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Posted on Sustainabilitank.info on February 14th, 2014
by Pincas Jawetz (PJ@SustainabiliTank.com)

 

Goa Carnival expects to attract more than 250,000 visitors this year.

GOA was a Potuguese Colony that was ceded to India. The people are mainly christian and still carry Portuguese culture.

Published on : Friday, February 14, 2014

Goa Carnival           West India Goa’s state annual Goa Carnival is expected to attract more than 250,000 visitors this year, Press Trsut of India (PTI) reported.

The non-stop festival will be held from March 1 to 5 in the main cities of the coastal state beginning with a float parade in state capital Panaji.

“Tourists are expected to arrive in droves to witness colourful parades scheduled in various cities,” said State Tourism Department director Nikhil Desai.

          “Occupancy in several hotels across the state is high. People have booked their tickets to participate in the festival,” Nikhil said.

           A float parade organised by the Tourism Department will be led by     King Momo, a ceremonial figure who proclaims the decree of eating, drinking and merry making during the carnival.

          The Goa Carnival is celebrated throughout Goa and ends days before the season of Lent that precedes Easter.

 

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THE MOST BRAZILIAN OF ALL SPANISH CARNIVALS.

 

Carnival

The Greatest event is THE FUNERAL OF THE SARDINE OF TENERIFE.

Actually – the climax comes on Carnival Tuesday with “el Coso”, a spectacular parade which will amaze everyone who sees it. The next day the Burial of the Sardine marks the end of the festivities: the spirit of Carnival, symbolised by the sardine, is carried through the streets on a funeral bier, and is then set on fire and consumed by the flames to the despair of the entourage of inconsolable and “grief-stricken” widows, widowers and mourners. The final ending, however, is really the celebration of the “Piñata Chica” at the weekend, with shows, dances and parades. If you are planning to come to the Santa Cruz de Tenerife Carnival you should make your arrangements well in advance. This already popular destination, with its year-round attraction of sun and beautiful beaches, is in even greater demand at this time.

 

Practical information:

Date:   From Feb 28, 2014 to Mar 9, 2014
Place:  Santa Cruz de Tenerife (Tenerife. Canary Islands)
CARNIVAL in SANTA CRUZ  and PUERTO DE LA CRUZ
YEAR   DATES PARADE Santa Cruz FUNERAL of the Sardine PARADE Puerto de la Cruz
2012 12/02-26/02 21/02 22/02 25/02
2013 03/02-17/02 12/02 13/02 16/02
2014 23/02-09/03 04/03 05/03 08/03
2015 08/02-22/02 17/02 18/02 21/02
2016 31/01-14/02 09/02 10/02 13/02

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Posted on Sustainabilitank.info on January 25th, 2014
by Pincas Jawetz (PJ@SustainabiliTank.com)

 Questions for the European Left   by Pilar Rahola in The Guardian.
brought to our attention by a Canadian cousin who is very proud of Canada’s position on the Middle East – as expressed by its Prime Minister Harper’s recent visit to Jerusalem.

 


Dr. Pilar Rahola i Martínez is a Spanish journalist, writer (writes also for the Guardian – the paper we honor most) a former politician and Member of Parliament. 

Rahola studied Spanish and Catalan Philology at the Universitad de Barcelona. A Spanish Catholic leftist that denounces the anti Israel wave for its antisemitism – which is not socially acceptable  correct diplomacy anymore, but says anti Israel is the same – but seemingly the more accepted course to go.

Quite a lady.  What she writes is more impressive because she is NOT Jewish.  Her articles are published in Spain and in some of the most important newspapers in Latin America.          en.wikipedia.org/wiki/Pilar_Rahola

 Questions for the European Left   by Pilar Rahola

Why don’t we see demonstrations against Islamic dictatorships in London, Paris , Barcelona ? 

Or demonstrations against the Burmese dictatorship? 

Why aren’t there demonstrations against the enslavement of millions of women who live without any legal protection? 

Why aren’t there demonstrations against the use of children as human bombs where there is conflict with Islam? 

Why has there been no leadership in support of the victims of Islamic dictatorship in Sudan ? 

Why is there never any outrage against the acts of terrorism committed against Israel ? 

Why is there no outcry by the European left against Islamic fanaticism? 

Why don’t they defend Israel’s right to exist? 

Why confuse support of the Palestinian cause with the defense of Palestinian terrorism? 

And finally, the million dollar question: Why is the left in Europe and around the world obsessed with the two most solid democracies, the United States and Israel, and not with the worst dictatorships on the planet? The two most solid democracies, who have suffered the bloodiest attacks of terrorism, and the left doesn’t care. 

And then, to the concept of freedom. In every pro-Palestinian European forum I hear the left yelling with fervor: “We want freedom for the people!” 

Not true. They are never concerned with freedom for the people of Syria or Yemen or Iran or Sudan, or other such nations. And they are never  preoccupied when Hamas destroys freedom for the Palestinians. They are only concerned with using the concept of Palestinian freedom as a weapon against Israeli freedom. The resulting consequence of these ideological pathologies is the manipulation of the press. 

The international press does major damage when reporting on the question of the Israeli-Palestinian issue. On this topic they don’t inform, they propagandize. 

When reporting about Israel, the majority of journalists forget the reporter code of ethics. And so, any Israeli act of self-defense becomes a massacre, and any confrontation, genocide. So many stupid things have been written about Israel that there aren’t any accusations left to level against her. 

At the same time, this press never discusses Syrian and Iranian interference in propagating violence against Israel, the indoctrination of children, and the corruption of the Palestinians. And when reporting about victims, every Palestinian casualty is reported as tragedy and every Israeli victim is camouflaged, hidden or reported about with disdain. 

And let me add on the topic of the Spanish left. Many are the examples that illustrate the anti-Americanism and anti-Israeli sentiments that define the Spanish left. For example, one of the leftist parties in Spain has just expelled one of its members for creating a pro-Israel website. I quote from the expulsion document: “Our friends are the people of Iran, Libya and Venezuela, oppressed by imperialism, and not a Nazi state like Israel .” 

In another example, the socialist mayor of Campozuelos changed Shoah Day, commemorating the victims of the Holocaust, with Palestinian Nabka Day, which mourns the establishment of the State of Israel, thus showing contempt for the six million European Jews murdered in the Holocaust. 

Or in my native city of Barcelona, the city council decided to commemorate the 60th anniversary of the creation of the State of Israel, by having a Week of solidarity with the Palestinian people. Thus, they invited Leila Khaled, a noted terrorist from the 70′s and current leader of the Popular Front for the Liberation of Palestine, a terrorist organization so described by the European Union, which promotes the use of bombs against Israel . 

This politically correct way of thinking has even polluted the speeches of President Zapatero. His foreign policy falls within the lunatic left, and onissues of the Middle East, he is unequivocally pro-Arab. I can assure you that in private, Zapatero places on Israel the blame for the conflict in the Middle East , and the policies of Foreign Minister Moratinos reflect this. The fact that Zapatero chose to wear a kafiah in the midst of the Lebanon conflict is no coincidence; it’s a symbol. 

Spain has suffered the worst terrorist attack in Europe and it is in the crosshairs of every Islamic terrorist organization. As I wrote before, they
Kill us with cell phones hooked to satellites connected to the Middle Ages. And yet the Spanish left is the most anti-Israeli in the world. 

And then it says it is anti-Israeli because of solidarity. This is the madness I want to denounce in this conference.

 
 Conclusion: 


I am not Jewish. Ideologically I am left and by profession a journalist. Why am I not anti-Israeli like my colleagues? Because as a non-Jew I have the Historical responsibility to fight against Jewish hatred and currently against the hatred for their historic homeland, Israel .

To fight against anti-Semitism is not the duty of the Jews, it is the duty of the non-Jews. 
 
As a journalist it is my duty to search for the truth beyond prejudice, lies and manipulations. The truth about Israel is not told. As a person from the left who loves progress, I am obligated to defend liberty, culture, civic education for children, coexistence and the laws that the Tablets of the Covenant made into universal principles. 
 
Principles that Islamic fundamentalism systematically destroys. That is to say, that as a non-Jew, journalist and lefty, I have a triple moral duty with Israel, because if Israel is destroyed, liberty, modernity and culture will be destroyed too. 
 
The struggle of Israel, even if the world doesn’t want to accept it, is the struggle of the world.

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Posted on Sustainabilitank.info on July 8th, 2013
by Pincas Jawetz (PJ@SustainabiliTank.com)

THINGS GET MESSIER AND MESSIER – THE FOLLOWING IS A MASTERPIECE!OR SHOULD WE SAY – A MESSPIECE !!


“What If Snowden Was on Board the Bolivian President’s Jet?”

Violeta Ayala* – a *Bolivian “Imdian” filmmaker writes in The Huffington Post on July 4th but shown to us only now.

A month ago I was invited to a lunch in La Paz, the highest capital in the world and the capital of my country Bolivia. It was at the stylish residence of the French ambassador. We were a group of filmmakers, invited to wine and dine at the embassy. Two of us were indigenous and the rest belonged to the traditional ruling class of Bolivia. Sitting around a fancy table with diplomats, a butler served us quiche and wine.

During lunch, the French Ambassador made a comment about Bolivia, saying, it had taken France hundreds of years to become a Republic and that we need to forget in Bolivia about this business of being Indigenous or European. Then he said, “Bolivia is just being born.”

I felt like my head was about to explode and I can tell you, it wasn’t the wine or the altitude!

“Excuse me dear Ambassador, who has just been born? My people have lived on this land for thousands of years. We built an empire that you helped to destroy, but today we have an indigenous President of Aymaran origin, Evo Morales who was elected democratically in 2005. The idea of a Republic might have worked in France, but not in The Plurinational State of Bolivia, a multi-ethnic country with 38 official languages!”

This little incident made me think about how much respect European countries actually have for my people.

Last night, when I was in Paris of all places, I heard the news and I felt the fuzzy feeling of another head explosion. I’d just seen on Twitter that Bolivia’s presidential jet carrying Evo Morales was denied permission to fly through French, Portuguese and Italian airspace on route to Bolivia on the grounds of a rumor. It was suspected Edward Snowden was hiding on board winging his way to safety in Bolivia.

