NEWS,04.12.2012

Steel reprieve comes at price for Hollande

Francois Hollande's bid to rescue steel furnaces in France's historic industrial heartland was to be the mark of a president on the side of the workers and a state with the courage to bring a multinational to heel.But the two-month stand-off over steel giant ArcelorMittal's  Florange plant in Lorraine has unnerved investors in the eurozone's second largest economy, confused France's unions and exposed his six-month-old government to international ridicule.The dispute began in September with reports that ArcelorMittal would shut the idled furnaces at the plant, the last survivor in the once bustling northeastern steel region. The government immediately ordered the company to restart the furnaces or put them up for sale. Hollande's Socialist allies have hailed as a victory a late-Friday compromise under which ArcelorMittal agreed to invest €180m to expand the site near the German border over five years and hold off making forced redundancies. But as the European steel sector struggles to cope with over-capacity, the furnaces themselves will remain shuttered for now, and questions remain over the exact fate of the some 630 workers employed there and further funding needed for expansion.With unemployment at 14-year highs of 10% and his popularity ratings at record lows for a president only half a year into his mandate, there was clear political advantage for Hollande to lock horns with Indian steel magnate Lakshmi Mittal.But the result is at best a no-score-draw, and the tactics used - anti-business rhetoric and the threat of nationalisation could damage his wider reform effort.While his pugnacious, micro-managing predecessor Nicolas Sarkozy led from the front, Hollande let his ministers lead the fight, creating confusion over who runs industrial policy.Arnaud Montebourg, the firebrand leftist industry minister who pushed the nationalisation option hardest, declared Mittal a persona non grata in France and revealed he had found an anonymous potential buyer ready to invest in the plant.That was lapped up by international critics including London mayor Boris Johnson, who told executives in New Delhi that the "sans culottes" revolutionaries had taken control in Paris and advised them to bring their investment rupees to Britain.Montebourg later retracted his personal attack on Mittal but then had to watch as aides of Prime Minister Jean-Marc Ayrault, who announced the final accord, briefed media that his putative investor was neither "credible or solid".Facing opposition calls to resign, Montebourg went on local television on Saturday to announce he had Hollande's support and insist he felt "not betrayed, merely let down" by the outcome.But worse than the damage done to the credibility of one of Hollande's most high-profile ministers, many fear the cacophony further shakes France's image as a place to do business just when it needs all the help it can get to avert recession. "It has been a disaster," a senior French banker said last week as the episode unfolded."Even for sophisticated investors who understand that in France there is a difference between the rhetoric and the reality, this is hugely unnerving."Elie Cohen, economist at the CNRS public research institute, told the commercial i Tele television network that by raising the option of nationalisation, Montebourg risked encouraging copy-cat demands by workers at other struggling sites.It is still too early to say whether the Florange wrangling will hurt foreign investment in France, which Bank of France data show has grown modestly since the 2008/2009 global turndown to hit €30bn or 1.5% of output last year.Barely noticed last week, US online giant Amazon  said it was opening a new distribution centre in northern France that will create up to 2 500 jobs - four times the number at the Florange furnaces and a reminder that 80% of France's economy is now in the services sector.Vital to France's long-term prospects is whether Hollande obtains in coming weeks the overhaul of the country's unwieldy and expensive labour regulations which he has tasked employers and unions to achieve in negotiations by year-end.For that, France's trade unions must make unprecedented concessions to allow business more flexibility in hiring and firing. But the government handling of the Florange tussle has left many labour leaders feeling betrayed."Until the last minute, basically, we were made to believe that temporary nationalisation was essentially a given," Edouard Martin, head of the Florange chapter of France's large CFDT union, told RTL radio. "We did not understand this last-minute fix-up in which Jean-Marc Ayrault unveils an option never before discussed ... We get the feeling he was lying to us all along."A big test now will be whether unions have been riled so much that they stonewall in the labour reform talks. It could also make some more prone to protest if the government makes the extra public spending cuts that analysts say could be needed next year to ensure France hits its deficit-cutting target.For now, both sides hope the battle of Florange is over. ArcelorMittal has welcomed a deal that includes commitments on voluntary redundancies and re-deployment of furnace workers elsewhere in its French activities that go little beyond what it would likely have offered without government intervention.Hollande's office concedes he did not manage to get the furnaces re-opened as he promised during his election campaign,  but argue the deal to expand activity in the current poor economic climate is a victory of sorts.Whether the accord goes ahead in its entirety partly depends on variables outside the two parties' control, including €400m worth of European Commission funding.It may not be quite the end of the story.Referring to the nationalisation threat, one Hollande aide noted: "We are still keeping that revolver on the table."

