NEWS,13.08.2012

An Impediment or an Opportunity for Peace?

 

There is an ongoing debate in and outside of Israel as to whether or not this is the right time to forge peace with the Palestinians in light of the regional upheavals and instability. The peace process, at this juncture, is hopelessly frozen while the expansion of the Israeli settlements and the continued internal Palestinian strife and factionalism increasingly dims the prospect of reaching an agreement. That said, the Arab Spring, which has triggered the rise of the Arab youth against their governments and has been accompanied by uncertainty, is not an impediment but an opportunity to solve the Israeli-Palestinian conflict based on a two-state solution. The reality on the ground strongly suggests that maintaining the status quo will be particularly detrimental to Israel.Those inside the Netanyahu government who suggest that now is not the right time to seek a peace agreement with the Palestinians because of the regional turmoil and the existential threats that Israel now faces are both misguided and disingenuous. On the contrary, given the threats from Iran and its surrogate Hezbollah and the potential consequences of a failed state in Syria, it is a particularly critical moment for Israel to forge peace with the Palestinians. By doing so, Israel would be in a position to focus on the vastly more serious threats emanating from its real adversaries and would prevent the rise of a Palestinian fifth column, should Israel become mired in these regional conflicts. To enhance their positions, those who oppose peace now offer three faulty arguments to justify their stance.First, the Palestinians cannot be trusted and Israel "correctly" points to the precedents of the partial disengagement from the West Bank between 1993 and 2000, the complete withdrawal from southern Lebanon in 2000 and the withdrawal from Gaza in 2005. From the Israeli perspective, all of these moments attest to the Palestinians' inability or unwillingness to forge a permanent peace, despite having ample opportunities.Second, due to Palestinian factionalism and infighting, there is no credible partner with whom Israel can negotiate as the Palestinians have been unable to sustain a unity government. The Netanyahu government is convinced that even if an agreement is reached, it will still prove transient.Third, there are extremist Palestinian groups, such as Hamas, Islamic Jihad and others, along with non-Palestinian factions, including Hezbollah and Al Qaeda, that are vehemently antagonistic toward Israel and remain committed to its destruction.However, none of the three arguments above can pass careful scrutiny. These types of arguments are used as excuses and a cover for the Netanyahu government's deep conviction that the Jews have an inherent right to whole "land of Israel". This remains an indefatigable nonstarter to reaching a peace agreement that requires significant territorial concessions, including the conversion of Jerusalem to the capital of Israeli and Palestinian states. From the Netanyahu government's perspective, the conditions of no peace and no war that currently prevail are preferable to a compromise of the Jews' historical rights and through a strong and determined will, Israel will eventually triumph.In light of the reality on the ground, which both the Israelis and the Palestinians alike must face by virtue of their inevitable coexistence, Israel must act now because the passage of time may well be to its detriment, if not its very existence. There are three critical issues that increasingly work against Israel.Considering Israel's demographic situation, its evolutionary path has shifted radically as emigration from Israel over the past two decades (about one million) is roughly equal to the immigration into Israel for the same period. This, along with low birth rates relative to the Palestinian population, continues to erode the sustainability of Israel's national character as a Jewish state. Should this growing demographic imbalance between the Jewish and Palestinian populations continue, Israel will be forced to either establish a single state (an unacceptable proposition for them as it will instantly make the Jewish population a minority) or resort to apartheid policies that will be vehemently rejected by the international community.In recent years Israel has been fortunate that Gaza and the West Bank were generally quiet with limited resistance to the occupation and only marginal rocket attacks from Gaza that the Israeli military was able to handle with ease. Maintaining the occupation, however, and the continuance of the creeping expansion of the settlements, coupled with the uprisings of Arab youth against their own governments, now