By Ulrich Leuchtmann
The Turkish lira faces the risk of a steep devaluation if the government presses ahead with an expansionary fiscal policy that makes a loan deal with the International Monetary Fund unlikely, says Ulrich Leuchtmann, currency strategist at Commerzbank.
“The government is not prepared to accept the fiscal cuts demanded by the IMF, particularly given that the country is in the middle of an election campaign,” he says. “This year’s budget plan is not worth the paper it is printed on. Spending remained high in January and tax revenues have collapsed.”
Mr Leuchtmann says the Turkish government is “playing with fire” by creating a double deficit (current account and budget deficit) that might interrupt crucial capital inflow.
He notes that Turkish foreign debt amounts to roughly 36 per cent of GDP, while the current account deficit is about 7 per cent of GDP – bad news in the current global environment of very high risk aversion.
“There is no doubt that a restrictive budget policy would be painful at a time of economic downturn,” he says. “But Turkey has only two alternatives to this scenario: either interest rates have to rise sharply, or it has to accept a dramatic lira depreciation. The former looks unlikely given last week’s surprise 150 basis point rate cut.
“Unless the government makes a fiscal policy U-turn after the elections in March, which would probably allow a speedy deal with the IMF, there seems no alternative to lira depreciation.”
Friday, February 27, 2009
Thursday, February 26, 2009
Turkey sees silver lining in strong euro
By Delphine Strauss in Istanbul
Published: February 24 2009 22:41 | Last updated: February 24 2009 22:41
Turkish businesses are used to lamenting their country’s volatile currency and snail’s pace progress towards European Union membership. This year there may be one advantage from these realities – at least for the tens of thousands who rely on tourism.
Over the last year the lira has fallen by about a third against the dollar and nearly a fifth against the euro. Tourism officials hope that, even in a year of recession, the currency advantage will tempt holidaymakers to Turkey.
“To be out of the eurozone is an advantage for us,” said Ahmet Barut, chairman of the Turkish Hotels Federation, which represents about 2,000 members.
No one expects a repeat of last year’s growth, when tourism revenues leapt 18.5 per cent to nearly $22bn. The number of foreign visitors in fact fell 4 per cent in January, the first decline in more than two years.
But despite a slow start to bookings for summer, ministers and analysts still forecast visitor numbers will grow this year.
Turkey is set to receive a stream of British tourists, spurning eurozone beach resorts where their spending power in sterling is severely reduced. British-based tour operators TUI Travel and Thomas Cook both report strong growth in Turkish bookings.
UK bookings for Turkey this summer had jumped 25 per cent year on year, compared with a drop of 10 per cent for the business as a whole, according to Ian Derbyshire, chief executive of Thomas Cook independent travel.
He said Turkey was now benefiting from a strategy of using its lower land and labour prices to develop big four- and five-star hotels offering all-inclusive holidays.
But for many small businesses, the big question will be whether visitors are willing to leave their hotels and spend extra cash.
In Istanbul’s Grand Bazaar, shopkeepers adept at quoting prices in several currencies watch the lira’s fluctuations constantly. For those who rely on sales to tourists, its latest slide could be a lifeline.
“It’s helpful for us. We can sell at much more normal prices,” said Ozgur Bilgili, offering tea in his family’s leather shop. Pulling a jacket from the rack to demonstrate, he said, “This would have cost $300 in the bad days. Now I can ask $250.”
“I’m not very worried, but I’m a little bit nervous,” said Sefer Savran, manager of an adventure activity company in the Mediterranean resort of Kas, who thought European tourists would come for shorter breaks not too far from home.
He had already offered travel agents a 15-20 per cent discount on his usual euro prices, but said agents did not yet know whether they would need to offer it.
Anatolian Balloons, which runs flights over the twisted rock formations of Cappadocia, is not cutting prices – it has just bought 17 hot air balloons, and paid in foreign exchange for the imported gas and equipment.
Numbers taking the €150 flight were lower than normal this winter, but the company said bookings for summer from tour companies were already promising.
But the currency advantage over eurozone resorts will go only part of the way to soothing the nerves of Turkey’s restaurateurs and hotel owners.
They worry that Israeli tourists, who numbered some 500,000 last year, will stay away after Ankara’s criticism of the Gaza offensive. And Russia, the biggest source of visitors after Germany, has its own troubles.
One shopkeeper summed up the feeling in the Grand Bazaar.
“The currency is good but there is no money. We’re all very worried.”
Published: February 24 2009 22:41 | Last updated: February 24 2009 22:41
Turkish businesses are used to lamenting their country’s volatile currency and snail’s pace progress towards European Union membership. This year there may be one advantage from these realities – at least for the tens of thousands who rely on tourism.
Over the last year the lira has fallen by about a third against the dollar and nearly a fifth against the euro. Tourism officials hope that, even in a year of recession, the currency advantage will tempt holidaymakers to Turkey.
“To be out of the eurozone is an advantage for us,” said Ahmet Barut, chairman of the Turkish Hotels Federation, which represents about 2,000 members.
No one expects a repeat of last year’s growth, when tourism revenues leapt 18.5 per cent to nearly $22bn. The number of foreign visitors in fact fell 4 per cent in January, the first decline in more than two years.
But despite a slow start to bookings for summer, ministers and analysts still forecast visitor numbers will grow this year.
Turkey is set to receive a stream of British tourists, spurning eurozone beach resorts where their spending power in sterling is severely reduced. British-based tour operators TUI Travel and Thomas Cook both report strong growth in Turkish bookings.
UK bookings for Turkey this summer had jumped 25 per cent year on year, compared with a drop of 10 per cent for the business as a whole, according to Ian Derbyshire, chief executive of Thomas Cook independent travel.
He said Turkey was now benefiting from a strategy of using its lower land and labour prices to develop big four- and five-star hotels offering all-inclusive holidays.
But for many small businesses, the big question will be whether visitors are willing to leave their hotels and spend extra cash.
In Istanbul’s Grand Bazaar, shopkeepers adept at quoting prices in several currencies watch the lira’s fluctuations constantly. For those who rely on sales to tourists, its latest slide could be a lifeline.
“It’s helpful for us. We can sell at much more normal prices,” said Ozgur Bilgili, offering tea in his family’s leather shop. Pulling a jacket from the rack to demonstrate, he said, “This would have cost $300 in the bad days. Now I can ask $250.”
“I’m not very worried, but I’m a little bit nervous,” said Sefer Savran, manager of an adventure activity company in the Mediterranean resort of Kas, who thought European tourists would come for shorter breaks not too far from home.
He had already offered travel agents a 15-20 per cent discount on his usual euro prices, but said agents did not yet know whether they would need to offer it.
Anatolian Balloons, which runs flights over the twisted rock formations of Cappadocia, is not cutting prices – it has just bought 17 hot air balloons, and paid in foreign exchange for the imported gas and equipment.
Numbers taking the €150 flight were lower than normal this winter, but the company said bookings for summer from tour companies were already promising.
But the currency advantage over eurozone resorts will go only part of the way to soothing the nerves of Turkey’s restaurateurs and hotel owners.
They worry that Israeli tourists, who numbered some 500,000 last year, will stay away after Ankara’s criticism of the Gaza offensive. And Russia, the biggest source of visitors after Germany, has its own troubles.
One shopkeeper summed up the feeling in the Grand Bazaar.
“The currency is good but there is no money. We’re all very worried.”
Wednesday, February 25, 2009
Turkish airliner crashes at Amsterdam airport, 9 dead
By Harro ten Wolde
AMSTERDAM (Reuters) - A Turkish Airlines passenger plane with 135 people aboard crashed in light fog while trying to land at Amsterdam's Schiphol airport on Wednesday, killing nine, a local official said.
Haarlemmermeer acting Mayor Michel Bezuijen said 50 people were injured, 25 severely, when flight 1951 crashed at 10:31 local time (4:31 a.m. EST) short of a runway at Schiphol, Europe's fifth-largest by passenger volume.
The cause of the crash was still not clear, Bezuijen told reporters.
Dutch television showed what appeared to be covered bodies on the ground near the crashed single-aisle Boeing 737 jetliner.
The crumpled plane lay in three parts, with the tail section of the fuselage broken off, and a wide crack in the fuselage just behind the cockpit. The airliner had not caught fire.
"We are in the middle of a field now, approximately 5-6 km from the airport," Survivor Mustafa Bahcecioglu told Turkish broadcaster Channel 24.
"The majority of the passengers are injured but there are people who are not injured. Around 30 ambulances have come," he said.
Airport officials said the crashed aircraft was a Boeing 737-800, flight TK 1951 from Istanbul.
The plane, on a flight from Istanbul, broke up when it hit the ground north of a runway at Schiphol, which is 20 km (12 miles) southwest of Amsterdam's center.
At Schiphol airport, 10 flights were delayed and 10 were canceled, but otherwise operations were as usual.
Survivor Huseyin Sumer told CNN Turk by telephone: "The plane split into three parts. We are calling people to say the situation is not very serious but there might be casualties on the front side of the plane."
The crash appeared to be the worst since an El Al cargo plane crashed into high-rise apartment blocks in a southeastern suburb of Amsterdam in October 1992, killing 43 people, 39 of them on the ground.
The 1992 cargo plane was a Boeing 747. It plowed into the buildings, setting them on fire, shortly after takeoff after two engines had broken off.
(Writing by Reed Stevenson; Additional reporting by Niclas Mika, Gilbert Kreijger, Catherine Hornby in Amsterdam, Philip Blenkinsop, Paul de Bendern in Istanbul and Ibon Villelabeitia in Ankara; Editing by Giles Elgood)
AMSTERDAM (Reuters) - A Turkish Airlines passenger plane with 135 people aboard crashed in light fog while trying to land at Amsterdam's Schiphol airport on Wednesday, killing nine, a local official said.
Haarlemmermeer acting Mayor Michel Bezuijen said 50 people were injured, 25 severely, when flight 1951 crashed at 10:31 local time (4:31 a.m. EST) short of a runway at Schiphol, Europe's fifth-largest by passenger volume.
The cause of the crash was still not clear, Bezuijen told reporters.
Dutch television showed what appeared to be covered bodies on the ground near the crashed single-aisle Boeing 737 jetliner.
The crumpled plane lay in three parts, with the tail section of the fuselage broken off, and a wide crack in the fuselage just behind the cockpit. The airliner had not caught fire.
"We are in the middle of a field now, approximately 5-6 km from the airport," Survivor Mustafa Bahcecioglu told Turkish broadcaster Channel 24.
"The majority of the passengers are injured but there are people who are not injured. Around 30 ambulances have come," he said.
Airport officials said the crashed aircraft was a Boeing 737-800, flight TK 1951 from Istanbul.
The plane, on a flight from Istanbul, broke up when it hit the ground north of a runway at Schiphol, which is 20 km (12 miles) southwest of Amsterdam's center.
At Schiphol airport, 10 flights were delayed and 10 were canceled, but otherwise operations were as usual.
Survivor Huseyin Sumer told CNN Turk by telephone: "The plane split into three parts. We are calling people to say the situation is not very serious but there might be casualties on the front side of the plane."
The crash appeared to be the worst since an El Al cargo plane crashed into high-rise apartment blocks in a southeastern suburb of Amsterdam in October 1992, killing 43 people, 39 of them on the ground.
The 1992 cargo plane was a Boeing 747. It plowed into the buildings, setting them on fire, shortly after takeoff after two engines had broken off.
(Writing by Reed Stevenson; Additional reporting by Niclas Mika, Gilbert Kreijger, Catherine Hornby in Amsterdam, Philip Blenkinsop, Paul de Bendern in Istanbul and Ibon Villelabeitia in Ankara; Editing by Giles Elgood)
Tuesday, February 24, 2009
Google users hit by mail outage
Business and consumer users of Google's popular e-mail service were hit by an outage on Tuesday.
The service went offline at 0930 GMT with Google saying it was "working hard to resolve this problem".
Professional users of Google mail are covered by a service level agreement that promises to be 99.9% operational in any calendar month.
More than 113 million people use Google mail worldwide, according to comScore.
In a statement, Google said "a number of users" were having problems with Google Mail.
"We know how important GMail is to our users so we take this very seriously," it added.
Google directed people to its mail support page for further status updates.
According to comScore, Google has the world's third most popular web mail service behind Hotmail with 283 million users and Yahoo with 274 million e-mail users.
Professional suite
More than a million business around the world use Google's professional suite of applications, including e-mail. Google itself relies on the service and press spokespeople for the firm were unable to e-mail journalists with statements regarding the problem.
The "premier edition" of the Apps service costs $50 (£34) per user for a year.
According to Google, its e-mail service suffered an average of 10 to 15 minutes of downtime per month in 2008.
The last outage of note was in August 2008 when users were unable to use Google Mail for "a couple of hours".
After the incident Todd Jackson, product manager for Google Mail, said in a blog post: "We're conducting a full review of what went wrong and moving quickly to update our internal systems and procedures accordingly."
Some users reported that Google Mail was working on G1 mobile phones, which are powered by Google's Android operating system. Google Mail also appeared to be working if accessed through a third-party mail reading program configured to send and receive e-mail using the Imap mail protocol.
The service went offline at 0930 GMT with Google saying it was "working hard to resolve this problem".
Professional users of Google mail are covered by a service level agreement that promises to be 99.9% operational in any calendar month.
More than 113 million people use Google mail worldwide, according to comScore.
In a statement, Google said "a number of users" were having problems with Google Mail.
"We know how important GMail is to our users so we take this very seriously," it added.
Google directed people to its mail support page for further status updates.
According to comScore, Google has the world's third most popular web mail service behind Hotmail with 283 million users and Yahoo with 274 million e-mail users.
Professional suite
More than a million business around the world use Google's professional suite of applications, including e-mail. Google itself relies on the service and press spokespeople for the firm were unable to e-mail journalists with statements regarding the problem.
The "premier edition" of the Apps service costs $50 (£34) per user for a year.
According to Google, its e-mail service suffered an average of 10 to 15 minutes of downtime per month in 2008.
The last outage of note was in August 2008 when users were unable to use Google Mail for "a couple of hours".
After the incident Todd Jackson, product manager for Google Mail, said in a blog post: "We're conducting a full review of what went wrong and moving quickly to update our internal systems and procedures accordingly."
Some users reported that Google Mail was working on G1 mobile phones, which are powered by Google's Android operating system. Google Mail also appeared to be working if accessed through a third-party mail reading program configured to send and receive e-mail using the Imap mail protocol.
Nuclear Iran? Decision time is here
Barack Obama’s foreign policy team knew that sooner or later they would face a crisis over Iran. Unfortunately for the new US president, the crisis is already upon them.
On Friday, the Financial Times reported that “Iran has built up a stockpile of enough enriched uranium for one nuclear bomb”. That same day, Benjamin Netanyahu was invited to form Israel’s next government.
Mr Netanyahu thinks that the Iranian government is “preparing another Holocaust for the Jewish state”. He has said: “It is 1938 and Iran is Germany.” Mr Netanyahu said this in 2006, so logically it is now 1941 – but the intervening years have not calmed him down. He thinks that an Iranian nuclear weapon would be a mortal threat to Israel.
As for President Obama, he has promised to “do everything in my power” to prevent Iran getting nuclear weapons. But how can he stop them?
A huge clue to the administration’s approach was given by Gary Samore in a speech in Israel on December 18. Shortly afterwards, it emerged that Mr Samore would handle the non-proliferation job in the Obama White House. His words carry weight.
Mr Samore said there was “a growing sense in the region and more broadly that Iran’s nuclear effort is unstoppable”. But he gave three reasons why an Obama diplomatic initiative might just work. The most important is the collapse in world oil prices, which makes Iran more vulnerable to economic sanctions. The second is that Mr Obama can make a credible offer of much better relations with the US. And third, Mr Obama’s popularity overseas will make it easier for him to line up international support for sanctions.
But Mr Samore was far from sanguine that this would be enough. He noted that “Moscow and Beijing basically don’t share our concern about Iran’s nuclear programme”, and that Iran’s leadership “probably value the acquisition of a nuclear weapons capability much more than better relations with the US”. He said: “We have to be realistic, and stopping Iran at this point is going to be a very difficult challenge.” The Iranians, he predicted, would attempt to “drag out negotiations ... while they continue to build up their enrichment capability”. So the US should set a deadline for the suspension of enrichment. The initial deal should trade suspension of enrichment for suspension of sanctions.
The Obama administration will do its utmost. But if the diplomatic effort fails, Mr Samore thinks that the US will be left with “two unappetising choices of either trying to manage Iran with a bomb or bombing Iran”.
Iran’s nuclear progress means that the US may have to face this “unappetising choice” rather sooner than the Obama team anticipated. The latest news from Iran suggests that the Iranians could produce material for a single bomb within months – although that would require a very public and detectable reconfiguration of their nuclear facilities.
So what should the Americans do? Mr Netanyahu will tell them that there is only one choice – bomb. His argument is based on the assumption that the Iranian government is run by genocidal maniacs, who would actively welcome Armageddon. Given the religious rhetoric of the Iranian regime, this possibility cannot be entirely dismissed. But most strategic experts – even in Israel – do not think that Iran is bent on nuking Israel.
Ephraim Kam, of the Jaffe Centre for Strategic Studies at Tel Aviv University, is fairly typical in arguing that a combination of Israeli and US nuclear deterrence would mean that “Iran will not use nuclear weapons, not against us and not against any other country.”
In common with many strategic thinkers across the Middle East, Mr Kam’s biggest fear is not that Iran will become a fundamentalist suicide-bomber state. He and others worry instead about a resurgent Persian empire, bent on regional domination.
An Iran with nuclear weapons could destabilise the region in numerous ways. It could back radical Islamist movements such as Hizbollah and Hamas with more energy and less fear of reprisals. It could threaten and intimidate the oil states of the Gulf. It could frighten more of the educated and mobile Israeli middle class into emigrating. And it could precipitate a destabilising arms race across the region – as Saudi Arabia, Egypt, the Gulf States and Turkey all rushed to go nuclear.
All of those developments would be deeply unappealing. But is it worth going to war to stop them? That question, in turn, breaks down into a number of subsidiary questions. Would a military attack work – or would Iran be able to rebuild swiftly? Would Iranian retaliation lead to a broader military conflict across the Gulf region – the home of US military bases and much of the world’s oil? Would Israel attack if Washington held back?
The US would have a much better chance than Israel of really setting back Iran’s nuclear programme, because – unlike the Israelis – the US could mount a sustained bombing campaign. But such a campaign would also be much more likely to broaden into a wider regional war. At that point, the war would have brought about the result it was launched to prevent – the destabilisation of the entire Middle East.
The world has already had to learn to live with a nuclear Pakistan and a nuclear North Korea. If it comes to it, we will have to live with a nuclear Iran. But nobody can be casual about that prospect. It is time for the Obama administration to launch a last big push to head off the Iranian bomb – and for the rest of the world to line up in support of that effort.
On Friday, the Financial Times reported that “Iran has built up a stockpile of enough enriched uranium for one nuclear bomb”. That same day, Benjamin Netanyahu was invited to form Israel’s next government.
Mr Netanyahu thinks that the Iranian government is “preparing another Holocaust for the Jewish state”. He has said: “It is 1938 and Iran is Germany.” Mr Netanyahu said this in 2006, so logically it is now 1941 – but the intervening years have not calmed him down. He thinks that an Iranian nuclear weapon would be a mortal threat to Israel.
As for President Obama, he has promised to “do everything in my power” to prevent Iran getting nuclear weapons. But how can he stop them?
A huge clue to the administration’s approach was given by Gary Samore in a speech in Israel on December 18. Shortly afterwards, it emerged that Mr Samore would handle the non-proliferation job in the Obama White House. His words carry weight.
Mr Samore said there was “a growing sense in the region and more broadly that Iran’s nuclear effort is unstoppable”. But he gave three reasons why an Obama diplomatic initiative might just work. The most important is the collapse in world oil prices, which makes Iran more vulnerable to economic sanctions. The second is that Mr Obama can make a credible offer of much better relations with the US. And third, Mr Obama’s popularity overseas will make it easier for him to line up international support for sanctions.