S Korea, US to 'maximise' bid to stop North

South Korea and the United States will "maximise" diplomatic efforts to stop North Korea's planned rocket launch, Seoul's top nuclear envoy said on Tuesday as he left for talks in Washington. Lim Sung-Nam's US trip will be dominated by Pyongyang's announcement on Saturday that it intends to launch a long-range rocket between 10 and 22 December. The United States and its key Asian allies South Korea and Japan have condemned the move as a disguised ballistic missile test that violates UN resolutions triggered by Pyongyang's two nuclear tests in 2006 and 2009.Lim told Yonhap news agency that his talks with US officials would seek to "maximise diplomatic efforts and the co-ordination between South Korea and the US to block North Korea's launch". Lim met in Seoul on Monday with ambassadors from China, Russia and Japan other members of the six-party talks on North Korea to discuss a common response. Pyongyang insists the launch is a "peaceful" and purely scientific mission aimed at placing a satellite in orbit. A previous attempt in April failed when the carrier exploded shortly after take-off. During his three-day visit to Washington, Lim will hold talks with his US counterpart, Glyn Davies, and other senior officials. China, the North's closest ally, has expressed "concern" at the launch plan, with the foreign ministry urging "relevant parties to act in a way that is more conducive to the stability of the Korean peninsula". Russia on Monday added its "regret" at Pyongyang's announcement and noted that North Korea was obliged to abide by UN resolutions. Analysts say the international community is running out of options for pressuring the impoverished but nuclear-armed North, which is already under layers of sanctions. The six-party, aid-for-denuclearisation talks have been at a standstill since Pyongyang walked of the forum in April 2009. It staged its second nuclear test a month later.

China's Xi vows to rule by law

China's newly appointed leader Xi Jinping pledged on Tuesday to implement rule of law, in comments that appeared aimed at rising social discontent over government corruption and police brutality.In a speech at the Great Hall of the People that marked the 30th anniversary of China's 1982 constitution, Xi spoke of curbing the near-dictatorial powers of the ruling party.His comments appeared to be the strongest yet by a Chinese leader on the need for legal restraints on the party and come amid a series of graft scandals and reports of the unbridled wealth of China's top communist families."We must firmly establish throughout society the authority of the constitution and the law and allow the overwhelming masses to fully believe in the law," Xi said in comments carried by China Central Television. "To fully implement the constitution needs to be the sole task and the basic work in building a socialist nation ruled by law."Xi was last month named as the head of the ruling Communist Party and is slated to take over the state presidency from current President Hu Jintao in March as part of China's once-a-decade leadership transition.This year's transition was badly rocked by the case of disgraced politician Bo Xilai, whose wife was convicted in August of murdering a British businessman, in a scandal that has revealed rampant graft and lawlessness at the pinnacle of political power.Bo is awaiting trial for corruption and abuse of power after allegedly using police in Chongqing city where he ruled to remove political opponents and dissidents, practices that are routine in China.Since becoming party head, Xi has repeatedly pledged to fight graft and on Tuesday he further vowed to rein in China's top leaders. "We must establish mechanisms to restrain and supervise power, power must be made responsible, power must be supervised, violations of law must be investigated," he said."We must ensure that the power bestowed by the people is constantly used for the interest of the people.""No organisation or individual has the special rights to overstep the constitution and law, any violation of the constitution and the law must be investigated."China's current constitution has enshrined the basic freedoms of speech, press, religious belief and association, but such rights are routinely sanctioned and violated, rights groups say.Xi also appeared to address such alleged rights violations."To ensure the implementation of the constitution, is to ensure the realisation of the basic rights of the people," he said."By defending the dignity for the law, we are defending the will of the party and the people for dignity."

NEWS, 10.06.2012.

Euro zone agrees to lend Spain up to $162b

 