President Morales had been visiting Moscow, as one of the 13 members of the Gas Exporting Countries Forum (GECF). An overlooked fact, however, is that while he was in Moscow, President Morales’ jet was never at Sheremetyevo airport where Edward Snowden is supposed to be waiting in transit. It seems like a bad joke that with all the access the NSA has to everyone’s email and phone calls that they couldn’t figure out if one guy was on a plane.

So, where did the rumor start?

Was it the U.S. government’s intention to stop Evo’s plane? Or was it to scare Bolivia, because Evo Morales had said he would consider an asylum request from Snowden? Or to scare any country who might consider helping Snowden? Or was it to scare Snowden himself so he stays put in Russia and has no other option but to accept Putin’s condition to stop releasing more documents?

The intentions are anyone’s guess, but what would the U.S. response have been if Obama’s jet, Air Force One, had received the same treatment as Bolivia’s president and been forced down while on route to Washington?

As for the rumors about Snowden being on Evo’s jet… Beyond ridiculous. How do you think Russia would react if Snowden disappeared from under the watchful eye of Russian security? I have no doubt President Putin is happy to have Snowden in transit waiting to play him as a pawn at the right time. The U.S. Government can’t be that naïve to think a good-hearted Putin would let Snowden go so easily? Would the U.S. allow a Russian whistleblower to slip through their fingers at the airport in Washington?

I think we can say for certain that all the countries involved in this little saga knew Snowden wasn’t on or anywhere near the Bolivian presidential jet. But what if, hypothetically Snowden was able to sneak past the FSB, Russian police, airport security and get on that plane? The Bolivian government has the right to grant asylum to whomever they decide is facing persecution.

I would like people to know that today the U.S. hosts some of Bolivia’s largest criminals. One such person is the former president, Gonzalo Sanchez de Lozada, and two of his ministers who are wanted in Bolivia, not for information leaks, but to face charges for the killing of 60 people who were protesting against his government’s policies to sell Bolivia’s resources to U.S. corporations. Sanchez de Lozada escaped Bolivia in a jet in 2003 and to this day the U.S. refuses to accept Bolivia’s extradition request for him.

I can only wonder looking out my hotel window in Paris why the French government started this nonsense that could have put the life of Bolivia’s president at risk?

Remember, it wasn’t the U.S. refusing air space to a presidential jet; it was the Republic of France, an independent country founded on the principles of Liberte, Egalite and Fraternite, refusing air space to a jet carrying the first indigenous president of Bolivia.

And now, the French government has said they didn’t know Bolivia’s president Evo Morales was on the presidential jet, the Spanish government say they didn’t do it, and the Portuguese say it was a technical problem.

Today is the 4th of July and the Union of South American Nations (UNASUR) is holding an emergency meeting in my hometown of Cochabamba to formulate their response to what was done to Bolivia’s presidential plane. Evo Morales has threatened to close the U.S. Embassy in Bolivia and the “Poncho Rojos” — Aymara Warriors have burned French flags outside the French Embassy in La Paz as a symbolic declaration of war.

As for me I celebrated the constitution of freedom of the founding fathers of the United States of America, with a glass of champagne next to a canal in the very country that gave the Statue of Liberty to the USA.

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Posted on Sustainabilitank.info on July 8th, 2013
by Pincas Jawetz (PJ@SustainabiliTank.com)


Daniel Ellsberg: Edward Snowden was right to flee.

The man who leaked the Pentagon Papers says the NSA leaker could not speak out if he had stayed.

That was then – and now is now!!!

Opinions
Snowden made the right call when he fled the U.S.
By Daniel Ellsberg, In The Washington Post of July 8, 2013.

Daniel Ellsberg is the author of “Secrets: A Memoir of Vietnam and the Pentagon Papers.” He was charged in 1971 under the Espionage Act as well as for theft and conspiracy for copying the Pentagon Papers. The trial was dismissed in 1973 after evidence of government misconduct, including illegal wiretapping, was introduced in court.

Many people compare Edward Snowden to me unfavorably for leaving the country and seeking asylum, rather than facing trial as I did. I don’t agree. The country I stayed in was a different America, a long time ago.

After the New York Times had been enjoined from publishing the Pentagon Papers — on June 15, 1971, the first prior restraint on a newspaper in U.S. history — and I had given another copy to The Post (which would also be enjoined), I went underground with my wife, Patricia, for 13 days. My purpose (quite like Snowden’s in flying to Hong Kong) was to elude surveillance while I was arranging — with the crucial help of a number of others, still unknown to the FBI — to distribute the Pentagon Papers sequentially to 17 other newspapers, in the face of two more injunctions. The last three days of that period was in defiance of an arrest order: I was, like Snowden now, a “fugitive from justice.”

Yet when I surrendered to arrest in Boston, having given out my last copies of the papers the night before, I was released on personal recognizance bond the same day. Later, when my charges were increased from the original three counts to 12, carrying a possible 115-year sentence, my bond was increased to $50,000. But for the whole two years I was under indictment, I was free to speak to the media and at rallies and public lectures. I was, after all, part of a movement against an ongoing war. Helping to end that war was my preeminent concern. I couldn’t have done that abroad, and leaving the country never entered my mind.

There is no chance that experience could be reproduced today, let alone that a trial could be terminated by the revelation of White House actions against a defendant that were clearly criminal in Richard Nixon’s era — and figured in his resignation in the face of impeachment — but are today all regarded as legal (including an attempt to “incapacitate me totally”).

I hope Snowden’s revelations will spark a movement to rescue our democracy, but he could not be part of that movement had he stayed here. There is zero chance that he would be allowed out on bail if he returned now and close to no chance that, had he not left the country, he would have been granted bail. Instead, he would be in a prison cell like Bradley Manning, incommunicado.

He would almost certainly be confined in total isolation, even longer than the more than eight months Manning suffered during his three years of imprisonment before his trial began recently. The United Nations Special Rapporteur for Torture described Manning’s conditions as “cruel, inhuman and degrading.” (That realistic prospect, by itself, is grounds for most countries granting Snowden asylum, if they could withstand bullying and bribery from the United States.)

Snowden believes that he has done nothing wrong. I agree wholeheartedly. More than 40 years after my unauthorized disclosure of the Pentagon Papers, such leaks remain the lifeblood of a free press and our republic. One lesson of the Pentagon Papers and Snowden’s leaks is simple: secrecy corrupts, just as power corrupts.

In my case, my authorized access in the Pentagon and the Rand Corp. to top-secret documents — which became known as the Pentagon Papers after I disclosed them — taught me that Congress and the American people had been lied to by successive presidentsand dragged into a hopelessly stalemated war that was illegitimate from the start.

Snowden’s dismay came through access to even more highly classified documents — some of which he has now selected to make public — originating in the National Security Agency (NSA). He found that he was working for a surveillance organization whose all-consuming intent, he told the Guardian’s Glenn Greenwald, was “on making every conversation and every form of behavior in the world known to them.”

It was, in effect, a global expansion of the Stasi, the Ministry for State Security in the Stalinist “German Democratic Republic,” whose goal was “to know everything.” But the cellphones, fiber-optic cables, personal computers and Internet traffic the NSA accesses did not exist in the Stasi’s heyday.

As Snowden told the Guardian, “This country is worth dying for.” And, if necessary, going to prison for — for life.

But Snowden’s contribution to the noble cause of restoring the First, Fourth and Fifth amendments to the Constitution is in his documents. It depends in no way on his reputation or estimates of his character or motives — still less, on his presence in a courtroom arguing the current charges, or his living the rest of his life in prison. Nothing worthwhile would be served, in my opinion, by Snowden voluntarily surrendering to U.S. authorities given the current state of the law.

I hope that he finds a haven, as safe as possible from kidnapping or assassination by U.S. Special Operations forces, preferably where he can speak freely.

What he has given us is our best chance — if we respond to his information and his challenge — to rescue ourselves from out-of-control surveillance that shifts all practical power to the executive branch and its intelligence agencies: a United Stasi of America.

Read more on this topic —- Eugene Robinson: We can handle the truth on NSA spying.

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THAT WAS OUR ORIGINAL JULY 4th posting:

The British Guardian – an American Media — on the run-up to July 4-th, 2013.

By Dan Gillmore

How Did American Become So Fearful and Timid That We’ve Given Away Essential Liberties? Some Are Even Afraid to Speak up
America’s founders would be horrified at this United States of Surveillance

July 2, 2013

I’m a longtime subscriber to an Internet mail list that features items from smart, thoughtful people. The list editor forwards items he personally finds interesting, often related to technology and/or civil liberties. Not long after the Guardian and Washington Post first started publishing the leaks describing the National Security Agency’s vast surveillance-dragnet, an item appeared about a White House petition urging President Obama to pardon Edward Snowden. The post brought this reply, among others:

“Once upon a time I would have signed a White House petition to this administration with no qualms. Now, however, a chilling thought occurs: what ‘watch lists’ will signing a petition like this put me on? NSA? IRS? It’s not a paranoid question anymore, in the United States of Surveillance.”

As we Americans watch our parades and fire up our grills this 4 July, the 237th anniversary of the Declaration of Independence – the seminal document of the United States – we should take the time to ask ourselves some related questions: how did we come to this state of mind and behavior? How did we become so fearful and timid that we’ve given away essential liberties? Do we realize what we’re giving up? What would the nation’s founders think of us?

No one with common sense believes Obama is planning to become a dictator. But the mail list question was indeed not paranoid – because Obama, building on the initiatives of his immediate predecessors, has helped create the foundation for a future police state. This has happened with bipartisan support from patriotic but short-sighted members of Congress and, sad to say, the general public.

The American media have played an essential role. For decades, newspaper editors and television programmers, especially local ones, have chased readers and ratings by spewing panic-inducing “journalism” and entertainment that helped foster support for anti-liberty policies. Ignorance, sometimes willful, has long been part of the media equation. Journalists have consistently highlighted the sensational. They’ve ignored statistical realities to hype anecdotal – and extremely rare – events that invite us to worry about vanishingly tiny risks and while shrugging off vastly more likely ones. And then, confronted with evidence of a war on journalism by the people running our government, powerful journalists suggest that their peers – no, their betters – who had the guts to expose government crimes are criminals. Do they have a clue why the First Amendment is all about? Do they fathom the meaning of liberty?