make it only a matter of time before the Palestinians will be inspired, if not forced, to rise against the occupation. They will not remain indefinitely passive, as they clearly see that the longer they wait, the more their land will be consumed, resulting in an irreversible reality on the ground that will deny the rise of an independent and viable state.Moreover, Israel will continue to face intensifying pressure from the international community due to the perpetuation of the status quo, which will dramatically increase Israel's isolation. For the United States and the European Union, who continue to be steadfast supporters of Israel, the lack of progress has a destabilizing effect on the region, which directly and indirectly impacts their national strategic interests and undermines Israel's national security. Israel should not be surprised if its closest allies, especially the U.S., decide to advance their own frameworks for peace largely based on prior Israeli-Palestinian negotiations in an attempt to save Israel from charting its own disastrous path.In a broader context, Israel's current enemies, specifically Iran and Hezbollah, will continue to exploit the Israeli-Palestinian conflict to their advantage. To counteract this encroaching threat, Israel can at least begin to neutralize its antagonists' positions by taking steps that open the door for a negotiated solution and normalization of relations with the Arab states by accepting the Arab Peace Initiative as a basis for negotiations. While this strategy may not initially and necessarily change the principle objection to Israel's very existence by actors such as Iran and Hezbollah, Israel could shift the geopolitical conditions in the region in its favor. As I was convincingly told time and time again by top Arab officials, the Arab states are prepared to move toward establishing full diplomatic relations with Israel once an Israeli-Palestinian peace is achieved. They cite the changing dynamics in the region in the wake of the Arab spring and the ensuing battle between Sunnis led by Saudi Arabia and Turkey and Shiites led by Iran who seeks regional hegemony.Despite the complex situation that Israel finds itself in, the basic question remains: how much longer can it sustain its present course without experiencing horrific and self-inflicted wounds? Israel must face the inevitable now while it is still in a strong position to negotiate an agreement with the Palestinians, a population that has, and can continue to, withstand the test of time. Unlike the precipitous withdrawal from Southern Lebanon and Gaza, any agreement with the Palestinians should be made with the Palestinian Authority in the West Bank and should be based on a quid pro quo that would involve phased withdrawals from the West Bank over a few years in order to foster mutual trust and normalization of relations while ensuring Israel's national security.Set against the context of the Arab Spring, Israel remains an oasis of stability with its economic, military and technological advantages continuing to strengthen over time. The inability of the Palestinians to change the dynamics in their favor has deepened the Israelis' complacency while removing any sense of urgency to solve the conflict, as they remain intoxicated by their military prowess and the deceptive calm before the storm. Simply put, passively waiting for the region to achieve a modicum of stability while Israel further entrenches itself in the territories is a non-starter as the Arab upheavals are not a fading phenomenon and will remain an engine of change for years, if not decades, to come. The Palestinian's turn will come sooner than expected.I must emphasize that the Palestinians, by their own violent actions and hostile public utterances, have directly contributed to the Israelis' skepticism and deepening of their conviction that the Palestinians are not partners to be trusted nor are they a population with whom they can negotiate a lasting peace. That said, it is up to Israel not to allow past experiences to blur its vision for the future and it must now chart its own future course by ending the occupation under specific "rules of disengagement" with the Palestinian Authority. Israel must never abandon the principles of equality and human rights regardless of race, color or religion, as they are the very basis on which the state arose from the ashes of the Holocaust.Netanyahu will eventually have to answer to the Israeli public as to what he has achieved over the past four years. The Israelis must now determine whether or not Netanyahu has made the conflict with the Palestinians considerably worse since he took office in 2009 and what price Israel will have to pay for his misguided and ominous policies.