Euro zone finance ministers have agreed to lend Spain up to 100 billion euros ($162 billion) to save its stricken banks and try to avert a broader financial catastrophe.Fellow finance ministers in the 17-nation euro zone accepted a plea from Spain in a statement released after a conference call lasting around two and a half hours.The Eurogroup and Madrid said the amount of the bailout would be sufficiently large to banish any doubts."The loan amount must cover estimated capital requirements with an additional safety margin, estimated as summing up to 100 billion euros in total," Eurogroup said in a statement.Spain said it wanted aid for its banks but would not specify the precise amount until two independent consultancies Oliver Wyman and Roland Berger - deliver their assessment of the banking sector's capital needs some time before June 21."The Spanish government declares its intention to request European financing for the recapitalisation of the Spanish banks that need it," Economy Minister Luis de Guindos told a news conference in Madrid.He said the amounts needed would be manageable, and that the funds requested would amply cover any needs.A bailout for Spain's banks, beset by bad debts since a property bubble burst, would make it the fourth country to seek assistance since Europe's debt crisis began.With the rescue of Greece, Ireland, Portugal and now Spain, the EU and IMF have now committed around 500 billion euros ($811b) to finance European bailouts.Washington, which is worried the euro zone crisis could drag the US economy down in an election year, welcomed the announcement."These are important for the health of Spain's economy and as concrete steps on the path to financial union, which is vital to the resilience of the euro area," Treasury Secretary Timothy Geithner said.Heated debate Officials said there had been a heated debate over the International Monetary Fund's role in Spain's bank rescue, which Madrid wanted kept to a minimum. It will not provide any of the money.In the end it was agreed that the IMF would help monitor reforms in Spain's banking sector, while EU institutions would ensure Spain stuck to its broader economic commitments.IMF Managing Director Christine Lagarde said the euro zone's plan was consistent with the IMF's estimate of the capital needs of Spain's banks and should provide "assurance that the financing needs of Spain's banking system will be fully met".Sources involved in the talks said there had also been pressure applied on Madrid to make a precise request right away, but Spain had resisted.Euro zone policymakers are eager to shore up Spain's position before June 17 elections in Greece which could push Athens closer to a euro zone exit and unleash a wave of contagion. Spain's auditors could report back after that date.Nonetheless, analysts said financial markets may be calmed by the announcement when they reopen on Monday."The figure of up to 100 billion ($162 billion) is more encouraging and pretty realistic; it's an attempt to cap the problem," said Edmund Shing, European head of equity strategy at Barclays."The issue, however, is there is still a lack of detail about where the money's coming from, which is crucial. The market will treat it with some caution until they see how it will be funded."The Eurogroup said the funds could come from either from the euro zone's temporary rescue fund, the EFSF, or the permanent mechanism, the ESM, which is due to start next month. Finland said that if money came from the EFSF, it would want collateral.EU sources said there was a preference to channel money to Spain through the ESM, rather than the EFSF. Under the ESM, an approval rate of 90% or less is needed to trigger aid, and the fund also has more flexibility in how it operates."That's why it's so important that the ESM ... be ratified quickly," German Finance Minister Wolfgang Schaeuble said.The Spanish government has already spent 15 billion euros ($24b) bailing out small regional savings banks that lent recklessly to property developers. Spain's biggest failed bank, Bankia, will cost 23.5 billion euros ($38b) to rescue and its shareholders have been wiped out."Whatever the formula being used, we need to say two things: first the innocent should not suffer for the guilty, second public money should come back to public coffers," said Socialist opposition chief Alfredo Perez Rubalcaba after speaking with Prime Minister Mariano Rajoy on Saturday morning.Light conditions The race to resolve the banks' troubles comes after Fitch Ratings cut Madrid's sovereign credit rating by three notches to BBB, highlighting the Spanish banking sector's exposure to bad property loans and to contagion from Greece's debt crisis. It said the cost to the Spanish state of recapitalising banks stricken by the bursting of a real estate bubble, recession and mass unemployment could be between 60-100 billion euros ($97-162b). Italy could yet get dragged in too. Its industry minister, Corrado Passera, said the economic situation in Italy had improved since the end of 2011, but remained critical. "Europe was more disappointing than we had expected, it was less capable of tackling a relatively minor problem such as Greece," Passera told a conference on Saturday.While Spain would join Greece, Ireland and Portugal in receiving a European financial rescue, officials said the aid would be focused only on its banking sector, without taking the Spanish state out of credit markets.That would be crucial to avoid overstraining the euro zone's rescue funds, which would struggle to cover Spanish government borrowing needs for the next three years plus possible additional assistance for Portugal and Ireland.Conditions in the plan did not appear to add to the austerity measures and structural economic reforms which Rajoy's government has already put in place."Since the funds being asked for are to attend to financial sector needs, the conditionality, as agreed in the Eurogroup meeting, will be specifically for the financial sector," de Guindos said.EU and German officials have cited national pride in the euro zone's fourth largest economy as a barrier to requesting a full assistance programme.The European Commission and Germany both agreed in principle last week that Spain should be given an extra year to bring its budget deficit down below the EU limit of 3% of gross domestic product because of a deep recession.The Eurogroup also said money could be funnelled to Spain's FROB bank fund although the government would "retain the full responsibility of the financial assistance".Irish Finance Minister Michael Noonan said the funds would be provided through the EFSF or ESM at the same interest rates which apply to funds provided to other bailout countries.

NEWS,05.04.2012.