The founders, for all their dramatic flaws, knew what liberty meant. They created a system of power-sharing and competition, knowing that investing too much authority in any institution was an invitation to despotism. Above all, they knew that liberty doesn’t just imply taking risks; it absolutely requires taking risks. Among other protections, the Bill of Rights enshrined an unruly but vital free press and guaranteed that some criminals would escape punishment in order to protect the rest of us from too much government power. How many of those first 10 amendments would be approved by Congress and the states today? Depressingly few, one suspects. We’re afraid.

America has gone through spasms of liberty-crushing policies before, almost always amid real or perceived national emergencies. We’ve come out of them, to one degree or another, with the recognition that we had a Constitution worth protecting and defending, to paraphrase the oath federal office holders take but have so casually ignored in recent years.

What’s different this time is the surveillance infrastructure, plus the countless crimes our lawmakers have invented in federal and state codes. As many people have noted, we can all be charged with something if government wants to find something – the Justice Department under Bush and Obama has insisted that simply violating an online terms of service is a felony, for example. And now that our communications are being recorded and stored (you should take that for granted, despite weaselly government denials), those somethings will be available to people looking for them if they decide you are a nuisance. That is the foundation for tyranny, maybe not in the immediate future but, unless we find a way to turn back, someday soon enough.

You may believe there’s no possibility of America turning into a thugocracy, that the amassed information – conversations, business dealings, personal health and financial data, media consumption, gun records and so much more – will never be systematically misused that way. But even if you do, ask yourself this: if a young employee of one of the countless private companies administering the surveillance state could get access to so much for idealistic reasons, how vulnerable is this material to people with baser motives? Do you suppose corporate spies or foreign security services might be able to tempt some of the holders of this information with money, or find others who are vulnerable to blackmail? We’re creating the ultimate treasure chest of information, and it’s value is nearly limitless.

America’s founders would be horrified at what we’ve done, and what we’ve become. They would have denounced our secret laws, Kafka-esque “no fly lists” and so many other recent creations of power-grabbing presidents emboldened by feeble lawmakers and compliant courts. While they wouldn’t have understood the modern concept of privacy – though they’ve have wanted to protect it once they did understand – they would have engineered checks and balances to prevent today’s wholesale abuses, made so much worse by active corporate participation, reluctant or not, in the digital dragnets.

I live in California. My senior US senator, Dianne Feinstein, is a former prosecutor and acts like it. In her no doubt sincere desire to protect Americans from harm, she has been a consistent Democratic enabler of untrammeled presidential and law-enforcement powers. She calls Edward Snowden, a whistleblower who unquestionably broke the law, a traitor. But he pulled back the curtain on an increasingly lawless surveillance state. She has helped shred the Bill of Rights. Who, in the end, will have done more to “preserve and protect the Constitution”? For me, that’s an easy call.

Will we confront what’s happening and move now to change our trajectory? There are glimmerings of rationality amid the fear-mongering, including the public’s growing understanding – despite politicans’ foot-dragging and the media’s longstanding refusal to do its job on this issue, like so many others – that the war on (some) drugs has been an international catastrophe and, at home, a useful tool for those who’d curb liberty.

Obama says he wants to have a “conversation” about surveillance, even though his administration works mightily to keep so much of its workings – on these and other matters – secret from the American public, Congress and the judiciary other than opaque, rubber-stamp courts. What we really need is a larger conversation about state power and the actual risks we face, with context and clarity. In the process we need to confront the people who amass power and profits by fueling the ever-expanding, increasingly militarized surveillance state, and insist that they explain and justify what they’re doing. Their “trust us” nostrums are hollow.

I don’t know what the American public will conclude if we ever have that conversation. I would do whatever I could to help everyone understand that a surveillance society is profoundly un-American. I implore journalists to be part of the truth-telling, to take a stand for the Bill of Rights by doing their jobs as the founders intended. If we’re to preserve the risk-filled but noble American experiment of trusting people with liberty, we’d all best get started.

I’m proudly American, in large part because we’ve so often faced hard facts and ultimately, if belatedly, done what’s right. I have faith that the American people want the unadorned truth and will think through what’s at stake this time – and that they’ll take to heart Benjamin Franklin’s eternally wise admonition: “Those who would give up essential liberty, to purchase a little temporary safety, deserve neither liberty nor safety.”

====================================================================

AND THE INTERNATIONAL ANGLE:

New Rumor of Snowden Flight Raises Tensions.
By RICK GLADSTONE and WILLIAM NEUMAN
Published by The New York Tines: July 2, 2013

It began as a seemingly offhand remark by the president of Bolivia, who suggested during a visit to Moscow that he might be happy to host Edward J. Snowden, the fugitive former security contractor who is desperate to find asylum. It escalated into a major diplomatic scramble in which the Bolivian president’s plane was rerouted on Tuesday, apparently because of suspicions that Mr. Snowden was aboard.

Evo Morales, president of Bolivia, was attending an energy conference in Moscow when he was asked in an interview if he would consider giving asylum to Edward J. Snowden.

Related

*
Snowden Is Said to Claim U.S. Is Blocking Asylum Bids (July 2, 2013)
*
Outrage in Europe Grows Over Spying Disclosures (July 2, 2013)
*
India Ink: India Denies Asylum to Snowden (July 2, 2013)

By day’s end, outraged Bolivian officials, insisting that Mr. Snowden was not on the plane, were accusing France and Portugal of acting under American pressure to rescind permission for President Evo Morales’s plane to traverse their airspace on the way back to Bolivia. Low on fuel, the plane’s crew won permission to land in Vienna.

“They say it was due to technical issues, but after getting explanations from some authorities we found that there appeared to be some unfounded suspicions that Mr. Snowden was on the plane,” the Bolivian foreign minister, David Choquehuanca, told reporters after the plane touched down in Vienna, where Mr. Morales was spending the night.

“We don’t know who invented this big lie,” the foreign minister said at a news conference in La Paz, Bolivia. “We want to express our displeasure because this has put the president’s life at risk.”

Rubén Saavedra, the defense minister, who was on the plane with Mr. Morales, accused the Obama administration of being behind the action by France and Portugal, calling it “an attitude of sabotage and a plot by the government of the United States.”

There was no immediate response by officials in Paris, Lisbon or Washington.

“We were in flight; it was completely unexpected,” Mr. Saavedra said on the Telesur cable network. “The president was very angry.”

Speaking by phone with Telesur, Mr. Saavedra said that Mr. Snowden was not on the plane. Later, Reuters cited an unidentified Austrian Foreign Ministry official as saying the same thing.

Bolivian officials said they were working on a new flight plan to allow Mr. Morales to fly home. But in a possible sign of further suspicion about the passenger manifest, Mr. Saavedra said that Italy had also refused to give permission for the plane to fly over its airspace. Later he said that France and Portugal had reversed course and offered to allow the plane to fly through their airspace after all.

On Monday, Mr. Morales, who was attending an energy conference in Moscow, was asked in an interview on the Russia Today television network if he would consider giving asylum to Mr. Snowden, 30, who has been holed up at Moscow’s Sheremetyevo Airport for more than a week, his passport revoked by the United States.

“Yes, why not?” Mr. Morales responded. “Of course, Bolivia is ready to take in people who denounce — I don’t know if this is espionage or monitoring. We are here.”

He said, though, that Bolivia had not received a request from Mr. Snowden, despite news reports to the contrary.

It was already clear by then that the Moscow conference had been overshadowed by the drama of Mr. Snowden and his disclosures about American intelligence programs, which have deeply embarrassed the Obama administration.

President Nicolás Maduro of Venezuela, who was also at the conference, had suggested he might offer Mr. Snowden asylum but did not plan to fly him to Venezuela.

But Mr. Morales’s remarks appeared to open the door. At least that was the way they were interpreted.

The problems began even before Mr. Morales left Moscow, Mr. Choquehuanca said. On Monday, Portugal, without explanation, had withdrawn permission for Mr. Morales’s plane to stop in Lisbon to refuel, the foreign minister said. That required Bolivian officials to get permission from Spain to refuel in the Canary Islands.

The next day, after taking off from Moscow, Mr. Morales’s plane was just minutes from entering French airspace, according to Mr. Saavedra, when the French authorities informed the pilot that the plane could not fly over France.

There was also plenty of confusion in Moscow over how Mr. Snowden could possibly have left undetected on a government aircraft.

Government planes carrying foreign officials to diplomatic meetings in Moscow typically arrive and depart from Vnukovo Airport, which is also the main airfield used by the Russian government, rather than from Sheremetyevo, where Mr. Snowden arrived from Hong Kong on June 23 hours after American officials had sought his extradition there.

The speculation that Mr. Snowden would hitch a ride on a government jet was discounted by the fact that the plane would have to first make a quick flight from one Moscow airport to the other.

In an interview with the television station Russia Today, Mr. Maduro said he would consider any request by Mr. Snowden. Then, ending the interview with a dash of humor, he said, “It’s time for me to go; Snowden is waiting for me.”

Rick Gladstone reported from New York, and William Neuman from Caracas, Venezuela. David M. Herszenhorn and Andrew Roth contributed reporting from Moscow, and Monica Machicao from La Paz, Bolivia.

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Posted on Sustainabilitank.info on July 5th, 2013
by Pincas Jawetz (PJ@SustainabiliTank.com)

Venezuela’s Independence Day

Press Statement
John Kerry
Secretary of State
Washington, DC
July 3, 2013

On behalf of President Obama and the people of the United States, I congratulate the people of Venezuela as you commemorate the day that Venezuela declared its independence 202 years ago.

Venezuela and the United States have much in common. For example, revolutionary leader General Francisco de Miranda also played a part in our own struggle for independence, participating in the Battle of Pensacola in 1781. His contribution is forever memorialized in a monument that stands in the heart of Philadelphia, the original capital of the United States. When a devastating earthquake struck Venezuela in 1812 the United States sent the Venezuelan people the first humanitarian assistance it ever provided to a foreign country. These two examples demonstrate that Venezuela and the United States have shared ties of friendship and common values since the birth of our two nations, and the ties between our people endure.