But Mr Samore was far from sanguine that this would be enough. He noted that “Moscow and Beijing basically don’t share our concern about Iran’s nuclear programme”, and that Iran’s leadership “probably value the acquisition of a nuclear weapons capability much more than better relations with the US”. He said: “We have to be realistic, and stopping Iran at this point is going to be a very difficult challenge.” The Iranians, he predicted, would attempt to “drag out negotiations ... while they continue to build up their enrichment capability”. So the US should set a deadline for the suspension of enrichment. The initial deal should trade suspension of enrichment for suspension of sanctions.
The Obama administration will do its utmost. But if the diplomatic effort fails, Mr Samore thinks that the US will be left with “two unappetising choices of either trying to manage Iran with a bomb or bombing Iran”.
Iran’s nuclear progress means that the US may have to face this “unappetising choice” rather sooner than the Obama team anticipated. The latest news from Iran suggests that the Iranians could produce material for a single bomb within months – although that would require a very public and detectable reconfiguration of their nuclear facilities.
So what should the Americans do? Mr Netanyahu will tell them that there is only one choice – bomb. His argument is based on the assumption that the Iranian government is run by genocidal maniacs, who would actively welcome Armageddon. Given the religious rhetoric of the Iranian regime, this possibility cannot be entirely dismissed. But most strategic experts – even in Israel – do not think that Iran is bent on nuking Israel.
Ephraim Kam, of the Jaffe Centre for Strategic Studies at Tel Aviv University, is fairly typical in arguing that a combination of Israeli and US nuclear deterrence would mean that “Iran will not use nuclear weapons, not against us and not against any other country.”
In common with many strategic thinkers across the Middle East, Mr Kam’s biggest fear is not that Iran will become a fundamentalist suicide-bomber state. He and others worry instead about a resurgent Persian empire, bent on regional domination.
An Iran with nuclear weapons could destabilise the region in numerous ways. It could back radical Islamist movements such as Hizbollah and Hamas with more energy and less fear of reprisals. It could threaten and intimidate the oil states of the Gulf. It could frighten more of the educated and mobile Israeli middle class into emigrating. And it could precipitate a destabilising arms race across the region – as Saudi Arabia, Egypt, the Gulf States and Turkey all rushed to go nuclear.
All of those developments would be deeply unappealing. But is it worth going to war to stop them? That question, in turn, breaks down into a number of subsidiary questions. Would a military attack work – or would Iran be able to rebuild swiftly? Would Iranian retaliation lead to a broader military conflict across the Gulf region – the home of US military bases and much of the world’s oil? Would Israel attack if Washington held back?
The US would have a much better chance than Israel of really setting back Iran’s nuclear programme, because – unlike the Israelis – the US could mount a sustained bombing campaign. But such a campaign would also be much more likely to broaden into a wider regional war. At that point, the war would have brought about the result it was launched to prevent – the destabilisation of the entire Middle East.
The world has already had to learn to live with a nuclear Pakistan and a nuclear North Korea. If it comes to it, we will have to live with a nuclear Iran. But nobody can be casual about that prospect. It is time for the Obama administration to launch a last big push to head off the Iranian bomb – and for the rest of the world to line up in support of that effort.
EU in dispute about project financing
Tony Barber
Western, eastern and southern European Union countries were at loggerheads about how and where to spend scarce EU funds on energy and other infrastructure projects to help pull Europe’s economy out of recession.
The dispute arose at a meeting of EU foreign ministers that also saw shadow-boxing about how to finance an “eastern partnership” initiative designed to promote closer ties with six former Soviet states wedged between the EU’s eastern borders and Russia.
Plunging economic growth rates, currency turmoil, large current account deficits and banking system weaknesses in various eastern European countries, inside and outside the EU, are causing concern among the bloc’s richer western European states, which fear instability may spread to their economies and financial sectors.
But participants in the meeting made clear there had been no agreement on a European Commission proposal to spend up to €5bn ($6.4bn, £4.4bn) on energy and other infrastructure work, much in east Europe. “More work is needed to fine-tune the list” of potential projects, said Alexandr Vondra, Czech deputy premier for EU affairs. “Time is of the essence here.”
By the Commission’s proposal, the €5bn would form part of an EU-wide €200bn fiscal stimulus package, of which about 85 per cent is to be provided by EU national governments.
Bulgaria, Greece, Portugal and Spain led a southern European bloc that criticised the Commission’s list of proposed projects for favouring eastern Europe at the expense of the rest of the 27-nation union.
At the same time Germany – biggest contributor to the EU budget – led a cost-conscious bloc including Austria, the Netherlands and the UK in opposing the Commission’s suggestion the €5bn should come from unspent money in the EU’s 2008 budget.
Similar difficulties surrounded the question of whether to offer €350m in fresh aid for the ex-Soviet states of Armenia, Azerbaijan, Belarus, Moldova and Ukraine, all of which are the objects of the EU’s eastern partnership, a plan set for formal launch in May.
France wants to ensure extra funds for the EU’s eastern neighbours will not come at the expense of the bloc’s Union for the Mediterranean, a French-inspired project started last year and intends closer relations with countries in north Africa and the Middle East.
“I am confident the €350m in fresh money will be adopted,” said Benita Ferrero-Waldner, EU external relations commissioner.
But EU foreign ministers warned they might limit Belarus’ participation in the eastern partnership if it were to bow to Russian pressure to recognise the independence of Abkhazia and South Ossetia, Georgia’s pro-Russian separatist regions.
“It would create a very, very difficult situation for Belarus. It would be out of line with the European consensus,” said Karel Schwarzenberg, foreign minister of the Czech Republic, which holds the EU’s rotating presidency.
Western, eastern and southern European Union countries were at loggerheads about how and where to spend scarce EU funds on energy and other infrastructure projects to help pull Europe’s economy out of recession.
The dispute arose at a meeting of EU foreign ministers that also saw shadow-boxing about how to finance an “eastern partnership” initiative designed to promote closer ties with six former Soviet states wedged between the EU’s eastern borders and Russia.
Plunging economic growth rates, currency turmoil, large current account deficits and banking system weaknesses in various eastern European countries, inside and outside the EU, are causing concern among the bloc’s richer western European states, which fear instability may spread to their economies and financial sectors.
But participants in the meeting made clear there had been no agreement on a European Commission proposal to spend up to €5bn ($6.4bn, £4.4bn) on energy and other infrastructure work, much in east Europe. “More work is needed to fine-tune the list” of potential projects, said Alexandr Vondra, Czech deputy premier for EU affairs. “Time is of the essence here.”
By the Commission’s proposal, the €5bn would form part of an EU-wide €200bn fiscal stimulus package, of which about 85 per cent is to be provided by EU national governments.
Bulgaria, Greece, Portugal and Spain led a southern European bloc that criticised the Commission’s list of proposed projects for favouring eastern Europe at the expense of the rest of the 27-nation union.
At the same time Germany – biggest contributor to the EU budget – led a cost-conscious bloc including Austria, the Netherlands and the UK in opposing the Commission’s suggestion the €5bn should come from unspent money in the EU’s 2008 budget.
Similar difficulties surrounded the question of whether to offer €350m in fresh aid for the ex-Soviet states of Armenia, Azerbaijan, Belarus, Moldova and Ukraine, all of which are the objects of the EU’s eastern partnership, a plan set for formal launch in May.
France wants to ensure extra funds for the EU’s eastern neighbours will not come at the expense of the bloc’s Union for the Mediterranean, a French-inspired project started last year and intends closer relations with countries in north Africa and the Middle East.
“I am confident the €350m in fresh money will be adopted,” said Benita Ferrero-Waldner, EU external relations commissioner.
But EU foreign ministers warned they might limit Belarus’ participation in the eastern partnership if it were to bow to Russian pressure to recognise the independence of Abkhazia and South Ossetia, Georgia’s pro-Russian separatist regions.
“It would create a very, very difficult situation for Belarus. It would be out of line with the European consensus,” said Karel Schwarzenberg, foreign minister of the Czech Republic, which holds the EU’s rotating presidency.
Turks reveal xenophobic, conservative attitudes in poll
Robert Tait
Turks are xenophobic, socially conservative people who rarely read books, relegate women to second-class status and harbour ambivalent views about democracy, contentious new research has revealed.
The unflattering picture has emerged from a survey by one of Turkey's most respected polling organisations, Konda, which interviewed 6,482 people.
Some 73% opposed allowing foreigners to own Turkish land or property, while nine out of 10 said they had never taken a holiday abroad. Just under 70% said they never read books, and 72% said they never or rarely bought new hi-tech products as soon they appeared on the market. Many also expressed fears that Turkey's neighbours planned to carve up the country.
Nearly 70% said wives needed their husband's permission to work while 57% believed that a female should never leave home wearing a sleeveless top. More than half - 53% - favoured allowing women judges, prosecutors, teachers and other public servants to wear the Islamic headscarf on duty, something Turkey's secular constitution forbids.
While 88% agreed that Turkey should be governed by democracy "under each and every condition", this was undermined by the significant proportion - 48% - who said the military should intervene "when necessary". The powerful armed forces have toppled four elected governments in coups in the past 50 years.
The survey, entitled Who Are We?, was conducted on behalf of Hurriyet, one of Turkey's biggest selling newspapers, renowned for its secularist outlook.
Tarhan Erdem, senior analyst with Konda, said the research was aimed at understanding ongoing social transformation and seeing whether Turkey was the country many of its people thought they knew. The high support for military intervention showed Turks had reservations about democracy, he said, while attitudes towards women exposed a lack of gender equality. "The data shows that women aren't free in their private lives," Erdem said.
Ahmet Insel, a columnist with Radikal newspaper, said opposition to foreign travel and property ownership stemmed from a preoccupation with the 1919-1923 war of independence that established modern Turkey.
"We think the war of independence is still under way, so it's no surprise we are xenophobic. We're still fighting foreigners," he said.
Turks are xenophobic, socially conservative people who rarely read books, relegate women to second-class status and harbour ambivalent views about democracy, contentious new research has revealed.
The unflattering picture has emerged from a survey by one of Turkey's most respected polling organisations, Konda, which interviewed 6,482 people.
Some 73% opposed allowing foreigners to own Turkish land or property, while nine out of 10 said they had never taken a holiday abroad. Just under 70% said they never read books, and 72% said they never or rarely bought new hi-tech products as soon they appeared on the market. Many also expressed fears that Turkey's neighbours planned to carve up the country.
Nearly 70% said wives needed their husband's permission to work while 57% believed that a female should never leave home wearing a sleeveless top. More than half - 53% - favoured allowing women judges, prosecutors, teachers and other public servants to wear the Islamic headscarf on duty, something Turkey's secular constitution forbids.
While 88% agreed that Turkey should be governed by democracy "under each and every condition", this was undermined by the significant proportion - 48% - who said the military should intervene "when necessary". The powerful armed forces have toppled four elected governments in coups in the past 50 years.
The survey, entitled Who Are We?, was conducted on behalf of Hurriyet, one of Turkey's biggest selling newspapers, renowned for its secularist outlook.
Tarhan Erdem, senior analyst with Konda, said the research was aimed at understanding ongoing social transformation and seeing whether Turkey was the country many of its people thought they knew. The high support for military intervention showed Turks had reservations about democracy, he said, while attitudes towards women exposed a lack of gender equality. "The data shows that women aren't free in their private lives," Erdem said.
Ahmet Insel, a columnist with Radikal newspaper, said opposition to foreign travel and property ownership stemmed from a preoccupation with the 1919-1923 war of independence that established modern Turkey.
"We think the war of independence is still under way, so it's no surprise we are xenophobic. We're still fighting foreigners," he said.
Turkish Mogul Butts Heads With Premier
By ANDREW HIGGINS
ISTANBUL -- An acrimonious feud between Turkey's leading media mogul and the country's Islam-tinged government has escalated sharply, amid fears in an embattled secular elite that intolerance of critical voices is eroding the Middle East's only Muslim democracy.
Speaking in his first interview after being hit recently with a tax charge and fine of around $500 million, Turkish media, energy and property magnate Aydin Dogan accused Prime Minister Recep Tayyip Erdogan of seeking to muzzle criticism and create a "calm and silent Turkey."
"The basis for all this is political," said Mr. Dogan, chairman of Dogan Sirketler Grubu Holdings AS, a conglomerate that controls seven newspapers, 28 magazines and three Turkish television channels as well as gasoline, electricity and other energy interests.
Turkey's ruling AK Party maintains that Mr. Dogan and his supporters are themselves trying to politicize a routine tax matter. The Finance Ministry said the fine and tax charge related to tax irregularities and had no other motive.
Mr. Dogan denies dodging taxes, and the company said it will contest the penalties.
The levy against Mr. Dogan's media group, Dogan Yayin Holdings, followed months of increasingly angry denunciations by Mr. Erdogan of "made-up news" about corruption.
The confrontation has sharpened tensions between Mr. Erdogan's party, which took power after a 2002 election, and a wealthy secular elite that previously dominated the economic and political affairs of a nation founded as a secular republic by Mustafa Kemal Ataturk in 1923.
A pillar of Turkey's secular establishment, Mr. Dogan, 72 years old, said he initially supported many AK Party policies, particularly its push to get Turkey into the European Union. Mr. Erdogan, he said, "has changed," veering away from early efforts to make Turkey more open and tolerant.
"Mr. Erodgan came to power using democracy. He is a product of democracy, but he can accept democracy only for himself," said Mr. Dogan, speaking in his palatial Istanbul office Friday. "He cannot accept side components of democracy such as free media."
Nearby, a television set -- tuned to one of the channels owned by Mr. Dogan -- broadcast yet another attack on his media by Mr. Erdogan.
Commenting on the broadside, Mr. Dogan said: "I used to get annoyed. Now I take it for granted."
Mr. Erodgan, who caused a stir last month by storming off the stage during a debate about Gaza at the World Economic Forum in Davos, Switzerland, has repeatedly denied wanting to silence media critics. He has said the government is merely trying to force businesses to obey the law and to end the unfair privileges that he argues they enjoyed under previous governments.
At a campaign rally last Thursday ahead of municipal elections in March, Mr. Erdogan accused Mr. Dogan's media company of joining forces with opposition politicians "to cover up its wrongdoings." He earlier mocked foes in the media as "dear dogs" that "sleep with" the opposition.
Bulent Gedikli, AK Party deputy chairman for economic affairs, said that Mr. Dogan's business faced a "routine tax examination" but that "what is not routine is the exaggerated manner" of the uproar that has followed. "This is very misleading to public opinion," said Mr. Gedikli.
Most of the levy relates to money earned by Dogan media from the sale of a stake to German media group Axel Springer AG, Mr. Dogan said.
Opposition politicians and free-press campaigners have condemned the government over the affair. Critics accuse Mr. Erdogan of adopting tactics similar to those used by Russian leader Vladimr Putin, who dismembered independent media group Media-Most and silenced other critical voices by deploying tax inspectors and other state functionaries to combat alleged economic crimes.
Turkey, however, has a far more robust free media and open society than Russia.
Mr. Dogan said seven of his companies are being investigated by tax inspectors. Relations with the government, he said, first "went haywire" early last year when his media outlets reported on the business dealings of Mr. Erdogan's son and the wife of another son. The mood soured further when Mr. Dogan's newspapers started digging into a criminal case in Germany involving a Turkish charity accused of funneling funds to Mr. Erdogan's AK Party.
"He could not put up with this and wanted to silence us. We refused to accept silence. The situation with the government got out of control," Mr. Dogan said.
Mr. Erdogan in September urged supporters to boycott Mr. Dogan's newspapers, the most prominent of which are Hurriyet and Milliyet.
Mr. Dogan said this only boosted circulation but added that the prime minister's anger has branded his various companies with an "X mark" that makes it difficult to do business. "All our business is tied up in red tape," he said, "Everything is delayed." Projects on hold include plans to build an oil refinery by Petrol Ofisi AS, majority owned by Mr. Dogan's group.
Mr. Dogan said he and Mr. Erdogan haven't spoken since 2006, though they did shake hands late last year at a wedding.
ISTANBUL -- An acrimonious feud between Turkey's leading media mogul and the country's Islam-tinged government has escalated sharply, amid fears in an embattled secular elite that intolerance of critical voices is eroding the Middle East's only Muslim democracy.
Speaking in his first interview after being hit recently with a tax charge and fine of around $500 million, Turkish media, energy and property magnate Aydin Dogan accused Prime Minister Recep Tayyip Erdogan of seeking to muzzle criticism and create a "calm and silent Turkey."
"The basis for all this is political," said Mr. Dogan, chairman of Dogan Sirketler Grubu Holdings AS, a conglomerate that controls seven newspapers, 28 magazines and three Turkish television channels as well as gasoline, electricity and other energy interests.
Turkey's ruling AK Party maintains that Mr. Dogan and his supporters are themselves trying to politicize a routine tax matter. The Finance Ministry said the fine and tax charge related to tax irregularities and had no other motive.
Mr. Dogan denies dodging taxes, and the company said it will contest the penalties.
The levy against Mr. Dogan's media group, Dogan Yayin Holdings, followed months of increasingly angry denunciations by Mr. Erdogan of "made-up news" about corruption.
The confrontation has sharpened tensions between Mr. Erdogan's party, which took power after a 2002 election, and a wealthy secular elite that previously dominated the economic and political affairs of a nation founded as a secular republic by Mustafa Kemal Ataturk in 1923.
A pillar of Turkey's secular establishment, Mr. Dogan, 72 years old, said he initially supported many AK Party policies, particularly its push to get Turkey into the European Union. Mr. Erdogan, he said, "has changed," veering away from early efforts to make Turkey more open and tolerant.
"Mr. Erodgan came to power using democracy. He is a product of democracy, but he can accept democracy only for himself," said Mr. Dogan, speaking in his palatial Istanbul office Friday. "He cannot accept side components of democracy such as free media."
Nearby, a television set -- tuned to one of the channels owned by Mr. Dogan -- broadcast yet another attack on his media by Mr. Erdogan.
Commenting on the broadside, Mr. Dogan said: "I used to get annoyed. Now I take it for granted."
Mr. Erodgan, who caused a stir last month by storming off the stage during a debate about Gaza at the World Economic Forum in Davos, Switzerland, has repeatedly denied wanting to silence media critics. He has said the government is merely trying to force businesses to obey the law and to end the unfair privileges that he argues they enjoyed under previous governments.
At a campaign rally last Thursday ahead of municipal elections in March, Mr. Erdogan accused Mr. Dogan's media company of joining forces with opposition politicians "to cover up its wrongdoings." He earlier mocked foes in the media as "dear dogs" that "sleep with" the opposition.
Bulent Gedikli, AK Party deputy chairman for economic affairs, said that Mr. Dogan's business faced a "routine tax examination" but that "what is not routine is the exaggerated manner" of the uproar that has followed. "This is very misleading to public opinion," said Mr. Gedikli.
Most of the levy relates to money earned by Dogan media from the sale of a stake to German media group Axel Springer AG, Mr. Dogan said.
Opposition politicians and free-press campaigners have condemned the government over the affair. Critics accuse Mr. Erdogan of adopting tactics similar to those used by Russian leader Vladimr Putin, who dismembered independent media group Media-Most and silenced other critical voices by deploying tax inspectors and other state functionaries to combat alleged economic crimes.
Turkey, however, has a far more robust free media and open society than Russia.
Mr. Dogan said seven of his companies are being investigated by tax inspectors. Relations with the government, he said, first "went haywire" early last year when his media outlets reported on the business dealings of Mr. Erdogan's son and the wife of another son. The mood soured further when Mr. Dogan's newspapers started digging into a criminal case in Germany involving a Turkish charity accused of funneling funds to Mr. Erdogan's AK Party.
"He could not put up with this and wanted to silence us. We refused to accept silence. The situation with the government got out of control," Mr. Dogan said.
Mr. Erdogan in September urged supporters to boycott Mr. Dogan's newspapers, the most prominent of which are Hurriyet and Milliyet.