Retiree's suicide jolts Greece, triggers violence

A Greek retiree shot himself dead in Athens' main square Wednesday, blasting politicians over the country's financial crisis in a suicide note that triggered violent clashes hours later between police and anti-austerity protesters. Riot police fired tear gas and flash grenades after protests attended by some 1,500 people turned violent, and youths hurled rocks and petrol bombs outside Parliament. Authorities reported no injuries or arrests. The 77-year-old retired pharmacist drew a handgun and shot himself in the head near a subway exit on central Syntagma Square which was crowded with commuters, police said. The square, opposite Parliament, has become the focal point of frequent public protests against Greece's two-year austerity campaign. The incident, during morning rush hour, jolted public opinion and quickly entered political debate, with the prime minister and the heads of both parties backing Greece's governing coalition expressing sorrow. "A pharmacist ought to be able to live comfortably on his pension," said Vassilis Papadopoulos, a spokesman for the "I won't pay" group. "So for him to reach the point of suicide out of economic hardship means a lot. It shows how the social fabric is unraveling." Greece has relied on international rescue loans since May 2010. To secure them, Athens implemented harsh austerity measures, slashing pensions and salaries while repeatedly raising taxes. But the belt-tightening worsened the recession and led to thousands of job losses that left one in five Greeks unemployed. "As a Greek, I am truly shocked," Dimitris Giannopoulos, an Athens doctor, said before the protest. "I am shocked because I see that (the government is) destroying my dignity ... and the only thing they care about are bank accounts." Police said a handwritten note was found on the retired pharmacist's body in which he attributed his decision to the debt crisis. According to a text of the note published by local media, the man said the government had made it impossible for him to survive on the pension he had paid into for 35 years. "I find no other solution than a dignified end before I start searching through the trash for food," read the note. Police did not confirm whether it was genuine. Greece has seen an increase in suicides over the past two years of economic hardship, during which the country repeatedly teetered on the brink of bankruptcy. Police did not release the pharmacist's name and offered few other details. By Wednesday evening, dozens of written messages had been pinned to the tree under which the man shot himself, some reading: "It was a murder, not a suicide," and "Austerity kills." Hundreds of protesters made their way across the street from the square to outside Parliament and the Tomb of the Unknown Soldier, chanting: "This was not a suicide, it was a state-perpetrated murder" and "Blood flows and seeks revenge." Dozens of riot police stood guard. Papadopoulos, the protest organizer, said the suicide shows Greeks can take no more austerity. "This suicide is political in nature and heavy in symbolism. It's not like a suicide at home," Papadopoulos said in a telephone interview. "There was a political suicide note, and it happened in front of a clearly political site, Parliament, where the austerity measures are approved." Prime Minister Lucas Papademos issued a statement as protesters gathered at the site of the suicide. "It is tragic for one of our fellow citizens to end his life," he said. "In these difficult hours for our society we must all  the state and the citizens  support the people among us who are desperate." Government spokesman Pantelis Kapsis described the incident as "a human tragedy," but said it should not become part of the political debate. "I don't know the exact circumstances that led that man to his act," Kapsis said. "I believe we must all remain calm and show respect for the true events, which we do not yet fully know." Evangelos Venizelos, leader of the Socialist party, said the suicide "is so overwhelming that it renders any political comment unbecoming and cheap." "Let us reflect on the condition of the country and of our society in terms of solidarity and cohesion," said Venizelos, who served as finance minister for eight months before resigning to lead the Socialists. Conservative party head Antonis Samaras said the tragedy highlighted the urgency of getting Greece out of the crisis. "Unfortunately, this is not the first (suicide)," he said. "They have reached record levels." More protests are planned Thursday.

NEWS,23.03.2012.