I wish Venezuelans everywhere health, happiness, and hope on the anniversary of your independence.

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The Washington Post of July 5, 2013 tells us:

““As head of state, the government of the Bolivarian Republic of Venezuela decided to offer humanitarian asylum to the young American Edward Snowden so that he can live in the homeland” of independence leader Simon Bolivar and the late President Hugo Chavez without “persecution from the empire,” Maduro said, referring to the United States.

He made the offer during a speech marking the anniversary of Venezuela’s independence. It was not immediately clear if there were any conditions to Venezuela’s offer.

Maduro added that several other Latin American governments have also expressed their intention of taking a similar stance by offering asylum for the cause of “dignity.”

In Nicaragua, Ortega said he was willing to make the same offer “if circumstances allow it.” Ortega didn’t say what the right circumstances would be when he spoke during a speech in Managua.

He said the Nicaraguan embassy in Moscow received Snowden’s application for asylum and that it is studying the request.

“We have the sovereign right to help a person who felt remorse after finding out how the United States was using technology to spy on the whole world, and especially its European allies,” Ortega said.

The offers came following a flap about the rerouting of Bolivian President Evo Morales’ plane in Europe earlier this week amid reports that Snowden might have been aboard.

Spain on Friday said it had been warned along with other European countries that Snowden, a former U.S. intelligence worker, was aboard the Bolivian presidential plane, an acknowledgement that the manhunt for the fugitive leaker had something to do with the plane’s unexpected diversion to Austria.

It is unclear whether the United States, which has told its European allies that it wants Snowden back, warned Madrid about the Bolivian president’s plane. U.S. officials will not detail their conversations with European countries, except to say that they have stated the U.S.’s general position that it wants Snowden back.

Maduro joined other leftist South American presidents Thursday in Cochabamba, Bolivia, to rally behind Morales and denounce the rerouting incident.

President Barack Obama has publicly displayed a relaxed attitude toward Snowden’s movements, saying last month that he wouldn’t be “scrambling jets to get a 29-year-old hacker.”

But the drama surrounding the flight of Morales, whose plane was abruptly rerouted to Vienna after apparently being denied permission to fly over France, suggests that pressure is being applied behind the scenes.

Spanish Foreign Minister Jose Manuel Garcia-Margallo told Spanish National Television that “they told us that the information was clear, that he was inside.”

He did not identify who “they” were and declined to say whether he had been in contact with the U.S. But he said that European countries’ decisions were based on the tip. France has since sent a letter of apology to the Bolivian government.”

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The bottom line is as reported by the Guardian:

“We are not colonies any more,” Uruguay’s president, Jose Mujica, said. “We deserve respect, and when one of our governments is insulted we feel the insult throughout Latin America.”

Ecuador’s president, Rafael Correa, said on Thursday he and other leaders were offering full support to Morales and called the rerouting of the plane an aggression against the Americas.

Cristina Fernandez of Argentina said Latin Americans treasured freedom after fighting for independence from Europe in the 19th century and then surviving Washington’s 20th-century history of backing repressive regimes in the Americas. She demanded an apology for the plane ordeal.

“I’m asking those who violated the law in calm but serious manner, to take responsibility for the errors made, it’s the least they can do,” Fernandez said. “To apologize for once in their life, to say they’re sorry for what they’ve done.”

Morales has said that while the plane was parked in Vienna, the Spanish ambassador to Austria arrived with two embassy personnel and they asked to search the plane. He said he denied them permission.

“Who takes the decision to attack the president of a South American nation?” Maduro asked. Spanish prime minister Mariano “Rajoy has been abusive by trying to search Morales’ plane in Spain. He has no right to breach international law.”

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It seems like time has come for a US face-saving diplomacy before true craters open up at US borders – East, West, and South.

We have previously outlined a draft that we did not publish – but think now that the airplane flap justifies a US Presidential pardon to Snowden – just to get the issue of the World table – the damage was done and no sense for the US to dig itself deeper into the hole it created.

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US senator from New Jersey, Robert Menendez, the Democratic chairman of the Senate Foreign Relations Committee, told little Ecuadoran that he would block the import of vegetables and flowers from Ecuador if Ecuador gives asylum to Edward Snowden. The cost to Ecuador would be one billion dollars in lost revenues. Will he also forbid trips from the US to the Galapagos?

Will he be consistent and close US imports of Venezuela oil? Of Latin oil in general?
Ecuador and Venezuela happen to be also members of OPEC which Bolivia is not. A policy of threats presents many interesting angles and possibilities.
Will there be ways to enlarge this with some reaction to what happens in Egypt, in Saudi Arabia, some more grand-standing anyone?

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Thursday the leaders of Venezuela, Ecuador, Argentina and Uruguay joined Bolivia’s President Morales in Cochabamba, for a special meeting to address the diplomatic row.

At the end of the summit a statement was issued demanding answers from France, Portugal, Italy and Spain. The United States was not mentioned in the statement.

“Europe broke all the rules of the game,” Venezuelan president Nicolas Maduro said shortly after arriving at Cochabamba airport. “We’re here to tell president Evo Morales that he can count on us. Whoever picks a fight with Bolivia, picks a fight with Venezuela.”

Maduro said an unnamed European government minister had told Venezuela the CIA was behind the incident.

“We are not colonies any more,” Uruguay’s president, Jose Mujica, said. “We deserve respect, and when one of our governments is insulted we feel the insult throughout Latin America.”

Ecuador’s president, Rafael Correa, said on Thursday he and other leaders were offering full support to Morales and called the rerouting of the plane an aggression against the Americas.

Cristina Fernandez of Argentina said Latin Americans treasured freedom after fighting for independence from Europe in the 19th century and then surviving Washington’s 20th-century history of backing repressive regimes in the Americas. She demanded an apology for the plane ordeal.

“I’m asking those who violated the law in calm but serious manner, to take responsibility for the errors made, it’s the least they can do,” Fernandez said. “To apologise for once in their life, to say they’re sorry for what they’ve done.”

Morales has said that while the plane was parked in Vienna, the Spanish ambassador to Austria arrived with two embassy personnel and they asked to search the plane. He said he denied them permission.

“Who takes the decision to attack the president of a South American nation?” Maduro asked. Spanish prime minister Mariano “Rajoy has been abusive by trying to search Morales’ plane in Spain. He has no right to breach international law.”

Before the meeting, Morales said his ordeal was part of a US plot to intimidate him and other Latin American leaders.

He urged European nations to “free themselves” from the United States. “The United States is using its agent [Snowden] and the president [of Bolivia] to intimidate the whole region,” he said.

France sent an apology to the Bolivian government. But Morales said “apologies are not enough because the stance is that international treaties must be respected”.

Spain’s foreign affairs minister, Jose Manuel Garcia-Margallo, said his country did not bar Morales from landing in its territory.

Amid the tensions, the US embassy in La Paz cancelled Independence Day celebrations scheduled for Thursday. In the eastern city of Santa Cruz, Bolivian government sympathisers painted protest slogans on the doors of the American consulate.

Bolivia has said it will summon the French and Italian ambassadors and the Portuguese consul to demand explanations.

Brazil was represented by Marco Aurelio Garcia, President Dilma Rousseff’s top international adviser. The presidents of Colombia, Chile and Peru, who have strong ties to the US, were not attending.

Colombia’s president, Juan Manuel Santos, said earlier on Thursday he supported Morales, but asked other leaders to remain cool and avoid an escalating dispute between Latin America and the European Union.

“We’re in solidarity with Evo Morales because what they did to him is unheard-of, but let’s not let this turn into a diplomatic crisis for Latin America and the EU,” Santos tweeted on Thursday.

—————————————

Our draft started: Thanks to the Egyptian military – their intervention got off the media front line the Snowden, Assage, Manning, WikiLeaks Warning Lighthouses – and replaced them with a renewed attention to the Islamic potential for acts of terror.

Furthermore – Latin America seems split between the go it alone States of the ALBA group – Bolivia, Cuba, Ecuador, Venezuela, their new friends – Argentina, Brazil, Uruguay, and now Nicaragua – and their opponents – the strong US connected, Chile, Colombia, Peru and the Southern European States Italy, France, Spain, Portugal that acted out on unsightly pressure from the White House, and perhaps even Austria – if it turns out to be true that they searched the Bolivian President’s plane. What about Mexico? Will they want to be seen as residing in the US vest-pocket?

Today it seems that just the Greens, the so called Pirates, and some other non-political fringe parties, are left in Europe to stand up for Democracy – The Reds, Blacks, Blues, Yellow, Orange, and Purple – all established political parties – have abandoned the Democracy ship because of the Transatlantic breeze from the Potomac. Europe seems anew like the Europe of the thirties with governments worried about their business-ties. Any infringements of democratic inalienable rights are not noted now, like they were not noted then. But this is totally misleading – just read the Guardian where all these stories started. This at a time the voters in quite a few European States do take position on this – and we would not be surprised if Austria as well took back its “Neutral Mantle” to declare that they too are ready to give refuge to Snowden. The coming days will tell.

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And as if nothing happened – a US hand to the people of Argentina as if they have now no elected government?:

Western Hemisphere: Argentina’s Independence Day

07/05/2013 02:31 PM EDT

Argentina’s Independence Day

Press Statement
John Kerry
Secretary of State
Washington, DC
July 5, 2013

On behalf of President Obama and the American people, I send best wishes to the people of Argentina as they celebrate their Independence Day this July 9.

The citizens of our two nations have a long history of productive and friendly relations, highlighted by educational and cultural exchanges and fruitful collaboration in the fields of science, technology, health, space, and energy.

The determination expressed by the patriots gathered at the Casa de Tucuman, to forge a free and independent nation, is a fundamental human longing, and one we share.

On this day, the United States wishes Argentina a happy celebration.

We look forward to working together to cultivate a strong bilateral relationship in the years to come.

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Posted on Sustainabilitank.info on June 2nd, 2013
by Pincas Jawetz (PJ@SustainabiliTank.com)

 

 

 

 

Are We Witnessing the Long-Awaited Turnaround in EU Economic Policy?

