07/09/2013 01:41 PMSnowden Odyssey: Venezuela Offers Refuge as Germany Dithers
President Nicolás Maduro has become the latest Latin American leader to offer safe haven to Edward Snowden. But shouldn't Germany also offer to take in the whistleblower on humanitarian grounds? Many believe it should, but politicians fear the consequences.
Is an end in sight to the asylum odyssey undergone by former US intelligence officer Edward Snowden? On Monday, Venezuelan President Nicolás Maduro confirmed the whistleblower had officially applied for asylum in the country.
Maduro had indicated several times in recent days that Snowden, who has been stuck in the transit zone at a Moscow airport for the past two weeks, could count on a positive response to any application for humanitarian reasons.
"Latin America is telling this young man that you are being persecuted by the empire, come here," Maduro said. Asked whether Snowden had tried to contact him by phone, the Venezuelen president said he had not, but said he would welcome a call.
Venezuela must still make an official decision on the application. Washington has warned against such a step and has demanded that the government in Caracas extradite Snowden to the United States if he arrives in the country. Otherwise, already tense relations between the countries could further deteriorate.
'Axis of Evo'
In what some newspapers are dubbing the "Axis of Evo," a reference to the leftist Bolivian leader Evo Morales, Nicaragua and Bolivia are also countries where Snowden could potentially be granted asylum. Nicaragua's embassy in Moscow also confirmed receipt of an asylum application from Snowden. But there had still been no direct contact with the whistleblower.
It also remains unclear how Snowden can leave Moscow's Sheremetyevo airport without valid identification, given that the United States has revoked his passport. Snowden has been holed up at the airport since he fled Hong Kong two weeks ago and the US is continuing to pursue him. White House spokesman Jay Carney said Monday that the US is in contact with all countries to which he might flee or over which he might fly on his way to seek asylum. Carney also reiterated calls for Russia to extradite Snowden.
The former intelligence service employee is wanted on charges relating to his revelations of the National Security Agency's Prism spying program, which monitors communication over the Internet and by telephone to an almost unimaginable degree. The United States has filed espionage charges against Snowden, accusing him of theft of government property, unauthorized communication of national defense information and wilful communication of classified intelligence information to an unauthorized person. Citing the possibility that Snowden could face the death penalty, Moscow has refused to extradite him.
Meanwhile, on Tuesday Britain's Guardian newspaper posted what appeared to be the second part of an interview with Snowden in which he described his transformation from loyal government employee to whistleblower. In it, he says he chose to release the highly classified information because freedoms were being undermined by what he described as intelligence agency "excesses."
"I think they are going to say I have committed grave crimes, I have violated the Espionage Act," he said. "They are going to say I have aided our enemies in making them aware of these systems. But this argument can be made against anyone who reveals information that points out mass surveillance systems."
In Cuba, President Raúl Castro welcomed the offers of asylum given to Snowden by Latin American countries. The trio of countries involved are all extremely critical of the United States' dominance over the continent.
In Nicaragua, however, business leaders criticized President Daniel Ortega's offer of asylum to Snowden. Venezuela and Bolivia could "afford this luxury" because their economies aren't as reliant on the United States as Nicaragua, José Aguerri, the head of private industry association Cosep told a national news portal. But the importance of the US to Nicaragua's economic and social development is "enormous, we're talking about exports, foreign investment and aid deliveries," he warned.
'There Is a Way to Bring Snowden to Germany '
Meanwhile, in Germany, where Snowden exposed cooperation between US and German intelligence agencies whom he said were "in bed together," the debate over whether Berlin should find a way to offer Snowden asylum continues to simmer.
In a strongly worded text in its current issue, SPIEGEL asks, "Would it not be an act of humanity to liberate him from his current state by, for example, offering him asylum in Germany?" SPIEGEL writes that Snowden could get to Germany from Moscow within a day -- a stamp and a signature would suffice for Snowden to board the next plane to Germany and apply for asylum here.
The magazine notes that German border guards could reject him, but they aren't required to. More likely is that Snowden would immediately be taken into custody because the US has filed a formal request for extradition. The federal government, however, could intervene. Either way, a court would step in to review whether the American request could be fulfilled.
Experienced judges who deal with such situations on a regular basis are almost certain, SPIEGEL reports, that the request for extradition would be rejected as invalid because the extradition treaty between Germany and the United States forbids the transfer of people who are wanted for political crimes. According to Nikolaos Gazeas, an expert on international law at the University of Cologne, the German interpretation of treason is that it is a political offense.
Still, as SPIEGEL points out, "there is a way to bring Edward Snowden to Germany and to let him stay here. One just has to be willing to do it and to accept the subsequent fury of the Americans."
But there's a not a willingeness to do so. "At the moment," the magazine writes, "realpolitik means knuckling under to the Americans because Germany is politically and economically dependent on the US and economically on the Chinese, which is why there is little objection from Berlin on the issue of human rights. Germany is a country that doesn't dare anything. The Snowden case also shows that Germany is a dwarf when it comes to world affairs."
dsl/SPIEGEL -- with wires
************Venezuela is Edward Snowden's best option, says Guardian's Glenn Greenwald - videohttp://www.guardian.co.uk/world/video/2013/jul/10/venezuela-edward-snowden-glenn-greenwald-video
The Guardian's Glenn Greenwald, who first reported Edward Snowden's leaks on surveillance by the US National Security Agency, says Venezuela is the whistleblower's best option for asylum. Snowden, who is wanted by the United States, is believed to be in Moscow. Venezuela is thought to be one of three countries to accept his application for asylum
***********US must fix secret Fisa courts, says top judge who granted surveillance orders
James Robertson breaks ranks and says he was shocked to hear of changes to allow broader authorisation of NSA programs
Dan Roberts in Washington
guardian.co.uk, Tuesday 9 July 2013 22.15 BST
A former federal judge who granted government surveillance requests has broken ranks to criticise the system of secret courts as unfit for purpose in the wake of recent revelations by NSA whistleblower Edward Snowden.
James Robertson, who retired from the District of Columbia circuit in 2010, was one of a select group of judges who presided over the so-called Fisa courts, set up under the Foreign Intelligence Surveillance Act, which are intended to provide legal oversight and protect against unnecessary privacy intrusions.
But he says he was shocked to hear of recent changes to allow more sweeping authorisations of programmes such as the gathering of US phone records, and called for a reform of the system to allow counter-arguments to be heard.
Speaking as a witness during the first public hearings into the Snowden revelations, Judge Robertson said that without an adversarial debate the courts should not be expected to create a secret body of law that authorised such broad surveillance programmes.
"A judge has to hear both sides of a case before deciding," he told members of a Privacy and Civil Liberties Oversight Board (PCLOB) recently appointed by President Obama.
"What Fisa does is not adjudication, but approval. This works just fine when it deals with individual applications for warrants, but the 2008 amendment has turned the Fisa court into administrative agency making rules for others to follow."
"It is not the bailiwick of judges to make policy," he added.
The comments, during the morning session of a PCLOB public workshop held in a Washington hotel, are the most serious criticism yet from a recently serving Fisa judge.
Until now, Fisa judges have mainly spoken anonymously to defend the court process.
Robertson says he was generally impressed with how "careful, fastidious and scrupulous" the court process had been, but felt the so-called ex parte system (where only the government is able to make its case to the judge) needed urgent reform.
"This process needs an adversary. If it's not the ACLU or Amnesty, perhaps the PCLOB can be that adversary."
Members of the oversight board, which has previously been criticised by Congress as an ineffective watchdog, shook their heads and rolled their eyes when this suggestion was made.
Later on Tuesday afternoon, the workshop also heard from a number of other experts who called for the decisions of the Fisa courts to be made public.
James Baker, a Department of Justice lawyer who has represented the government in surveillance requests before the Fisa court, said that an unclassified summary of its findings could be produced fairly easily in future cases, although it would be harder do this retrospectively.
He said this was preferable to trying to redact existing orders. "Not everything that the Fisa court does is reflected in a [written] opinion," he said. "If the court writes the summary, it can write what it wants to say."
A panel of technical experts also gave evidence that legal attempts to separate US citizens from foreign surveillance targets online were increasingly flawed, because of the difficulty of identifying geographic locations in an era of cloud computing and virtual private networks.
Steven Bellovin, a computer expert at Columbia University, revealed that the NSA had even patented a system of locating addresses by triangulating round-trip times for data packets to travel between known internet nodes, but said such technology still often failed to separate foreign and domestic internet traffic.
The quartet who gave evidence argued that technological solutions to protecting privacy were necessarily limited and less preferable than introducing better policy checks and balances.
Nevertheless, the day-long PCLOB "workshop" produced little sign that the oversight board was preparing to propose radical new policy in its report to President Obama.
James Dempsey, a PCLOB member, criticised civil liberties campaigners for not doing more to suggest alternative ways for the government to gather intelligence. He also suggested the scale of intelligence that needed to be collected made it difficult to see how authorities could go back to granting individual warrants rather than blanket approvals.
Rachel Brand, another seemingly unsympathetic board member, concluded: "There is nothing that is more harmful to civil liberties than terrorism. This discussion here has been quite sterile because we have not been talking about terrorism."
Chilean president praises raped girl, 11, for going through with pregnancy
Concern for child's welfare as Sebastián Pinera, who supports ban on abortion, says decision shows 'depth and maturity'
Associated Press in Santiago
guardian.co.uk, Wednesday 10 July 2013 04.01 BST
Chile's president has praised an 11-year-old girl after she said in a TV interview that she wants to give birth to the baby who was conceived when she was raped by her mother's partner.
President Sebastián Pinera's remark that her decision showed "depth and maturity" caused anger on social media in a case that has ignited a heated national debate over abortion in one of Latin America's most socially conservative nations. Abortion, even for medical reasons and in the case of rape, has been illegal since General Augusto Pinochet's dictatorship.