          Dmitry Rogozin Appointed Special Presidential Representative for Transnistria

On March 21, outgoing President Dmitry Medvedev appointed Dmitry Rogozin as Special Representative of the Russian President for Transnistria (“po Pridnestrovyu”). Undoubtedly, Medvedev acted at the behest of the incoming president, Vladimir Putin. On that same date, Putin – in the final days of his prime-ministerial tenure – appointed Rogozin as chairman of the Russian side of the Russia-Moldova inter-governmental cooperation commission. In the event that Medvedev and Putin swap places, Rogozin will be working for Medvedev on this commission and in the Russian government (Interfax, March 21, 22).Rogozin will continue serving as Russia’s deputy prime minister responsible for the armaments industry. In February 2011, then-president Medvedev appointed Rogozin as presidential special representative for missile-defense negotiations with the US and NATO (a position now about to devolve to president-elect Putin’s portfolio). Rogozin served as Russia’s envoy to NATO from January 2008 to December 2011 (under Foreign Affairs Minister Sergei Lavrov, at least theoretically).Concurrent assignments, dual or even multiple, are not uncommon in the Russian government. Rogozin’s assignment to handle Transnistria, however, is highly unconventional (as is his character) and not immediately explicable. At one time in his variegated career, Rogozin had served as presidential special representative on matters of Kaliningrad Oblast (2002-2004). That oblast, like Transnistria, is a Russian-garrisoned exclave, a non-contiguous territory. (Transnistria is sometimes referenced as a de facto Kaliningrad on the Nistru River, despite the different legal status of the two territories). Rogozin’s Kaliningrad experience may have been a factor, but not a major one in the decision to appoint him as Putin’s representative on Transnistria.Rogozin’s “Transnistria” assignment will almost certainly cover both local issues and the international negotiating process. Announcing Rogozin’s appointment, the Kremlin’s press office cited Rogozin’s experience as an international negotiator in his previous postings. Rogozin’s “Moldova” assignment, on the other hand, seems confined to economic and social issues between Russia and right-bank Moldova, apparently excluding Transnistria (left-bank Moldova) from the purview of the Russia-Moldova inter-governmental commission. In line with Russia’s constitutional system, Rogozin will apparently be reporting to President Putin on Transnistria issues, and to Russia’s prime minister (possibly Medvedev who appointed him formally) on rump-Moldova issues. If so, Rogozin’s bifurcated appointment is designed to treat the two parts of Moldova separately from each other and institutionalize the country’s division. Inserting Rogozin into the negotiating process on Transnistria (or any issue) would be a recipe for its disruption. His track record at NATO is one of systematic confrontation, verbal aggression, and (while playing a relatively weak hand for Russia) seeking psychological ascendancy over Western counterparts through insulting behavior. While Putin himself resorts to such tactics from time to time, Rogozin did so methodically during his tenure at NATO. Moldova has reacted to Rogozin’s appointment with palpable confusion. Moldova’s Foreign Affairs Ministry “takes cognizance of [Russia’s] decision with surprise. On the one hand, it might confirm the importance that Russia assigns to the conflict-resolution process. On the other hand, this move was not discussed in advance with Moldova’s authorities. [Moldova] will seek appropriate clarifications” (Moldpres, March 22). For its part, Tiraspol has issued a self-assured statement welcoming Rogozin’s appointment and expressing confidence in his effectiveness (Olvia-press, March 22)The 5+2 negotiating format (Russia, Ukraine, OSCE, US, EU, Chisinau, Tiraspol) is the only format accepted by all sides as legitimate, but it has remained inactive from 2006 to 2011, and is not fully reactivated yet. Thus far, Russia’s Foreign Affairs Ministry has handled the negotiations through mid-level diplomats, under supervision from State Secretary Grigory Karasin and Russia’s Security Council. Inserting Rogozin would change the level of institutional and personal authority over the negotiations on the Russian side.Outside the 5+2 format, Germany seeks a special role for itself in a would-be Russo-German bilateral format. Envisaged by Chancellor Angela Merkel and President Medvedev in their 2009 Meseberg Memorandum, this channel has not materialized in any shape other than informal contacts thus far. Apparently seeking to carve out a German role in these negotiations, German diplomats seek to nudge Chisinau into unilateral concessions in the 5+2 process, although Germany is not a member of that process. Inducing Moldovan concessions in 5+2 from outside 5+2 would distort that process; but might, at that price, qualify Berlin in Moscow’s eyes for starting together the Meseberg process. With Medvedev’s departure from office, and Medvedev’s sudden appointment of Rogozin as Putin’s special representative for Transnistria, the Meseberg process seems to be headed nowhere.During his posting as envoy to NATO, Rogozin occasionally boasted that he had personally fought in Transnistria against Moldovans in the 1992 armed conflict. This sounds exaggerated, but it is a fact that Rogozin visited Transnistria in 1992 (quite possibly also thereafter) in his capacity as a left-nationalist Russian politician. From the early 1990s until 2008, Rogozin was the leader of a whole series of ultra-nationalist organizations and parties, focusing on Russia’s “near abroad” and an empire-rebuilding agenda. These organizations included the Congress of Russian Communities (in two iterations), Rodina, and a few obscure and ephemeral ones. As a politician, Rogozin operated at times through “projects” of the authorities, at times on his own. His projects were serial failures until 2008, when Putin rescued him from the political gutter and appointed him as Russia’s envoy to NATO. That appointment was in itself a calculated insult to the Alliance.While Chisinau seems confused about the significance of Rogozin’s latest presidential appointment, Berlin must be wondering what may become of its Meseberg process if its fate comes to depend on Rogozin.