Greek economy shrinks 6.2%

The Greek economy, struggling in a fifth year of recession, shrank 6.2% in the second quarter compared with a year earlier, official data showed on Monday.The economy contracted 6.5% in the first quarter, worse than the initially given 6.2%, according to revised figures issued in June.The Bank of Greece expects the economy to shrink 4.5% for 2012 as a whole, following a 6.9% drop last year.The country is relying on two financial rescue packages backed by the EU, the International Monetary Fund and the European Central Bank worth around €240bn for its economic survival.Last year, private creditors agreed to write-off more than €100bn in debt, roughly half the amount they were owed, as part of a second bailout programme.Harsh austerity measures and economic reforms linked to the aid agreements have taken their toll on the economy, with unemployment hitting record highs.The conservative-led coalition government has yet to finalise spending cuts of about €11.5bn in order to unlock its next aid installment worth some €31bn.

UK tourism slumps during Olympics

The Olympics brought less tourist money to recession-hit Britain than officials promised, a trade group said on Monday, with a majority of businesses reporting losses from last year A survey of more than 250 tour operators, hoteliers and visitor attractions found that tourist traffic fell all over Britain, not just London, said UK inbound, a leading trade association representing British tour operators said. The survey said 88% of British tourism-oriented businesses reported some losses during the games compared with the same period last year. Officials are still tallying up the total number of tourists who came to or avoided  London this summer. The capital normally sees about 1.5 million tourists on average in August, but UK inbound and other trade groups say a significant number have chosen to steer clear of London, and even the rest of Britain because they thought it would be too busy. The official visitor figures won't be available until September. Tourism officials say that international Olympics visitors to London, including athletes, officials and tourists, totalled about 300 000. Domestic spectators from Britain made up the majority of people visiting games venues Restaurants and shops have complained that these games visitors did not spend as much money on food and shopping as typical summer tourists. "The people who came to the Games really didn't do very much sightseeing, didn't do very much shopping, didn't do very much eating out,"said Miles Quest, a spokesperson for the British Hospitality Association.London's hotels have hit about 80% occupancy, not more than typical August rates, Quest added.Visa, the only credit card accepted at the Olympics, reported that international visitors to Britain spent more than £450m ($705m) on their cards during the first week of the games, up by 8% on the same time last year.Around £12.7ms were spent on Visa cards in London restaurants last week, an increase of almost 20% on a year ago.

NEWS, 08.06.2012.

EU agrees on border checks in visa-free area

 

European Union nations agreed Friday they can temporarily restore border checks within the visa-free Schengen area in case of a surge of illegal migrants, despite opposition from Brussels.Officials from Denmark, which currently holds the rotating EU presidency, said home affairs ministers from the 27-nation bloc had unanimously agreed to the move."Disappointed by lack of European ambition among member states", said the EU's home affairs commissioner Cecilia Malmstroem, who opposed the move.The agreement will enable the 26 countries in the travel-free Schengen area to restore border controls for up to a year under "exceptional circumstances".Those circumstances, according to demands made by France and Germany earlier this year, are problems related to illegal immigration, which has emerged as one of Europe's most sensitive political issues amid the debt crisis, slow growth and mounting unemployment.Going into the talks, Malmstroem had said: "We cannot accept what is on the table today."She has repeatedly argued that Schengen was never designed to control migration but to ease freedom of movement.The EU's Frontex agency that mans borders said in a report that registered illegal crossings on the outer borders of the Schengen area shot up by 35 percent in 2011.Numbers rose from 104,000 in 2010 to 141,000 the following year, largely due to flows across the Mediterranean from the Arab Spring upheavals.But the second biggest hot-spot was the border between Greece and Turkey, which saw 55,000 detections last year.With low-cost flights to Turkey on the increase as war, chaos and poverty send people fleeing hot-spots from Afghanistan and Pakistan to Somalia, the flow is forecast to increase.Responding to the rise in anti-immigrant sentiment, France and Germany in April sent Schengen counterparts a joint letter calling for drastic change.But that was before the May election of socialist President Francois Hollande, who stepped into the shoes of conservative Nicolas Sarkozy.The new French Interior Minister Manuel Valls made no statement on arriving for the talks, but was in a tight spot. Should he have rejected the previous government's stand, his Socialist party would face the ire of the right just as the country heads into parliamentary elections June 10 and 17.Sarkozy, chasing the far-right vote, had threatened to pull out of the Schengen zone within a year failing improved action to keep out illegal migrants.Currently, the Schengen treaty allows renewal of border controls in the case of a terror or security threat thrown up by sports or other events.But the draft approved by the ministers would allow a state within the Schengen area to reimpose border controls for six months, renewable for another six "when the control of an external border is no longer ensured due to exceptional circumstances".

 