Pinera's government has opposed any easing of the ban.
"I've asked the health minister to personally look after the [girl's] health," Pinera said. "She's 14 weeks pregnant and yesterday she surprised us all with words showing depth and maturity, when she said that despite the pain caused by the man who raped her, she wanted to have and take care of her baby."
The girl was repeatedly raped over the course of two years by her mother's partner, who has been arrested and has confessed to the abuse. Her mother shocked Chileans when she defended him, saying the relationship was consensual. The case was brought to police by the pregnant child's maternal grandmother in the remote southern city of Puerto Montt.
"It will be like having a doll in my arms," the girl, whose face was obscured during the interview, told local TV station Canal 13. "I'm going to love the baby very much, even though it comes from that man who hurt me."
The former president Michelle Bachelet, the frontrunner in the 17 November presidential elections, favours legalising abortion in cases of rape or risk to the health of the pregnant woman or the child. Bachelet – a paediatrician who spent the past several years heading the UN agency for women – referred to the child's case in a recent interview. "She's a girl who needs to be protected and therefore I think a therapeutic abortion, in this case because of rape, would be in order," Bachelet told local Radio ADN.
Chile remains firmly conservative in social matters four decades after the dictatorship. It legalised divorce in 2004, becoming one of the last in the world to grant married couples the right. The Chilean senate rejected three bills in 2012 that would have eased the absolute ban on abortion.
Pinera said his government was concerned about protecting the girl's health. But experts said the girl's life was at risk and she was not prepared to take a decision about her pregnancy.
"At that age the girl doesn't have a capacity of discernment; not even at age 14 would she have the mental and emotional capacity to discern this," said Giorgio Agostini, a forensic psychologist with experience in child sex abuse cases.
"It's very likely that she is saying she wants to have the baby like a living doll. We've seen this in other investigations," Agostini said. "So what the president is saying doesn't get close to the psychological truth of an 11-year-old-girl. It's a subjective view that is not based on any scientific reasoning to support it."
In Latin America only Cuba, Uruguay and some local governments make early abortions accessible to all women. Uruguay recently passed a law authorising elective abortions in the first three months of pregnancy in the most liberal law of its kind in Latin America. Many countries in the region outlaw abortion in all circumstances.
Body found in Honduras believed to be kidnapped TV journalist
Police believe severed head and body parts found in Villanueva belong to popular television journalist Anibal Barrow
Reuters in Tegucigalpa
guardian.co.uk, Wednesday 10 July 2013 07.51 BST
Honduran police have said they believe a severed head and other body parts found in a region of the country ravaged by Mexican drug cartels belong to a popular television journalist kidnapped last month.
Honduran police chief Juan Bonilla said officers found the clothing Anibal Barrow was last seen wearing and a savings account booklet in his name near a partially buried and decomposing headless torso in the northern city of Villanueva.
The evidence suggested the body, which had also had its arms and legs removed, belonged to Barrow, Bonilla said.
Police said on Tuesday they had also found the victim's head, arms, legs and feet.
Four people have been arrested in connection with the killing, and police are looking for six other suspects, Bonilla said, adding that no motive for the murder has been established.
Lying about165km (100 miles) north of Tegucigalpa, Villanueva is next to San Pedro Sula, Honduras's second-largest city.
Violence linked to organised crime in Honduras has surged in recent years, partly due to the presence of Mexican drug gangs that use the country as a transit point for contraband.
Barrow, 58, a popular morning news anchor on Globo TV, one of Honduras's largest broadcasters, was abducted by armed men on 24 June in San Pedro Sula.
His death would put the number of murdered Honduran journalists since 2010 at 28, according to the country's human rights commission.
"This horrendous crime intimidates all Honduran journalists. We strongly urge authorities to clarify … whether or not the motive (for the crime) was his profession," said Juan Mairena, president of the country's journalist association.
Honduras has the highest murder rate in the world, according to the United Nations, with 87 killings per 100,000 in 2012, and San Pedro Sula is the world's most murderous city.
Obama urged to halt Ramadan force-feeding at Guantánamo
Islamic leaders call on administration to rethink policy towards hunger-striking detainees during religious fast
Ben Ferguson , Maggie O'Kane, and Ed Pilkington in New York
The Guardian, Monday 8 July 2013
Link to video: Yasiin Bey (aka Mos Def) force-fed under standard Guantánamo Bay procedurehttp://www.guardian.co.uk/world/video/2013/jul/08/mos-def-force-fed-guantanamo-bay-video
Islamic community leaders are calling on the Obama administration to rethink its policy of force-feeding hunger-striking detainees in Guantánamo during the month-long fast of Ramadan that begins on Monday.
The US government has said that barring "unforeseen emergency or operational issues" it will respect the daylight fast by trying only to force feed 45 detainees at night. Muslim groups say that by refusing to suspend the practice during Ramadan the US is adding insult to injury.
"We believe it's wrong to force feed at any time but it is particularly upsetting to do it through Ramadan," said Ibrahim Hooper, spokesman of the largest US Muslim civil rights and advocacy group, the Council On American-Islamic Relations (CAIR). He said the situation was Kafkaesque: "It's not just a religious issue, it's also a human rights issue in violation of international norms and medical ethics."
Dr Azzam Tamimi, an Islamic community leader in Britain, said he hoped the Obama administration would reconsider. "As Ramadan starts, this issue is becoming increasingly embarrassing for the US government; it's about time President Obama took a brave decision to end this in a way that would be appreciated around the Islamic world."
The continuation of force-feeding through Ramadan is being legally challenged by four of the 106 detainees who are on hunger strike in protest at their prolonged detention without trial. A lawsuit filed with a federal court in Washington last week argues that night-time feeding could lead to long periods without water, endangering the hunger strikers.
To mark the beginning of Ramadan, the human rights group Reprieve has released to the Guardian a video in which the actor and rapper Yasiin Bey (aka Mos Def) submits himself to the enteral feeding imposed in Guantánamo. When the first tube was dislodged, he was unable to go ahead with a second attempt by the medical team to insert it.
The star said that he volunteered to be force-fed by two volunteer doctors to highlight what was happening to the hunger strikers in Guantánamo.
The four-minute video, directed by Bafta award-winning filmmaker Asif Kapadia, seeks to reconstruct the specific force-feeding instructions set out in standard operating guidelines from Guantánamo leaked to al-Jazeera. It shows a plastic tube being inserted through Bey's nostril into his stomach. The "Medical Management Standard Operating Procedure" document leaked from the detention camp defines a hunger striker as a detainee who has missed at least nine consecutive meals or whose weight has fallen to less than 85% of his ideal body weight.
If force feeding is deemed medically necessary, medical personnel shackle the detainee "and a mask is placed over the detainee's mouth to prevent spitting and biting". A feeding tube is then passed through the detainee's nostril into the stomach.
The process takes about 20 to 30 minutes but they can be required to stay in the restraint chair for up to two hours until a chest x-ray confirms the nutrient has reached their stomach.
The prisoner is then removed from restraint chair to "dry cell" where they are observed by a guard for up to an hour "for any indication of vomiting or attempts to induce vomiting". If they do vomit, they are returned to the restraint chair for the entire duration of the observation period in subsequent feeds.
If they bite the tube, the guards hold their head still for "as long as necessary for the detainee to relax his jaw".
Other religious groups have also spoken out against the practice. Last month Bishop Richard Pates, chair of the committee on international justice and peace for the US conference of Catholic bishops, wrote to the defence secretary Chuck Hagel noting the opposition of the International Committee of the Red Cross to force-feeding. "Rather than resorting to such measures, our nation should first do everything it can to address the conditions of despair that have led to this protest."
Egypt: interim presidency appoints PM and vice-president
Army says it is determined to tackle challenges facing country, while warning against political 'manoeuvring'
Ian Black and Patrick Kingsley in Cairo
The Guardian, Wednesday 10 July 2013
Egypt's military-backed interim presidency moved to implement a speedy transition to civilian rule yesterday, appointing the economist Hazem el-Beblawi as prime minister and the internationally known opposition leader, Mohamed ElBaradei, as vice-president.
In a tense atmosphere after the killing of 55 supporters of the deposed president, Mohamed Morsi, and threats of fresh mass protests by his supporters, the army also warned against political "manoeuvring" at a time of instability and anxiety – apparently to forestall more squabbling about other cabinet posts.
General Abdel-Fatah al-Sisi, the defence minister and armed forces commander who ousted Morsi last week, said in a statement broadcast on state TV that the military was determined to tackle the challenges facing Egypt in "these difficult circumstances". Sisi's message was also a greeting to Egyptians on the occasion of the Muslim Ramadan holiday, which begins today.
Beblawi, a respected former finance minister, will lead a technocratic government whose other members have yet to be announced. Crucially, it looks unlikely to include Islamists. The Muslim Brotherhood is holding out for Morsi's restoration, which does not now seem likely.
ElBaradei, a Nobel peace prize laureate, was on the verge of being named prime minister last week, but at the last minute that was blocked by the Salafi Nour party. His role is a fillip for liberals.
Moves towards political stability were swiftly rewarded. Saudi Arabia said it had approved a $5bn (£3.4bn) aid package to Egypt and the UAE agreed to grant it $1bn and lend another $2bn. Both the conservative Gulf monarchies were hostile to Morsi and the Brotherhood.
Earlier, the interim government announced plans for elections and drew up an interim constitution that gave full executive and legislative plans to the interim president, Adly Mansour. The charter was criticised by the Tamarod campaign, the grassroots movement that brought millions to the streets against Morsi in recent weeks. Last night it was also rejected by the liberal National Salvation Front, of which ElBaradei is a member.