NEWS,08.03.2012..

Greece seals bond swap deal

Greece closed a bond swap offer to private creditors today after clearing the minimum threshold of acceptance to push the deal through, moving closer to unlocking funds it needs to avoid a dangerous debt default. Government officials said before the final deadline for declaring interest passed that more than 75% of eligible bonds had already been committed. The biggest sovereign debt restructuring in history will see bond holders accept losses of some 74% on the value of their investments in a deal that will cut more than 100 billion euros from Greece's crippling public debt. Preliminary results from the offer are expected to be announced officially at the weekend before a conference call with euro zone finance ministers in the afternoon. One of the chief negotiators for the bondholders, Charles Dallara, forecast a "very high" final take-up, though he was unsure if it would hit the 90% Greece is aiming for. Athens had said that it would abandon the deal if it did not receive at least 75% participation in the offer and it required two-thirds take-up to deploy a legal device to force recalcitrant creditors to accept the terms. The private sector involvement (PSI) deal is a key element in a broader international bailout aimed at averting a chaotic default by Greece and a potentially disastrous banking crisis across the euro zone. The European Union and International Monetary Fund have made a successful bond swap a pre-condition for final approval of the 130 billion euros ($170 billion) bailout agreed last month.” If all goes well, tomorrow we will be able to announce that a debt burden of 105 billion euros has been lifted from the Greek people," Venizelos told parliament earlier in the day. "For the first time we are cutting debt instead of adding to it.” Despite the optimism, the deal will not solve Greece's deep-seated problems and at best it may buy time for a country facing its biggest economic crisis since World War Two and staggering under debt equal to 160% of its gross domestic product. However financial markets rose strongly as the threat of an immediate and uncontrolled default receded. Bank stocks rose sharply and the risk premium on Italian and Spanish government bonds fell as investors hoped a Greek deal would curb the likelihood of any contagion spreading to other weaker euro zone economies. Euro zone ministers could decide whether to clear the overall bailout package in a conference call this weekend although they may leave the final decision until a face-to-face meeting on Tuesday. Greece must have the funds in place by March 20 when some 14.5 billion euros of bonds are due, which it cannot hope to repay alone. With over 75% take-up secured, well above the required two thirds threshold, Athens should be able to apply collective action clauses (CAC) imposing the deal on all holders of 177 billion euros in bonds regulated by Greek law.Venizelos is expected to discuss that option on the euro zone ministerial call over the weekend. Athens faces a more complex problem with some 18 billion euros in bonds regulated under international law with a number of hedge funds expected to try to fight a deal in the courts. It also remains to be seen whether credit default swaps (CDS) which some investors have taken as insurance against a forced restructuring of the debt will be paid out. Greece has staggered from deadline to deadline since the crisis broke two years ago and several of its international partners have expressed open doubts about whether its second major bailout in two years will be the last. Underlining the severe problems facing Greece after five years of deep recession, data on Friday showed unemployment running at a record 21% in December, twice the euro zone average, with 51% of young people without a job. There has been growing resentment over the austerity medicine ordered by international creditors which has compounded the pain from a slump which has seen the economy shrink by a fifth since 2008.But Greece, totally reliant on international support to stave off bankruptcy, has also infuriated both the EU and the IMF with its repeated failure to push through promised reforms.” We have shown a lot of solidarity with Greece," German Finance Minister Wolfgang Schaeuble said late on Wednesday. "Everyone knows that the real problems of Greek society are in Greece and not abroad."

NEWS,28.02.2012.

