entire country is like a construction site. When it comes to the fight against tax evasion, investigators are making little headway in part because many offenders went out of business long ago or have disappeared. Government agencies are overwhelmed by the task of determining which culprits are even capable of paying their fines. Furthermore, the judiciary is so inefficient that it is often pointless to take a case to the courts, where 150,000 tax disputes are currently pending.

It is thus not surprising that attracting investors to the country has proven difficult and the privatization of government assets has slowed down. Still, financing gaps are the result. Athens has already received more than €200 billion in aid money -- yet it may need more. An additional €5 to €8 billion might be necessary next year.

Reform efforts have also slowed in Italy, even though Prime Minister Enrico Letta unveiled another legal package a few days ago. But economists aren't convinced that the changes will ever be implemented.

Letta's predecessor Mario Monti, who managed to maneuver the country away from the precipice Silvio Berlusconi had created, was a miracle worker to be sure and was able to calm the markets. But he did little to fix Italy's structural shortcomings. They include, in addition to an oppressive tax burden, a bloated, incapable bureaucracy, which obstructs or smothers virtually any economic activity; an inefficient judiciary, which scares away potential investors; and poor infrastructure, including potholed streets, a failure-prone energy supply, trains that are constantly late, aging communication networks and a depressingly low educational level.

Reforms Must Continue

According to Clemens Fuest, president of the Center for European Economic Research (ZEW), respected economists believe that Italy's debt-to-GDP ratio "will inevitably continue to rise."

Economists are also skeptical about Portugal's chances of reducing to a sustainable level its sovereign debt level of more than 120 percent of GDP. And in the case of Greece, another debt haircut seems unavoidable after Germans vote this autumn.

Chancellor Merkel and the troika will have little choice but to change their strategy. So far, they have emphasized austerity measures and increasing competitiveness in the crisis-ridden countries. This may work in the long term, but they need more support until then.

Economist Steinberg criticizes lawmakers involved in efforts to save the euro for applying the same economic model to all countries and trying to create small, strongly exported-oriented economies. "Merkel's strategy could work if all euro-zone countries would export to China." But, he adds, the majority of trade takes place within the euro zone. "In other words, there have to be countries here that consume and import."

SPIEGEL reporters have spent extensive time in Southern Europe in recent weeks to study the various problems faced by Greece, Spain, Italy and Portugal. Their stories will appear over the course of the next four weeks.

The quartet of countries, they have realized, all share one thing in common: A shift in the mood is needed so that companies will be willing to invest and consumers will be willing to consume once again. Economic stimulus programs can help, but they can't produce miracles. And, as painful as they are, the reforms must continue.

In the long run, a monetary union with so many differences in cost and economic structures cannot survive.


Translated from the German by Christopher Sultan

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« Reply #7304 on: Jul 04, 2013, 06:33 AM »

Irish MPs vote not to grill Google and Apple bosses over tax

Irish parliament's finance committee presses ahead with watered down inquiry into Ireland's engagement with global tax

Simon Bowers   
The Guardian, Wednesday 3 July 2013 23.58 BST   

An Irish parliamentary committee has voted down calls for multinational companies to be grilled in Dublin about their tax affairs, in the wake of a string of controversies at firms such as Google and Apple which use the Irish tax regime .

Ciaran Lynch, chairman of the Irish parliament's finance committee, is pressing ahead with a watered down inquiry, which he said would look at "global taxation and how Ireland engages with the global tax architecture". It will call on evidence from revenue commissioners, finance ministry officials, the Organisation for Economic Cooperation and Development and other experts. However, no company executive will face questioning.

Calls for Apple and other multinationals to give an account of their tax arrangements in Ireland had been led by Sinn Fein's finance spokesman, Pearse Doherty. "How can we look anybody in the eye out there and defend the type of austerity measures that this government is introducing when we're unwilling to take companies in [before parliament] who are not paying their fair share in this state?" he said.

"It can only be presented as this committee protecting these multinational firms who pay no tax here, who don't employ anybody and who don't pay any tax internationally. I think it makes a mockery out of this committee, an absolute mockery."

Lynch dismissed this view, insisting there was no need for Ireland to replicate evidence from tax investigations undertaken by the UK's public accounts committee and the US's Senate subcommittee on investigations.

"If there has been suggestions that companies have been 'off side' on tax, then the right people to go are those who make the rules. You don't go to Manchester United or Chelsea when they're accused of being offside – you go to the referee, or to Fifa or Uefa," he said.

The promise of an Irish parliamentary inquiry into tax and multinationals was given in the wake of a US Senate inquiry into Apple which showed that the iPad and iPhone maker booked two-thirds of its $34bn (£22.3bn) global profits in 2011 in companies registered in Cork.

Some of Apple's largest Irish subsidiaries were found not to be tax resident anywhere, prompting Carl Levin, chair of the Senate subcommittee on investigations, to call Ireland a tax haven.

Sheila Killian, a lecturer in accounting and finance at Limerick University, has raised concerns that Ireland's aggressive competitiveness on tax is part of a corrosive "race-to-the-bottom" culture. She has said these arrangements can "really bleed tax from other jurisdictions, particularly [poorer nations in] the global south.

"Less money goes in aid to the south than flies from the south in capital. If you allow your tax system to be used by multinational firms to facilitate that kind of flight, that's very problematic."

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