Euro Commission wants Greece to close banks

The European Commission is pressing Greece to wind down certain banks, possibly including its fifth-largest lender ATEbank, European Union sources said. Although it is the responsibility of Greece's central bank to close a struggling lender, the EU's executive also has a say under state-aid rules, which allow it to refuse a request to rescue a bank if the commission considers it too costly to save - effectively forcing the bank to be wound up. Throughout the crisis, the commission has rarely used the full extent of its state-aid powers and few European banks have been closed. If it were to use them in Greece, it would mark a more aggressive stance in tackling weak European banks at the heart of the crisis. It could use the same powers to wind up banks in Spain and Portugal, one of the sources said.A balancing act"We are moving into a new phase with Greece, Portugal and Spain," said one of the sources, who spoke on condition of anonymity because of the sensitivity of the matter. "Some banks are going to be squeezed. Some are going to be closed down. "It is always a balance," the source said, explaining that if a bank is central to a country's financial stability it might need rescuing, but otherwise it may have to be let go. "If you have a financial stability component, then you could be prepared to rescue a bank, but we are beyond that point now in a number of countries," the official said. "ATEbank will have to be closed or wound down over time." ATEbank and the Greek central bank declined to comment. Having declined to comment, the Greek finance ministry later denied the report. ATEbank management has in the past proposed merging all state-controlled banks, including the Hellenic Postbank, into one. If ATEbank were shuttered, it would not mean that the whole of Greece's banking system was collapsing. Other key Greek banks are not in the same danger and could benefit from any refocused capital. No decision till after electionsNo decision will be taken until after Greece holds elections on June 17. The outcome of the vote, which polls suggest could be won by a far-left coalition opposed to Greece's EU/Internationl Monetary Fund bailout, could fundamentally change Greece's ties to the EU. Last month, Greece's four biggest banks  National Bank , Alpha, Eurobank and Piraeus Bank  received €18bn in capital under the joint EU/IMF bailout, a €130bn programme that involved writing down the value of Greece's privately-owned debt, including sovereign bonds held by Greek banks. ATEbank, a state-owned agricultural lender founded in 1929, did not get money under the bailout after failing to present a plan for its own longer-term commercial viability. It is now the focus of concern, the sources said. The Greek authorities have started to make early preparations to wind down ATEbank, a process of liquidation that would not mean immediate closure but which is expected to begin in the second half of the year, one of the sources said. A Greek government source said shutting down the bank was a likely scenario, but reiterated the importance of the elections and said it would be some time before a decision was taken. A spokesperson for Joaquin Almunia, the EU's competition commissioner, said a restructuring plan for ATEbank, approved last year, envisaged further steps to restore the bank to health. This could include recapitalisation measures. "We expect new aid measures to be notified to the commission. When this is the case we will assess the situation of the bank," the spokesperson said. No major banksUnder any winding-up depositors, who had more than €17bn at the bank as of September last year, would be protected by the country's deposit guarantee scheme, which protects the first €100 000 of any deposit. The resources to pay for the winding down, which could include setting up a bad bank for risky loans, would come from the Hellenic Financial Stability Fund, at least in part. The fund was set up in July 2010 to help restabilise Greece's banking system. Any closure of a bank in Greece, whose future could determine the survival of the euro, would be highly sensitive. None of the country's major banks were wound up in the crisis. But officials believe the money left in the country's aid programme  around €7bn currently, with the possibility of €25bn more from the EU/IMF bailout funds  is insufficient to recapitalise all banks and that some must be sacrificed to secure the most important lenders. Greek banks suffered heavy losses on the government bonds they own when the country negotiated a writedown of its debt, known as private sector involvement (PSI), earlier this year. "This is such a dire situation," said another source. "PSI left Greek banks with huge write-downs and many have negative capital as a result. Wecannot recapitalise all the banks." Failed stress testSome in the Greek administration fear that closing a bank could send an unwelcome signal. "At this particular moment, you have the issue that the closing of a bank can trigger higher depression because of the perception," said one Greek official. "They are going to create even more destabilisation in the economy." ATEbank, which failed a Pan-European stress test last July, had customer loans of more than €20bn in September 2011, the most recent records available. The bank, which expanded beyond its agricultural roots into mainstream commercial banking between 2000 and 2009, racked up heavy losses on bad loans to farmers and consumers and suffered a large write-down in the value of its Greek government bond holdings. In the absence of a Pan-EU framework to wind down banks, the commission's power under the state-aid regime has made it the bloc's de facto resolution authority for troubled lenders. Winding up a bank in Greece would be left chiefly to the country's central bank and the European Central Bank. While the US has closed hundreds of banks since the sub prime mortgage crisis, European countries have been reluctant but there has been a gradual shift in this thinking. "In Europe, weak banks one way or another have been taken over by bigger banks," said a central bank source. "However, I think there are some cases where this is difficult because the condition of the banks is such that it doesn't make sense to keep the bank alive." Ireland's Anglo Irish Bank and Germany's WestLB are among the rare examples of banks that were shuttered in the crisis. Denmark also closed a number of small lenders.