Mr. Dogan said this only boosted circulation but added that the prime minister's anger has branded his various companies with an "X mark" that makes it difficult to do business. "All our business is tied up in red tape," he said, "Everything is delayed." Projects on hold include plans to build an oil refinery by Petrol Ofisi AS, majority owned by Mr. Dogan's group.
Mr. Dogan said he and Mr. Erdogan haven't spoken since 2006, though they did shake hands late last year at a wedding.
Monday, February 23, 2009
Greek terror group claims responsibility for attack on TV network
By Anthee Carassava
Sunday, February 22, 2009
ATHENS: A Greek terrorist group has claimed responsibility for opening fire on a private television network in Athens last week, vowing additional attacks against journalists, the police said.
The attack was the second this month by a far-left group called Sect of Rebels and the latest in a wave of attacks that has gripped the nation since violent riots in December and revived fears of domestic terrorism here after several years of relative stability.
In the attack Wednesday, a makeshift grenade was thrown and 14 bullets were fired at the Athens headquarters of the Alter TV network. The group also attacked an Athens police station on Feb. 3. No one was hurt in either episode.
In a statement Friday, the Sect of Rebels said it intended to expand its campaign to include attacks against journalists.
"By attacking the specific station we are sending an ultimatum to all journalists," the statement said. "The period in which you were target-free is over." It condemned journalists as "colluding with the corrupt establishment."
Anti-government riots shook Greece in December after the police shooting of a 15-year-old boy in Athens. Militant youths rampaged through several cities, destroying scores of businesses and causing about $1.3 billion in damage.
In the last month, three militant groups have carried out more than 20 attacks on banks, prosecutors, defense lawyers and police officers.
Earlier this month, the police foiled a car bombing at Citibank's Athens headquarters.
Homegrown terrorism had largely waned since the authorities dismantled Greece's deadliest groups before the 2004 Olympics in Athens.
"Now we're almost back to where we were before the Olympics," said a police official, speaking on the condition of anonymity.
Sunday, February 22, 2009
ATHENS: A Greek terrorist group has claimed responsibility for opening fire on a private television network in Athens last week, vowing additional attacks against journalists, the police said.
The attack was the second this month by a far-left group called Sect of Rebels and the latest in a wave of attacks that has gripped the nation since violent riots in December and revived fears of domestic terrorism here after several years of relative stability.
In the attack Wednesday, a makeshift grenade was thrown and 14 bullets were fired at the Athens headquarters of the Alter TV network. The group also attacked an Athens police station on Feb. 3. No one was hurt in either episode.
In a statement Friday, the Sect of Rebels said it intended to expand its campaign to include attacks against journalists.
"By attacking the specific station we are sending an ultimatum to all journalists," the statement said. "The period in which you were target-free is over." It condemned journalists as "colluding with the corrupt establishment."
Anti-government riots shook Greece in December after the police shooting of a 15-year-old boy in Athens. Militant youths rampaged through several cities, destroying scores of businesses and causing about $1.3 billion in damage.
In the last month, three militant groups have carried out more than 20 attacks on banks, prosecutors, defense lawyers and police officers.
Earlier this month, the police foiled a car bombing at Citibank's Athens headquarters.
Homegrown terrorism had largely waned since the authorities dismantled Greece's deadliest groups before the 2004 Olympics in Athens.
"Now we're almost back to where we were before the Olympics," said a police official, speaking on the condition of anonymity.
EU Commission hails enlargement
The European Commission says the 27-nation EU must not let the current economic crisis jeopardise the gains of eastward enlargement.
A commission report says the accession of 12 states since 2004 - mostly ex-Soviet bloc countries - boosted living standards and business opportunities.
It said enlargement served as an anchor for stability and driver of democracy.
But there are concerns that EU states may be tempted to prop up weak domestic firms at their neighbours' expense.
The BBC's Chris Mason in Brussels says the impact of the economic crisis threatens to undermine the single market, a founding tenet of European integration.
'Peace and prosperity'
The European Union took in 10 mostly ex-communist countries in Central and Eastern Europe in 2004 and two more, Romania and Bulgaria, in 2007.
It is now the world's biggest integrated economic area, with half a billion people producing 30% of global economic output and 17% of world trade.
“ Enlargement has served as an anchor of stability, and driver of democracy and the rule of law in Europe ”
Olli Rehn
EU Enlargement Commissioner
In the report on published on Friday, the commission said enlargement had brought about huge economic and political benefits for both sides.
Income per capita in new member states rose from 40% of the old member states' average in 1999 to 52% in 2008. Economic growth averaged 5.5% per year in 2004-2008, compared to 3.5% in 1999-2003.
The old member states averaged annual growth of around 2.2% in the last four years.
Enlargement also increased trade opportunities. In 2007, almost 80% of exports of the new member states went to the rest of the EU. Old member states also saw their sales to the new members increase to around 7.5% of their total exports in 2007, from 4.75% a decade ago.
Unemployment in new member states declined to levels similar to those across the rest of the EU - around 7% in 2007.
"Enlargement has served as an anchor of stability, and driver of democracy and the rule of law in Europe," Enlargement Commissioner Olli Rehn said.
"Economically it has benefited both new and old member states, as well as the EU as a whole. It has extended the area of peace and prosperity to almost 500 million people and increased our weight in the world," he added.
Protectionism fears
But some of the poorer member states fear protectionism is on the rise in richer countries, our correspondent says.
“ Divided we will achieve nothing ”
Joaquin Almunia
EU Economic Affairs Commissioner
The old member states can afford to spend billions of dollars to shield their banks and industries from the crisis, he adds.
"We should not let the crisis overshadow this uncontested success. United, we can shape the solution to global issues such as climate change or a new international financial governance," Economic Affairs Commissioner Joaquin Almunia said. "Divided we will achieve nothing."
An emergency summit will take place in Brussels on 1 March partly to discuss protectionism.
A commission report says the accession of 12 states since 2004 - mostly ex-Soviet bloc countries - boosted living standards and business opportunities.
It said enlargement served as an anchor for stability and driver of democracy.
But there are concerns that EU states may be tempted to prop up weak domestic firms at their neighbours' expense.
The BBC's Chris Mason in Brussels says the impact of the economic crisis threatens to undermine the single market, a founding tenet of European integration.
'Peace and prosperity'
The European Union took in 10 mostly ex-communist countries in Central and Eastern Europe in 2004 and two more, Romania and Bulgaria, in 2007.
It is now the world's biggest integrated economic area, with half a billion people producing 30% of global economic output and 17% of world trade.
“ Enlargement has served as an anchor of stability, and driver of democracy and the rule of law in Europe ”
Olli Rehn
EU Enlargement Commissioner
In the report on published on Friday, the commission said enlargement had brought about huge economic and political benefits for both sides.
Income per capita in new member states rose from 40% of the old member states' average in 1999 to 52% in 2008. Economic growth averaged 5.5% per year in 2004-2008, compared to 3.5% in 1999-2003.
The old member states averaged annual growth of around 2.2% in the last four years.
Enlargement also increased trade opportunities. In 2007, almost 80% of exports of the new member states went to the rest of the EU. Old member states also saw their sales to the new members increase to around 7.5% of their total exports in 2007, from 4.75% a decade ago.
Unemployment in new member states declined to levels similar to those across the rest of the EU - around 7% in 2007.
"Enlargement has served as an anchor of stability, and driver of democracy and the rule of law in Europe," Enlargement Commissioner Olli Rehn said.
"Economically it has benefited both new and old member states, as well as the EU as a whole. It has extended the area of peace and prosperity to almost 500 million people and increased our weight in the world," he added.
Protectionism fears
But some of the poorer member states fear protectionism is on the rise in richer countries, our correspondent says.
“ Divided we will achieve nothing ”
Joaquin Almunia
EU Economic Affairs Commissioner
The old member states can afford to spend billions of dollars to shield their banks and industries from the crisis, he adds.
"We should not let the crisis overshadow this uncontested success. United, we can shape the solution to global issues such as climate change or a new international financial governance," Economic Affairs Commissioner Joaquin Almunia said. "Divided we will achieve nothing."
An emergency summit will take place in Brussels on 1 March partly to discuss protectionism.
Saturday, February 21, 2009
Serbs ordered to pay for mosque
Serb authorities in Bosnia-Hercegovina have been ordered to pay $42m (£26m) to local Muslims for the destruction of mosques during the Bosnian civil war.
All 16 mosques in Banja Luka, the main town of the Serb-run Republika Srpska, were destroyed in the 1992-1995 war.
A lawyer for the area's Muslim community said the local court verdict was of historic importance.
Hundreds of religious buildings were destroyed in the conflict, in which about 100,000 civilians were killed.
The local court ruling came nine years after the Bosnian Islamic Community sued the Bosnian Serb government and Banja Luka city authorities for the destruction of the shrines in 1993.
The Islamic Community said more than 1,000 of its objects were destroyed or damaged during the war.
"For us, what is far more important than material compensation is that for the first time Republika Srpska has taken complete responsibility for the destruction of the mosques," SRNA news agency quoted the Islamic Community's lawyer Esad Hrvacic as saying.
The Dayton peace agreement signed in 1995 created two semi-state entities: Republika Srpska for the Serbs, and the Bosniak-Croat Federation for Bosniaks (Bosnian Muslims) and Croats.
All 16 mosques in Banja Luka, the main town of the Serb-run Republika Srpska, were destroyed in the 1992-1995 war.
A lawyer for the area's Muslim community said the local court verdict was of historic importance.
Hundreds of religious buildings were destroyed in the conflict, in which about 100,000 civilians were killed.
The local court ruling came nine years after the Bosnian Islamic Community sued the Bosnian Serb government and Banja Luka city authorities for the destruction of the shrines in 1993.
The Islamic Community said more than 1,000 of its objects were destroyed or damaged during the war.
"For us, what is far more important than material compensation is that for the first time Republika Srpska has taken complete responsibility for the destruction of the mosques," SRNA news agency quoted the Islamic Community's lawyer Esad Hrvacic as saying.
The Dayton peace agreement signed in 1995 created two semi-state entities: Republika Srpska for the Serbs, and the Bosniak-Croat Federation for Bosniaks (Bosnian Muslims) and Croats.
Friday, February 20, 2009
Peres taps Netanyahu to form Israel's new government
By Ethan Bronner and Alan Cowell
Friday, February 20, 2009
JERUSALEM: President Shimon Peres invited Benjamin Netanyahu, head of the conservative Likud Party, to form the next Israeli government Friday following inconclusive elections 10 days ago.
Almost immediately, Netanyahu launched an appeal to adversaries to overcome their differences and form a government of national unity to meet "huge challenges" including what he termed Iran's development of nuclear weapons and its sponsorship of "terrorism" in Lebanon and Gaza.
Netanyahu will have six weeks for try to put together a government.
Israel's elections last week ended with the Kadima Party led by Foreign Minister Tzipi Livni edging past Likud to the top spot with 28 seats, compared with 27 for Likud and 15 for Avigdor Lieberman's far-right Yisrael Beiteinu Party, out of 120 seats in Parliament.
A stable government needs a commitment of at least 61 seats. In negotiations before Peres' announcement, Netanyahu secured a promised total of 65 seats from supporters including Lieberman's party, the ultra-Orthodox Sephardic party Shas, with 11 seats, and several smaller religious parties.
At a brief appearance with Peres on Friday, Netanyahu appealed directly to Livni and to Ehud Barak, leader of the smaller Labor Party, to meet him for discussions on forming a national unity government.
"Let us work together for the state of Israel," he said.
Livni has signalled that she is uninterested in joining any government that she does not head, and told supporters on Thursday that Kadima would probably go into the opposition.
Peres met on Friday with both Netanyahu and Livni, who hinted that her position had not changed, Reuters reported. "A large government has no value if it does not have a path," she said. Asked if she was ready to go into opposition she said: "If necessary, certainly," Reuters reported.
On Thursday, Livni said: "Today, the foundation was laid for an extreme right-wing government led by Netanyahu. This is not our way, and there is nothing for us in such a government."
She added that she "would not serve as a fig leaf for a government of paralysis."
Kadima favors continuing the peace talks with the Palestinian Authority that Livni has been leading, while Netanyahu believes that the talks have been largely fruitless and that emphasis should be placed on building the Palestinians' institutions and economy.
Lieberman's anti-Arab stands, including a demand that all Arab citizens sign a loyalty oath to the Jewish state, have alienated many in Livni's party. It is widely felt that a government with Netanyahu and Lieberman in charge would be narrowly based and unstable and would find little favor in Washington, leading to another election before long.
Netanyahu, widely known as "Bibi," is a politician of long standing in Israel. He served as Israel's delegate to the United Nations and went on to become deputy foreign minister.
After Likud's defeat in the 1993 election, he seized the party leadership and was prime minister from 1996 to 1999. When he lost the elections in 1999, he resigned his seat in Parliament and his leadership of Likud. He returned to the leadership to suffer a humiliating defeat in elections in 2006.
Friday, February 20, 2009
JERUSALEM: President Shimon Peres invited Benjamin Netanyahu, head of the conservative Likud Party, to form the next Israeli government Friday following inconclusive elections 10 days ago.
Almost immediately, Netanyahu launched an appeal to adversaries to overcome their differences and form a government of national unity to meet "huge challenges" including what he termed Iran's development of nuclear weapons and its sponsorship of "terrorism" in Lebanon and Gaza.
Netanyahu will have six weeks for try to put together a government.
Israel's elections last week ended with the Kadima Party led by Foreign Minister Tzipi Livni edging past Likud to the top spot with 28 seats, compared with 27 for Likud and 15 for Avigdor Lieberman's far-right Yisrael Beiteinu Party, out of 120 seats in Parliament.
A stable government needs a commitment of at least 61 seats. In negotiations before Peres' announcement, Netanyahu secured a promised total of 65 seats from supporters including Lieberman's party, the ultra-Orthodox Sephardic party Shas, with 11 seats, and several smaller religious parties.
At a brief appearance with Peres on Friday, Netanyahu appealed directly to Livni and to Ehud Barak, leader of the smaller Labor Party, to meet him for discussions on forming a national unity government.
"Let us work together for the state of Israel," he said.
Livni has signalled that she is uninterested in joining any government that she does not head, and told supporters on Thursday that Kadima would probably go into the opposition.
Peres met on Friday with both Netanyahu and Livni, who hinted that her position had not changed, Reuters reported. "A large government has no value if it does not have a path," she said. Asked if she was ready to go into opposition she said: "If necessary, certainly," Reuters reported.
On Thursday, Livni said: "Today, the foundation was laid for an extreme right-wing government led by Netanyahu. This is not our way, and there is nothing for us in such a government."
She added that she "would not serve as a fig leaf for a government of paralysis."
Kadima favors continuing the peace talks with the Palestinian Authority that Livni has been leading, while Netanyahu believes that the talks have been largely fruitless and that emphasis should be placed on building the Palestinians' institutions and economy.
Lieberman's anti-Arab stands, including a demand that all Arab citizens sign a loyalty oath to the Jewish state, have alienated many in Livni's party. It is widely felt that a government with Netanyahu and Lieberman in charge would be narrowly based and unstable and would find little favor in Washington, leading to another election before long.
Netanyahu, widely known as "Bibi," is a politician of long standing in Israel. He served as Israel's delegate to the United Nations and went on to become deputy foreign minister.
After Likud's defeat in the 1993 election, he seized the party leadership and was prime minister from 1996 to 1999. When he lost the elections in 1999, he resigned his seat in Parliament and his leadership of Likud. He returned to the leadership to suffer a humiliating defeat in elections in 2006.
Push for EU aid to struggling economies
By Chris Giles in London
Published: February 17 2009 01:39 | Last updated: February 17 2009 01:39
Austria has stepped up its campaign for the EU to aid struggling eastern European economies, with Ewald Nowotny, the governor of the central bank, telling the Financial Times “I cannot imagine a policy of benign neglect will be the last word” for countries of strategic importance such as the Ukraine.
Keen to downplay the problem as one that will bring down Austrian banks, Mr Nowotny insisted that three-quarters of the loans of his country’s banks were to EU eastern European countries with the biggest share in the relatively stable Czech Republic.
Austrian banks, he said, accounted for only 20 per cent of the exposure of western EU banks to Eastern Europe, so “therefore what is important is to see the exposure to this region as a European problem ... and not only an Austrian problem”.
On Monday, S&P, the credit ratings agency, put Ukraine on negative credit watch, as it waits for clarification of the country’s willingness and ability to fulfil the conditions of its International Monetary Fund loan.
A problem in Ukraine could trigger a “domino effect” of economic difficulties in the European Union, Josef Pröll, Austria’s finance minister warned last week.
But Mr Nowotny tried to press home the positive case for engagement with eastern European EU members, saying this would be in the collective interest of western European economies, Germany in particular. “Old Europe,” he said, had a €60bn ($76bn) trade surplus with member states further east, which was vulnerable if these economies were allowed to falter.
While Mr Nowotny insisted that Austrian banks’ loans to customers in eastern Europe were sill healthy, there is little doubt that compared to the size of the economy, Austria is more exposed to the east than other EU states.
East European loans account for 75 per cent of gross domestic product, followed by Sweden (30 per cent) and Greece (19 per cent).
Austria’s difficulties with its eastern neighbours has raised the borrowing costs of the government with the yield on Austrian 10-year government debt over 1 percentage point higher than equivalent German debt, still far below the spread in Greece, for example.
Mr Nowotny said that while markets had not differentiated different risks sufficiently within eurozone countries in the past, now “I am afraid we are going from one extreme to another”. “Markets tend to overshoot,” he added.
But the market’s assessment of higher risks in funding the Austrian government has not diminished Mr Nowotny’s desire to promote Keynesian economics on the European Central Bank governing council, an area where most other members are much more cautious.
“What we are relearning – because it is an old Keynesian position – is that if there is a deep recession, monetary policy alone is not enough and has to be supplemented by expansionary fiscal policy”.
With almost all EU countries adopting expansionary policies, he added, “the chances to be effective ... are of course much better than if countries went alone and that is one of the reasons, for me, for cautious optimism”.
Copyright The Financial Times Limited 2009
Published: February 17 2009 01:39 | Last updated: February 17 2009 01:39
Austria has stepped up its campaign for the EU to aid struggling eastern European economies, with Ewald Nowotny, the governor of the central bank, telling the Financial Times “I cannot imagine a policy of benign neglect will be the last word” for countries of strategic importance such as the Ukraine.
Keen to downplay the problem as one that will bring down Austrian banks, Mr Nowotny insisted that three-quarters of the loans of his country’s banks were to EU eastern European countries with the biggest share in the relatively stable Czech Republic.
Austrian banks, he said, accounted for only 20 per cent of the exposure of western EU banks to Eastern Europe, so “therefore what is important is to see the exposure to this region as a European problem ... and not only an Austrian problem”.
On Monday, S&P, the credit ratings agency, put Ukraine on negative credit watch, as it waits for clarification of the country’s willingness and ability to fulfil the conditions of its International Monetary Fund loan.
A problem in Ukraine could trigger a “domino effect” of economic difficulties in the European Union, Josef Pröll, Austria’s finance minister warned last week.
But Mr Nowotny tried to press home the positive case for engagement with eastern European EU members, saying this would be in the collective interest of western European economies, Germany in particular. “Old Europe,” he said, had a €60bn ($76bn) trade surplus with member states further east, which was vulnerable if these economies were allowed to falter.
While Mr Nowotny insisted that Austrian banks’ loans to customers in eastern Europe were sill healthy, there is little doubt that compared to the size of the economy, Austria is more exposed to the east than other EU states.
East European loans account for 75 per cent of gross domestic product, followed by Sweden (30 per cent) and Greece (19 per cent).
Austria’s difficulties with its eastern neighbours has raised the borrowing costs of the government with the yield on Austrian 10-year government debt over 1 percentage point higher than equivalent German debt, still far below the spread in Greece, for example.
Mr Nowotny said that while markets had not differentiated different risks sufficiently within eurozone countries in the past, now “I am afraid we are going from one extreme to another”. “Markets tend to overshoot,” he added.
But the market’s assessment of higher risks in funding the Austrian government has not diminished Mr Nowotny’s desire to promote Keynesian economics on the European Central Bank governing council, an area where most other members are much more cautious.