But it was welcomed by the US, which had previously expressed concerns about Morsi's removal, but praised the way that Egyptian officials had now "laid out a plan for the path forward".
Morsi supporters were still gathering near the scene of Monday's killings, described as a massacre by the Brotherhood, but defended by the army and a uniformly uncritical state media as a response to a "terrorist" attack.
At the Rabaa Adawiya sit-in, the ground zero of the Islamist presence in east Cairo, the crowds were more sombre than agitated. Mourners left rings of stones where their friends had died, and only a few chanted insults at the soldiers guarding the barbed-wire fence that blocked one entrance to the site.
"It was criminal, it was treason," said Mahmoud Mohamed, a Salafi from Minya, of Monday's massacre. "But protesters are righteous people. We don't know violence. We will only resist with peaceful chanting."
Sherif Mohamed, a teacher from Cairo, said: "The army is trying to falsify the news, cover up their actions. But we are fearless, we are determined. We will continue to stand here in support of legitimacy."
At Cairo's Zeinhom morgue, where many of those killed were taken, mourners were still waiting for their friends' bodies to be released – many still coming to terms with the horror of what happened. "It was barbaric," said Mohamed Abu Sayed, a lecturer at Al-Azhar University, who was waiting for the body of his friend, Mohamed Abdel Rahman. "It was a black day in the history of Egypt's army." Abu Sayed called for Islamists to continue their peaceful resistance in response.
Amnesty International said its inquiries suggested the use of disproportionate force by the security forces. "Many of those killed and injured had been shot in the head and upper body with shotgun pellets and live ammunition," it added.
Morsi, who is now under house arrest, won last year's election by a narrow majority against an old-regime candidate. The president's supporters say he was deposed by a military coup. Opponents call his removal by the military a continuation of the 2011 revolution. The Brotherhood called the appointment of Beblawi and ElBaradei "a deal with putschists".
07/10/2013 11:54 AM
Search for Stability: Deep Divides Threaten Egypt's Path Forward
By Raniah Salloum in Cairo
Egypt is deeply polarized and hatred between the two main camps is stewing. Even as the interim government reaches for reconciliation, the road ahead looks increasingly treacherous.
It is a good 15-minute drive from Tahrir Square in the heart of Cairo to Raba'a al-Adaweya Square in the Nasr City quarter of the capital. Yet worlds divide the Egyptians who have been gathering at the two sites in recent days. And every day, it seems, the division becomes wider.
In Tahrir Square on Tuesday, people were selling posters of the country's new strongman, General Abdel-Fattah el-Sissi, who toppled then-President Mohammed Morsi last week. Sissi is backed by a colorful mixture of people opposed to Morsi's Islamist rule. On Raba'a al-Adaweya Square, however, demonstrators held images of Morsi aloft. They are the followers of the Islamist Muslim Brotherhood movement -- and they have vowed not to vacate their tent city until Morsi is back in office.
The conflict has become so entrenched that the country appears ungovernable, and an intense struggle for Egypt's very identity has emerged. One side believes that the Muslim Brotherhood wants to force its beliefs onto the country. The Islamists accuse the liberals of seeking to do the same.
The country's interim government is trying to bridge the gap. On Tuesday, the office of interim President Adly Mansour announced that it would soon be announcing an initiative it is calling "One Nation." "The presidency invites everyone to participate in an overarching initiative whereby a humanitarian basis for coexistence shall be set," read the statement. Also on Tuesday, the prime minister's office announced it would offer cabinet posts to Freedom and Justice, the Muslim Brotherhood party.
On Wednesday, however, it looked as though that would not be enough. The Muslim Brotherhood has rejected any participation in the interim cabinet, according to the news agency AFP -- a rebuff that seems to underline the Islamists' earlier call for an uprising against the interim government. The move is unsurprising, considering it was only Monday that over 50 Muslim Brotherhood members were killed while protesting outside of an army barracks. Even as it remains unclear exactly what happened, the Islamists say the shooting was unprovoked, hardly a position that lends itself to rapid reconciliation.
The military is trying to move forward quickly nonetheless. On Monday evening, the army issued a constitutional decree establishing the rules for a rapid transition back to democracy and an ambitious timeline was laid out. On Tuesday, agreement was finally reached on an interim prime minister after three previous candidates had been blocked by the Salafist party Nour.
Yet even as agreement was ultimately reached, the difficult negotiations over the interim prime minister show just how difficult it will be for the military to make rapid progress. For one, the various groups that supported the overthrow of Morsi have very little in common. Not even a week after Morsi's ouster, the alliance's fragility is becoming apparent. The youth movement Tamarod, for example, has criticized the constitutional decree as has the main liberal group, National Salvation Front. Ahmed el-Tayeb, a powerful Sunni Sheikh who is head of the Al-Azhar Mosque, has threatened to abandon the alliance altogether. It is a threat that the Salafists from the Nour party have made several times as well.
Meanwhile, hatred appears to be gaining the upper hand. On Tuesday, there were very few demonstrators in Tahrir Square. But the headlines on Egypt's biggest newspapers for sale there showed how the recent events were being interpreted. "The Army Kills More Than 50 Terrorists," read one representative headline about the Monday massacre. The state-run paper al-Akhbar added the absurd accusation that "there were 200 heavily armed Americans, Iraqis and Syrians among the terrorists."
'Worse than the Unbelievers'
At the same time, on Raba'a al-Adaweya Square, several thousands were gathered. One speaker said that the military was using violence to prevent additional people from making their way to the square -- which was little more than a bold-faced lie. An Islamist newspaper accused the liberal politician Mohamed ElBaradei of being a "US agent who wants to destroy Egyptian democracy." Morsi's critics are described as being "worse than the unbelievers within the family of the Prophet Muhammad."
The atmosphere has become so heated that people have begun demanding that perfect strangers show their colors. Clothes are interpreted to determine who belongs to which camp. Bearded men are presumed to be followers of Morsi, whereas women in T-shirts are immediately branded as being pro-military. Scuffles have become more common.
It is currently unclear how this divide might ultimately be bridged. "We will not stop demonstrating until Morsi is president once again," says 53-year-old Salafist Mamdou Ismail. He is a member of the Nour party, which officially threw its support behind the military. Its grassroots members apparently see things differently.
There is some hope that Ramadan, the month of fasting which begins on Wednesday, will help calm the situation. But Ismail and his friends say that, even if they cannot eat or drink during daylight hours, they plan to continue demonstrating.
Egypt faces 'post-apartheid challenge', says prime minister in waiting
Economist Samir Radwan is favourite to become country's next prime minister after being endorsed by influential al-Nour party
Patrick Kingsley in Cairo
guardian.co.uk, Tuesday 9 July 2013 13.55 BST
The favourite to be the first prime minister in the post-Morsi era has said a polarised Egypt faces the same challenges as post-apartheid South Africa, and named national reconciliation and economic renewal as his top two priorities should his appointment be confirmed.
Samir Radwan, a development economist and former finance minister, was first contacted about the role on Monday and is at least the third person to have been considered for the post since Morsi fell last Wednesday. Mohamed ElBaradei, the liberal figurehead, was vetoed by Salafi – or ultra-orthodox – politicians on Saturday, while lawyer Ziad Baha al-Din is believed to have later turned the position down.
Speaking to the Guardian on the phone from Geneva, Radwan said a faltering economy could only be reformed if Egypt's divides were bridged.
"We must work really hard on reconciliation – à la South Africa, after apartheid," said Radwan, who cautioned that his appointment was still not confirmed. "There has been an offer, but it has to be considered all around. The interim president and his advisers rightly want some consensus … It's not final, and it depends on discussions."
But Radwan remains the favourite, particularly after a leading Salafi party – al-Nour – publicly endorsed his nomination. Radwan is considered a less polarising figure than ElBaradei, a former UN diplomat, who is seen by Islamists as too emblematic of secularism.
Radwan already has strong opinions on how to reform Egypt's economy – which, in an interview with the Guardian this spring, he suggested was at its worst for decades. "You are talking about nearly half of the population being in a state of poverty," Radwan said in May.
Radwan admitted that with his economic background the offer of the premiership had taken him by surprise as he holidayed in Geneva. A former adviser at the International Labour Organisation, Radwan said he had thought a role in the finance ministry might be more likely – but that he would take the premiership if his appointment was accepted by all parties.
The delay in the appointment of a prime minister reflects the surprisingly pivotal role of al-Nour within Egypt's new military-backed administration. Just nine months ago, al-Nour was a key ally of Morsi's Muslim Brotherhood – but last week it backed his removal in a high-stakes move that gave the party a place at the bargaining table in post-Morsi Egypt, but risked alienating its pro-Morsi support base. For Egypt's secular-slanted new government, al-Nour's continued involvement is crucial because of the support it is thought to wield on Egypt's streets. But by engaging in the government, al-Nour risks upsetting the very supporters who currently give it such clout – and its rejection of ElBaradei last weekend was therefore considered an attempt to show its powerbase that the party's involvement was yielding dividends.
Egyptian state media backs military action as rival organs attacked
Many independent as well as official news groups are supporting the interim president Adly Mansour
Ian Black and Patrick Kingsley in Cairo
guardian.co.uk, Tuesday 9 July 2013 18.56 BST
Egyptian state media have closed ranks in support of the military and its version of the removal of President Mohamed Morsi as well as Monday's killing of 55 supporters of the deposed Islamist leader in a shooting at a protest in Cairo.
In an atmosphere of extreme polarisation, the country's state and many independent news organisations are now solidly backing the interim president Adly Mansour, who was installed by the army last week. TV channels sympathetic to Morsi's Muslim Brotherhood have been shut down.
Foreign media outfits perceived as being sympathetic to Islamists are being attacked, with CNN and al-Jazeera TV singled out for hostility. The US news network has been vilified by protesters as being pro-Brotherhood, partly because it described the military's move as a coup.