 

 

On May 29, the EU Commission (as well as OECD) published its assessment of the budgetary and reform programs of its member states and issued its “country-specific recommendations”  – with the exception of Portugal, Greece and Cyprus which had already received their “adjustment programs” earlier.

Media reporting focused on the extension (by 2 years) of the time by which some countries have to achieve their medium-term objectives, and on President Hollande’s rebuke of the EC’s recommendations for France.

Commission President Barroso spoke of the need to loosen the consolidation efforts and to start combating unemployment, especially for youths. 6 bill EUR should be available for this purpose. Suddenly, promoting growth is no longer a taboo. The recent Franco-German announcement of an impending
“gouvernement economique” or “verstärkter Koordinierungsmechanismus”
also give some hope.

 

Still, Barroso (and the EC) thinks that ”structural reforms” in goods and labor markets are the key to growth, and thus need to be speeded up. His (marginal) slowing down of austerity is not based on the recognition that the EU crisis strategy has proven to be a complete failure, but “only” on the lack of political acceptance by the unemployed citizens of the EU.
A turnaround in policy, a necessary change in the policy paradigm, this is not.

 

It seems to be impossible for politicians, both national and supranational ones, to admit past mistakes. But this would be the pre-requirement for a turnaround. Barroso and the others act as if everything so far had been going according to plan, had been successful, and that now one just adds another element to the heretofor successful strategy. This behavior, repression of facts, has been analyzed extensively by my late compatriot Sigmund Freud.
It prevents new insights from coming onto the radar screen, a requirement for a new direction.

 

Technically, the EC assessed the Stability Programs and the Reform Programs. In its own words, by assessing them jointly, the EC purports to assess the complete economic policy of its member states. Let us look at the Austrian assessment as a case in point.

 

Economic growth is mentioned only with respect to the Austrian forecasts which underlie the programs – which are seen as being too optimistic. The prime objective of the analysis is, as usual, the positively assessed path of budget consolidation. The medium-term objective (as structural deficit of 0.45% of GDP) should be achieved 2 years earlier than originally (2017) planned. But Austria’s public expenditure share path again is seen as too optimistic. With respect to the tax system, the EC tells the Austrians that the least growth-damaging real estate taxes are far below the EU average, and thus could be increased.

 

The most important points of criticism concern the labor market: the participation rates of females and seniors are by far too low, income differences between genders too high, the pension age for women creeps only marginally towards that of men, early retirement is still to prevalent; education achievements are under par, at the same time costs of the system too high, migrants are left behind. All this against the background of the recognition that (measured) unemployment in Austria is the lowest in the EU. The EC criticizes also inadequacies in financial market supervision between home and host countries, as well as too many barriers for professional services and for personal services in health and care sectors.

 

For all these areas, EC gives recommendations to speed up reforms. All these points are well taken (by me, not necessarily the authorities), but: their implementation alone, while important, does not generate growth. There is not enough emphasis on promoting innovation, on real problems with the tertiary education system, no mentioning at all about a positive growth expectation – which would require an increase in effective demand in Europe. The structural problems of the financial sector are largely ignored, with the exception of the possible budgetary consequences of winding down one of the nationalized banks.

 

Macropolicy is not mentioned, not in the Austrian assessment, not in the assessment of the Eurozone. There EC mentions the need to achieve an adequate policy mix by better coordination of budget consolidation and structural policies, but no word is lost on coordination between the fiscal stance of the Eurozone and ECB’s monetary policy. This shows once more that macroeconomic policy is a foreign concept to the EC, that economic policy consists of budget policy cum supply side (micro) economics. Briefly, imbalances in foreign trade are mentioned, plus its necessary “rebalancing”, but that is it. When reading the documents, one sees that the focus on individual countries’ assessment virtually crowds out the assessment of the Eurozone and the EU as a whole. They are seen as the sum of the individual countries, but not as an objective of macroeconomic policy.

 

Conclusion: Nothing much has changed in the EU’s policy orientation. While the soaring youth unemployment is – finally – seen as a major (mainly political) problem, austerity is slowed down and youth training programs are encouraged. But this is not a change in the mainly austerity-driven paradigm. It does appear that the requirements of the financial markets still drive EU economic policy, rather than the life expectations of the EU citizens. The recent news about the watering-down and delay of the Financial Transactions Tax are only one indicator of this. The objective that the EU should pursue the welfare of its populations, enshrined in the Treaty, seems to have been forgotten.

======================================================================

Op-Ed Columnist – THE NEW YORK TIMES.

Prisoners of the Euro

TO its custodians and admirers, the European Union is the only force standing between its member states and the age-old perils of chauvinism, nationalism and war. That was the pointed message that the Nobel Committee sent last year, when it awarded the union a Peace Prize for its role in “the advancement of peace and reconciliation, democracy and human rights.” And it is the message hammered home relentlessly by the Continent’s politicians, who believe their citizens face a stark choice, in the words of Chancellor Angela Merkel of Germany, between continued integration and a return to “centuries of hatred and blood spill.”

But right now, the E.U. project isn’t advancing democracy, liberalism and human rights. Instead, it is subjecting its weaker member states to an extraordinary test of their resilience, and conducting an increasingly perverse experiment in seeing how much stress liberal norms can bear.

That stress takes the form of mass unemployment unseen in the history of modern Europe, and mass youth unemployment that is worse still. In the Continent’s sick-man economies, the jobless rate for those under 25 now staggers the imagination: over 40 percent in Italy, over 50 percent in Spain, and over 60 percent in Greece.

For these countries, the euro zone is now essentially an economic prison, with Germany as the jailer and the common currency as the bars. No matter what happens, they face a future of stagnation — as aging societies with expensive welfare states whose young people will sit idle for years, unable to find work, build capital or start families.

The question is whether they will face ideological upheaval as well. So far, the striking thing about the aftermath of the 2008 financial crisis, both in Europe and the United States, is how successfully the center has held. Power has passed back and forth between left and right, but truly radical movements have found little traction, and political violence has been mercifully rare.

In a sense, Francis Fukuyama’s post-cold-war declaration of the “end of history” — by which he meant the disappearance of credible alternatives to liberal democracy and mixed-economy capitalism — has held up pretty well in the last five years. Amid the worst economic disaster since the Great Depression, illiberal societies like Egypt and Syria have faced political crises, but the developed world has not. There has been no mass turn to fascism, no revival of Marxist economics, no coup d’états in Madrid or jackboots in Rome.

But you have to wonder whether the center can hold permanently, if unemployment remains so extraordinarily high. How must liberal democracy and mixed-economy capitalism look to young people in the south of Europe right now? How stable is a political and ideological settlement that requires the rising generation to go without jobs, homes and children because the European project supposedly depends on it? And for that matter, how well is the Continent’s difficult integration of Muslim immigrants likely to proceed in a world where neither natives nor immigrants can find work?

Already, the Greek electorate has been flirting with empowering a crypto-communist “coalition of the radical left,” even as a straightforwardly fascist party gains in the polls as well. Hungary’s conservative government has tiptoed toward authoritarianism. Spain has seen huge street protests whose organizers aspire to imitate the Arab Spring. And lately, Sweden, outside the euro zone but not immune to its youth unemployment problems, has been coping with unsettling, highly un-Scandinavian riots in immigrant neighborhoods.

These perturbations do not threaten democracy in Europe yet, and maybe they never will. Maybe the liberal democratic consensus is so bred into the bone that no amount of elite misgovernment can persuade Europe’s younger generation to turn against it. Maybe nothing can end the end of history.

But for the countries facing a youth unemployment crisis, that still seems like an awfully risky bet to make.

Yet there’s a Catch-22 facing Greeks and Spaniards and Italians looking for an alternative to just staying the course. As wrenching as it would be, the option that would do the most to defang extremists of the left and the right would probably be to abandon the euro immediately, with each country regaining control of its own fiscal and monetary policy and seeing what options open up. But at the moment, the only people arguing for that course are … the extremists of the left and the right!

For that to change, more of the Continent’s political elites would need to recognize that their beloved integration project may actually be threatening Europe’s long democratic peace. For now, there simply aren’t enough responsible people ready to unwind what should never have been knitted together in the first place. But with every increase in the unemployment rate, the odds get better that irresponsible and illiberal figures will end up unwinding it instead.

Readers’ Comments:   Read All Comments (15) »

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Posted on Sustainabilitank.info on April 4th, 2013
by Pincas Jawetz (PJ@SustainabiliTank.com)

The following is a presentation of facts that cannot be ignored anymore. Deserves close reading by those in the North that thought you can bumble your way through without creating a real union capable of calling out “it is all for one and not just one for all!” The EU is not just the fulfilling of the German dream of takeover of Europe by peaceful means. Cyprus dreaming of being the Mediterranean base of Russia? What else? Austria a bridge to the East? Yes, but only after twinning up with Finland.
The article does not mention the UK even once – we interpret this as a sign it has crystallized as the island off-shore that ought to partner with the US and stop bothering the decision making process of the continent at large.
It was the UK interest that created Cyprus in the first place by not letting it split and join Greece and Turkey. Who needed two weak Greek States in the Union? Malta? another UK invention? Slovenia was good – why not also a Catalunya or Catalonia?

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english banner othernews

A Line Of Demarcation Through The Eurozone Is Taking Shape

 
 
Wolf Richter*  

Everyone learned a lesson from the “bail-in” of the Cypriot banks: Russian account holders who’d laundered and stored their money on the sunny island; bank bondholders who’d thought they’d always get bailed out; Cypriot politicians whose names showed up on lists of loans that had been extended by the Bank of Cyprus and Laiki Bank but were then forgiven and written off. Even brand-new Finance Minister Michael Sarris who got axed because he’d been chairman of Laiki when this was going on. His lesson: when a cesspool of corruption blows up, no one is safe. And German politicians learned a lesson too: that it worked!

“With the Cyprus aid package, it was proven that countries like Germany, the Netherlands, and Finland, if they stick together, are able to push for a strict stability course,” Hans Michelbach told the Handelsblatt. The chairman of the finance committee in the German Parliament and member of the CSU, Chancellor Angela Merkel’s coalition partner, called for deeper collaboration of the triple-A countries in the Eurozone “to strengthen the confidence of citizens and investors in the common currency.”