“What we are relearning – because it is an old Keynesian position – is that if there is a deep recession, monetary policy alone is not enough and has to be supplemented by expansionary fiscal policy”.
With almost all EU countries adopting expansionary policies, he added, “the chances to be effective ... are of course much better than if countries went alone and that is one of the reasons, for me, for cautious optimism”.
Copyright The Financial Times Limited 2009
Greece to woo foreign investors
By David Oakley
Published: February 17 2009 16:26 | Last updated: February 17 2009 16:40
The Greek government is to launch a charm offensive in Asia and the US to try to attract investors as record levels of sovereign debt make it increasingly hard to raise funds in Europe.
Greece, whose credit rating was downgraded last month because of rising worries over its public debt, has been forced to pay much higher yields relative to Germany to raise debt owing to the deterioration in financial conditions and rising investor concern over the health of its economy.
The country plans to issue a 10-year bond next month of benchmark size, typically about €5bn. The government will send delegations to the US and Asia ahead of fundraising. Buyers of Greek bonds are typically split between domestic and other European investors.
Spyros Papanicolaou, director-general of the Greek debt management agency, said: “We have had more difficulties in attracting investors in a deteriorating climate, so it makes sense to look for investors elsewhere. We have seen spreads with Germany rise higher than they should, as Greek public finances are not in bad shape.”
Although the Greeks have not had problems reaching their targets for debt raising, yields have risen to record levels over Germany recently. On Tuesday they were trading about 300 basis points over Germany compared with about 60bp before the collapse of Lehman Brothers in September last year.
Other eurozone countries, such as Italy and Spain, are also considering looking at attracting more US and Asian investors to buy their bonds. With more than $1,000bn of bonds expected to be issued in Europe this year, a 25 per cent increase on 2008, investors have become more choosy.
On Wednesday last week, a German 10-year bond auction failed for the second time because investors decided to buy other eurozone debt, because they could pick up extra yield.
Greece is also considering launching more bonds in dollars – and even the yen – to attract a wider pool of investors. The last time it issued bonds in dollars was in June last year. It has not issued a bond denominated in yen since it joined the euro in April 2001. The last Greek yen-denominated issue was in the 1990s, Mr Papanicolaou said.
Eurozone countries typically issue debt in their own currency, although last year Spain, Italy and Belgium issued debt in dollars. But this was because it was cheaper than issuing debt in euros, not due to a desire to attract new investors.
Copyright The Financial Times Limited 2009
Published: February 17 2009 16:26 | Last updated: February 17 2009 16:40
The Greek government is to launch a charm offensive in Asia and the US to try to attract investors as record levels of sovereign debt make it increasingly hard to raise funds in Europe.
Greece, whose credit rating was downgraded last month because of rising worries over its public debt, has been forced to pay much higher yields relative to Germany to raise debt owing to the deterioration in financial conditions and rising investor concern over the health of its economy.
The country plans to issue a 10-year bond next month of benchmark size, typically about €5bn. The government will send delegations to the US and Asia ahead of fundraising. Buyers of Greek bonds are typically split between domestic and other European investors.
Spyros Papanicolaou, director-general of the Greek debt management agency, said: “We have had more difficulties in attracting investors in a deteriorating climate, so it makes sense to look for investors elsewhere. We have seen spreads with Germany rise higher than they should, as Greek public finances are not in bad shape.”
Although the Greeks have not had problems reaching their targets for debt raising, yields have risen to record levels over Germany recently. On Tuesday they were trading about 300 basis points over Germany compared with about 60bp before the collapse of Lehman Brothers in September last year.
Other eurozone countries, such as Italy and Spain, are also considering looking at attracting more US and Asian investors to buy their bonds. With more than $1,000bn of bonds expected to be issued in Europe this year, a 25 per cent increase on 2008, investors have become more choosy.
On Wednesday last week, a German 10-year bond auction failed for the second time because investors decided to buy other eurozone debt, because they could pick up extra yield.
Greece is also considering launching more bonds in dollars – and even the yen – to attract a wider pool of investors. The last time it issued bonds in dollars was in June last year. It has not issued a bond denominated in yen since it joined the euro in April 2001. The last Greek yen-denominated issue was in the 1990s, Mr Papanicolaou said.
Eurozone countries typically issue debt in their own currency, although last year Spain, Italy and Belgium issued debt in dollars. But this was because it was cheaper than issuing debt in euros, not due to a desire to attract new investors.
Copyright The Financial Times Limited 2009
Turkish media group given $408m tax fine
By Delphine Strauss in Ankara
Published: February 18 2009 23:45 | Last updated: February 18 2009 23:45
Turkey’s biggest media group has once again fallen foul of the authorities, incurring a TL693m ($408m) tax fine at a time when its advertising revenues are set to weaken and its parent company wants to use its cash to expand in other sectors.
Dogan Yayin, which owns TV channels and some of Turkey’s top-selling daily newspapers, on Wednesday disclosed the fine, which is bigger than its current market capitalisation. The group, which plans to appeal, said it had also been ordered to pay back taxes of TL132.9m.
Shares fell 17.7 per cent on Istanbul’s stock exchange on Wednesday, while shares in its parent, Dogan Holding, fell 14.1 per cent.
The penalty is the latest in a string of regulatory decisions against the media and energy conglomerate, controlled by billionaire Aydin Dogan.
Its subsidiary Petrol Ofisi, a fuel distributor in which Austria’s OMV has a 34 per cent stake, faced a tax fine last year but made a deal to pay a reduced amount.
Investors worry that the group could be suffering from a public row between Mr Dogan and Recep Tayyip Erdogan, Turkey’s prime minister, who last autumn called on his supporters to boycott Dogan publications due to coverage of a corruption scandal.
“This is normal for us. I’m not surprised,” said Dr Ragip Nebil Ilseven, chief executive of Dogan Holding. But Salih Yendi, chief of the tax authority, told Bloomberg neither the fine nor the timing of the announcement was political.
The latest fine relates to profits Dogan Yayin made when it sold its 25 per cent stake in Dogan TV to the German publisher Axel Springer in late 2006 – a partnership it extended recently, with Axel Springer gaining a board seat and a stake in Dogan Yayin.
If the fine were enforced in full, Dogan Holding – which has net cash of about $1.1bn – may have to step in to help its more indebted subsidiary.
Sinan Goksen, analyst at Expres Invest, said that could hinder the group in other projects, including its plan to bid in a 50-50 joint venture with Italy’s Lottomatica in the privatisation of Turkey’s national lottery.
Toygun Onaran, analyst at KBC Financial Products, said that even if the fine were not exacted in full, “this is making the situation unclear, and in this unclear situation nobody wants that risk”.
Copyright The Financial Times Limited 2009
Published: February 18 2009 23:45 | Last updated: February 18 2009 23:45
Turkey’s biggest media group has once again fallen foul of the authorities, incurring a TL693m ($408m) tax fine at a time when its advertising revenues are set to weaken and its parent company wants to use its cash to expand in other sectors.
Dogan Yayin, which owns TV channels and some of Turkey’s top-selling daily newspapers, on Wednesday disclosed the fine, which is bigger than its current market capitalisation. The group, which plans to appeal, said it had also been ordered to pay back taxes of TL132.9m.
Shares fell 17.7 per cent on Istanbul’s stock exchange on Wednesday, while shares in its parent, Dogan Holding, fell 14.1 per cent.
The penalty is the latest in a string of regulatory decisions against the media and energy conglomerate, controlled by billionaire Aydin Dogan.
Its subsidiary Petrol Ofisi, a fuel distributor in which Austria’s OMV has a 34 per cent stake, faced a tax fine last year but made a deal to pay a reduced amount.
Investors worry that the group could be suffering from a public row between Mr Dogan and Recep Tayyip Erdogan, Turkey’s prime minister, who last autumn called on his supporters to boycott Dogan publications due to coverage of a corruption scandal.
“This is normal for us. I’m not surprised,” said Dr Ragip Nebil Ilseven, chief executive of Dogan Holding. But Salih Yendi, chief of the tax authority, told Bloomberg neither the fine nor the timing of the announcement was political.
The latest fine relates to profits Dogan Yayin made when it sold its 25 per cent stake in Dogan TV to the German publisher Axel Springer in late 2006 – a partnership it extended recently, with Axel Springer gaining a board seat and a stake in Dogan Yayin.
If the fine were enforced in full, Dogan Holding – which has net cash of about $1.1bn – may have to step in to help its more indebted subsidiary.
Sinan Goksen, analyst at Expres Invest, said that could hinder the group in other projects, including its plan to bid in a 50-50 joint venture with Italy’s Lottomatica in the privatisation of Turkey’s national lottery.
Toygun Onaran, analyst at KBC Financial Products, said that even if the fine were not exacted in full, “this is making the situation unclear, and in this unclear situation nobody wants that risk”.
Copyright The Financial Times Limited 2009
Turkey rate cut surprises markets
By Delphine Strauss in Ankara
Published: February 19 2009 23:37 | Last updated: February 19 2009 23:37
Turkey’s central bank cut its main borrowing rate by 150 basis points on Thursday evening, a much bigger step than markets had expected at a time when eastern European neighbours are considering raising rates to shore up their currencies.
Policymakers have now slashed Turkey’s benchmark borrowing rate by 525 basis points since November. The latest move takes it to a record low of 11.5 per cent. They also cut the lending rate on Thursday from 15.5 per cent to 14 per cent.
Analysts described the decision as “bold”, given the pressure on emerging currencies and Turkey’s delay in reaching an agreement with the International Monetary Fund that would boost investors’ confidence.
“This is a risky move, especially if one takes into consideration the risk of a contagion from the weakness of [central European] currencies. In this environment, the need for an IMF programme is even higher,” said Yarkin Cebeci, economist at JPMorgan.
The lira slid around 25 per cent against the dollar in 2008, mostly in the final months of the year, but has been relatively stable since the start of 2009, reflecting investors’ perception that Turkey is holding out relatively well in a troubled neighbourhood.
The central bank did not rule out further rate cuts, saying it thought inflation likely to “significantly undershoot target” at the end of the year. It said it would also take new measures to boost foreign exchange liquidity.
Policymakers were responding to growing signs of distress in Turkey’s economy, which most analysts expect will contract or at best stall in the year ahead. Recent figures show employment has hit a four-year high of 12.3 per cent , while industrial production has plunged with car manufacturers’ exports down as much as 60 per cent.
“We think that the policy rate should be lowered as much as possible this year,” said Tevfik Aksoy, economist at Morgan Stanley, arguing it would be the best chance to bring interest rates that have lingered in double digits to manageable levels in the longer term. But Turkey would also need to finalise an IMF deal and tighten fiscal policy immediately after local elections in March, he added.
Analysts at Unicredit said Turkey was among countries “in distinctly better positions” than many others in the region, adding that because domestic consumption was a big driver of growth, any scope for policy stimulus would be “especially precious”.
Copyright The Financial Times Limited 2009
Published: February 19 2009 23:37 | Last updated: February 19 2009 23:37
Turkey’s central bank cut its main borrowing rate by 150 basis points on Thursday evening, a much bigger step than markets had expected at a time when eastern European neighbours are considering raising rates to shore up their currencies.
Policymakers have now slashed Turkey’s benchmark borrowing rate by 525 basis points since November. The latest move takes it to a record low of 11.5 per cent. They also cut the lending rate on Thursday from 15.5 per cent to 14 per cent.
Analysts described the decision as “bold”, given the pressure on emerging currencies and Turkey’s delay in reaching an agreement with the International Monetary Fund that would boost investors’ confidence.
“This is a risky move, especially if one takes into consideration the risk of a contagion from the weakness of [central European] currencies. In this environment, the need for an IMF programme is even higher,” said Yarkin Cebeci, economist at JPMorgan.
The lira slid around 25 per cent against the dollar in 2008, mostly in the final months of the year, but has been relatively stable since the start of 2009, reflecting investors’ perception that Turkey is holding out relatively well in a troubled neighbourhood.
The central bank did not rule out further rate cuts, saying it thought inflation likely to “significantly undershoot target” at the end of the year. It said it would also take new measures to boost foreign exchange liquidity.
Policymakers were responding to growing signs of distress in Turkey’s economy, which most analysts expect will contract or at best stall in the year ahead. Recent figures show employment has hit a four-year high of 12.3 per cent , while industrial production has plunged with car manufacturers’ exports down as much as 60 per cent.
“We think that the policy rate should be lowered as much as possible this year,” said Tevfik Aksoy, economist at Morgan Stanley, arguing it would be the best chance to bring interest rates that have lingered in double digits to manageable levels in the longer term. But Turkey would also need to finalise an IMF deal and tighten fiscal policy immediately after local elections in March, he added.
Analysts at Unicredit said Turkey was among countries “in distinctly better positions” than many others in the region, adding that because domestic consumption was a big driver of growth, any scope for policy stimulus would be “especially precious”.
Copyright The Financial Times Limited 2009
Monday, February 16, 2009
Turkey's Kurdish clashes continue
Demonstrators marking the 10th anniversary of the arrest of Kurdish leader Abdullah Ocalan have clashed with Turkish police for a second day.
Police used water cannon and tear gas to break up thousands of stone-throwing demonstrators across south-east Turkey.
A number of demonstrators and police were injured and some 50 arrests made.
Protesters were angry that Mr Ocalan continues to be held as the only inmate on a prison island where he is serving a life sentence for treason.
In Diyarbakir, the predominantly Kurdish region's largest city, some 1,500 demonstrators confronted heavily armed riot police supported by helicopters.
Fighting also broke out in Istanbul between masked youths and riot police, the Associated Press reported.
Some of the crowds - supporters of Mr Ocalan's movement, the banned Kurdistan Workers' Party (PKK) - pelted military vehicles with bricks and rocks while police beat several protesters with truncheons.
The PKK has fought for an independent Kurdish state within Turkey since 1984.
It is designated a terrorist group by Turkey, the EU and the United States.
Mr Ocalan was sentenced to death for treason, but this was later commuted to life imprisonment.
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/europe/7891578.stm
Police used water cannon and tear gas to break up thousands of stone-throwing demonstrators across south-east Turkey.
A number of demonstrators and police were injured and some 50 arrests made.
Protesters were angry that Mr Ocalan continues to be held as the only inmate on a prison island where he is serving a life sentence for treason.
In Diyarbakir, the predominantly Kurdish region's largest city, some 1,500 demonstrators confronted heavily armed riot police supported by helicopters.
Fighting also broke out in Istanbul between masked youths and riot police, the Associated Press reported.
Some of the crowds - supporters of Mr Ocalan's movement, the banned Kurdistan Workers' Party (PKK) - pelted military vehicles with bricks and rocks while police beat several protesters with truncheons.
The PKK has fought for an independent Kurdish state within Turkey since 1984.
It is designated a terrorist group by Turkey, the EU and the United States.
Mr Ocalan was sentenced to death for treason, but this was later commuted to life imprisonment.
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/europe/7891578.stm
Narrow-minded leadership hurts Europe
By Wolfgang Münchau
Published: February 15 2009 19:27 | Last updated: February 15 2009 19:27
“It is justifiable if a factory of Renault is built in India so that Renault cars may be sold to the Indians. But it is not justifiable if a factory ... is built in the Czech Republic and its cars are sold in France” – Nicolas Sarkozy, president of France.
This is a troubling statement indeed. But instead of launching a tirade against Mr Sarkozy, I would like to make an observation that is perhaps not immediately evident: his statement is entirely consistent with the way the European Union has reacted to the financial crisis.
To see the link between crisis management and the rise in protectionism, look at the initial policy response to last September’s financial shockwaves. European leaders have woefully underestimated the crisis and possibly still do. The European economy is now heading towards a depression, with German gross domestic product falling at an annualised rate of almost 9 per cent. The early misjudgment of the crisis resulted in stimulus packages with two defects. They were initially too small but, more importantly, they were not co-ordinated. One important aspect of the economic meltdown is the presence of strong cross-country spillovers, both globally and inside the EU. The policy response failed to take account of these spillovers.
For the bank bail-out programmes, the EU managed to set a minimum level of competition rules, but these programmes, too, were national and not co-ordinated. So how does the combined effect of these two unco-ordinated responses lead to protectionism?
If stimulus money is dispersed at national level, governments naturally try to make sure that the money stays inside their countries. The prospect that consumers might spend the money on imported goods was one of the reasons why eurozone governments were reluctant to cut taxes. Because of EU competition rules, the same logic also applies to government purchases. Under those rules, governments had to open public projects to EU-wide tenders. If you play by the rules, keeping the cash in your country is not easy.
Governments have since relaxed those rules. In other words, if you want to make sure that these programmes function in their warped way, you have to dismantle the single market. The same logic applies to the bank rescue packages. If the European Commission tried to block each uncompetitive bank rescue, it would be blamed for causing a financial collapse. Governments have found a way to circumvent the EU, by breaking so many rules at once, that the Commission cannot even begin to react effectively.
Expect to see three effects with progressively destructive force. The first is that the stimulus is much less effective than it could otherwise have been. When everybody tries to gain a competitive advantage over each other, the effects usually cancel out.
Second, the stimulus and bank rescue packages harm the single European market directly. The French subsidies are more blatant, as is the protectionist rhetoric of its president. But everybody in Europe plays the same game. It is not as though the single market is the default position for European commerce. Much of the service sector is exempted. Europe lacks an effective pan-European retail infrastructure and retail banking system. Reversing this programme long before it is completed would be a mistake.
Third, and most destructive, the combined decision on stimulus and financial rescue packages poses an existential threat to monetary union. A blanket loan guarantee to every bank, as most governments have granted, in combination with indiscriminate capital injections and a reluctance to restructure, will mean the transformation of private into sovereign default risk – aggravated further by the economic downturn. Some insolvent banks are now owned by the state, while the bulk of damaged, not-yet-insolvent banks are lingering on, hoarding cash. This programme is a drain of resources with no resolution in sight.
I would now expect several eurozone countries with weak banking sectors to get into serious difficulties as the crisis continues. There is a risk of cascading sovereign defaults. If this was limited to countries of the size of Ireland or Greece, one could solve this problem through a bail-out. But solvency risk is not a problem confined to small countries. The banking sectors in Italy, Spain and Germany are increasingly vulnerable.
When European leaders meet for their anti-protectionism summit on March 1, they will produce warm words to reaffirm their commitment to the single market. I suspect they will continue to misdiagnose the crisis. Protectionism is not the root of the problem. The protectionism we are experiencing now is caused by co-ordination failure. It is neither sudden, nor surprising.
The right course would be to solve the underlying problem – to shift at least some of the stimulus spending to EU or eurozone level and, ideally, drop those toxic national schemes altogether and to adopt a joint strategy for the financial sector, at least for the 45 cross-border European banks. But this is not going to happen. It did not happen in October, and it is not going to happen now. As a result of the extraordinary narrow-mindedness of Europe’s political leadership, expect serious damage to the single market in general and the single market for financial services in particular. As for the eurozone, I always argued in the past that a break-up is in effect impossible. I am no longer so sure.
Published: February 15 2009 19:27 | Last updated: February 15 2009 19:27
“It is justifiable if a factory of Renault is built in India so that Renault cars may be sold to the Indians. But it is not justifiable if a factory ... is built in the Czech Republic and its cars are sold in France” – Nicolas Sarkozy, president of France.
This is a troubling statement indeed. But instead of launching a tirade against Mr Sarkozy, I would like to make an observation that is perhaps not immediately evident: his statement is entirely consistent with the way the European Union has reacted to the financial crisis.
To see the link between crisis management and the rise in protectionism, look at the initial policy response to last September’s financial shockwaves. European leaders have woefully underestimated the crisis and possibly still do. The European economy is now heading towards a depression, with German gross domestic product falling at an annualised rate of almost 9 per cent. The early misjudgment of the crisis resulted in stimulus packages with two defects. They were initially too small but, more importantly, they were not co-ordinated. One important aspect of the economic meltdown is the presence of strong cross-country spillovers, both globally and inside the EU. The policy response failed to take account of these spillovers.