In one very public display, al-Jazeera Arabic's Cairo director, Abdel Fatteh Fayed and his crew were ejected from an army press conference on Monday after Egyptian journalists in the room chanted "Out! Out!". The Qatari-owned satellite TV network has long been accused of partiality towards Islamists across the Arab world.
Later 22 employees of its Cairo bureau announced their resignation after security forces raided the premises. Wesam Fadhel accused the channel of "lying openly" about events in Egypt. Anchor Karem Mahmoud said the staff had resigned in protest against "biased coverage."
Egypt's state media, led by the veteran al-Ahram newspaper, has not questioned the military's account of what happened outside the Republican Guard officers club on Monday, when the protesters and three security personnel were killed. State TV broadcast few images and none of the harrowing ones seen on social media or foreign channels. The presidency has, however, announced a judicial investigation.
In Tuesday's editions, al-Ahram called the attackers "armed men." Al Gumhouria described them as "terrorists". Al-Akhbar, another state-owned paper, ran front page pictures of soldiers carrying a wounded comrade and an image purportedly showing a protester firing on soldiers.
Following the fall of Hosni Mubarak in February 2011, Egyptian state media first moved to support the military and then, after his election last June, to back Morsi. Al Ahram's current editor, Mamdouh al-Wali, was appointed as part of a process known as the "Brotherhoodisation" of key institutions. He has not been seen at the paper since the president's removal.
The love-in with the new administration marks a complete reversal of the relationship private media organs had with the state under Morsi. Two weeks ago, the government banned the owner of CBC, a major opposition TV channel, from leaving the country, and ordered a leading opposition talkshow host off air. Newspapers backing the army's version of events this week – such as al-Dustour and al-Watan – were only a fortnight ago attacking Morsi every day.
Five pro-Islamist TV channels were targeted moments after the army announced Morsi's removal and remain closed – though journalists who were arrested were released. Half a dozen Egyptian human rights organisations have expressed their deep concern. "The story of the state-owned media is really shameful," said Hani Shukrullah, who was sacked as editor of al-Ahram online this year. "You have the same administration and the same people who before 2011 were defending Mubarak and describing revolutionaries as depraved troublemakers moving to support the military and the revolution and then moving to the Brotherhood once Morsi came to power. Now they are moving back again.
"Now the emphasis is on singing the praises of the army. There are some exceptions and dissenting voices. But the core is becoming quite repulsive. The private TV stations don't tell the story. With the closure of the Islamist stations you really have to turn to CNN or al-Jazeera to see what the Islamists are saying and doing – except the footage of them committing atrocities."
Beirut car bomb blasts Hezbollah stronghold
Explosion in bustling neighbourhood of Beir el-Abed leaves 37 people injured, the worst blast to hit the area in years
Associated Press in Beirut
guardian.co.uk, Tuesday 9 July 2013 14.38 BST
A car bomb has rocked a stronghold of the Shia militant group Hezbollah south of the Lebanese capital, Beirut, setting several cars alight and wounding 37 people in a major security breach of a tightly guarded area, officials said.
The powerful blast in a bustling commercial and residential neighbourhood on Tuesday, the worst explosion to hit the area in years, came as many Lebanese Shias began observing Ramadan, and is likely to be direct fallout from the civil war raging in neighbouring Syria.
A group of about 100 outraged Hezbollah supporters marched in the area after the blast, carrying pictures of the Hezbollah chief Hassan Nasrallah and shouting in support of their leader.
Hezbollah operatives fired into the air to disperse people who attacked the interior minister, Marwan Charbel, with stones as he inspected the scene of the blast, trapping him for 45 minutes in a building before he was escorted through a backdoor.
Charbel is seen by some Shias as sympathetic to the hardline Sunni cleric Ahmad al-Assir, who agitated against Hezbollah for months and is now on the run.
With skirmishes between Shias and Sunnis on the rise around the country, Lebanon is increasingly buffeted by powerful forces that are dividing the Arab world along sectarian lines. Some Syrian rebel groups, which are predominantly Sunni, have threatened to strike in Lebanon after Hezbollah joined the troops of the Syrian president, Bashar al-Assad, in their battle against opposition fighters.
"This is a message, but we will not bow," Ziad Waked, a municipal official, told Hezbollah's al-Manar television.
Officials said the blast was in a parking area near a supermarket and a petrol station in the Beir el-Abed district.
"The explosion was so strong I thought it was an Israeli air raid," said one witness, Mohammad al-Zein. "My wife was sleeping in bed and all the glass fell on her, injuring her in the mouth, arms and legs."
Another resident said he had been fasting on the first day of Ramadan and was on his way to shop for the evening meal. "I was riding my motorcycle on my way to a sweets shop and then there was this massive explosion that knocked me off and I fell on the ground," he said.
The Red Cross's head of operations, George Kattaneh, said 37 people had been lightly wounded, many from breaking glass.
The area is a few hundred metres from what is known as Hezbollah's "security square", where many of the party's officials live and have offices. Nasrallah received dignitaries there before the 2006 war. The area was bombed out by Israel in that conflict and Nasrallah has gone underground since then, only rarely appearing in public and never for more than a few minutes for fear of Israeli assassination.
The explosion was one of the biggest in the area since the end of Lebanon's 15-year civil war in 1990. Television footage from the scene revived memories of the war, when car bombs set by sectarian groups were common. There have been numerous car bombs targeting politicians and journalists since then, but random car bombs have been rare.
Hezbollah operatives in civilian clothes, some of them carrying Kalashnikov rifles, cordoned off the site of the explosion with yellow ribbons. They and Lebanese security officials barred journalists from approaching the site itself.
Ambulances and fire engines, their sirens wailing, raced to the area and witnesses said casualties were rushed to the nearby Bahman and Rasoul al-Atham hospitals. Immediately after the blast, people could be seen running in the street away from the site of the explosion which set several cars on fire.
The power of the explosion shattered windows and damaged several buildings in the area. A security official said the bomb had been placed in a car and weighed 35kg.
Ethiopia's sesame seed trade with China – a partnership of equals?
Ethiopia uses sesame seeds to repay loans on Chinese-built infrastructure. But what are the long-term benefits to farmers?
Wednesday 10 July 2013 11.17 BST guardian.co.uk
It seems unlikely that many Ethiopian farmers sat down and thought about what Chinese consumers want to eat for breakfast before planting their crops. Yet a surge in the eastward export of sesame seed over the past decade has created an unexpected interdependency between the two countries.
In less than a decade, Ethiopia has jumped from being a minor producer of sesame (38,000 tonnes in 2002, according to the UN's Food and Agriculture Organisation) to the largest producer in Africa and fourth largest in the world (320,000 tonnes in 2011, according to the most recent data available). During the same period, China has switched from being a net exporter to a net importer, providing the main destination for Ethiopia's sesame seeds.
Sesame seeds perhaps rank among the lesser known of China's growing food imports, lacking the headline-grabbing attention of Brazilian soyabeans. Black sesame paste, eaten at breakfast, lunch and dinner, is a popular snack among many southern Chinese people. It is made by mixing roast and ground sesame seeds with sesame oil; a sweeter version can be made by adding sugar or honey. Its use as a popular baking ingredient aside, sesame seed can be used as an oil or a high-protein feed for poultry.
Ethiopia has long produced sesame, but as China's economic ties with the country and elsewhere in Africa have grown, so has seed production. For Ethiopia, Chinese ties have meant an increase in Chinese manufacturing imports, and access to finance and new infrastructure. In January, the China Development Bank provided a $25m loan to finance agricultural enterprises. In May, the Export-Import Bank of China agreed to provide $3.3bn to build a railway from Ethiopia to Negad port in Djibouti.
In return, Ethiopia has effectively been using sesame seeds to repay Chinese loans. Foreign currency earned by selling sesame is passed over to the state-owned Commercial Bank of Ethiopia and used to secure and repay loans provided by China, according to Deborah Bräutigam, senior research fellow at the International Food Policy Research Institute. The relationship is likely to have started in 2005-06 as a shortage of sesame seeds in China and a favourable tariff policy (set by China) kickstarted the rise in Ethiopian exports, which are regulated largely by the state-owned Ethiopian commodities exchange.
Bräutigam says China is unlikely to have stipulated that Ethiopia export its sesame, which is now its second most valuable export after coffee. "The 'guaranteed supply' of whatever export is already going to China is simply the mechanism for ensuring repayment of the loan," she says.
However, the growth of sesame seed production on the back of Chinese demand is such that traders expect Ethiopia to earn $2bn a year from exports of seeds, spices and pulses by 2015, according to reports.
Among Ethiopian farmers the main beneficiaries appear to be smallholders, with sesame largely grown as a cash crop on farms producing less than 400kg a year, according to Jo Wijnands, a researcher at the Agricultural Economics Research Institute.
"Production has gone up very quickly," says Wijnands, "but I don't think the huge increases have come through efficiency of production, but with much more land being given over to it. The farmers have seen good prices from the previous year, so they have expanded their area. Demand could change quickly, but I don't think it'll change much in the next five years because of demand from China."
You could argue that sesame seed farmers are generating cash for themselves, at the same time as helping to finance Ethiopia's infrastructure. However, Wijnands is sceptical about the long-term benefit of the increased trade. He says there is little evidence of improvements in agricultural techniques in smallholder sesame seed production. An Oxfam report from 2011 said more than 600,000 smallholder farmers produced sesame seeds in Ethiopia, but still faced difficulties including seed shortages, poor product quality and access to finance.
Recent news of a Chinese shoemaker promising a $2bn investment in a new manufacturing hub near Addis Ababa, the capital, is perhaps more indicative of the benefits Ethiopia hopes to reap from its closer alliance with China. As the Ethiopian prime minister, Hailemariam Desalegn, made clear in a speech during his recent visit to Beijing, his country does not want a lopsided relationship.