There are still five in that euro triple-A club: Germany, Austria, the Netherlands, Finland, and Luxembourg. “It would be good if we could also convince Luxembourg to participate more strongly in this stability collaboration,” he said. It would be in the best interest of Luxembourg as major financial center, he added. A reference to Luxembourg’s precarious status, as Cyprus had learned, of being a tiny country with banks so large that it can’t bail them out by itself.

To protect the euro, the alliance of the triple-A countries must be united firmly against large euro countries like Italy and France, he said. “Strong signals of stability would be of great importance for the Eurozone,” particularly now, given the “unclear situation” in Italy, renewed doubts about Greece, and the failure of the French government in its stability policies.

Exactly what French President François Hollande needs: the euro triple-A club breathing down his neck. He’s already in trouble at home. To reverse the slide, he got on state-owned France 2 TV last Thursday to speak to the French people so that they could see how his sincerity, wisdom, and economic policies would stop the country from sinking ever deeper into a quagmire.

And a quagmire it is: double-digit unemployment, a Purchasing Managers Index just above Greece’s, new vehicle sales that plunged almost 15% so far this year, a budget deficit that refuses to be brought under control…. He has tweaked some policy measures here and there. And he dug up a new version of the 75% income-tax bracket that had been squashed by the Constitutional Court. But Jérôme Cahuzac, the Budget Minister who’d tried to get the first version through the system, went up in flames over allegations of tax fraud and “tax fraud laundering.”

Now the people have had it. After the TV appearance, his approval rating, ten months into his term, plummeted another 6 points to 31%, a low that scandal-plagued Nicolas Sarkozy took four years to reach. And only 27% approved of his economic policies. “The French simply don’t want austerity,” lamented an unnamed government insider.

France was suffering the consequences of the “socialist experiments” of its government and was becoming less and less competitive, explained Michelbach. He emphasized that France would remain an important partner of Germany. He wasn’t kidding: France buys 10% of Germany’s exports and is crucial to the German economy. But if France didn’t change course, he said, that could become a “serious problem” for the Eurozone.

As opposed to the mere hiccups of Cyprus or Greece. More banks and more countries will require bailouts­Slovenia, Spain, Italy, and Malta are on the list. And no one wants to see France on that list. Even Italy is too large to get bailed out by other countries­though it’s rich enough to bail itself out, à la Cyprus [ A "Politically Explosive" Secret: Italians Are Over Twice As Wealthy As Germans].

But in Germany, a revolt against these save-the-euro bailouts has been brewing for a while. With elections in September, it’s taking on volume and voices, and the structure of a political party, the Alternative for Germany, not unpalatable radicals but the educated bourgeoisie, and they want to stop the bailouts and dump the euro.

The government is feeling the heat. No one can afford to lose votes. Michelbach’s triple-A club, a line of demarcation in the Eurozone, is one of the reactions. Merkel might benefit from it in the elections. The other four countries might find if appealing, though it will be of dubious appeal in the rest of the Eurozone. But if efforts fail to fix the Eurozone’s problems­and the Eurozone lumbering that way­a tightly knit triple-A club could weather the storm together, more stable and more unified than the Eurozone ever was. And Michelbach had just floated a version of that idea.

Every country in the Eurozone has its own collection of big fat lies that politicians and Eurocrats have served up in order to make the euro and the subsequent bailouts or austerity measures less unappetizing. Here are some from the German point of view…. Ten Big Fat Lies To Keep The Euro Dream Alive

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    *    www.testosteronepit.com    www.amazon.com/author/wolfrichter
 twitter.com/TestosteronePit

Wolf Richter wrote also – “White House Hypocrisy And Trade Sanctions Against China.” -  Practically every car sold in the US contains Chinese-made components. But suddenly, in the middle of a heated presidential campaign, the Obama administration decided to do something about it.

Wolf Richter is a  San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience.

In www.nakedcapitalism.com/2013/03/w… he explains “Having worked a bit on international deals, and for companies operating in foreign markets, cross border transactions have an even lower success rate than domestic ones. The big reason is the one mentioned here, which is marked cultural incompatibility between the seller and buyer. Here the Chinese did less badly than they could have (they could have tried forcing Chinese practices on the German operation, which would have destroyed the value of the asset). But the logic of the transaction was unclear. Was it technology transfer? Consolidation? It appears both might have been goals, and neither happened very much.

But I find it intriguing that as lousy as the Japanese were at doing deals  (they found it hard to understand that the contract was the deal, and were too inclined to overpay), they were good at managing workers in manufacturing operations (service businesses were another kettle of fish, there they tended to drive Americans crazy).  This is a skill the Chinese will have to master, since they desperately need to re-invest their surpluses, and they are trying to acquire more real-economy assets.”    FASCINATING.

His insights in Wall Street machinations are also very good.

 

 

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Posted on Sustainabilitank.info on March 15th, 2013
by Pincas Jawetz (PJ@SustainabiliTank.com)

 

Uri Avnery

March 16, 2013

 

                                    To the Victor, the Spoils.

 IN THE days following the recent Israeli elections, Ya’ir Lapid, the major winner, let it be known that he wanted to be the next Foreign Minister.

 No wonder. It’s the hell of a job. You can’t lose, because the Foreign Minister is responsible for nothing. Serious foreign fiascos are always laid at the door of the Prime Minister, who determines foreign policy anyway. The Foreign Minister travels around the world, stays in luxury hotels with gourmet cuisine, has his picture taken in the company of royalty and presidents, appears almost daily on TV. Sheer paradise.

 For someone who declares publicly that he wants to become Prime Minister soon, perhaps in a year and a half, this post is very advantageous. People see you among the world’s great. You look “prime ministerial”. 

 Moreover, no experience is needed. For Lapid, who entered politics less than a year ago, this is ideal. He has all a Foreign Minister needs: good looks and a photogenic quality. After all, he made his career on TV.

 So why did he not become Foreign Minister? Why has he let himself be pushed into the Finance Ministry – a far more strenuous job, which can make or break a politician?

 Simply because the Foreign Ministry has a big sign on its door: Occupied.

 THE LAST Foreign Minister, Avigdor Lieberman, was, probably, the least suitable person for the job in the whole country. He is no Apollo. He has an air of brutality, shifty eyes and spare vocabulary. He is unpopular everywhere in the world except Russia and its satellites.  He has been avoided throughout by most of his international colleagues. Many of them consider him an outright fascist. 

 But Netanyahu is afraid of Lieberman. Without Lieberman’s parliamentary storm troopers, Likud has only 20 seats – just one more than Lapid. And within the joint party, Lieberman may well replace Netanyahu in the not too distant future.

 Lieberman has been forced out of the Foreign Office by the law that forbids an indicted person to serve in the government. For many years now, a dark judicial cloud has been hanging over his head. Investigations followed suspicions of huge bribes. In the end, the Attorney General decided to content himself with an indictment for fraud and breach of trust: a minor diplomat turned over to Lieberman a secret police dossier concerning his investigation and was awarded an ambassadorship.

 Netanyahu’s fear of Lieberman induced him to promise that the Foreign Minister’s post would remain empty until the final judgment in Lieberman’s case. If acquitted, his lofty position will be waiting for him.

 This may be a unique arrangement. After barring Lapid’s ambition to succeed him, Lieberman declared this week triumphantly: “Everyone knows that the Foreign Office belongs to the Israel Beitenu party!” 

 THAT IS an interesting statement. It may be worthwhile pondering its implications.

 How can any government office “belong” to a party?

 In feudal times, the King awarded his nobles hereditary fiefs. Each nobleman was a minor king in his domain, in theory owing allegiance to the sovereign but in practice often almost independent. Are modern ministries such fiefs “belonging” to the party chiefs?

 This is a question of principle. Ministers are supposed to serve the country and its citizens. In theory, the best man or woman suited for the job should be appointed. Party affiliation, of course, does play a role. The Prime Minister must construct a working coalition. But the uppermost consideration, even in a multi-party democratic republic, should be the suitability of the candidate for the particular office.

 Unfortunately, this is rarely the case. Though no elected Prime Minister should go to the length of Ehud Barak, who displayed an almost sadistic delight in placing each of his colleagues in the ministry he was most unsuitable for. Shlomo Ben-Ami, a gentle history professor, was put into the Ministry of Police (a.k.a. Interior Security), where he was responsible for an incident in which several Arab citizens were shot. Yossi Beilin, a genius bubbling with original political ideas, was sent to the Ministry of Justice. And so on.

 I remember meeting several of the new ministers at a diplomatic reception soon after. They were all deeply embittered and their comments were of course unprintable.

 But that was not the point. The point was that by appointing ministers quite unsuitable to the tasks entrusted to them, Barak did great damage to the interests of the state. You don’t entrust your body to a surgeon who is really a lawyer, nor do you entrust your money to a banker who is really a biologist.

 YET THE idea of political entitlement was hovering over the whole process of forming the cabinet. The awarding of the ministries more closely resembles a dispute among thieves over the spoils than a responsible process of manning or womanning the ministries which will be responsible for the security and well-being of the nation.

 The quarrel that held up the formation of the new government for several crucial days was over the Ministry of Education. Lapid wanted it for his No. 2, an orthodox (though moderate) rabbi. The incumbent, Gideon Sa’ar, desperately clung to it, organizing petitions in his favor among teachers, mayors and what not.

 This could have been a legitimate fight if it had been about questions of education. For example, Sa’ar, a fanatical Likud man, has sent the pupils to religious and nationalistic sites in Greater Eretz Israel, to imbue them with proper patriotic fervor. He is also more intent on his pupils winning international capability tests than on education as such.

 But nobody spoke about these subjects. It was a simple fight over entitlement. In medieval times, it might have been fought out with lances in a tournament. In these civilized days, both sides use political blackmail. Lapid won.

 I AM not a great admirer of Tzipi Livni and her air of a spoilt brat. But I am happy about her appointment to the Ministry of Justice.

 Her last two predecessors were intent on destroying the Supreme Court and putting an end to “judicial activism”. (This seems to be a problem in many countries nowadays. Governments want to abolish the court’s power to annul anti-democratic laws.) Tzipi can be relied on to buttress the Supreme Court, seen by many as “the last bastion of Israeli democracy”.