For the bank bail-out programmes, the EU managed to set a minimum level of competition rules, but these programmes, too, were national and not co-ordinated. So how does the combined effect of these two unco-ordinated responses lead to protectionism?
If stimulus money is dispersed at national level, governments naturally try to make sure that the money stays inside their countries. The prospect that consumers might spend the money on imported goods was one of the reasons why eurozone governments were reluctant to cut taxes. Because of EU competition rules, the same logic also applies to government purchases. Under those rules, governments had to open public projects to EU-wide tenders. If you play by the rules, keeping the cash in your country is not easy.
Governments have since relaxed those rules. In other words, if you want to make sure that these programmes function in their warped way, you have to dismantle the single market. The same logic applies to the bank rescue packages. If the European Commission tried to block each uncompetitive bank rescue, it would be blamed for causing a financial collapse. Governments have found a way to circumvent the EU, by breaking so many rules at once, that the Commission cannot even begin to react effectively.
Expect to see three effects with progressively destructive force. The first is that the stimulus is much less effective than it could otherwise have been. When everybody tries to gain a competitive advantage over each other, the effects usually cancel out.
Second, the stimulus and bank rescue packages harm the single European market directly. The French subsidies are more blatant, as is the protectionist rhetoric of its president. But everybody in Europe plays the same game. It is not as though the single market is the default position for European commerce. Much of the service sector is exempted. Europe lacks an effective pan-European retail infrastructure and retail banking system. Reversing this programme long before it is completed would be a mistake.
Third, and most destructive, the combined decision on stimulus and financial rescue packages poses an existential threat to monetary union. A blanket loan guarantee to every bank, as most governments have granted, in combination with indiscriminate capital injections and a reluctance to restructure, will mean the transformation of private into sovereign default risk – aggravated further by the economic downturn. Some insolvent banks are now owned by the state, while the bulk of damaged, not-yet-insolvent banks are lingering on, hoarding cash. This programme is a drain of resources with no resolution in sight.
I would now expect several eurozone countries with weak banking sectors to get into serious difficulties as the crisis continues. There is a risk of cascading sovereign defaults. If this was limited to countries of the size of Ireland or Greece, one could solve this problem through a bail-out. But solvency risk is not a problem confined to small countries. The banking sectors in Italy, Spain and Germany are increasingly vulnerable.
When European leaders meet for their anti-protectionism summit on March 1, they will produce warm words to reaffirm their commitment to the single market. I suspect they will continue to misdiagnose the crisis. Protectionism is not the root of the problem. The protectionism we are experiencing now is caused by co-ordination failure. It is neither sudden, nor surprising.
The right course would be to solve the underlying problem – to shift at least some of the stimulus spending to EU or eurozone level and, ideally, drop those toxic national schemes altogether and to adopt a joint strategy for the financial sector, at least for the 45 cross-border European banks. But this is not going to happen. It did not happen in October, and it is not going to happen now. As a result of the extraordinary narrow-mindedness of Europe’s political leadership, expect serious damage to the single market in general and the single market for financial services in particular. As for the eurozone, I always argued in the past that a break-up is in effect impossible. I am no longer so sure.
Turkish banks feel heat from bad loans
By Delphine Strauss
Published: February 15 2009 20:12 | Last updated: February 15 2009 20:12
A jump in bad loans hit Turkish banks’ profits in the last quarter of 2008 after a long period in which they had expanded branch networks and rapidly increased consumer credit and lending to small businesses.
Akbank, Turkey’s biggest lender by market value, reported fourth-quarter net income of TL212m ($128m) after the market close on Friday – below expectations and 39 per cent below the third quarter. Net income of TL1.78bn in 2008 was 15 per cent below the previous year.
At Garanti Bank, part-owned by General Electric, unconsolidated net profit fell 14 per cent quarter on quarter to TL350m. Year-end net profit was down 24 per cent from 2007 at TL1.75bn.
Analysts polled by Reuters expect Is Bank, Turkey’s second biggest by market value, to report a 7 per cent drop in full-year earnings.
Turkish banks have largely avoided the travails of their western counterparts and still have sound loan-to-deposit ratios and capital adequacy ratios at 13 per cent or above.
But Tevfik Bilgin, head of Turkey’s banking regulator, has warned that non-performing loans (NPLs) would rise from 2008’s average rate of 3.6 per cent as the economic contraction took its toll on businesses and consumers.
Garanti and Akbank said bad loans had jumped 46 per cent and 35 per cent, respectively, in the last quarter – although both are still beating the sector average – and their drop in profits was partly due to higher provisioning expenses. Shares in Garanti, the most actively traded stock on Istanbul’s exchange, rallied on Friday.
But Akbank’s shares fell sharply last week after it emerged some family shareholders planned to sell stakes in both the bank and its parent, Sabanci Holding, totalling more than $1bn even at depressed prices.
Nergis Kasabali, analyst at Ata Invest, said the news would weigh on Akbank’s share price unless a sale to institutional investors was announced soon.
Copyright The Financial Times Limited 2009
Published: February 15 2009 20:12 | Last updated: February 15 2009 20:12
A jump in bad loans hit Turkish banks’ profits in the last quarter of 2008 after a long period in which they had expanded branch networks and rapidly increased consumer credit and lending to small businesses.
Akbank, Turkey’s biggest lender by market value, reported fourth-quarter net income of TL212m ($128m) after the market close on Friday – below expectations and 39 per cent below the third quarter. Net income of TL1.78bn in 2008 was 15 per cent below the previous year.
At Garanti Bank, part-owned by General Electric, unconsolidated net profit fell 14 per cent quarter on quarter to TL350m. Year-end net profit was down 24 per cent from 2007 at TL1.75bn.
Analysts polled by Reuters expect Is Bank, Turkey’s second biggest by market value, to report a 7 per cent drop in full-year earnings.
Turkish banks have largely avoided the travails of their western counterparts and still have sound loan-to-deposit ratios and capital adequacy ratios at 13 per cent or above.
But Tevfik Bilgin, head of Turkey’s banking regulator, has warned that non-performing loans (NPLs) would rise from 2008’s average rate of 3.6 per cent as the economic contraction took its toll on businesses and consumers.
Garanti and Akbank said bad loans had jumped 46 per cent and 35 per cent, respectively, in the last quarter – although both are still beating the sector average – and their drop in profits was partly due to higher provisioning expenses. Shares in Garanti, the most actively traded stock on Istanbul’s exchange, rallied on Friday.
But Akbank’s shares fell sharply last week after it emerged some family shareholders planned to sell stakes in both the bank and its parent, Sabanci Holding, totalling more than $1bn even at depressed prices.
Nergis Kasabali, analyst at Ata Invest, said the news would weigh on Akbank’s share price unless a sale to institutional investors was announced soon.
Copyright The Financial Times Limited 2009
EU is losing its grip on Caspian gas corridor
Borut Grgic
Published: February 15 2009
The European Union faces two obstacles to its project to pipe gas via a southern corridor from the Caspian region and thus reduce western Europe’s dependence on Russian supplies: Turkey’s attitude and the Balkan activities of Gazprom, the state-controlled Russian oil monopoly.
After receiving less than a warm embrace by the EU, Recep Tayyip Erdogan’s administration and the Turkish public are not eager to jump on the EU bandwagon when it comes to the southern gas corridor. Ankara’s objective is to turn Turkey into a regional energy hub. This means that Turkey would not be a transit state, but a buyer and reseller of Caspian gas to European customers. Of course, Mr Erdogan is playing hardball to get this status for Turkey. But it is a proposal the EU must refuse. There is no added value in buying Turkish gas when we can be buying Azeri and Turkmen gas directly from the producers.
European energy supply security has been suffering partly because of the problems that exist between the producing countries and transit states. The most recent example is the Russian-Ukrainian “gas war three”.
Turkey is dispensable as a transit state. To get to the Caspian gas, Europe can go across the Black Sea and connect Georgia and Romania. A connection between Azerbaijan and Georgia already exists. Romania has been subtly making a case for itself as a viable alternative to Turkey, but the Georgian option is not risk-free.
How can we forget the Georgia-Russia August war that has seen the birth of two new semi-states – Abkhazia and South Ossetia? A Moscow-controlled Abkhazia could pose a problem in building a secure gas connection from Azerbaijan through Georgia. But if Turkey keeps digging in its heels on the transit of Azerbaijan gas to Europe, even the Abkhazia problem will find a solution. The Turkish offer to the Azeris for gas is around $144 per 1,000 cubic metres – a price so low when compared with the $400-plus market price in Europe that the offer cannot be taken seriously in Baku. For the difference in the price Caspian producers can pay off the Abkhaz authorities to make sure they do not interfere with the gas terminals on Georgia’s Black Sea coast close to the Abkhazia border.
The bottom line is clear. The preferred way to get gas from Azerbaijan to Europe is via Turkey, but not under any condition. Mr Erdogan has to be flexible, and Europe, too. He is right to say the EU should open the energy chapter in membership negotiations with Turkey before talking to him about the transit issue. Part of the blame is on the shoulders of Cyprus and other EU states, such as France, who are blocking the energy chapter.
It is time to get serious about the southern corridor, lest Azerbaijani gas be sold to Russia and Iran. Both have expressed interest. If Baku sells its gas elsewhere, what will be the incentive for Turkmenistan to sell to Europe?
An attractive offer should be made to Turkey – something to the effect of the unlocking of the energy chapter in return for a transit agreement from Ankara. This is a deal the Czech EU presidency should bring when it next meets Mr Erdogan – hopefully soon.
On a separate note, Russia’s Gazprom has just concluded a deal with Serbia and bought NIS, the Serbian national oil and gas company. With NIS in its pocket, Gazprom now has access to all the downstream markets of the former Yugoslavia. Serbia was a gas hub in the past and the networks are still there, if a little rusty. By refilling them with cheaper-than-market-price Russian gas, Gazprom can establish control over the south-east European gas market in no time.
This will not necessarily derail the southern corridor option, but it can complicate developments further. With the south-east European gas market in the hands of Gazprom, what are the incentives for the Caspian producers to look for alternative options to the Russian one to deliver their gas to Europe? If they sell the gas into the Russian grid at market price minus transit, or straight to Gazprom at a competitive price, why bother with bogus alternatives? Their profits will be large and they will not have to worry about getting the gas to the market and all the complications along the way.
Europe is losing its grip on the southern gas corridor. If no quick fixes are pursued – which above all means signing a deal with Ankara on transit of Azerbaijani gas this year – it is best that we learn to deal with Russia as the only supplier of gas from the east.
The writer is director of the Institute for Strategic Studies, Brussels
Copyright The Financial Times Limited 2009
Published: February 15 2009
The European Union faces two obstacles to its project to pipe gas via a southern corridor from the Caspian region and thus reduce western Europe’s dependence on Russian supplies: Turkey’s attitude and the Balkan activities of Gazprom, the state-controlled Russian oil monopoly.
After receiving less than a warm embrace by the EU, Recep Tayyip Erdogan’s administration and the Turkish public are not eager to jump on the EU bandwagon when it comes to the southern gas corridor. Ankara’s objective is to turn Turkey into a regional energy hub. This means that Turkey would not be a transit state, but a buyer and reseller of Caspian gas to European customers. Of course, Mr Erdogan is playing hardball to get this status for Turkey. But it is a proposal the EU must refuse. There is no added value in buying Turkish gas when we can be buying Azeri and Turkmen gas directly from the producers.
European energy supply security has been suffering partly because of the problems that exist between the producing countries and transit states. The most recent example is the Russian-Ukrainian “gas war three”.
Turkey is dispensable as a transit state. To get to the Caspian gas, Europe can go across the Black Sea and connect Georgia and Romania. A connection between Azerbaijan and Georgia already exists. Romania has been subtly making a case for itself as a viable alternative to Turkey, but the Georgian option is not risk-free.
How can we forget the Georgia-Russia August war that has seen the birth of two new semi-states – Abkhazia and South Ossetia? A Moscow-controlled Abkhazia could pose a problem in building a secure gas connection from Azerbaijan through Georgia. But if Turkey keeps digging in its heels on the transit of Azerbaijan gas to Europe, even the Abkhazia problem will find a solution. The Turkish offer to the Azeris for gas is around $144 per 1,000 cubic metres – a price so low when compared with the $400-plus market price in Europe that the offer cannot be taken seriously in Baku. For the difference in the price Caspian producers can pay off the Abkhaz authorities to make sure they do not interfere with the gas terminals on Georgia’s Black Sea coast close to the Abkhazia border.
The bottom line is clear. The preferred way to get gas from Azerbaijan to Europe is via Turkey, but not under any condition. Mr Erdogan has to be flexible, and Europe, too. He is right to say the EU should open the energy chapter in membership negotiations with Turkey before talking to him about the transit issue. Part of the blame is on the shoulders of Cyprus and other EU states, such as France, who are blocking the energy chapter.
It is time to get serious about the southern corridor, lest Azerbaijani gas be sold to Russia and Iran. Both have expressed interest. If Baku sells its gas elsewhere, what will be the incentive for Turkmenistan to sell to Europe?
An attractive offer should be made to Turkey – something to the effect of the unlocking of the energy chapter in return for a transit agreement from Ankara. This is a deal the Czech EU presidency should bring when it next meets Mr Erdogan – hopefully soon.
On a separate note, Russia’s Gazprom has just concluded a deal with Serbia and bought NIS, the Serbian national oil and gas company. With NIS in its pocket, Gazprom now has access to all the downstream markets of the former Yugoslavia. Serbia was a gas hub in the past and the networks are still there, if a little rusty. By refilling them with cheaper-than-market-price Russian gas, Gazprom can establish control over the south-east European gas market in no time.
This will not necessarily derail the southern corridor option, but it can complicate developments further. With the south-east European gas market in the hands of Gazprom, what are the incentives for the Caspian producers to look for alternative options to the Russian one to deliver their gas to Europe? If they sell the gas into the Russian grid at market price minus transit, or straight to Gazprom at a competitive price, why bother with bogus alternatives? Their profits will be large and they will not have to worry about getting the gas to the market and all the complications along the way.
Europe is losing its grip on the southern gas corridor. If no quick fixes are pursued – which above all means signing a deal with Ankara on transit of Azerbaijani gas this year – it is best that we learn to deal with Russia as the only supplier of gas from the east.
The writer is director of the Institute for Strategic Studies, Brussels
Copyright The Financial Times Limited 2009
Friday, February 13, 2009
Turkey says any IMF deal to be short-term
By Selcuk Gokoluk
ANKARA, Feb 12 (Reuters) - Turkish Economy Minister Mehmet Simsek said on Thursday that a possible IMF loan deal to help the country face a global financial crisis will be for a duration of 18 months to 3 years.
Turkish financial markets have long waited for a fresh loan programme to replace the $10 billion accord which expired last May and shore up the $750 billion economy which has slowed sharply under the impact of the global crisis.
However, protracted IMF talks were suspended in January due to disagreements over its terms, raising concerns about whether a deal -- expected at around $25 billion -- will be agreed. Ambivalent comments have come from Prime Minister Tayyip Erdogan, who has the final say on the fate of the talks, about the likelihood of an agreement.
Analysts say the government may be trying to drag out talks with the Fund in order to avoid having to curtail spending ahead of municipal elections on March 29. Any major IMF stand-by agreement would traditionally be accompanied by strict fiscal conditions.
The IMF has been pushing for tighter fiscal policy and a higher primary surplus while the government has wanted to use IMF money to stimulate economic growth.
In an interview with broadcaster CNBC-e, Simsek said there was no disagreement with the IMF on targets and the contents of the deal and that the outstanding issues were more concerned with technical matters. However, on January 30 Simsek said disagreements were not over minor issues.
'If there is an agreement with the IMF its duration can be a minimum 18 months and it can go up to three years,' Simsek said. Turkey has in the past mostly signed three-year stand-by deals with the IMF.
ANKARA, Feb 12 (Reuters) - Turkish Economy Minister Mehmet Simsek said on Thursday that a possible IMF loan deal to help the country face a global financial crisis will be for a duration of 18 months to 3 years.
Turkish financial markets have long waited for a fresh loan programme to replace the $10 billion accord which expired last May and shore up the $750 billion economy which has slowed sharply under the impact of the global crisis.
However, protracted IMF talks were suspended in January due to disagreements over its terms, raising concerns about whether a deal -- expected at around $25 billion -- will be agreed. Ambivalent comments have come from Prime Minister Tayyip Erdogan, who has the final say on the fate of the talks, about the likelihood of an agreement.
Analysts say the government may be trying to drag out talks with the Fund in order to avoid having to curtail spending ahead of municipal elections on March 29. Any major IMF stand-by agreement would traditionally be accompanied by strict fiscal conditions.
The IMF has been pushing for tighter fiscal policy and a higher primary surplus while the government has wanted to use IMF money to stimulate economic growth.
In an interview with broadcaster CNBC-e, Simsek said there was no disagreement with the IMF on targets and the contents of the deal and that the outstanding issues were more concerned with technical matters. However, on January 30 Simsek said disagreements were not over minor issues.
'If there is an agreement with the IMF its duration can be a minimum 18 months and it can go up to three years,' Simsek said. Turkey has in the past mostly signed three-year stand-by deals with the IMF.
Week before Gaza op, Israel and Syria were ready for direct talks
By Zvi Barel
Erdogan had invited Olmert to his official residence after he met Turkey's president. He suggested calling Assad and drafting a joint announcement about a direct discussion between the Israeli and Syrian delegations.
The source said Erdogan called Assad, told him that Olmert was at his residence and asked whether he would accept Erdogan's mediation. Assad agreed and the two began drafting the statement.
Every few minutes Erdogan's assistant brought Olmert, who was in another room, notes from Erdogan's talk with Assad and asked for his comments. Erdogan passed Olmert's comments on to Assad and took down his responses, which he then passed on to Olmert.
The source said the three-way conversation continued for more than four hours, until about 1 A.M. Olmert told Erdogan he must return to Israel. Erdogan said he would continue talking to Assad and call Olmert the next day for his comments.
"The joint Syrian-Israeli statement was nearly finished and needed only a few corrected words to be completed," the Turkish source said.
"After making the statement, the parties were to announce that they were ready to start direct negotiations and Erdogan was convinced that he had an agreed-on draft," the source said.
The statement had been expected to include an agreement to adhere to the understanding reached with Yitzhak Rabin.
This stipulated that Israel would be prepared to withdraw from the entire Golan in exchange for permanent peace and security arrangements, as well as agreement on what the term normalization would mean for future peaceful relations.
But a week later, Israel launched the offensive in Gaza. When Erdogan heard of the attack he said that Olmert had stabbed him in the back and that Israel must pay for it, one of his aides said.
Erdogan had invited Olmert to his official residence after he met Turkey's president. He suggested calling Assad and drafting a joint announcement about a direct discussion between the Israeli and Syrian delegations.
The source said Erdogan called Assad, told him that Olmert was at his residence and asked whether he would accept Erdogan's mediation. Assad agreed and the two began drafting the statement.
Every few minutes Erdogan's assistant brought Olmert, who was in another room, notes from Erdogan's talk with Assad and asked for his comments. Erdogan passed Olmert's comments on to Assad and took down his responses, which he then passed on to Olmert.
The source said the three-way conversation continued for more than four hours, until about 1 A.M. Olmert told Erdogan he must return to Israel. Erdogan said he would continue talking to Assad and call Olmert the next day for his comments.
"The joint Syrian-Israeli statement was nearly finished and needed only a few corrected words to be completed," the Turkish source said.
"After making the statement, the parties were to announce that they were ready to start direct negotiations and Erdogan was convinced that he had an agreed-on draft," the source said.
The statement had been expected to include an agreement to adhere to the understanding reached with Yitzhak Rabin.
This stipulated that Israel would be prepared to withdraw from the entire Golan in exchange for permanent peace and security arrangements, as well as agreement on what the term normalization would mean for future peaceful relations.
But a week later, Israel launched the offensive in Gaza. When Erdogan heard of the attack he said that Olmert had stabbed him in the back and that Israel must pay for it, one of his aides said.
'Netanyahu Is Not Prepared to Compromise'
It still isn't clear who will be asked to form Israel's next government. But if Netanyahu gets the nod, German commentators fear the peace process will suffer.