"Africa should not be a net exporter of primary commodities and net importer of capital goods whether from China or elsewhere … China has both the responsibility and the incentive, as it has already begun to do, to turn Africa's resource curse into a blessing that will further enhance the mutual interest of both partners."
July 10, 2013
Czech President Swears in Cabinet in Showdown With Parliament
PRAGUE — Czech President Milos Zeman swore in a cabinet led by a longtime ally on Wednesday that faces almost certain rejection by parties in parliament, raising the prospect of prolonged political uncertainty in the central European nation.
The leftist president confirmed economist Jiri Rusnok as prime minister, hoping that he can pull the Czech economy out of a recession now into its second year and lead the country into an election due next year.
But the cabinet is likely to lose a vote of confidence, due within 30 days, as Rusnok's appointment has infuriated both the three parties of the outgoing center-right coalition and the leftist opposition, who all view it as a power grab by Zeman.
Rusnok, who served as finance minister in a Zeman-led cabinet a decade ago, replaces Petr Necas, who resigned last month after a close aide was charged with bribery and abuse of office. Prosecutors have asked parliament to lift the center-right former premier's parliamentary immunity.
If Rusnok loses the parliamentary vote of confidence, Zeman is meant to appoint another prime minister. But there are no time limits and politicians fear Zeman could drag out the process, leaving Rusnok's team in place for many months to carry out the president's wishes.
Such a course would increase the risk of gridlock in policymaking which could hold up a 2014 budget plan and rattle investors, who have long viewed the Czech Republic as a safe haven among emerging economies.
Rusnok's new cabinet includes several people who have worked as advisers to Zeman and former members of the opposition Social Democratic party, which Zeman led until 2002.
For finance minister, Rusnok picked Jan Fischer, a former prime minister in a technocrat cabinet in 2009-10.
The Czech budget deficit is set to fall below the EU-prescribed limit of 3 percent of economic output this year.
But the budget-cutting drive of the center-right coalition in power from 2010 until last month has pushed the Czech economy into its longest recession in two decades.
Fischer and Rusnok have said that returning the country to growth is a top priority for the new government.
(Reporting by Jana Mlcochova; Writing by Jason Hovet; Editing by Gareth Jones)
Germany calls on EU to ban 'patent box' tax breaks
Finance minister said schemes offered by Britain and other countries lead to unfair competition for foreign investment
The Guardian, Tuesday 9 July 2013 19.09 BST
Germany's finance minister called on Tuesday for a ban on the so-called "patent box" tax break offered by Britain, Netherlands and some other EU members, which he says results in unfair competition for foreign investment.
Wolfgang Schäuble told reporters he wanted EU finance ministers to review the lower corporate tax rates on profit related to innovations and exploiting patents.
Corporate tax avoidance has become a hot political topic with austerity-weary voters across Europe angered by accusations of tax avoidance levelled against companies including Starbucks, Google and Apple in the past year.
Politicians have promised action and the G20 group of rich economies has commissioned the Organisation for Economic Co-operation and Development to devise ways of tackling corporate profit shifting.
Schäuble said patent box schemes were at odds with EU rules designed to deter discriminatory tax rules. "We have to look at this practice and discuss it in Europe, he said. "That's no European spirit. You could get the idea they are doing it just to attract companies."
Countries that offer them say they encourage innovation and high-value jobs in research and development. Critics see the scheme as state-sanctioned tax avoidance.
The schemes can be valuable for companies such as the UK's GlaxoSmithkline. The pharmaceuticals group has said the UK regime encouraged it to build a new plant in Britain and bring many patents held overseas back into the UK.
Citigroup has estimated GSK's effective tax rate will fall to 21% by 2017, from an estimated 24% in 2013, as a result of the measure.
Academics say the ability of companies to operate in one European market and access neighbouring ones without barriers means that, although it is a global issue, tax competition is most fiercely fought in the bloc.
The European Commission wants an approach that would force firms to apportion their EU profit between countries according to a formula based on where staff, assets and sales are based. The British government declined to comment.
Vatican to be pressed for confidential records on clerical child sex abuse
UN committee's 'list of issues' will present Pope Francis with direct challenge to disclose whether secret deals were made to preserve church's reputation
guardian.co.uk, Tuesday 9 July 2013 19.12 BST
The Vatican is to face tough questioning by a United Nations committee over the Catholic church's record in tackling child sexual abuse by its clergy around the world.
A detailed "list of issues" has been released by the Geneva-based Committee on the Rights of the Child (CRC) before the appearance of officials from the Holy See. The session is expected early next year.
The decision to ask senior Roman Catholic clerics to hand over confidential internal documents to such a high-profile inquiry marks a fresh initiative in the global debate over clerical abuse. It will present the new pontiff, Pope Francis, with a direct challenge to provide records of financial compensation given to victims of sexual abuse and disclose whether secret deals were made to preserve the church's reputation.
The UN committee's document is headed: "List of issues to be taken up in connection with the consideration of the second periodic report of the Holy See." Paragraph 11 of the CRC's document states: "In the light of the recognition by the Holy See of sexual violence against children committed by members of the clergy, brothers and nuns in numerous countries around the world, and given the scale of the abuses, please provide detailed information on all cases of child sexual abuse committed by members of the clergy, brothers and nuns or brought to the attention of the Holy See."
The information sought includes cases where priests were transferred to other parishes, "where instructions were given not to report such offences, and at which level of the clergy", and "where children were silenced in order to minimise the risk of public disclosure". The CRC has also asked for "the investigations and legal proceedings conducted under penal canon law against perpetrators of sexual crimes" and "the number of child victims who have been given assistance for recovery, including psychological support and social reintegration and have received financial compensation".
The committee has been lobbied by international victims' groups as well as the UK-based National Secular Society. Keith Porteous Wood, the society's director who gave evidence in Geneva, told the Guardian: "Pope Francis will be judged on his ability to clean up child abuse and the Vatican bank's money laundering and tax evasion. He cannot rely on regulators' patience lasting much longer on either."
The Vatican has replied to past UN requests to respond to general concerns about sex abuse by Catholic clergy. The list of questions demands far more details.
Shortly after becoming pope, Francis announced that he had urged the Vatican to deal with the problem. A spokesman said in April that the church would "act decisively in sex abuse cases, above all promoting measures to protect minors, assistance for all those who in the past suffered such violence, [and] necessary measures against the guilty".
The CRC has been pressing the Vatican for greater disclosure over the issue of clerical abuse for years. Barbara Blaine of the Survivors Network of Those Abused By Priests said last month: "The fact that a UN committee has called the Vatican to account for its record on children's rights, including the right to be free from sexual violence and exploitation, is giving survivors all over the world hope."
France drops controversial 'Hadopi law' after spending millions
The 'three strikes' anti-piracy measure, introduced under Nicolas Sarkozy, would have cut off users' access to the internet
guardian.co.uk, Tuesday 9 July 2013 16.09 BST
A French anti-piracy law that would disconnect those suspected of copyright infringement has been overturned and replaced with a system of automatic fines, it has been announced in a official government report.
Mired in controversy, the "Hadopi law" succumbed to the pressure of the entertainment industry and would disconnect those suspected of piracy from the internet. Users were first sent two written warnings, in what was called a "graduated response", and if they did not reply their internet connection would be cut off on the final warning.
The report says that instead of simply disconnecting users, those suspected of copyright could be fined if they did not reply to warnings, with a relatively low fine (€60) to begin, and the size of the fine would increase depending on the number of infractions.
French anti-piracy will now their focus – instead of handing heavy punishments to individual users, the government is looking towards penalising "commercial piracy" and "sites that profit from pirated material", according to an official spokesperson.
The Hadopi law was introduced in 2009 by the then president, Nicolas Sarkozy, but suffered great controversy when France's highest court, the Constitutional Council, declared access to the internet a basic human right.
The government has spent millions on the agency that patrols the system and during its implementation, it only ever fined one individual €150, disconnecting their internet access for 15 days.
In 2009, Sarkozy defended the Hadopi law, insisting that the government should protect "lawlessness" in all parts of its territory, including in the online world:
"How can there be areas of lawlessness in areas of our society? How can one simultaneously claim that the economy is regulated but the internet is not so? How can we accept that the rules that apply to society as a whole are not binding on the internet?…
By defending copyright I do not just defend artistic creation, I also defend my idea of a free society where everyone's freedom is based on respect for the rights of others. I am also defending the future of our culture. It is the future of creation."
New French investment law could boost social enterprises
By broadening criteria the French government is hoping more companies will become socially responsible investors
9 July 2013 16.57 BST
A new law governing how French workers' company pensions are invested could boost social enterprise and 'solidarity' initiatives in France.
On 24 July the junior minister for the social and solidarity economy (SSE), Benoît Hamon, will present a new bill to the French president and ministers' council. As with social enterprise, solidarity activities seek to achieve social good and address social wrongs.
France introduced its first "90-10", socially responsible employee savings scheme in 2001. For the first time this obliged companies to offer their employees access to savings funds schemes which invested between five and ten per cent of their capital in non-listed organisations and activities with a 'solidarity label'. The solidarity label is administered by French prefectures and functions as a form of quality assurance in this regard.
In 2008 the Sarkozy government extended the initiative to all employee saving schemes throughout France. But it has had mixed success. Cyrille Langendorff works with Crédit Coopératif, a French co-operative bank that specialises in financing social economy organisations. He says the mixed success is partly the result of unfamiliarity with the label and a reluctance to engage on the part of fund managers. "The prefectures which deliver the [solidarity] label sometimes don't know it exists or how it works. Also, for fund managers, it's a lot of work and analysis of organisations and sectors they don't know much about for 5% of the portfolio."