 Much more problematical is the appointment of Moshe Ya’alon as Minister of Defense. He inherited the job because there is just nobody around who could be appointed instead. Israelis take their defense seriously, and you cannot appoint, say, a gynecologist to this job.

 “Bogy”, as everybody calls him, is a former Chief of Staff of the Army, and a very undistinguished one. Indeed, when he finished the standard three years on the job, Prime Minister Ariel Sharon refused to grant him the almost automatic fourth year. Bogy was bitter and complained that he always had to wear high boots, because of the many snakes in the Ministry of Defense and the General Staff. He may need them again now.

 His many detractors call him a “bock” – German and Yiddish for a goat, symbolizing a lack of intelligence. He is an extreme militarist, who sees all problems through the sights of a gun. He can be sure of the allegiance of Israel’s vast army of ex-generals (or “degenerals”’ as I call them).

  THE MOST problematical appointment of all is the choice of Uri Ariel for the crucial post of Minister of Housing.

Uri Ariel is the arch-settler. He was the founder of a settlement, a leader of the settlers’ organization, the Ministry of Defense official responsible for the settlements. He was also a director of the Keren Kayemet – Jewish National Fund – a major arm of the settlement enterprise. He entered the Knesset when Rehavam Ze’evi, the leader of the extreme-extreme Right, was assassinated by a Palestinian hit squad.

Turning this Ministry over to such a person means that most of its resources will go to a frantic expansion of the settlements, each of which is a nail in the coffin of peace. Yet Lapid supported this appointment with all his new-found political clout, as part of his “brotherhood” bond with Naftali Bennett, who is now the godfather of the settler movement.

Bennet’s party also gained the all-important Knesset finance committee, which is needed to funnel the funds to the settlements. It means that the settlers have gained complete control of the state.

Lapid’s big election victory may yet be revealed as the biggest disaster for Israel.

The brotherhood pact between Lapid and Bennett made it possible for them to blackmail poor Netanyahu and get (almost) everything they longed for. Except the Foreign Ministry.

How will Lapid turn out as Minister of Finance? Difficult to say. Since he is totally innocent of any economic knowledge or experience, he will have to depend on the Prime Minister above and the ministry bureaucracy below. Treasury officials are a tough lot, with a thoroughly neo-liberal outlook. Lapid himself also adheres to this creed, which is called by many Israelis “swinish capitalism” – a term invented by Shimon Peres.

ONE of Lapid’s main election promises was to put an end to the Old Politics, held responsible for all the ills and ugliness of our political life until now. Instead, he said, there will be the New Politics, an age of shining honesty and transparency, embodied by selfless and patriotic leaders, such as the members of his new party.

 Not for nothing did he call his party There Is A Future.

Well, the Future has arrived, and it looks suspiciously like the Past. Indeed, the New Politics look very much like the Old Politics.

 Very, very old. Even the ancient Romans are supposed to have said “To the victor, the spoils!” But then, Ya’ir Lapid doesn’t know Latin.

——————————

Others, like Ari Shavit of Haaretz, look at the Obama visit, with expressed worry – something like -  The President who holds Israel’s fate in the palm of his hand: Israel has recently lost quite a bit of its ability to chart its own strategic future, and this will make Obama’s upcoming trip different than previous ones by U.S. presidents.

Above is potentially much more serious then if Ms. Merkel would pay a visit to Rome as in our second clip. There it is only about restructure and money – in Israel it is about restructure and Near East neighborhood policy.

——————————-

New York Times Editorial – March 15, 2013

Italy, in Search of a Government.

By
Published: March 14, 2013

Italy’s newly elected Parliament convenes on Friday with no clear governing majority. Only a government with a strong popular mandate can push through the kind of radical changes Italy really needs: sweeping labor market and tax reforms, tough anticorruption laws, electoral reform and a new fiscal bargain with euro-zone partners that replaces austerity with growth. All or most of that will now have to wait until new elections, probably later this year, can produce more definitive results.

The vote produced a four-way split among two parties that endorse the European-backed austerity policies that have plunged Italy into deep recession, the anti-establishment Five Star Movement and a bloc led by former Prime Minister Silvio Berlusconi.

That four-way split means that no politically feasible coalition is mathematically possible, especially since the Five Star Movement’s founder, Beppe Grillo, has repeatedly declared that the movement will not support a government led by any of the other groupings. Even if Mr. Grillo does not reconsider that position, there is no need for Italians, their European partners or the bond markets to panic. Mario Monti will continue as the caretaker prime minister until Parliament can agree on a successor. Taxes will be collected, government bills paid and administrative decisions taken. One ratings agency, Fitch, last week downgraded Italian bonds one notch but still considers them investment grade. Bond auctions this week went tolerably well, and Rome has now successfully raised a significant chunk of the money it will need to see it through this year. Democracy’s ways can be frustratingly slow, especially when radical changes are on the agenda and long established parties fail to rise to the occasion. Yet democracy is the European Union’s founding and defining principle. Italy’s partners, though understandably frustrated, need to be patient and supportive. And the European Central Bank must be prepared to deter speculators by stepping in if necessary as a lender of last resort.

Those, like Chancellor Angela Merkel of Germany, who pressured Mr. Monti’s government to tighten the screws of austerity on Italy’s growth-starved economy share some responsibility for his disappointing electoral performance. And they now share some responsibility to stand by Italy as it seeks a democratic way out of the resulting parliamentary deadlock.

A version of this editorial appeared in print on March 15, 2013, on page A24 of the New York edition with the headline: Italy, in Search of a Government.

 

 

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Posted on Sustainabilitank.info on March 4th, 2013
by Pincas Jawetz (PJ@SustainabiliTank.com)

March 3, 2013

Populists or Business (Banking) Lobbyists?

The public media and European mainstream parties’ politicians are unisono lamenting the rise of populism as manifested by the strong showing of Beppe Grillo in Italy’s parliamentary election last weekend. They decry, as they did earlier in the case of Greece, when the “populist” Syriza party nearly won the election, the irresponsibility, the negativism, the “against-it-all” attitude of these parties’ leaders. Let us add to these election results the street demonstrations and battles in Greece, in Spain, in Portugal, in Bulgaria, in Slovenia – all these before the background of people jumping to death from windows of their to-be-repossessed apartments, of soup kitchens, of soaring unemployment rates (especially, and even more tragically, of the young), and of the horrifying increase in poverty rates in many of these and other countries.

It does seem, that in spite of these politicians’ lamentoes, that European citizens are no longer accepting the crisis resolution policies imposed on them by politicians – at the bidding of financial markets. Yes, Mario Monti, the unelected and now defeated prime minister, managed to calm “market fears”, yes, Mario Draghi, the ECB president, managed to do the same – and more – by last fall promising to “do everything necessary” to enable European states’ return to the financial markets, yes, some of the Southern states (plus Ireland) were able during the past months to place bond auctions at “sustainable” yields (i.e. below the benchmark of 6%). But the concomitant “aid programs” by the European Central Bank, the European Commission and the International Monetary Fund, the dreaded “troika” are what the restive populations are no longer willing to swallow. Since governments took over bank debt, the citizens have been called upon to foot the bill, by having their taxes increased, government expenditures, especially social expenditures, cut and losing their jobs as a result of the persistent recession which these programs (and the similar, if less stringent “debt brake” conditions imposed on all EU countries. There is already talk about a “lost decade” for Europe.

With all this austerity (which is portrayed as without alternative) it is completely unclear where future growth should come from even after this decade. The mainstream recipe that balanced budgets (and their corresponding structural reforms) guarantee growth has been proven false, not only in theory, but also in empirical practice. If the second largest economic block in the world (with about 18 trillion $ in GDP, about one fourth of the world economy) reduces public sector demand in addition to falling demand in the private sector, this affects the whole world. This is different from the frequently cited more recent cases, where one individual country managed to export its way out of recession, when all other countries were growing and thus increasing their demand.

In this situation, the EU parliament has achieved a spectacular success, by agreeing (also with EU Finance Ministers) to limit bankers’ bonus payments to 100% of base salary (in exceptional cases to 200%). This is part of a hard-fought package setting new rules for European banks’ equity and liquidity requirements. There are widespread “populism” cries by especially English bankers, but also their colleagues around Europe that this would drive out banking from Europe, that this is a Continental coup to transfer banking business from London to Paris or Frankfurt (??), that this is “unfair”. The more sanguine bankers say (see eg. Financial Times March 2, 2013) that this just means that their base salary will have to be doubled as a consequence. Tory MPs are fuming and using this as an additional argument that the UK should leave the EU as soon as possible. Of course, they do not mention the fact that it was their leader, David Cameron, who pulled the Tories out of the European Peoples’ Party group, which – in the form of the Austrian Othmar Karas – was leading the negotiations of the European Parliament with the Finance Ministers. They also forget to mention that banking lobbies (led by the English) have delayed and watered down the other parts of the Banking package to be concluded.

The Greek and Italian elections, the street protests, the events in many other European countries should lead to a realization by the EU policy makers, both in the Central Bank, in the Commission and in the Council, that it is not just “clowns” (@ Peer Steinbruck, the Social Democratic candidate for the German premiership) who say “no more” to this oppressive economic policy recipe, but it is large parts of the European populations who have not only lost confidence that these recipes will work, but actively are against them – because they see that as in the Great Depression of the late 1920s – they lead to impoverishment and political disaster. Politicians should listen more closely to their populations, and less to the financial sector lobbyists, who have caused this crisis and refuse to play their part in shouldering their part of the burden. It was the lobbyists’ close connection to the politicians who made banking debts into government debt, it was their whisperings which had told politicians fairy tales about the financial markets being the most efficient markets in the world, thus self-regulation and “light-touch” regulation was all that was needed.

What are the alternatives?

The primary policy objective should not be to “return countries to financial markets’ access”, but to have indebted states return to a sustainable economic and social policy path which improves the welfare of their populations. To this end, government debt financing should be taken away from financial markets and turned over to a publicly accountable public institutions (the ECB or the ESM with a banking licence).