Israel is set to announce the final tally from Tuesday's parliamentary vote on Thursday. But even before the official numbers are in, Likud party Chairman Benjamin Netanyahu has started a major push to form a coalition government as quickly as possible, even though early results had him running (just barely) behind his rival, Tzipi Livni.
According to the Israeli paper Haaretz on Thursday, Netanyahu was planning to offer Avigdor Lieberman, from the ultra-nationalist Israel Beitenu party, the Finance Ministry in an effort to quickly bind him in a new government. The paper also reported that "Bibi," as Netanyahu is known to both friends and foes alike, will then invite his rivals from the Kadima party, chaired by Livni, to take on the foreign and defense portfolios.
It is unclear whether the gambit will work. Preliminary results show that Netanyahu's party won 27 seats in parliament, against 28 for Kadima. But because the right side of the political spectrum -- boosted by 15 seats won by Israel Beitenu -- trounced the left, overall, it appears difficult for Livni to form a stable coalition. Still, Interior Minister Meir Sheetrit, a member of Kadima, said the party would not join an extreme right-wing government under Netanyahu's leadership.
"We will join a Netanyahu government only if it is (not extreme)," he said, according to Haaretz. "We are not afraid to sit in the opposition."
There is still some time before President Shimon Peres has to decide who to ask to form a government. Results will become official next week. If Peres opts for Netanyahu, it will be the first time in Israel's history that the strongest party was passed over to lead a government.
Outside Israel, many are viewing developments with some concern. The hawkish tone from Likud and other parties on the right has raised fears that the Middle East peace process might stall under Netanyahu. Lieberman's participation in any Netanyahu-led government is particularly worrying for many. His platform has been profoundly anti-Arab -- in fact Lieberman proposed that all Arab Israelis should sign a loyalty oath to Israel as a Jewish state.
German commentators on Thursday also voiced their concerns.
The left-leaning Die Taggeszeitung writes:
"Israel has voted for the right and, in doing so, reacted to the radicalization of the Palestinians. Three years after the electoral victory of Hamas, Israel's left-leaning parties no longer have a chance at winning a majority. Every missile that was shot at Israel from the Gaza Strip strengthened the position of those Israeli politicians who aren't willing to compromise."
"Hamas aided Israel's right-leaning politicians in gaining power -- and now the right may even be able to secure a stabile, long-term coalition."
The Financial Times Deutschland writes:
"Even if Jerusalem ends up with a coalition that is prepared to work towards peace, the battle is still far from over. As long as Hamas' goal is the destruction of Israel, creating a two-state solution will remain nearly impossible, as a separate peace with Fatah cannot exist. It's also difficult to imagine progress in the Middle East unless Syria and Iran stop supporting Hamas and fueling the conflict."
"If US President Barack Obama wants his 'aggressive' peace initiative to have a chance, it won't be enough to sit around hoping that Israel's new government will work on a peace agreement. It also won't be enough to put pressure on Jerusalem if, in the end, hardliners there have all the say."
The center-right Frankfurter Allgemeine Zeitung focuses on the need for a new political system in Israel:
"Only with Ms. Livni is there a real chance (for peace) because the foreign minister campaigned on a platform of one day living peacefully next to a Palestinian state and returning the Golan Heights to Syria in exchange for peace. Benjamin Netanyahu is not prepared to accept any of these compromises and would, at best, aid Palestinians in making economic progress."
"In order to undertake painful compromises with the Palestinians and Arab neighbors, Israel needs a stable governing majority.... Israel desperately needs to overhaul its political system because whoever wins power will have to commit a large portion of his or her time to building a shaky coalition and then keeping it together -- more time than for important issues that require full commitment. That means, not only finding a peaceful solution to the conflict with Palestinians, but also addressing the international financial crisis that is currently hitting Israel with full force and has already cost countless Israelis their jobs."
The center-left Süddeutsche Zeitung writes:
"Netanyahu's win has created a dilemma for Obama. The US president needs to make progress in the peace process in order to move toward reconciliation with the Arab world. Netanyahu will be an uncompromising ruler, and his promised toughness and politics of fear helped win a parliamentary majority for the right. He opposes peace talks like the ones Livni held with moderate Palestinians in the West Bank.... He doesn't want to discuss borders, refugees and Jerusalem with Palestinians but rather to stick with the politics of containment. At best, he could assist in creating industry parks."
"It would be courageous to aid Palestinians in creating a state, as the US government is currently doing on a small scale by training Palestinian security forces in the West Bank. It would furthermore be courageous to reform the Israeli election system. Twelve parties are represented in the new Knesset and they will, as always, be a hindrance to one another. The 2 percent rule hinders every step toward parliamentary progress. It also keeps courageous politicians like Livni from breaking the vicious cycle of Israel's internal politics."
-- Caroline Winter, 2:45 p.m. CET
Israel is set to announce the final tally from Tuesday's parliamentary vote on Thursday. But even before the official numbers are in, Likud party Chairman Benjamin Netanyahu has started a major push to form a coalition government as quickly as possible, even though early results had him running (just barely) behind his rival, Tzipi Livni.
According to the Israeli paper Haaretz on Thursday, Netanyahu was planning to offer Avigdor Lieberman, from the ultra-nationalist Israel Beitenu party, the Finance Ministry in an effort to quickly bind him in a new government. The paper also reported that "Bibi," as Netanyahu is known to both friends and foes alike, will then invite his rivals from the Kadima party, chaired by Livni, to take on the foreign and defense portfolios.
It is unclear whether the gambit will work. Preliminary results show that Netanyahu's party won 27 seats in parliament, against 28 for Kadima. But because the right side of the political spectrum -- boosted by 15 seats won by Israel Beitenu -- trounced the left, overall, it appears difficult for Livni to form a stable coalition. Still, Interior Minister Meir Sheetrit, a member of Kadima, said the party would not join an extreme right-wing government under Netanyahu's leadership.
"We will join a Netanyahu government only if it is (not extreme)," he said, according to Haaretz. "We are not afraid to sit in the opposition."
There is still some time before President Shimon Peres has to decide who to ask to form a government. Results will become official next week. If Peres opts for Netanyahu, it will be the first time in Israel's history that the strongest party was passed over to lead a government.
Outside Israel, many are viewing developments with some concern. The hawkish tone from Likud and other parties on the right has raised fears that the Middle East peace process might stall under Netanyahu. Lieberman's participation in any Netanyahu-led government is particularly worrying for many. His platform has been profoundly anti-Arab -- in fact Lieberman proposed that all Arab Israelis should sign a loyalty oath to Israel as a Jewish state.
German commentators on Thursday also voiced their concerns.
The left-leaning Die Taggeszeitung writes:
"Israel has voted for the right and, in doing so, reacted to the radicalization of the Palestinians. Three years after the electoral victory of Hamas, Israel's left-leaning parties no longer have a chance at winning a majority. Every missile that was shot at Israel from the Gaza Strip strengthened the position of those Israeli politicians who aren't willing to compromise."
"Hamas aided Israel's right-leaning politicians in gaining power -- and now the right may even be able to secure a stabile, long-term coalition."
The Financial Times Deutschland writes:
"Even if Jerusalem ends up with a coalition that is prepared to work towards peace, the battle is still far from over. As long as Hamas' goal is the destruction of Israel, creating a two-state solution will remain nearly impossible, as a separate peace with Fatah cannot exist. It's also difficult to imagine progress in the Middle East unless Syria and Iran stop supporting Hamas and fueling the conflict."
"If US President Barack Obama wants his 'aggressive' peace initiative to have a chance, it won't be enough to sit around hoping that Israel's new government will work on a peace agreement. It also won't be enough to put pressure on Jerusalem if, in the end, hardliners there have all the say."
The center-right Frankfurter Allgemeine Zeitung focuses on the need for a new political system in Israel:
"Only with Ms. Livni is there a real chance (for peace) because the foreign minister campaigned on a platform of one day living peacefully next to a Palestinian state and returning the Golan Heights to Syria in exchange for peace. Benjamin Netanyahu is not prepared to accept any of these compromises and would, at best, aid Palestinians in making economic progress."
"In order to undertake painful compromises with the Palestinians and Arab neighbors, Israel needs a stable governing majority.... Israel desperately needs to overhaul its political system because whoever wins power will have to commit a large portion of his or her time to building a shaky coalition and then keeping it together -- more time than for important issues that require full commitment. That means, not only finding a peaceful solution to the conflict with Palestinians, but also addressing the international financial crisis that is currently hitting Israel with full force and has already cost countless Israelis their jobs."
The center-left Süddeutsche Zeitung writes:
"Netanyahu's win has created a dilemma for Obama. The US president needs to make progress in the peace process in order to move toward reconciliation with the Arab world. Netanyahu will be an uncompromising ruler, and his promised toughness and politics of fear helped win a parliamentary majority for the right. He opposes peace talks like the ones Livni held with moderate Palestinians in the West Bank.... He doesn't want to discuss borders, refugees and Jerusalem with Palestinians but rather to stick with the politics of containment. At best, he could assist in creating industry parks."
"It would be courageous to aid Palestinians in creating a state, as the US government is currently doing on a small scale by training Palestinian security forces in the West Bank. It would furthermore be courageous to reform the Israeli election system. Twelve parties are represented in the new Knesset and they will, as always, be a hindrance to one another. The 2 percent rule hinders every step toward parliamentary progress. It also keeps courageous politicians like Livni from breaking the vicious cycle of Israel's internal politics."
-- Caroline Winter, 2:45 p.m. CET
US and Iran 'Like Two Boxers Circling around a Ring'
This week has seen a number of comments from leaders in the US and Iran that signal a potential thawing in relations. German commentators welcome the change in tone but worry that talk of negotiations might merely be wishful thinking.
A series of diplomatic comments emanating from leaders in both Washington and Tehran this week indicate that a slow thawing of relations may have already have begun between the two countries.
The exchange began with United States President Barack Obama's inauguration speechlast month, when he told Muslim countries that America "will extend a hand if you are willing to unclench your fist." This sentiment was echoed in a press conference on Monday, when Obama said that his administration was reviewing Iran policy and "looking at areas where we can have constructive dialogue" and acknowledged that "there's been a lot of mistrust built up over the years."
On Tuesday, in Tehran, Iranian President Mahmoud Ahmadinejad responded with his own gentler words. "Our nation is ready to hold talks based on mutual respect and in a fair atmosphere," Ahmadinejad said in front of tens of thousands of spectators while delivering a speech marking the 30th anniversary of the 1979 Iranian revolution.
This exchange was followed by more statements on Wednesday. Hassan Qashqavi, a spokesman for the Iranian Foreign Ministry, sounded a harsher tone when he said that talks would only come if the US stopped making "baseless" accusations against Iran about seeking nuclear weapons and supporting terrorism, according to the Associated Press. Foreign Minister Manouchehr Mottak struck a softer tone when he told Reuters that changes in US policies and stances would be greeted as "happy news" in Tehran.
Also on Wednesday, Secretary of State Hillary Rodham Clinton told reporters she was hopeful that the US and Iran would be able to "work out a way of talking." At a news conference with Czech Foreign Minister Karel Schwarzenberg, whose country currently holds the six-month rotating presidency of the European Union, Clinton added that Washington might "reconsider where we stand" on its deployment of a missile shield in Eastern Europe if it feels Iran is willing to abandoned its alleged pursuit of nuclear weapons. Clinton added, however, that "we are a long, long way from seeing any evidence of a behavioral change." Under the missile defense program planned by former US President George W. Bush, the Czech Republic would have been the site of a major radar installation used in the shield.
German commentators, who are generally opposed to the US missile plan, welcome these statements but also express concern. Commentators fear there is too much uncertainty in the region, with the final outcome of Israeli election still uncertain and presidential elections in Iran slated for June 12. The outcome of both elections could deeply influence -- positively or negatively -- any efforts aimed at rapprochement.
A series of diplomatic comments emanating from leaders in both Washington and Tehran this week indicate that a slow thawing of relations may have already have begun between the two countries.
The exchange began with United States President Barack Obama's inauguration speechlast month, when he told Muslim countries that America "will extend a hand if you are willing to unclench your fist." This sentiment was echoed in a press conference on Monday, when Obama said that his administration was reviewing Iran policy and "looking at areas where we can have constructive dialogue" and acknowledged that "there's been a lot of mistrust built up over the years."
On Tuesday, in Tehran, Iranian President Mahmoud Ahmadinejad responded with his own gentler words. "Our nation is ready to hold talks based on mutual respect and in a fair atmosphere," Ahmadinejad said in front of tens of thousands of spectators while delivering a speech marking the 30th anniversary of the 1979 Iranian revolution.
This exchange was followed by more statements on Wednesday. Hassan Qashqavi, a spokesman for the Iranian Foreign Ministry, sounded a harsher tone when he said that talks would only come if the US stopped making "baseless" accusations against Iran about seeking nuclear weapons and supporting terrorism, according to the Associated Press. Foreign Minister Manouchehr Mottak struck a softer tone when he told Reuters that changes in US policies and stances would be greeted as "happy news" in Tehran.
Also on Wednesday, Secretary of State Hillary Rodham Clinton told reporters she was hopeful that the US and Iran would be able to "work out a way of talking." At a news conference with Czech Foreign Minister Karel Schwarzenberg, whose country currently holds the six-month rotating presidency of the European Union, Clinton added that Washington might "reconsider where we stand" on its deployment of a missile shield in Eastern Europe if it feels Iran is willing to abandoned its alleged pursuit of nuclear weapons. Clinton added, however, that "we are a long, long way from seeing any evidence of a behavioral change." Under the missile defense program planned by former US President George W. Bush, the Czech Republic would have been the site of a major radar installation used in the shield.
German commentators, who are generally opposed to the US missile plan, welcome these statements but also express concern. Commentators fear there is too much uncertainty in the region, with the final outcome of Israeli election still uncertain and presidential elections in Iran slated for June 12. The outcome of both elections could deeply influence -- positively or negatively -- any efforts aimed at rapprochement.
Ancient city's Nazi past seeps out after stabbing
By Nicholas Kulish
Thursday, February 12, 2009
PASSAU, Germany: The stabbing of the police chief here in December provoked a nationwide furor because the victim, Alois Mannichl, was known as a staunch opponent of neo-Nazis, who were immediately blamed for the attack.
But the loud public protests and demonstrations in the streets of Passau gave way to silence, as days stretched into weeks and the case remained unsolved. Speculation that the perpetrator was a member of the police chief's family ran rampant, from local gossip all the way up to the leading newspapers and magazines in Germany.
What had become an instant symbol of out-of-control right-wing violence quickly turned into an investigation under the microscope. Here in this ancient city, which traces its history back to Roman times and earlier, the case and its aftermath have dredged up a reputation for ties to Nazism that civic leaders had worked hard to shed.
Now two months after the crime shook the country, the police and prosecutors here said Wednesday in a statement that they were more or less back to square one, ruling out Mannichl's wife and children while still searching for a man who is 6-foot-3, powerfully built, with close-cropped hair and possibly a tattoo on his neck, the same description released Dec. 14, the day after the attack.
"At this point, there is no evidence that the crime was committed by anyone in the family circle," said the statement. The 50-member special investigative commission established in the days after the attack is investigating "in all directions," but has no "hot lead" at this stage, the statement said.
The attack on Mannichl, which was serious but not fatal, renewed calls nationwide for a ban against the far-right National Democratic Party, known by its German initials as the NPD It also further inflamed concerns about a rise in violence by the extreme right.
In the state of Bavaria, where Passau is located, the number of right-wing-motivated assaults rose to 76 in 2007 from 42 in 2006, the most recent government figures available. But the newspaper Frankfurter Rundschau has reported unreleased figures that through the first 10 months of 2008, right-wing violent crimes increased 15 percent nationwide.
Mannichl has been known for his hard line against the extreme right, but earned the particular enmity of neo-Nazi groups after ordering the opening of the grave of a prominent former Nazi, Friedhelm Busse, after his death last July. Busse was buried with a flag bearing a swastika, which is outlawed in Germany, and the police removed the flag as evidence.
Around 5:30 p.m. on Dec. 13, an attacker plunged a knife into Mannichl's chest outside his home on a quiet residential street in the tiny town of Fürstenzell near Passau, narrowly missing his heart, according to news reports. Mannichl said after the attack that his attacker yelled, "Greetings from the national resistance" and "You won't be trampling on the graves of our comrades anymore."
The attack made headlines nationwide, as did a candlelight vigil in Mannichl's honor. "When anyone is attacked by a right-wing extremist, it is an attack on us all," said Chancellor Angela Merkel in an interview the next week.
The day after the attack, the police arrested two men, ages 26 and 27, in connection with the crime. Two days later, a couple from Munich were detained for questioning as potential accomplices.
Yet all four were quickly released. And the questions began to mount, in particular around the fact that the knife used in the attack reportedly came from Mannichl's house. He explained that it had been used for cutting gingerbread during a neighborhood Advent celebration and that it had been left outside, where the assailant could have picked it up.
Heinz Fromm, the president of the domestic intelligence agency, the Federal Office for the Protection of the Constitution, said publicly that the office had no evidence linking the crime to right-wing extremists. And conjecture about the case, and Mannichl, evolved into a popular parlor game from Passau clear to the capital, Berlin.
The national news magazine Stern later reported that it was "more or less being openly speculated that the police chief could have been the victim of a family drama" and might have sent his own police force on a wild goose chase.
Other possibilities aired publicly included the attacker was from the punk or goth scene or was an angry criminal out for revenge who only pretended to be a neo-Nazi to disguise his identity.
Mannichl declined to be interviewed for this article, but told a Munich newspaper last month that he was trying to live with the "virulent speculation." He described the questions surrounding the case as "a deep valley" in his life.
Members of the local NPD, who have long accused Mannichl of harassment, organized a protest against what they called unfair "baiting" of the right wing in connection with the case. On Jan. 4, some 200 far-right demonstrators from all over Germany gathered in Passau, where they were confronted by roughly 1,000 counterprotesters and nearly as many police officers. There were several arrests but no violence.
For Passau, a city of 50,000 that sits at the confluence of three rivers, the Inn, the Ilz and the Danube, and seeks to lure tourists to the narrow lanes of its quaintly lovely medieval old town, it was all an unwelcome return to what officials call an unfair reputation as a "brown city," a reference to the brown shirts that came to identify the Nazi party.
Passau gained international notoriety as a symbol of Germany's uneasy relationship with its past in the Academy Award-nominated film "The Nasty Girl," based on the true story of Anna Rosmus, who faced death threats when she began looking into the Nazi past of her hometown in 1980 when she was 19.
Passau remained a popular gathering spot for the far right, both the NPD and the German People's Union, until just a few years ago, because of its connection to famous Nazis (Hitler lived here for two years as a child) but also because they could hold their local gatherings in Nibelung Hall, a 1934 example of Nazi architecture.
But the city has steadily evolved into a more cosmopolitan, open place. A university established here in 1978 brought 8,000 students and a cultural shot in the arm.
The fall of the Iron Curtain and the integration of Europe has turned Passau's location in what was once an isolated corner of Germany into a crossroads and a destination. Nibelung Hall was torn down in 2004, and its replacement is called the Dreiländerhalle, or Hall of Three Lands.
Thursday, February 12, 2009
PASSAU, Germany: The stabbing of the police chief here in December provoked a nationwide furor because the victim, Alois Mannichl, was known as a staunch opponent of neo-Nazis, who were immediately blamed for the attack.
But the loud public protests and demonstrations in the streets of Passau gave way to silence, as days stretched into weeks and the case remained unsolved. Speculation that the perpetrator was a member of the police chief's family ran rampant, from local gossip all the way up to the leading newspapers and magazines in Germany.
What had become an instant symbol of out-of-control right-wing violence quickly turned into an investigation under the microscope. Here in this ancient city, which traces its history back to Roman times and earlier, the case and its aftermath have dredged up a reputation for ties to Nazism that civic leaders had worked hard to shed.