Pirate risk for Costa Cruises liner

A crippled cruise ship owned by the company whose giant liner was wrecked off Italy last month is being towed by a French tuna boat to the main island in the Seychelles, its owners say.An engine room fire on the Costa Allegra knocked out the ship's main power supply in the Indian Ocean on Monday, leaving it adrift with more than a thousand people on board in waters vulnerable to pirates.It is being protected by nine members of an anti-piracy unit of the Italian navy, a precaution regularly taken on ships in the Indian Ocean which is prone to attacks by Somali pirates."The ship is not in a high-risk area, but we can't be 100% sure," said Costa Cruises' Giorgio Moretti.While yachts have been seized in the past near Seychelles, pirates have yet to successfully hijack a cruise liner in the Indian Ocean.The ship's Italian owner, Costa Cruises, a unit of US cruise line giant Carnival Corp, said a plan to tow it to the nearer island of Desroches had been aborted because it would have been harder to moor and disembark the passengers there.The Trevignon, a deep sea trawler which sails the oceans for tuna from the Atlantic port of Concarneau, is pulling the Costa Allegra, a vessel many times its size, on a 400-metre cable at a speed of only about six knots, the Trevignon's skipper Alain Dervout told his local French newspaper, Ouest-France.He was joined today by two tugs and a coastguard ship, all from Seychelles, the archipelago's government said. A military aircraft was also flying in support of the operation.The cruise ship was due to arrive at the Seychelles capital of Victoria on Wednesday evening or Thursday morning local time, depending on weather conditions, government spokeswoman Srdjana Janosevic said. Clocks in the Seychelles are four hours ahead of GMT."Helicopters will ensure continuous supply of food, comfort items, flashlights in order to mitigate guests' discomfort given the difficult conditions on board," Costa Cruises spokesman Davide Barbano said in a statement.A team from the Italian coastguard is heading to the Seychelles to investigate the accident, but a spokesman for the agency it would be wrong to make analogies to the Costa Concordia disaster on January 13, in which at least 25 people died and over which a criminal investigation has been launched."They are two different situations, totally different conditions, so they are not related accidents," Cosimo Nicastro.Prosecutors in the Italian city of Genoa have opened an investigation into the fire on the Costa Allegra, judicial sources said.Nicastro said there was no question of the passengers being transferred to other vessels."The safest place for the people is on the ship. There is no reason to put them on another ship or a helicopter. They will remain on the Costa Allegra and we will keep monitoring the situation," he said.An evacuation off Desroches Island would have presented the ship owner and local authorities with a tricky and expensive logistical operation.The 636 passengers and 413 crew would have had to use the ship's lifeboats to land on the exclusive coral-fringed island, where Britain's Prince William and his then girlfriend, now wife, Kate Middleton, stayed a few years ago."Logistics and hotels on the island are not sufficient. It would require ... an immediate transfer from Desroches to Mahe," Barbano, the Costa Cruises spokesman, said.

NEWS,11.02.2012.

Israel's Mossad Teams up with Terror Group to Kill Iran's Nuclear Scientists (Part 2)