At present, in order to secure the solidarity label a company must fulfil one of two conditions. It must either undertake to source a proportion of its employees from a disadvantaged background or it must conform to certain criteria of democratisation in its governance.
Hamon's new bill proposes five new criteria that must be secured simultaneously for companies to secure the solidarity label; a business's purpose must be conducted in line with the government's social policies; its financial importance must be impacted by the social mission it is trying to fulfil; there must be a cap on the spread between salaries at the top and bottom of the business; equity securities are not to be listed on a regulated market and the business's social mission and a salary cap must be included in its terms of association.
Minister Hamon has described the new law, in part, as a response to the development of "a movement in favour of this way of entrepreneurship". By broadening the criteria, the French government is hoping to increase the number of companies involved in socially responsible investing, and so increase their social impact.
However it could also risk the dilution of social criteria. Companies could be attracted to the scheme "for marketing purposes or to get funding at a cheaper rate", says Langendorff. Minister Hamon hopes the bill will become law by the end of 2013.
According to the European commission, in 2008-9, the social economy in France grew by 2.9% and created more than 60,000 paid jobs. Over the same period, the rest of the private sector shrank by 1.6% and the public sector by 4.2%. The French government has agreed to a series of other initiatives to support the social economy, including the more efficient collation of statistics for monitoring purposes, the development of common principle of definition of the social and solidarity economy and financial support for social entrepreneurs.
07/09/2013 02:06 PM
'A Toxic System': Why Austerity Still Isn't Working in Greece
By Anne Seith
Despite drastic austerity measures, a new Greek debt haircut looks unavoidable. The old system has proven resistant to reform and billions in emergency aid hasn't been enough to turn things around.
After making a lot of money manufacturing swimming pools, Stelios Stavridis has redirected his entrepreneurial talents toward saving his country.
The 66-year-old Greek business executive with aristocratic features recently became the head of the country's privatization agency, which has been charged with selling off hundreds of government-owned real estate, companies, marinas and airports.
Stavridis is the third man to hold the position in only a year, but this doesn't reduce his professional confidence. He says he has just had "excellent" conversations with observers from the so-called troika, consisting of the International Monetary Fund (IMF), the European Commission and the European Central Bank (ECB), who regularly review the country's progress.
However, Stavridis also had to confess to the troika that his agency is unlikely to meet its goals for this year. The planned sale of the national gas company to the Russian Gazprom conglomerate fell apart at the last minute, and now a €652 million ($839 million) deal for the privatization of gambling company OPAP is also on the rocks, because the buyer feels that he is being cheated.
This means Stavridis will almost certainly fail to reach his original 2013 privatization goal of €2.6 billion. Because of these and other difficulties, the financing plan for Greece now faces a large shortfall of €11.1 billion by 2015.
Yet Another Debt Haircut?
Greece's euro partners have already pledged more than €230 billion in aid, and government spending has also been slashed by dozens of billions. Representatives of Greek business are now convinced that the country cannot survive without yet another debt haircut.
The subject is politically sensitive, especially in Germany, because this time a debt haircut would also affect public creditors, which already hold 80 percent of Greek sovereign debt. In other words, a large share of German assistance loans would be irretrievably lost.
German Chancellor Angela Merkel is still strongly opposed to a debt haircut, fearing that Greece's enthusiasm over reforms will vanish once financial pressure subsides. The country needs more than money alone to get back on its feet. Even the IMF is critical of the devastating effects of austerity programs on the country's economy. But that is only half the truth. The fact is that while Greece has drastically cut spending, efforts at structural reform are stagnating. This also hampers economic success.
When the troika observers first arrived in the country in 2010, they were surprised at just how overregulated the economy was, at how inefficient the entire government and judicial apparatus had become. Not even the estimated government deficit for 2009 was correct. When it was recalculated, 6 percent turned into 12.7 percent and eventually even went up to 15.6 percent.
Six austerity programs later, the deficit is expected to decline to about 4 percent for this year. Greece's euro partners attribute this success to the efforts of conservative Prime Minister Antonis Samaras. "The current government is finally strongly committed to bringing order to the state," says Panos Carvounis, a representative of the European Commission in Athens. "Things are moving."
'Greek Success Story?'
According to Carvounis, the country finally has a complete picture of its revenues and expenditures, and Samaras has made progress with reforms of the healthcare system. The labor market has also been radically reformed. Greece's costly multi-employer collective bargaining agreements are now history, and the rules governing settlement payments to laid-off workers are no longer as stringent as they used to be.
This spring, because of these successes, it seemed that the country was out of the woods. Unit labor costs, seen as an indicator of a country's competitiveness, had declined by 10 percent compared to 2007, thanks to the easing of labor market regulations. Major corporations like Unilever, Philip Morris and Hewlett-Packard were announcing substantial investment plans.
During a visit to Beijing, Samaras overconfidently touted what he called his "Greek success story."
But what outsiders see as successful reforms come at the expense of ordinary Greeks. A few hundred meters from the office of EU representative Carvounis, a retiree shot himself to death last year because of financial problems. Surveys show that household income has plunged by almost 40 percent since the crisis began. Some 64 percent of young people are unemployed, and the healthcare system, after several rounds of austerity cuts, is on the verge of collapse. In many public hospitals, patients have to pay for their own bandages and swabs, while relatives are called upon to care for them, because of a shortage of nurses.
'Our Political System is Toxic'
In light of such conditions, the troika has often proposed that the wealthy be required to play a stronger role in financing the government. But even the Samaras administration shies away from challenging their influential lobbying groups. Greek ship owners, for instance, the country's most powerful business group, contribute little to the country's recovery. In fact, their ample revenues from shipping are tax-exempt.
"Our political system is toxic," says Antigone Lyberaki, 54, an economics professor at Panteion University in Athens. According to Lyberaki, the government apparatus and economic structure were destroyed by decades in which bribes and political relationships were more important than performance.
Over the years, powerful lobbying groups were able to secure privileges that they are now fiercely defending. For instance, when the government sought to eliminate overpriced licenses for truck drivers, the drivers shut down traffic throughout the country, and the military had to be brought in to bring supplies to hospitals.
It was only one of hundreds of bitter conflicts over the gradual liberalization of Greece's utterly overregulated economy.
An Uphill Battle to Reform
In the bloated administration, for example, many civil servants owe their jobs to political favors rather than to their own competency. Even Prime Minister Samaras awarded senior government positions to several supporters from his home district of Messinia after taking office.
By 2015, the government bureaucracy is required to shrink by 150,000 jobs, and another 15,000 civil servants are to be replaced by young, well-qualified candidates. But the government has long shied away from layoffs.
Instead, the government promoted early retirement programs and placed 2,000 civil servants into a so-called mobility reserve. Athens had promised the troika that the workers would be permanently laid off if no new jobs could be found for them within a year. But the government managed to find work for everyone in the mobility reserve, and a promised search for another 12,500 civil servants for the program petered out. Men like Odysseas Drivalas are the reason for this reluctance. The tanned former civil servant is the president of ADEDY, the umbrella trade union for civil servants. As the head of a union serving about 400,000 members, he thinks it is a "myth" that the government has too many employees. "We are planning another general strike soon," he says.
Men like Drivalas ought to be involved in the reform process, but chances of that are slim. Many union members support the leftist Coalition of the Radical Left, or SYRIZA, whose leader, Alexis Tsipras, warns against turning Greece into a "German colony."
The Old System Resists
The sometimes ludicrous conditions in Greece's government agencies are one of the main reasons the economy is doing so poorly. In one example, a fast-track process introduced in 2010 was intended to help entrepreneurs obtain all the permits they needed within 60 days, which was later changed to 45 days. But three of four major investors that completed this procedure are still fighting for their projects today.
"They overestimated the speed at which such reforms could be done," says Paul Mylonas, chief economist at the National Bank of Greece. Most of all, the reformers probably underestimated the old system's powers of resistance.
There is no shortage of ideas about how to move the country forward. Economist Mylonas, for example, is convinced that there is significant room for expansion in the shipping-related service sector, especially in areas like "logistics, insurance and storage." EU representative Carvounis wants the tourism industry to focus more on visitors interested in culture and mountain biking. The country, he says, is "almost empty for six months" every year.
But these are the kinds of plans that require a long time to implement. "Ninety percent of our companies are only three to five people," says Mylonas. "We cannot be competitive on this basis."
These conditions make the troika's forecasts for future development seem delusional. It expects the country to generate 3.5 percent growth in 2017, while the national debt is forecast to decline from 175 percent of GDP today to "substantially below" 110 percent by 2022.
Even chief privatizer and professional optimist Stavridis admits that he and his fellow Greeks have "huge problems." But, he adds, "I am 100 percent certain that we will win."
Translated from the German by Christopher Sultan
07/09/2013 12:16 PM
Aid for Athens: France Demands Direct Funding for Greek Banks
Europe has decided to release billions more in aid money to Athens pending progress on reform. But France believes it isn't enough and is demanding that ailing Greek banks be given direct assistance from European bailout funds. The proposal is controversial.
European finance ministers on Monday night agreed to release some €6.8 billion ($8.8 billion) in aid money to Greece to keep the country solvent throughout the summer. But on Tuesday, France said that it is time to pony up even more money to help the ailing Greek banking system.
"A lot of things would be much easier if the euro-zone bailout fund were already able to directly recapitalize Greek banks," French Europe Minister Thierry Repentin told the German business daily Handelsblatt. He was referring to the fund known as the European Stability Mechanism, which was given the ability last year to help banks directly. Greek banks, Repentin said, should get assistance "just like all other banks in the euro zone that need it so as to limit the negative effects of the crisis on public finances."