Now two months after the crime shook the country, the police and prosecutors here said Wednesday in a statement that they were more or less back to square one, ruling out Mannichl's wife and children while still searching for a man who is 6-foot-3, powerfully built, with close-cropped hair and possibly a tattoo on his neck, the same description released Dec. 14, the day after the attack.
"At this point, there is no evidence that the crime was committed by anyone in the family circle," said the statement. The 50-member special investigative commission established in the days after the attack is investigating "in all directions," but has no "hot lead" at this stage, the statement said.
The attack on Mannichl, which was serious but not fatal, renewed calls nationwide for a ban against the far-right National Democratic Party, known by its German initials as the NPD It also further inflamed concerns about a rise in violence by the extreme right.
In the state of Bavaria, where Passau is located, the number of right-wing-motivated assaults rose to 76 in 2007 from 42 in 2006, the most recent government figures available. But the newspaper Frankfurter Rundschau has reported unreleased figures that through the first 10 months of 2008, right-wing violent crimes increased 15 percent nationwide.
Mannichl has been known for his hard line against the extreme right, but earned the particular enmity of neo-Nazi groups after ordering the opening of the grave of a prominent former Nazi, Friedhelm Busse, after his death last July. Busse was buried with a flag bearing a swastika, which is outlawed in Germany, and the police removed the flag as evidence.
Around 5:30 p.m. on Dec. 13, an attacker plunged a knife into Mannichl's chest outside his home on a quiet residential street in the tiny town of Fürstenzell near Passau, narrowly missing his heart, according to news reports. Mannichl said after the attack that his attacker yelled, "Greetings from the national resistance" and "You won't be trampling on the graves of our comrades anymore."
The attack made headlines nationwide, as did a candlelight vigil in Mannichl's honor. "When anyone is attacked by a right-wing extremist, it is an attack on us all," said Chancellor Angela Merkel in an interview the next week.
The day after the attack, the police arrested two men, ages 26 and 27, in connection with the crime. Two days later, a couple from Munich were detained for questioning as potential accomplices.
Yet all four were quickly released. And the questions began to mount, in particular around the fact that the knife used in the attack reportedly came from Mannichl's house. He explained that it had been used for cutting gingerbread during a neighborhood Advent celebration and that it had been left outside, where the assailant could have picked it up.
Heinz Fromm, the president of the domestic intelligence agency, the Federal Office for the Protection of the Constitution, said publicly that the office had no evidence linking the crime to right-wing extremists. And conjecture about the case, and Mannichl, evolved into a popular parlor game from Passau clear to the capital, Berlin.
The national news magazine Stern later reported that it was "more or less being openly speculated that the police chief could have been the victim of a family drama" and might have sent his own police force on a wild goose chase.
Other possibilities aired publicly included the attacker was from the punk or goth scene or was an angry criminal out for revenge who only pretended to be a neo-Nazi to disguise his identity.
Mannichl declined to be interviewed for this article, but told a Munich newspaper last month that he was trying to live with the "virulent speculation." He described the questions surrounding the case as "a deep valley" in his life.
Members of the local NPD, who have long accused Mannichl of harassment, organized a protest against what they called unfair "baiting" of the right wing in connection with the case. On Jan. 4, some 200 far-right demonstrators from all over Germany gathered in Passau, where they were confronted by roughly 1,000 counterprotesters and nearly as many police officers. There were several arrests but no violence.
For Passau, a city of 50,000 that sits at the confluence of three rivers, the Inn, the Ilz and the Danube, and seeks to lure tourists to the narrow lanes of its quaintly lovely medieval old town, it was all an unwelcome return to what officials call an unfair reputation as a "brown city," a reference to the brown shirts that came to identify the Nazi party.
Passau gained international notoriety as a symbol of Germany's uneasy relationship with its past in the Academy Award-nominated film "The Nasty Girl," based on the true story of Anna Rosmus, who faced death threats when she began looking into the Nazi past of her hometown in 1980 when she was 19.
Passau remained a popular gathering spot for the far right, both the NPD and the German People's Union, until just a few years ago, because of its connection to famous Nazis (Hitler lived here for two years as a child) but also because they could hold their local gatherings in Nibelung Hall, a 1934 example of Nazi architecture.
But the city has steadily evolved into a more cosmopolitan, open place. A university established here in 1978 brought 8,000 students and a cultural shot in the arm.
The fall of the Iron Curtain and the integration of Europe has turned Passau's location in what was once an isolated corner of Germany into a crossroads and a destination. Nibelung Hall was torn down in 2004, and its replacement is called the Dreiländerhalle, or Hall of Three Lands.
Balkan states get new EU warning
Romania has lost momentum in its judicial reforms while Bulgaria has made some progress, the European Commission says.
The two Balkan neighbours - the EU's newest members - are subject to special commission monitoring because their justice systems are seen to be flawed.
In November the commission stripped Bulgaria of 220m euros (£188m) in EU funding because of corruption.
Both countries risk new penalties if they fail to make progress by July.
"It is important that the Romanian authorities regain momentum on judicial reform and the fight against corruption so as to reverse certain backward movements of recent months," the commission said on Thursday.
"This means in particular adopting the codes needed to modernise the legal system and showing through an expeditious treatment of high-level corruption cases that the legal system is capable of implementing the laws in an independent and efficient way."
The commission criticised the Romanian parliament, saying it had blocked investigations into some high-level corruption cases.
On Bulgaria, the commission noted "some initial steps" towards structural and legislative reform had been taken in the prosecution office, justice ministry and interior ministry.
"These measures need to be sustained and further extended in order to deliver concrete results," it said.
Bulgaria has set up joint investigation teams combining prosecutors with security agents and interior ministry officers, but the commission called for "indictments regarding the serious crime groups targeted by these joint teams".
The two Balkan neighbours - the EU's newest members - are subject to special commission monitoring because their justice systems are seen to be flawed.
In November the commission stripped Bulgaria of 220m euros (£188m) in EU funding because of corruption.
Both countries risk new penalties if they fail to make progress by July.
"It is important that the Romanian authorities regain momentum on judicial reform and the fight against corruption so as to reverse certain backward movements of recent months," the commission said on Thursday.
"This means in particular adopting the codes needed to modernise the legal system and showing through an expeditious treatment of high-level corruption cases that the legal system is capable of implementing the laws in an independent and efficient way."
The commission criticised the Romanian parliament, saying it had blocked investigations into some high-level corruption cases.
On Bulgaria, the commission noted "some initial steps" towards structural and legislative reform had been taken in the prosecution office, justice ministry and interior ministry.
"These measures need to be sustained and further extended in order to deliver concrete results," it said.
Bulgaria has set up joint investigation teams combining prosecutors with security agents and interior ministry officers, but the commission called for "indictments regarding the serious crime groups targeted by these joint teams".
Thursday, February 12, 2009
Dutch MP banned from entering UK
A Dutch MP who described the Koran as a "fascist book" has been banned from entering the UK amid fears his presence would endanger public security.
Freedom Party MP Geert Wilders was invited to show his controversial film - which links the Islamic holy book to terrorism - in the UK's House of Lords.
But Mr Wilders, who faces trial in his own country for inciting hatred, has been denied entry by the Home Office.
Mr Wilders said the move was "cowardly" but one peer said it was "welcome".
'Offensive'
Mr Wilders' film Fitna caused outrage across the Muslim world when it was posted on the internet last year.
Its opening scenes show a copy of the Koran followed by footage of the 9/11 attacks in the US and the bombings in Madrid in 2004 and London in 2005.
The Dutch prime minister has said the film served "no purpose other than to offend".
Mr Wilders was asked to show the film at the House of Lords by UK Independence Party peer Lord Pearson.
However, he received a letter from the British Embassy in the Netherlands telling him he would not be allowed into the UK.
The Home Office said there was a blanket ban on Mr Wilders entering the UK under EU laws enabling member states to exclude someone whose presence could threaten public security.
"The government opposes extremism in all forms," it said in a statement, adding that it had tightened up rules on excluding those engaging in "unacceptable behaviour" in October.
"It will stop those who want to spread extremism, hatred, and violent messages in our communities from coming to our country."
Mr Wilders described the decision as "cowardly" and said he still intends to travel to the UK on Thursday to take part in the event.
'Very saddened'
He told the BBC: "It's incredible that an elected politician who was invited by one of your parliamentarians to a discussion with people who are against me, or in favour of me [was banned from the UK]."
Mr Wilders added: "I was surprised and very saddened that the freedom of speech that was a very strong point of UK society has been harassed. I thought Great Britain had the mother of all parliaments."
The Dutch government is reported to be trying to overturn the ban.
In the past, Mr Wilders has called for the Koran to be banned and compared it to Mein Kampf.
Earlier this year, a Dutch court ordered prosecutors to put Mr Wilders on trial for inciting hatred and discrimination by making anti-Islamic statements.
Labour peer Lord Ahmed, who expressed his concerns to the Parliamentary authorities about Mr Wilders' visit, said he welcomed the decision to ban the MP.
"It would be unwise to have him in the UK because this man's presence would cause hatred," he said.
"He has a case against him in the Amsterdam court for inciting hatred."
'Attacked obviously'
Lord Ahmed, who said other Muslim peers shared his concerns, stressed that Mr Wilders' views would certainly present a threat to public order.
"When Muslims are attacked obviously you will see people react to that."
But Lord Pearson said the decision to bar him was "weak and unacceptable in the extreme".
"The Home Office is guilty of appeasement on this, clearly."
The peer said the screening would still go ahead on Thursday whether Mr Wilders was present or not.
He said the parliamentary authorities were happy for the event to take place but had ordered extra security for it.
"The film does not threaten anyone," he said, adding that it simply showed how violent extremists justified their actions.
He said the screening would be followed by a debate on issues relating to the Koran, extremism and freedom of speech.
Freedom Party MP Geert Wilders was invited to show his controversial film - which links the Islamic holy book to terrorism - in the UK's House of Lords.
But Mr Wilders, who faces trial in his own country for inciting hatred, has been denied entry by the Home Office.
Mr Wilders said the move was "cowardly" but one peer said it was "welcome".
'Offensive'
Mr Wilders' film Fitna caused outrage across the Muslim world when it was posted on the internet last year.
Its opening scenes show a copy of the Koran followed by footage of the 9/11 attacks in the US and the bombings in Madrid in 2004 and London in 2005.
The Dutch prime minister has said the film served "no purpose other than to offend".
Mr Wilders was asked to show the film at the House of Lords by UK Independence Party peer Lord Pearson.
However, he received a letter from the British Embassy in the Netherlands telling him he would not be allowed into the UK.
The Home Office said there was a blanket ban on Mr Wilders entering the UK under EU laws enabling member states to exclude someone whose presence could threaten public security.
"The government opposes extremism in all forms," it said in a statement, adding that it had tightened up rules on excluding those engaging in "unacceptable behaviour" in October.
"It will stop those who want to spread extremism, hatred, and violent messages in our communities from coming to our country."
Mr Wilders described the decision as "cowardly" and said he still intends to travel to the UK on Thursday to take part in the event.
'Very saddened'
He told the BBC: "It's incredible that an elected politician who was invited by one of your parliamentarians to a discussion with people who are against me, or in favour of me [was banned from the UK]."
Mr Wilders added: "I was surprised and very saddened that the freedom of speech that was a very strong point of UK society has been harassed. I thought Great Britain had the mother of all parliaments."
The Dutch government is reported to be trying to overturn the ban.
In the past, Mr Wilders has called for the Koran to be banned and compared it to Mein Kampf.
Earlier this year, a Dutch court ordered prosecutors to put Mr Wilders on trial for inciting hatred and discrimination by making anti-Islamic statements.
Labour peer Lord Ahmed, who expressed his concerns to the Parliamentary authorities about Mr Wilders' visit, said he welcomed the decision to ban the MP.
"It would be unwise to have him in the UK because this man's presence would cause hatred," he said.
"He has a case against him in the Amsterdam court for inciting hatred."
'Attacked obviously'
Lord Ahmed, who said other Muslim peers shared his concerns, stressed that Mr Wilders' views would certainly present a threat to public order.
"When Muslims are attacked obviously you will see people react to that."
But Lord Pearson said the decision to bar him was "weak and unacceptable in the extreme".
"The Home Office is guilty of appeasement on this, clearly."
The peer said the screening would still go ahead on Thursday whether Mr Wilders was present or not.
He said the parliamentary authorities were happy for the event to take place but had ordered extra security for it.
"The film does not threaten anyone," he said, adding that it simply showed how violent extremists justified their actions.
He said the screening would be followed by a debate on issues relating to the Koran, extremism and freedom of speech.
Tuesday, February 10, 2009
Temper tantrums
Feb 5th 2009 | ANKARA
From The Economist print edition
WAS it premeditated? Or did Turkey’s prime minister, Recep Tayyip Erdogan, lose control? Mr Erdogan’s walkout from a debate with Israel’s president, Shimon Peres, in Davos has made him the most talked about Turkish leader since Kemal Ataturk. His audience of financiers and policy wonks was stunned. But Muslims worldwide cheered as Mr Erdogan scolded Mr Peres over Israel’s war in Gaza. “When it comes to killing, you know very well how to kill. I know well how you hit and kill children on beaches,” thundered a crimson-faced Mr Erdogan.
The incident has led to new debate over Turkey’s strategic alliance with Israel, whether an increasingly erratic Mr Erdogan is fit to lead Turkey at all and, if so, in what direction: east or west? There is no question of Turkey walking away from NATO or the European Union, or scrapping military ties with Israel and America. Mr Erdogan’s critics say his outburst was a ploy to please voters. If so, it worked: his approval ratings have shot up. Polls suggest that 80% of Turks support Mr Erdogan’s actions. His mildly Islamist Justice and Development party will reap dividends in municipal elections on March 29th.
Mr Erdogan’s defiance has also helped to assuage his people’s long-running feelings of humiliation and inferiority, which date back as far as the Ottoman defeat in the first world war. Many insist that Mr Erdogan’s reaction was spontaneous and utterly sincere. Turkey has assumed “moral leadership” based on Western values, opined Cengiz Candar, a liberal commentator. Mindful of the public mood, Turkey’s secular opposition leader, Deniz Baykal, grudgingly declared that his rival had done the right thing.
Not everybody agrees, however. Mr Erdogan’s behaviour makes it less likely that Turkey can successfully mediate between Israel and Syria. His call to Barack Obama to “redefine” what terrorist means has been seen as an appeal to remove the label from Hamas. Although European and American reaction has been muted, in private officials are unhappy. “What [the Davos spat] does leave in Europe is the feeling that Mr Erdogan is unpredictable,” says a European diplomat. Mr Obama is highly unlikely now to pay Turkey an early visit.
Mr Erdogan’s temper tantrums are not new. But they used to be reserved for his critics at home. The Davos affair, says another foreign diplomat, is further evidence of “Mr Erdogan’s conviction that the West needs Turkey more than Turkey needs it.” It is of a piece with Mr Erdogan’s threat to back out of the much-touted Nabucco pipeline to carry gas from the Caspian Sea to Europe via Turkey. In Brussels recently Mr Erdogan said that, if there were no progress on the energy chapter of Turkey’s EU accession talks then “we would of course review our position”. Meanwhile, Turkey sided with Saudi Arabia and the Vatican in opposing a UN statement suggested by the EU to call for the global decriminalisation of homosexuality.
Mr Erdogan’s supporters argue that EU foot-dragging on Turkey’s membership bid explains why Turkey is now seeking new friends in the Middle East and beyond. Its growing regional clout is another reason why the EU should embrace Turkey. But the reverse is also true. It is because it is the sole Muslim country that is at once secular, democratic and allied with the West that Turkey commands such respect in the rest of the world. Growing numbers of Arab investors have flocked to Turkey, “because we see it as part of Europe, not the Middle East,” says an Arab banker in Istanbul.
To retain its allure, Turkey will need to swallow its pride and make further concessions on Cyprus. The EU may suspend membership talks altogether unless Turkey meets a December 2009 deadline to open its ports to Greek-Cypriots. The hope is that Egemen Bagis, who was chosen as Turkey’s official EU negotiator in January, will remind Mr Erdogan that, at least in these talks, it is Turkey that is the supplicant not the other way round.
From The Economist print edition
WAS it premeditated? Or did Turkey’s prime minister, Recep Tayyip Erdogan, lose control? Mr Erdogan’s walkout from a debate with Israel’s president, Shimon Peres, in Davos has made him the most talked about Turkish leader since Kemal Ataturk. His audience of financiers and policy wonks was stunned. But Muslims worldwide cheered as Mr Erdogan scolded Mr Peres over Israel’s war in Gaza. “When it comes to killing, you know very well how to kill. I know well how you hit and kill children on beaches,” thundered a crimson-faced Mr Erdogan.
The incident has led to new debate over Turkey’s strategic alliance with Israel, whether an increasingly erratic Mr Erdogan is fit to lead Turkey at all and, if so, in what direction: east or west? There is no question of Turkey walking away from NATO or the European Union, or scrapping military ties with Israel and America. Mr Erdogan’s critics say his outburst was a ploy to please voters. If so, it worked: his approval ratings have shot up. Polls suggest that 80% of Turks support Mr Erdogan’s actions. His mildly Islamist Justice and Development party will reap dividends in municipal elections on March 29th.
Mr Erdogan’s defiance has also helped to assuage his people’s long-running feelings of humiliation and inferiority, which date back as far as the Ottoman defeat in the first world war. Many insist that Mr Erdogan’s reaction was spontaneous and utterly sincere. Turkey has assumed “moral leadership” based on Western values, opined Cengiz Candar, a liberal commentator. Mindful of the public mood, Turkey’s secular opposition leader, Deniz Baykal, grudgingly declared that his rival had done the right thing.
Not everybody agrees, however. Mr Erdogan’s behaviour makes it less likely that Turkey can successfully mediate between Israel and Syria. His call to Barack Obama to “redefine” what terrorist means has been seen as an appeal to remove the label from Hamas. Although European and American reaction has been muted, in private officials are unhappy. “What [the Davos spat] does leave in Europe is the feeling that Mr Erdogan is unpredictable,” says a European diplomat. Mr Obama is highly unlikely now to pay Turkey an early visit.
Mr Erdogan’s temper tantrums are not new. But they used to be reserved for his critics at home. The Davos affair, says another foreign diplomat, is further evidence of “Mr Erdogan’s conviction that the West needs Turkey more than Turkey needs it.” It is of a piece with Mr Erdogan’s threat to back out of the much-touted Nabucco pipeline to carry gas from the Caspian Sea to Europe via Turkey. In Brussels recently Mr Erdogan said that, if there were no progress on the energy chapter of Turkey’s EU accession talks then “we would of course review our position”. Meanwhile, Turkey sided with Saudi Arabia and the Vatican in opposing a UN statement suggested by the EU to call for the global decriminalisation of homosexuality.
Mr Erdogan’s supporters argue that EU foot-dragging on Turkey’s membership bid explains why Turkey is now seeking new friends in the Middle East and beyond. Its growing regional clout is another reason why the EU should embrace Turkey. But the reverse is also true. It is because it is the sole Muslim country that is at once secular, democratic and allied with the West that Turkey commands such respect in the rest of the world. Growing numbers of Arab investors have flocked to Turkey, “because we see it as part of Europe, not the Middle East,” says an Arab banker in Istanbul.
To retain its allure, Turkey will need to swallow its pride and make further concessions on Cyprus. The EU may suspend membership talks altogether unless Turkey meets a December 2009 deadline to open its ports to Greek-Cypriots. The hope is that Egemen Bagis, who was chosen as Turkey’s official EU negotiator in January, will remind Mr Erdogan that, at least in these talks, it is Turkey that is the supplicant not the other way round.
Marfin begins takeover negotiations for Olympic
By Kerin Hope in Athens
Published: February 9 2009 17:17 | Last updated: February 9 2009 17:17
Greece’s Marfin Investment Group starts negotiations on Tuesday with the Greek government to buy 100 per cent of Olympic Airlines, the ailing state-owned carrier, after an international tender collapsed last week.
Marfin, an investment holding group listed on the Athens stock exchange, said it is committed to investing at least €200m to acquire Olympic – Europe’s last fully state-owned carrier - and restructure its operations.