The MEK and its sister organizations have since the beginning been run by Massoud and Maryam Rajavi, a husband-wife team who have maintained tight control despite assassination threats and internal dissent. Massoud Rajavi, 63, founded the MEK, but since the U.S. invasion of Iraq has taken a backseat to his wife.The State Department report describes the Rajavis as “fundamentally undemocratic” and “not a viable alternative to the current government of Iran.”NBC News correspondent Tom Aspell visits an MEK base in Iraq in this Nightly News piece that aired on May 26, 1991.One reason for that is the MEK’s close relationship with Saddam Hussein, as demonstrated by this 1986 video showing the late Iraqi dictator meeting with Massoud Rajavi. Saddam recruited the MEK in much the same way the Israelis allegedly have, using them to fight Iranian forces during the Iran-Iraq War, a role they took on proudly. So proudly, they invited NBC News to one of their military camps outside Baghdad in 1991.“The National Liberation Army (MLA), the military wing of the Mujahedin, conducted raids into Iran during the latter years of the 1980-88 Iran-Iraq War,” according to the State Department report. The NLA's last major offensive reportedly was conducted against Iraqi Kurds in 1991, when it joined Saddam Hussein's brutal repression of the Kurdish rebellion. In addition to occasional acts of sabotage, the Mujahedin are responsible for violent attacks in Iran that victimize civilians.”“Internally, the Mujahedin run their organization autocratically, suppressing dissent and eschewing tolerance of differing viewpoints,” it said. “Rajavi, who heads the Mojahedin’s political and military wings, has fostered a cult of personality around himself.”The U.S. suspicion of the MEK doesn’t end there. Law enforcement officials have told NBC News that in 1994, the MEK made a pact with terrorist Ramzi Yousef a year after he masterminded the first attack on the World Trade Center in New York City. According to the officials, who spoke on condition of anonymity, Yousef built an 11-pound bomb that MEK agents placed inside one of Shia Islam’s greatest shrines in Mashad, Iran, on June 20, 1994. At least 26 people, mostly women and children, were killed and 200 wounded in the attack.That connection between Yousef, nephew of 9-11 mastermind Khalid Sheikh Mohammad, and the MEK was first reported in a book, “The New Jackals,” by Simon Reeve. NBC News confirmed that Yousef told U.S. law enforcement that he had worked with the MEK on the bombing.In recent years, the MEK has said it has renounced violence, but Iranian officials say that is not true, that killings of Iranians continue. Still, through some deft lobbying, the group has been able to get the United Kingdom and the European Union to remove it from their lists of terrorist groups.The alleged involvement of the MEK in the assassinations of Iranian nuclear scientists provides the U.S. with a cloak of deniability regarding the clandestine killings. Because the U.S. has designated the MEK as a terrorist organization, neither military nor intelligence units of the U.S. government, can work with them. “We cannot deal with them, “said one senior U.S. official. “We would not deal with them because of the designation.” Iranian officials initially accused the Israelis and MEK of being behind the attacks, but they have since added the CIA to the list. Three days after the Jan. 11, 2012, bombing in Tehran that killed Roshan, the state news agency IRNA reported that Iran’s Foreign Ministry had sent a diplomatic letter to the U.S. claiming to have “evidence and reliable information” that the CIA provided “guidance, support and planning” to assassins directly involved in the attack.U.S. Secretary of State Hillary Clinton immediately denied any connection to the killings. “I want to categorically deny any United States involvement in any kind of act of violence inside Iran,” Clinton told reporters on the day of the attack.But at least two GOP presidential candidates have no problem with the targeting of nuclear scientists. In a November debate, former House Speaker Newt Gingrich endorsed “taking out their scientists,” and former Pennsylvania Sen. Rick Santorum called it, ”a wonderful thing.”The MEK’s opposition to the Iranian government also has recently earned it both plaudits and support from an odd mix of political bedfellows. A group of former Cabinet-level officials have joined together to support the MEK’s removal from the official U.S. Foreign Terrorist Organization list, even taking out a full-page ad last year in the New York Times calling for the removal of the MEK from the U.S. terrorist list. Former Vermont Gov. Howard Dean, former U.S. Attorney General Michael Mukasey, former U.N. Ambassador John Bolton; former Homeland Security Secretary Tom Ridge, former FBI Director Louis Freeh and former Rep. Patrick Kennedy were among those whose signatures were on the ad.“There’s an extraordinary group of bipartisan or even apolitical leaders, military leaders, diplomats, the United States … the United Kingdom, the European Union, even a U.S. District Court in Washington, said that this group that was put on the foreign terrorist organization watch list in 1997 doesn’t deserve to be there,” Ridge said in November on “The Andrea Mitchell Show” on MSNBC TV.U.S. politicians also have been pushing the U.S. government to protect the 3,400 MEK members and their families at Camp Ashraf in Iraq, about 35 miles north of Baghdad. With the departure of U.S. troops, the MEK feared that Iraqi forces, with encouragement from Iran, would attack the camp, leading to a bloodbath. At the last minute, however, agreement was brokered with the United Nations that would permit the MEK members’ departure for resettlement in unspecified democratic countries. As of this week, there’s been little movement on the planned resettlement. Iranian fighters with the National Liberation Army, the military wing of the MEK, clean armoured personnel carriers in 1997 after a field exercise near Camp Ashraf in Iraq.The Iranians see what’s happening as terrorism and hypocrisy by the United States. They have forwarded documents and other evidence to the United Nations – and directly to the United States, they say.” I think this is very cynical plan. This is unacceptable,” said Larijani. “This is a bad trend in the world. Unprecedented. We should kill scientists … to block a scientific program? I mean this is disaster!”Daniel Byman, a professor in the School of Foreign Service at Georgetown University and also a senior fellow with the Saban Center for Middle East Policy at the Brookings Institution, said that if the accounts of the Israeli-MEK assassinations are accurate, the operation borders on terrorism.“In theory, states cannot be terrorist, but if they hire locals to do assassinations, that would be state sponsorship,” said Byman, author of the recent book, “A High Price: The Triumphs and Failures of Israeli Counterterrorism.” “You could argue that they took action not to terrorize the public, the purpose of terrorism, but only the nuclear community. An argument could also be made that degrading the program means that you don’t have to take military action and thus, this is a lower level of violence and that really these are military targets, where normally terrorist targets are civilians.”But ultimately, Byman said, there is a “spectrum of responsibility” and that Israel is ultimately responsible.Ronen Bergman, while not speaking on behalf of the Israeli government, suggests that there is a justification, citing an oft-repeated but disputed quote in which Iranian President Mahmoud Ahmadinejad’s said that Israel should be wiped off the face of the earth.“Meir Degan, the chief of Mossad, when he was in office, hung a photograph behind him, behind the chair of the chief of Mossad,” notes the Israeli commentator. “And in that photograph you see -- an ultra-orthodox Jew -- long beard, standing on his knees with his-- hands up in the air, and two Gestapo soldiers standing -- beside him with guns pointed at him. One of -- one of them is smiling.“And Degan used to say to his people and the people coming to visit him from CIA, NSA, et cetera, ‘Look at this guy in the picture. This is my grandfather just seconds before he was killed by the SS,’” Bergman said. “’… We are here to prevent this from happening again.’"