First, however, Greece needs to make sure that it fulfils the conditions necessary to receive all of the next aid tranche. European finance ministers made it clear on Monday evening that they are dissatisfied with the progress Athens is making on reform and elected to break up the tranche into smaller payments in order to keep the pressure on the Greek government to fulfil their pledges.
"Greece is getting on track," German Finance Minister Wolfgang Schäuble said in Brussels as the meeting ended. "It is not easy for them."
The agreement reached on Monday night foresees an initial payment of €2.5 billion this month to be followed up by more payments in subsequent months. Greece's creditors are primarily concerned by the slow progress Athens has made on downsizing its public sector, with thousands of additional layoffs pending. The country's privatization program has also generated much less cash than expected, most recently as a result of the government's inability to find a buyer for the natural gas company DEPA. Tax reform and the pursuit of tax dodgers is another area where Greece's creditors have demanded improvement.
"It's time to step up the momentum of reform in Greece," said European Commissioner for Economic and Monetary Affairs Olli Rehn on Monday night.
Still, the public sector cuts are controversial in Greece, with thousands of teachers and municipal workers taking to the streets of Athens on Monday and Tuesday. Some 12,500 state employees are to be placed on administrative leave by the end of September with an additional 12,500 to join them by the end of the year. They will receive 75 percent of their salary for eight months. If they haven't found a new job by then, they will be unemployed.
There is concern that the additional cuts could further damage the country's fragile economy which, while slowly improving, is still stuck in its sixth straight year of recession. Economists forecast that the country could return to growth next year -- a tiny increase of just 0.6 percent -- but some worry that dividing up aid payments could derail the slow recovery.
The agreement to continue funding Greece, however, was by no means unexpected. Despite widespread concern with Athens' slow pace of reform, there is little appetite for risking a return of the euro crisis by withholding funding. The situation in Portugal has made European finance ministers even more cautious. Political instability in Lisbon last week recently triggered a spike in the interest rate on Portuguese sovereign bonds. The country was able to avoid a collapse of the government, but Lisbon must nevertheless push through an additional €5 billion austerity package in the coming months, and there are concerns that political worries might return.
Greece too has seen its share of political instability in recent weeks, with the government of Prime Minister Antonis Samaras almost collapsing due to its sudden and controversial shutdown of public broadcaster ERT. One of the parties in his three-party coalition left, leaving him with a tiny three-seat majority in parliament.
It is unclear whether France's proposal to provide direct aid to Greek banks will gain much traction. Some €60 billion of the €500 billion ESM fund has been made available to provide direct assistance to euro-zone banks that need it. But it remains controversial. Furthermore, European leaders only recently agreed to involve shareholders, creditors and individual countries should large banks find themselves in need of help. It remains unclear whether that agreement applies to existing cases like Greece.
07/09/2013 05:20 PM
NSU Hit List: Would-Be Neo-Nazi Victims Live in Fear
By Oezlem Gezer and Simone Kaiser
They murdered 10 people, but neo-Nazi terrorists of the NSU had their sights set on more. The trial against the cell has begun, but one family whose bakery was cased by the far-right extremists still lives in fear. Their feeling of belonging in Germany has been destroyed.
Hanife Ceylan never had any doubt that Stuttgart was her home. A daughter of Turkish Gastarbeiter, or "guest workers," invited to Germany help rebuild its industry and fuel its post-war economic miracle, Ceylan moved to this car-making city at the age of 15. Here she met the love of her life, took out a home loan and sent her children to German schools, from preschool through university. She speaks the local Swabian dialect better than she speaks Turkish.
Yet after 33 years in Germany, Hanife Ceylan (not her real name) is considering giving up her German passport.
"You can feed it to the dogs," she says. Wearing a white apron, she's standing behind the counter of her bakery in downtown Stuttgart, making sandwiches and sorting the pastries in the display case. "They never saw me as a real German."
By "they," Ceylan means the members of the "National Socialist Underground" (NSU), the neo-Nazi terror cell that consisted of Beate Zschäpe, Uwe Mundlos and Uwe Böhnhardt. The two men murdered nine people in broad daylight, simply because they bore foreign names, and Ceylan now knows that her name could just as easily have joined the others on a stone memorial in Nuremberg that commemorates the dead. She thinks often about why she escaped that fate -- and why the others didn't. And she's searching for an explanation. "If God doesn't want them to kill you, then they can try whatever they want," she says.
In November 2011, Beate Zschäpe set fire to the house where the neo-Nazi group had hidden. In the rubble of that burned-out apartment in the eastern German city of Zwickau, police found photographs, city maps and address lists with names and businesses belonging to people with foreign roots. These documents show that the three neo-Nazis conducted surveillance on dozens of places and people as they scouted potential targets.
'Good Visual Cover'
"Good property and suitable proprietor," for example, is written next to the address of a business in the city of Dortmund. A note next to the address of a Turkish fast food restaurant reads, "Good escape route from here!" Another reads, "Good visual cover. Person good, but old (over 60)."
Investigators also recovered a CD from the charred rubble and were able to identify seven of the photographs stored on it as streets in Stuttgart. The pictures were apparently taken in June 2003, by which point the NSU had already committed four murders.
The photographs show Turkish and Italian grocery stories, restaurants, well-populated streets and entrances to buildings. A man posing in several of the images is identified in the police files as "very likely" Uwe Böhnhardt. In one, he leans casually against a mountain bike, a dark-colored backpack on his back and a baseball cap on his head in the sunlight. It is a postcard image of a right-wing terrorist out on a sightseeing tour. In the background of the shot is Hanife Ceylan's store.
Investigators took the NSU documents they found seriously. So seriously, in fact, that in the summer of 2012 they summoned Ceylan and her husband to Stuttgart police headquarters. This is the day that Ceylan's life in Germany split into "before" and "after."
The "before" began in the summer of 1980 when, as a young woman, Ceylan followed her mother from a village in Turkey to Germany. Ceylan's parents were among the first generation of Gastarbeiter to come to Germany and they were grateful to the country that gave them work and a new life better than the one they left behind.
Ceylan grew up with this same sense of gratitude toward Germany. She cleaned toilets and offices, worked on the conveyor belt in a metalworking factory and in a pastry shop. She earned her own money and eventually married a man who was also from Turkey. "Germany was good to us," Ceylan says.
Creating Jobs, Paying Taxes
In 1993, the Ceylans opened a vegetable shop in downtown Stuttgart. They hired Italians, Russians and Greeks. Their German neighbors liked shopping at the store. Ceylan's husband included pork in the store's offerings and drank liquor with his customers. "It was really multicultural," Ceylan recalls of those days.
The vegetable shop became a neighborhood meeting point. Ceylan let people buy groceries on credit, gave a homeless man in the neighborhood sandwiches and discounted prices for her regular customers. Her children grew up in the shop, doing their homework among the tomato crates. Ceylan was now a business owner, someone who created jobs and paid taxes. It gave her a feeling of being able to give something back to Germany. When she traveled the world with her family, Ceylan was always proud to show her German passport at border checkpoints.
When business slowed at the vegetable store, she closed it and opened a bakery instead. She never thought of leaving Germany -- not until the day in the summer of 2012 when she received a letter informing her that the police wanted to question her and her husband.
The conversation lasted less than 30 minutes and Ceylan remembers only snatches of it. She was expected to answer questions just minutes after learning that murderers had had her in their sights and that the NSU had conducted surveillance on her business, just as they had with the store owners they ultimately targeted in their killing spree.
No one has yet been able to determine just how concrete the neo-Nazi trio's plans were. No one knows how often they cased a target without attacking.
But the police sought to learn as much as they could from the Ceylans. Was it possible, they wanted to know, to observe you easily from outside? Did you ever notice a man on a bicycle who photographed your shop? The couple shook their heads. In the space of these few minutes with the police, their 32 years of certainty about their German homeland fell apart. The conversation over, the police sent the Ceylans home and told them to ask their children as well if they had noticed anything at the time, nine years ago.
First Female Victim?
The second part of Hanife Ceylan's life in Germany, the "after," is marked by sleepless nights and copious tears. Ceylan asks herself, Why me? Why not me? When she closes her eyes, she sees her name listed next to those of the people the NSU murdered. Might she have become the terror cell's first female victim? Ceylan believes the busy foot traffic of the pedestrian zone where her business was located, or perhaps the close proximity to a tram line, may be what protected her from attack.
She has told her German friends none of this. She doesn't want their pity. At home, though, the family talks about little else. They believe they remember the day the police asked about. It was the same summer that the Ceylans' daughter was completing her final year in high school, when a man on a bicycle passed by their business and took pictures, claiming it was for the local newspaper.
Ceylan's husband also remembers another day when an unfamiliar man came to the back of the shop, ordered a case of beer, but then simply disappeared. And there was the Volkswagen Passat with a license plate from an eastern German city that once parked for a long time in front of the store.
These days, fear has a permanent spot at the Ceylans' kitchen table and a role in their daily life. Last year, for example, their landlady, who knows nothing about the NSU's earlier surveillance of the Ceylans' shop, installed smoke detectors in the bakery simply on the grounds that she considered any business run by Turks to be a potential target for attack.
Ceylan takes antidepressants now and sleeps at most four hours a night, before waking again early in the morning to wander restlessly through the apartment. "My mother needs to see a therapist," says her oldest son. No one offered help after that conversation with the police, he says. "We don't need some special task force," he adds, "just a bit of reassurance for my mother." He also wonders if the family should change its name.
Hanife Ceylan used to dream of a single-family home for her family. "Now I would only live in a building that also has a lot of Germans," she says. She feels a bitterness she never knew before. She feels it when she hears people say that the serial killings weren't so bad and she felt it when the court failed initially to reserve spots in the courtroom for Turkish media.