A Marfin official said the group wants to buy Olympic’s three divisions – flying operations, ground handling and the technical base – which were offered separately in the failed tender.
“It’s all or nothing, Olympic needs restructuring as a fully integrated airline,” the official said.
Marfin was the only group that responded to the government’s last-ditch call for a private Greek investor to rescue the airline, which has been losing an estimated €2m a day.
Aegean Airlines, a fast-expanding private Greek carrier, last year carried more passengers than Olympic for the first time.
The government has set a minimum price of €110m for Olympic based on an independent valuation of its assets. It is keen to reach a deal quickly so that services can be upgraded by the start of the tourist season in April.
Marfin has cash reserves of €1.2bn following the sale last year of its minority stake in Hellenic Telecoms, the public operator, to Deutsche Telekom.
The Marfin official said the group is open for co-operation with other local investors if they come forward. Last week Athens Airways, a new private airline that operates one domestic route, said it was keen to participate in a rescue bid for Olympic.
Olympic pilots yesterday broke ranks with the airline’s other unions to support Marfin’s bid. The airline’s 4,500 permanent workers still officially support state ownership.
Published: February 9 2009 17:17 | Last updated: February 9 2009 17:17
Greece’s Marfin Investment Group starts negotiations on Tuesday with the Greek government to buy 100 per cent of Olympic Airlines, the ailing state-owned carrier, after an international tender collapsed last week.
Marfin, an investment holding group listed on the Athens stock exchange, said it is committed to investing at least €200m to acquire Olympic – Europe’s last fully state-owned carrier - and restructure its operations.
A Marfin official said the group wants to buy Olympic’s three divisions – flying operations, ground handling and the technical base – which were offered separately in the failed tender.
“It’s all or nothing, Olympic needs restructuring as a fully integrated airline,” the official said.
Marfin was the only group that responded to the government’s last-ditch call for a private Greek investor to rescue the airline, which has been losing an estimated €2m a day.
Aegean Airlines, a fast-expanding private Greek carrier, last year carried more passengers than Olympic for the first time.
The government has set a minimum price of €110m for Olympic based on an independent valuation of its assets. It is keen to reach a deal quickly so that services can be upgraded by the start of the tourist season in April.
Marfin has cash reserves of €1.2bn following the sale last year of its minority stake in Hellenic Telecoms, the public operator, to Deutsche Telekom.
The Marfin official said the group is open for co-operation with other local investors if they come forward. Last week Athens Airways, a new private airline that operates one domestic route, said it was keen to participate in a rescue bid for Olympic.
Olympic pilots yesterday broke ranks with the airline’s other unions to support Marfin’s bid. The airline’s 4,500 permanent workers still officially support state ownership.
Pressure intensifies for Turkey accord with IMF
By Delphine Strauss in Ankara
Published: February 9 2009 23:43 | Last updated: February 9 2009 23:43
Turkey’s government risks losing credibility with investors and missing the best chance in years to tame endemically high inflation and borrowing costs if it backs away from talks with the International Monetary Fund, analysts warn.
An IMF mission left Ankara two weeks ago without reaching agreement about a new financing package.
It has not yet been invited to return, and ministers have made it clear talks will not resume until big differences are resolved.
For months investors have been counting on Turkey securing at least $20bn (€15.6bn, £13.6bn) in IMF funding. Many now wonder if Recep Tayyip Erdogan, the prime minister, who said on Monday Turkey could manage with or without the IMF, will commit to a deal requiring unpopular fiscal tightening.
“The government’s credit is running out,” said Ahmet Akarli, economist at Goldman Sachs. “People are not in panic but everyone is watching this much more closely than two months ago.”
The IMF accepts that Turkey’s public debt will rise this year, when it forecasts a 1.5 per cent contraction in GDP. But it wants a tougher fiscal rule and controls on municipality spending to restore the budget balance in later years.
Mr Erdogan is understandably reluctant to announce such a depressing growth outlook and difficult remedy just before local elections in March – especially as Turkey has to date weathered the crisis much better than eastern European neighbours.
“There is a feeling in the market that Turkey is holding out better in a troubled region,” said Christian Keller at Barclays Capital. Chris Scicluna at Daiwa Securities said Turkey’s tough negotiating tactics reflected “relative underlying strengths”.
The delay has had surprisingly little impact on asset prices or the lira – largely because most investors still expect a deal once elections are over. But to delay leaves Turkey vulnerable to any global upset or signs of trouble in its own economy. Analysts estimate it faces a financing gap of $15bn-$30bn in 2009 and say it will need IMF money to avoid a deeper recession or a lira slide.
If the government were to sign a deal only under duress, after a collapse in confidence, the IMF could impose more stringent terms, Mr Akarli warned. But he thought Turkey might “muddle through 2009” without external help.
Observers also worry the government’s promises of fiscal discipline ring increasingly hollow. Mr Keller said public finances had deteriorated before the crisis. Turker Hamzaoglu, at Merrill Lynch, said: “The government will be perceived as showing reluctance to run prudent fiscal policies.”
Without the anchor of an IMF programme Turkey could also miss a rare chance to bring inflation and interest rates decisively into single digits. Now inflation is subsiding despite the lira’s decline. The central bank has cut rates since November to a record 13 per cent.
Further cuts will depend on tight fiscal policy and an IMF deal. “This is a once in a decade chance to get real interest rates down,” Mr Keller said. “This must be the way to convince politicians.”
● New banknotes depicting a 19th century writer have sparked an online battle between supporters and opponents of Turkey’s socially conservative government, writes Delphine Strauss.
Critics of the ruling Justice and Development party, alert to any hint of deviation from Turkey’s secular constitution, are furious that the 50 lira note carries a picture of Fatma Aliye Hanım. She married at 16 and published her work, signing herself “a woman”, only after winning her husband’s consent.
The central bank says it chose to celebrate someone believed to be Turkey’s first female novelist because she was a prominent defender of women’s rights in the context of her time.
But others claim she favoured Islamic law and regretted the creation of the modern state founded by Mustafa Kemal Ataturk.
Published: February 9 2009 23:43 | Last updated: February 9 2009 23:43
Turkey’s government risks losing credibility with investors and missing the best chance in years to tame endemically high inflation and borrowing costs if it backs away from talks with the International Monetary Fund, analysts warn.
An IMF mission left Ankara two weeks ago without reaching agreement about a new financing package.
It has not yet been invited to return, and ministers have made it clear talks will not resume until big differences are resolved.
For months investors have been counting on Turkey securing at least $20bn (€15.6bn, £13.6bn) in IMF funding. Many now wonder if Recep Tayyip Erdogan, the prime minister, who said on Monday Turkey could manage with or without the IMF, will commit to a deal requiring unpopular fiscal tightening.
“The government’s credit is running out,” said Ahmet Akarli, economist at Goldman Sachs. “People are not in panic but everyone is watching this much more closely than two months ago.”
The IMF accepts that Turkey’s public debt will rise this year, when it forecasts a 1.5 per cent contraction in GDP. But it wants a tougher fiscal rule and controls on municipality spending to restore the budget balance in later years.
Mr Erdogan is understandably reluctant to announce such a depressing growth outlook and difficult remedy just before local elections in March – especially as Turkey has to date weathered the crisis much better than eastern European neighbours.
“There is a feeling in the market that Turkey is holding out better in a troubled region,” said Christian Keller at Barclays Capital. Chris Scicluna at Daiwa Securities said Turkey’s tough negotiating tactics reflected “relative underlying strengths”.
The delay has had surprisingly little impact on asset prices or the lira – largely because most investors still expect a deal once elections are over. But to delay leaves Turkey vulnerable to any global upset or signs of trouble in its own economy. Analysts estimate it faces a financing gap of $15bn-$30bn in 2009 and say it will need IMF money to avoid a deeper recession or a lira slide.
If the government were to sign a deal only under duress, after a collapse in confidence, the IMF could impose more stringent terms, Mr Akarli warned. But he thought Turkey might “muddle through 2009” without external help.
Observers also worry the government’s promises of fiscal discipline ring increasingly hollow. Mr Keller said public finances had deteriorated before the crisis. Turker Hamzaoglu, at Merrill Lynch, said: “The government will be perceived as showing reluctance to run prudent fiscal policies.”
Without the anchor of an IMF programme Turkey could also miss a rare chance to bring inflation and interest rates decisively into single digits. Now inflation is subsiding despite the lira’s decline. The central bank has cut rates since November to a record 13 per cent.
Further cuts will depend on tight fiscal policy and an IMF deal. “This is a once in a decade chance to get real interest rates down,” Mr Keller said. “This must be the way to convince politicians.”
● New banknotes depicting a 19th century writer have sparked an online battle between supporters and opponents of Turkey’s socially conservative government, writes Delphine Strauss.
Critics of the ruling Justice and Development party, alert to any hint of deviation from Turkey’s secular constitution, are furious that the 50 lira note carries a picture of Fatma Aliye Hanım. She married at 16 and published her work, signing herself “a woman”, only after winning her husband’s consent.
The central bank says it chose to celebrate someone believed to be Turkey’s first female novelist because she was a prominent defender of women’s rights in the context of her time.
But others claim she favoured Islamic law and regretted the creation of the modern state founded by Mustafa Kemal Ataturk.
Bad new vibrations
Jan 29th 2009 | ISTANBUL
From The Economist print edition
WIDESPREAD outrage over Israel’s assault on Gaza has sharply soured the tone of Turkey’s people and government towards the Jewish state. The prime minister, Recep Tayyip Erdogan, castigated it for hammering the Palestinians. So far he has resisted a clamour in Turkey to loosen or even sever his country’s close ties with Israel. But some advocates of the strategic friendship between the two countries fear it may be at risk.
Behind the scenes, Turkish policymakers, especially military ones, still cherish their ties with Israel. Speaking this week in Switzerland, Mr Erdogan seemed keen to draw a line under the row. He explained that he was incensed by the war in Gaza particularly because his tireless mediation had brought Israel and Syria close to a deal over the Golan Heights. He said he had also been trying to fix a deal with Hamas over a prisoner exchange, including freedom for a kidnapped Israeli corporal.
Similar rows have occurred before. In 2004 he annoyed Israel by calling it a terrorist state after it assassinated Hamas’s founder, Sheikh Ahmed Yassin, as he left a mosque in Gaza. Mr Erdogan then invited Khaled Meshaal, Hamas’s present leader, to visit Turkey. But Israeli-Turkish relations were mended after prodding by the United States. Military co-operation went on. Israel has invariably chosen to turn a deaf ear to Turkey’s occasionally fierce rhetoric for the sake of that strategic liaison. In a bid to soothe the anger of Jews and Israelis, Turkey’s foreign minister, Ali Babacan, urged Hamas to decide “whether it wants to be an armed group or a political movement”.
But this time Mr Erdogan had been a lot angrier. Israel, he railed, was “committing a crime against humanity…The world must not turn a blind eye to Israel’s savagery…How can such a country, which totally ignores and does not implement the UN Security Council’s resolutions be let through the gates of the UN?”
An education ministry circular particularly annoyed Israel by telling Turkish schoolchildren to observe a minute’s silence in solidarity with Palestinian children. In the event, the Israelis persuaded the Turks to cancel a proposed essay and drawing contest for schoolchildren to air their feelings of hatred towards Israel. Israeli officials were apparently poised to respond by proposing a programme in Israeli schools for discussing the genocide of Armenians by Turks in the first world war.
In any case, anti-Israeli anger on Turkey’s streets rose during the assault on Gaza. In rallies across the country demonstrators chanted “Killer Israel! Nazi Israel! Turkish armies, march on Jerusalem!” Calls to boycott Israeli goods and scrap military co-operation grew louder.
Not for the first time, anti-Semitism reared its head. In the western city of Eskisehir, members of a nationalist group brandished placards that read, “Only dogs can enter: no Armenians or Jews!” An outcry from Turkey’s 25,000-strong Jewish community, plus pressure from the foreign ministry, shamed a local prosecutor into launching a probe. Turkey’s Jewish community issued a rare statement saying that “we Turkish Jews, an inseparable part of the Turkish Republic, feel deep sorrow for the comments appearing in recent days in certain media outlets that belittle and insult our religion and present us as targets.”
An ancient alliance
Turks deny accusations of anti-Semitism, noting that the Ottoman Sultans opened their doors over 500 years ago to Jews fleeing from Christian persecution in Spain. In 1948, Turkey was among the first countries to recognise Israel. Under a military co-operation deal in 1996, Israeli pilots have been training in Turkish skies. In 2007, bilateral trade rose to $2.7 billion. Between 2006 and 2007, the number of Israelis visiting Turkey went up from 362,000 to 511,400—more than 7% of Israel’s population. Turkey has also earned praise from the Americans for its recent mediation between Syria and Israel.
But anti-Semitism is often part of a general anti-Christian and anti-Western feeling. “Jew” and “Armenian” are both often used as slurs. Last year a Pew Global Attitudes Survey found that anti-Jewish sentiment in Turkey had risen: 76% said they had negative views towards Jews, whereas only 7% said they looked kindly on them.
Anti-Semitism was also blatant during a campaign against an Israeli financier, Sammy Ofer, who had planned to invest with a Turkish partner in rehabilitating Istanbul’s historic Galata district and its port near the Golden Horn. The tender was cancelled amid widespread claims that the deal was crooked and that “Jewish capital” was trying to take over the country.
Radical Turkish Islamists have long tried to stir up anti-Semitism. Their long-standing jibe against the secular Kemal Ataturk, modern Turkey’s founder, was that he was “really a Jew”. In recent years assorted leftists and Kemalists have joined an anti-Jewish chorus that frequently accompanies hostility to America, which is often accused of plotting with Israel to set up an independent Kurdish state in northern Iraq that will eventually take large chunks out of south-eastern Turkey.
Behind-the-scenes lobbying by Turkish, American and European Union diplomats may have persuaded Mr Erdogan to tone down his language. He recently told Turkey’s parliament, “As a leader, I have said that anti-Semitism is a crime against humanity.” But if anti-Israeli rhetoric in Turkey persists, the Israeli lobby in the United states could hit back by backing a congressional resolution to call the mass killings by Turks of some 1m Armenians “genocide”. Hitherto, Israel’s influential lobby in America has repeatedly helped block such a resolution, though Barack Obama and his vice-president, Joe Biden, have both referred to genocide in the past and have pledged to back the bill.
Secret talks between Turkey and Armenia to open diplomatic ties and reopen their borders are hotly opposed by some in the Armenian diaspora’s lobby in America. American Jews have long felt queasy about defending Turkey over the massacre of Armenians. Hitherto, pragmatism has prevailed and they have sided with the Turks. But if Mr Erdogan keeps on lambasting Israel, they may change their mind.
From The Economist print edition
WIDESPREAD outrage over Israel’s assault on Gaza has sharply soured the tone of Turkey’s people and government towards the Jewish state. The prime minister, Recep Tayyip Erdogan, castigated it for hammering the Palestinians. So far he has resisted a clamour in Turkey to loosen or even sever his country’s close ties with Israel. But some advocates of the strategic friendship between the two countries fear it may be at risk.
Behind the scenes, Turkish policymakers, especially military ones, still cherish their ties with Israel. Speaking this week in Switzerland, Mr Erdogan seemed keen to draw a line under the row. He explained that he was incensed by the war in Gaza particularly because his tireless mediation had brought Israel and Syria close to a deal over the Golan Heights. He said he had also been trying to fix a deal with Hamas over a prisoner exchange, including freedom for a kidnapped Israeli corporal.
Similar rows have occurred before. In 2004 he annoyed Israel by calling it a terrorist state after it assassinated Hamas’s founder, Sheikh Ahmed Yassin, as he left a mosque in Gaza. Mr Erdogan then invited Khaled Meshaal, Hamas’s present leader, to visit Turkey. But Israeli-Turkish relations were mended after prodding by the United States. Military co-operation went on. Israel has invariably chosen to turn a deaf ear to Turkey’s occasionally fierce rhetoric for the sake of that strategic liaison. In a bid to soothe the anger of Jews and Israelis, Turkey’s foreign minister, Ali Babacan, urged Hamas to decide “whether it wants to be an armed group or a political movement”.
But this time Mr Erdogan had been a lot angrier. Israel, he railed, was “committing a crime against humanity…The world must not turn a blind eye to Israel’s savagery…How can such a country, which totally ignores and does not implement the UN Security Council’s resolutions be let through the gates of the UN?”
An education ministry circular particularly annoyed Israel by telling Turkish schoolchildren to observe a minute’s silence in solidarity with Palestinian children. In the event, the Israelis persuaded the Turks to cancel a proposed essay and drawing contest for schoolchildren to air their feelings of hatred towards Israel. Israeli officials were apparently poised to respond by proposing a programme in Israeli schools for discussing the genocide of Armenians by Turks in the first world war.
In any case, anti-Israeli anger on Turkey’s streets rose during the assault on Gaza. In rallies across the country demonstrators chanted “Killer Israel! Nazi Israel! Turkish armies, march on Jerusalem!” Calls to boycott Israeli goods and scrap military co-operation grew louder.
Not for the first time, anti-Semitism reared its head. In the western city of Eskisehir, members of a nationalist group brandished placards that read, “Only dogs can enter: no Armenians or Jews!” An outcry from Turkey’s 25,000-strong Jewish community, plus pressure from the foreign ministry, shamed a local prosecutor into launching a probe. Turkey’s Jewish community issued a rare statement saying that “we Turkish Jews, an inseparable part of the Turkish Republic, feel deep sorrow for the comments appearing in recent days in certain media outlets that belittle and insult our religion and present us as targets.”
An ancient alliance
Turks deny accusations of anti-Semitism, noting that the Ottoman Sultans opened their doors over 500 years ago to Jews fleeing from Christian persecution in Spain. In 1948, Turkey was among the first countries to recognise Israel. Under a military co-operation deal in 1996, Israeli pilots have been training in Turkish skies. In 2007, bilateral trade rose to $2.7 billion. Between 2006 and 2007, the number of Israelis visiting Turkey went up from 362,000 to 511,400—more than 7% of Israel’s population. Turkey has also earned praise from the Americans for its recent mediation between Syria and Israel.
But anti-Semitism is often part of a general anti-Christian and anti-Western feeling. “Jew” and “Armenian” are both often used as slurs. Last year a Pew Global Attitudes Survey found that anti-Jewish sentiment in Turkey had risen: 76% said they had negative views towards Jews, whereas only 7% said they looked kindly on them.
Anti-Semitism was also blatant during a campaign against an Israeli financier, Sammy Ofer, who had planned to invest with a Turkish partner in rehabilitating Istanbul’s historic Galata district and its port near the Golden Horn. The tender was cancelled amid widespread claims that the deal was crooked and that “Jewish capital” was trying to take over the country.
Radical Turkish Islamists have long tried to stir up anti-Semitism. Their long-standing jibe against the secular Kemal Ataturk, modern Turkey’s founder, was that he was “really a Jew”. In recent years assorted leftists and Kemalists have joined an anti-Jewish chorus that frequently accompanies hostility to America, which is often accused of plotting with Israel to set up an independent Kurdish state in northern Iraq that will eventually take large chunks out of south-eastern Turkey.
Behind-the-scenes lobbying by Turkish, American and European Union diplomats may have persuaded Mr Erdogan to tone down his language. He recently told Turkey’s parliament, “As a leader, I have said that anti-Semitism is a crime against humanity.” But if anti-Israeli rhetoric in Turkey persists, the Israeli lobby in the United states could hit back by backing a congressional resolution to call the mass killings by Turks of some 1m Armenians “genocide”. Hitherto, Israel’s influential lobby in America has repeatedly helped block such a resolution, though Barack Obama and his vice-president, Joe Biden, have both referred to genocide in the past and have pledged to back the bill.
Secret talks between Turkey and Armenia to open diplomatic ties and reopen their borders are hotly opposed by some in the Armenian diaspora’s lobby in America. American Jews have long felt queasy about defending Turkey over the massacre of Armenians. Hitherto, pragmatism has prevailed and they have sided with the Turks. But if Mr Erdogan keeps on lambasting Israel, they may change their mind.
Subscribe to:
Posts (Atom)