She doesn't believe the trial will bring justice. "They destroyed my world, too," Ceylan says of the NSU. She believes politicians need to do something, and wonders why the chancellor hasn't turned her attention personally to the issue of right-wing radical groups. Ceylan is certain there are others out there -- friends, copycats and supporters of Mundlos, Böhnhardt and Zschäpe -- who are eager to complete what the terrorists started. It is because of such people that the Ceylans' life has been ruled by caution and rules since that day at the police station. It is because of them that the Ceylans are careful to keep their real name a secret.
"You can't be in the shop alone on Sunday, because you have black hair," Ceylan tells her son when he wants to help at the bakery. Nor does she allow anyone to open the shop alone on the early shift. In winter, the bakery is locked from the inside until it's light outside. Even so, Ceylan is convinced that even if the police were to constantly stand guard across the street, no one could protect her and her family. Nor would it help in the least that Ceylan's passport bears Germany's coat of arms, identifying her as a German citizen. "If God wants them to kill us, then no one can save us," she says.
Translated from the German by Ella Ornstein
07/10/2013 11:10 AM
Frack the Minister: Satirical Party Crashes German Election
By David Crossland
In a bid to shake up Germany's dull election campaign, satirical party "Die Partei" plans to challenge Chancellor Angela Merkel with a hard-hitting manifesto. It involves involves putting her in a cage, fracking her largest minister and building a wall around the country in ominous pursuit of "humanistic fascism."
There's only one way Chancellor Angela Merkel, enjoying a huge lead in opinion polls, can still lose the general election on September 22: She'd have to hire the campaign team of her hapless Social Democratic rival Peer Steinbrück, says the leader of Die Partei ("The Party"), a small, irreverent political party that is vowing to liven up what is shaping up to become the dullest election in a generation.
In an interview with SPIEGEL ONLINE, party chairman Martin Sonneborn, 48, co-publisher of Titanic, a satirical magazine, said he would put Merkel on trial in a cage if he came to power, for her supposed contribution to the fall of the Berlin Wall. It's an issue close to his heart because Die Partei, founded in 2004, once campaigned on a platform of rebuilding the Wall. "We've since dropped that particular policy from our manifesto, but it remains a popular one," said Sonneborn.
Last Friday, Die Partei was officially approved by the agency responsible for overseeing German federal elections as one of 38 parties eligible to run. Its greatest electoral success to date came in May when one of its members was voted onto the council of the northern city of Lübeck. That was its first taste of power since a Left Party council member in the western city of Leverkusen defected to Die Partei.
No Debate, And None on The Horizon
"We're a party that wants to gain power just like any other party, but we're trying to achieve this in part with satirical methods," says Sonneborn. Die Partei emcompasses a fully-fledged organization with regional branches, a treasurer and no less than eight chancellor candidates. It even has a uniform for its members -- "gray C&A suits, off the rack for €49."
The election campaign may yet take off, of course, but so far it has been sorely lacking both in entertainment value and hard-hitting political discourse. There are no real battlegrounds, and none on the horizon, unless the NSA scandal blows up in Merkel's face.
The shrewd chancellor has nudged her conservative Christian Democratic Union to the left to snatch away many of the SPD's pet policies. And the main parties broadly agree on how to tackle the euro crisis. She's also well ahead of Steinbrück in terms of personal popularity. Germans regard her as a safe pair of hands, and they appreciate that she has steered Germany through the euro crisis without imposing too much of a financial burden on them.
Her CDU is a whopping 16 points ahead of the SPD in the most recent voter survey. She may have trouble forming a stable coalition, however. In fact, the make-up of her government is at present the only real question mark, because her current partner, the pro-business Free Democratic Party, has dramatically lost support since the last election in 2009. Still, few people seriously believe Merkel will fail to win her third term.
'She Stands For Even Less Than We Do'
Asked to explain the secret of her success, given the near total lack of major policies or reforms in her current term, her penchant for radical U-turns, her often-criticized lack of leadership or vision, and recent revelations that she had been a secretary for "Agitation and Propaganda" in communist East Germany's FDJ youth organsation, Sonneborn said: "The lady stands for even less than we do. And that's saying something."
Besides, not even Steinbrück's own party seems to think he has a chance. The only real highlight of the campaign so far came in June when Steinbrück, known as a thick-skinned, straight-talking political warhorse, came close to tears at an SPD conference after his wife Gertrud told everyone to stop picking on him. The media have been sharply critical of the gaffe-prone candidate, whose most memorable line so far has been to demand better pay for chancellors.
So if you want serious controversy, you have to turn to Die Partei, it seems. Sonneborn is keen to deliver.
"Frau Merkel is one of the dangerous gang of three East Germans who are responsible for the opening of the Wall. Their masterplan was to take over the country and transfer all our money to the East," said Sonneborn. The other two are President Joachim Gauck, and Matthias Sammer, the sports director of FC Bayern Munich football club. Sonneborn did not elaborate on the charges. Instead, he outlined some other campaign pledges:
• To build a wall around Germany to tackle globalization, financial market turmoil and the euro crisis.
• To limit management pay to 25,000 times an ordinary worker's pay.
• To use the controversial mining method of hydraulic fracturing or "fracking" on Peter Altmaier, Germany's heavyset environment minister, to release the "tremendous energy resources" within him.
• To ban pub crawls by foreign tourists in German inner cities.
• To further complicate the German tax system so that large companies can no longer find money-saving loopholes.
• To follow the Greek example and shut down public broadcasters like ARD and ZDF and make them repay the license fees and apologize for their output.
• To raise €5 million through crowdfunding to finance the controlled detonation of Berlin's baroque city palace once it has been rebuilt. And to erect a grand, presumably communist-style "Palace of Die Partei" in its place, or a large swimming pool. "We'd have to run an ideas competition for that," Sonneborn explained.
• To lower the school leaving age to 10 in order to solve the demographic problem of an ageing society.
• To lower the voting age to boost electoral support for Die Partei.
But Die Partei won't make its full manifesto known until after the election, says Sonneborn. He admits that some of the measures would be painful, hinting vaguely at plans for forced nationalization and expropriating banks as well as a radical redistribution of wealth.
"You can only confront multinationals and banks from a position of strength," says Sonneborn, who adheres to an ideology he desribes as "humanistic fascism" or "dictatorship with a human face." Germany's political system, he says rather ominously, needs to be "modified."
He dismissed the pro-Internet Pirate Party and the new anti-euro party Alternative für Deutschland as lacking seriousness and gravitas, pointing out that Die Partei is far more established, having been founded nine years ago.
"This election campaign has been so boring because we haven't been a part of it yet," said Sonneborn. "We're going to change that."
Portugal makes the Eurozone tremble
4 July 2013
Les Echos Paris
The political crisis hitting Portugal is opening up a new period of turmoil for the EU. While some voices are rushing in to declare that the crisis is over, the question of growth is coming up. Can austerity without stimulus do it? And, above all, in politically fragile states?
Ministers resigning, a government teetering, and anxiety gripping the markets all over again: who would have imagined just a few weeks ago that Portugal would cause such a stir? Ever since the EUR €78bn rescue plan was approved, the country has been held up as an example. Lisbon, it must be said, has not held back in its efforts to clean up its finances), trim back its civil service and courageously see through the reforms demanded by its financial backers.
Behind the facade of the Eurozone's good student, though, there remain gaping cracks. The fiscal consolidation plan has been pursued at the cost of a severe recession, and the coalition government has lost the support of the public. “Austerity fatigue" has overtaken the country, and today threatens to trigger early elections and precipitate a renegotiation of the aid programme.
It has also raised the spectre of a forced restructuring of the debt, or even an abandoning of the euro. Portugal is rousing the ghosts from the autumn of 2011 in the Eurozone, when investors saw Greece head straight for bankruptcy, Spain and Italy sink in their turn and the European banks lose the trust of those who financed them. And it is waking those ghosts at the worst possible time: since investors have grasped that they will not be able to rely forever on central banks and their generous injections of liquidity to cushion the shock of the recession and make up for the shortcomings of the politicians, nervousness has ramped up several notches on the markets. What can the ECB really do today, aside from putting pressure on European leaders to speed up reforms?
In these last 12 months the markets welcomed, and rightly, the vigorous action of Mario Draghi to support banks by handing out billions of euros in loans, and then the states, by buying up their sovereign debt. But they had forgotten the key thing: the "peripheral" countries’ sluggish growth and weak credit, their still unbearable debts, high unemployment and the instability of their governments.
The markets above all hid the disparities between countries in the Eurozone, disparities that remain considerable, if not growing, and that cannot be sustained over the long term. Without conceding new mutualising of resources and the transfer of sovereignty. As it is very unlikely that Germany will make a gesture before its parliamentary elections in September and before the verdict of the Court in Karlsruhe on the legality of the actions of the ECB is announced, the anxiety promises to persist throughout the summer.
View from Spain: ‘To rectify is wise’
In the pages of El País, columnist Xavier Vidal-Folch still awaits the “grand rectification" of the austerity policy in Europe in the wake of the political crisis in Portugal –
the good student is disturbed [and] is calling for a large-scale correction of an austerity policy that has gone too far.
It is urgent to do it in a big way, rather than through "multiple operations of correction, in instalments" which is what we are seeing in Europe these days, says Vidal-Folch. One example is the second Greek bailout, in July 2011, which involved a writedown of the debt and better loan conditions for Athens. Another was the June 21 decision of the Ecofin Council to stretch out the repayment terms for Portugal and Ireland. Finally, he quotes the most recent decision of the European Council of July 3 on youth unemployment –
To rectify is wise. Bravo. The problem is that these dribbles of rectification are not the great rectification demanded by the double-dip recession today.[...] If these adjustments had been taken into account from the start, would we not have avoided part of the recession, much disaffection for the European Union and far too much social suffering?