As far as bank debt is concerned, a European plan must be developed with a medium-term view of how the European Financial sector should look like in 10-20 years. This would counter-act the present “re-nationalization” trends where every country attempts to save its banks (frequently at the expense of others) at high costs to the taxpayers. Some banks will need to be closed, others restructured, and effective regulation set up. It is clear that (some) debts will need to be repaid, but much of bank debt should be paid by bank owners and their bondholders, not by taxpayers. For highly indebted bank sectors, a European bank resolution fund could take over some of the debt.

It is true that a number of “problem countries” in the EU have pursued wrong policies in the past, e.g. waste of public (EU and national) funds, neglect of innovation and R&D policies, high military expenditures, neglect of industrial policies, neglect of modern education systems, neglect of building up sustainable energy systems (both on the supply and demand side), and many more. Each country needs to develop a positive vision of where it wants to stand in 10 years’ time, and then select the appropriate instruments, and convince its EU partners of its way.
The major political task will be to convince the populations that there is light at the end of the tunnel, that some sacrifices are necessary, but that these will be distributed equitably, that there are positive prospects for this and the next generation, that the social system will cushion the inevitable burdens. To generate the confidence that “we are all in this together” will not be credible, if voiced by those politicians who have gotten us (knowingly or unknowingly) into the present mess. This is the task for new, and credible politicians who not only know what possible alternatives are, but can also muster enough support, both political and technical, from the populations who voted for them. This may and will require new communication methods – as they have been employed during the recent elections.

At a European level, a new more comprehensive economic policy umbrella must be opened. The nearly exclusive attention to budget consolidation was geared to placating the financial markets – who also are getting cold feet seeing what “their” policies do to growth (see the most recent downgrade of the UK). It must throw off the yoke of financial market dictate and turn itself to strengthening the European model, with a view to balance social, economic and environmental requirements for the future.

European civil society is growing together. Public institutions, like the labor movement, are not. In the face of the crisis, labor unions are re-nationalizing, attempting to save jobs for their own members at the expense of their foreign colleagues. They should learn from the business lobby, which has been much more successful in convincing European and national policy makers of their own interests.

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Posted on Sustainabilitank.info on November 24th, 2012
by Pincas Jawetz (PJ@SustainabiliTank.com)


Toward a New Generation of Development Goals – A Day of Informal Discussions
Monday November 26, 2012, 9:30 am – 5:40 pm
United Nations, New York, NLB Conference Room 1

as per e-mail from the UN-NGLS — the UN Non-Governmental Liaison Service.


Background:

Following the Rio+20 Summit, and as the world and UN system move closer to the milestone of 2015 for
realization of the Millennium Development Goals (MDGs), many discussions are underway concerning the future
of the MDGs and their relation to the new generation of development goals that will succeed them.
Simultaneous discussions have emerged about whether the world needs a new development paradigm, and if
so, what sort of framework must underpin it, what aspirational goals will guide it, and what targets and
indicators will be used to measure and evaluate its progress. This new framework will not be built in the same
way we achieved the MDGs, which were distilled from key international agreements reached during the major
development conferences of the 1990s. The current state of international agreement regarding the future of
development is not yet at the point of consensus reflected in the Millennium Declaration and MDGs. Now, in
addition, the field of development actors has broadened: the Fourth High Level Forum on Aid Effectiveness in
Busan, Korea, in 2011 culminated in a Partnership Agreement that—for the first time—established a framework
for development co-operation that includes traditional donors, South-South co-operators, the BRICS, civil society
organisations and private funders. All of these actors, as well as the G20, now have a major influence in the
shaping of development post-2015.

—————————–
Purpose and Format:


The purpose of this day of informal discussions is to bring together key participants in the relevant stakeholder
groups – in civil society, the UN system and among political decision-makers – to further ongoing discussions on
what is needed in order to move toward a new generation of development goals. The day’s discussions are
divided into three panels that will focus on what is needed to: 1) determine the guiding principles and values for
a joint MDG/SGD agenda, 2) define the core concepts and main elements of a new development paradigm, and
3) ensure coherence in bringing the different processes together. The need to bring the remaining work on
MDGs together in a single track along with the development of Sustainable Development Goals (SDGs) according
to the outcomes of Rio+20 is imperative and as such is a guiding principle for the day’s discussions.


9:30 am – 9:45 am
Opening: Welcome Remarks
Rubén Campos, Programs Coordinator, Club de Madrid
Patricia Espinosa, Member, SG’s High-Level Panel on Post-2015 Development Agenda; Secretary of
Foreign Affairs, Government of Mexico
Werner Puschra, Executive Director, Friedrich-Ebert-Stiftung, New York Office

————————–
9:45 am – 11:30 am

Panel 1: Guiding Principles and Values for a Joint MDG/SDG Agenda

The Millennium Summit of September 2000 was the culmination of a decade of intense international debate on
aid in which both governments and civil society were strongly engaged. The resulting Millennium Declaration
put forward the human-rights based values of freedom, equality, solidarity, tolerance, respect for nature, and
shared responsibility. This set of guiding principles informed the development of the MDGs, but the process
towards them led to the imperfect capture of the ideals of the Millennium Declaration.
Nevertheless, the Millennium Declaration is and must be the touchstone for the principles and values that will
guide a joint MDG/SDG agenda. Additionally, the UN Task Team on the Post-2015 Development Agenda has
proposed “a vision for the future that rests on the core values of human rights, equality and sustainability” that
is “reorganized along four key dimensions of a more holistic approach: (1) inclusive social development; (2)
inclusive economic development; (3) environmental sustainability; and (4) peace and security.” Panel 1
therefore brings together a set of speakers representing different stakeholder perspectives, from political
decision-makers, leaders from civil society and members of the UN Secretariat, to debate these and other
overarching principles and values that should guide the UN’s development agenda moving forward.

Moderator: Werner Puschra, Executive Director, Friedrich-Ebert-Stiftung, New York Office
Inputs from: Alejandro Toledo, President of Peru (2001-2006); Member, Club de Madrid
Shamshad Akhtar, Assistant Secretary-General for Economic Development, UN Department of
Economic and Social Affairs
Maria Teresa Mesquita Pessôa, Minister Plenipotentiary, Permanent Mission of Brazil to the United
Nations
H.E. Mr. Jun Yamazaki, Ambassador, Permanent Mission of Japan to the United Nations
Telma Viale, Representative, Special Representative to the United Nations and Director, International
Labour Organization
Mwangi Waituru, Co-Chair, Executive Board, Beyond 2015; Director, Seed Institute; National Cocoordinator,
GCAP Kenya
Reflections: From members of the High-Level Panel on post-2015 framework:
Patricia Espinosa, Member, SG’s High-Level Panel on Post-2015 Development Agenda; Secretary of
Foreign Affairs, Government of Mexico
John Podesta, Member, SG’s High-Level Panel on Post-2015 Development Agenda; Chair and
Counselor, Center for American Progress
Stefano Prato, Advisor to SG’s High-Level Panel on Post-2015 Development Agenda Member Betty
Maina, Kenya; Managing Director, Society for International Development (Italy)

——————————
11:30am – 1:00 pm

Panel 2: Main Elements of a New Development Paradigm

The UN Inter Agency Task Team’s report to the Secretary General, “Realizing the Future We Want For All”,
proposes a more holistic approach toward a post-2015 development agenda. The Task Team’s recommendation
is that principles (human rights, equality and sustainability), broad objectives (environmental sustainability,
inclusive economic development, inclusive social development, and peace and security) as well as specific goals
and targets related to the objectives be embedded in an enabling environment which is characterized by
elements such as a fair and stable global trading, macroeconomic and financial system, sustainable food and
nutrition security, sustainable use of natural resources and democratic and coherent global governance
mechanisms.
Panel 2’s discussion is based upon an embrace of the idea that envisioning coherent and related national,
regional and global policy areas necessary for an enabling environment is an essential step in the creation of a
new and sustainable development paradigm. This panel will be an opportunity for interlocutors from civil society
and Member States to question and engage members of the Task Team and the broader Secretariat as well as to
present their own visions of the necessary enabling elements.

Moderator: Clem McCartney, Policy and Content Coordinator, Shared Societies Project, Club de Madrid
Inputs from: Homi Kharas, Executive Secretary, SG’s High-Level Panel on Post 2015 Development Agenda; Deputy
Director, Global Economy & Development Program, Brookings Institution
Rob Vos, Director of Development Policy, UN Department of Economic and Social Affairs
Claire Courteille, Director, Equality Department, International Trade Union Confederation
David O’Connor, Chief, Policy Analysis and Networks Branch, Division for Sustainable Development,
UN-DESA
Kalissa Regier, Coordination Committee, International Food Security and Nutrition Civil Society
Mechanism; Representative National Farmers Union of Canada to Via Campesina
Richard Morgan, Senior Advisor, Post 2015 Agenda, UNICEF
Manish Bapna, Executive Vice President & Managing Director, World Resources Institute
Jose Dallo, Programme Specialist, Bureau for Development Policy, UN Development Programme
Minh-Thu Pham, Director of Public Policy, UN Foundation
Corinne Woods, Director, UN Millennium Campaign

1:00 pm – 3:00 pm Lunch break-
——————————————————–


3:00 pm – 5:00 pm

Panel 3: Ensuring Coherence—Bringing the Different Processes Together
Panel 3 gives the opportunity for a variety of Member States to elaborate upon ideas and proposals for how the
UN System can bring the MDG and SDG processes together to achieve coherence. It will be an interactive
discussion moderated by Barbara Adams, a member of the Civil Society Reflection Group, first with
representatives of Member States and then opening up a question and answer session with the audience,
including taking questions remotely from those around the world who will be watching via livestream webcast.

Moderator: Barbara Adams, Senior Policy Advisor, Global Policy Forum.

3:00 pm-3:45 pm
Inputs from: H.E. Mr. Luis-Alfonso de Alba, Ambassador and Permanent Representative, Permanent Mission of
Mexico to the United Nations
H.E. Mr. Gérard Araud, Ambassador and Permanent Representative, Permanent Mission of France to
the United Nations
H.E. Mr. Enrique Román-Morey, Ambassador and Permanent Representative, Permanent Mission of
Peru to the United Nations
H.E. Mr. Hans Peter Wittig, Ambassador and Permanent Representative, Permanent Mission of
Germany to the United Nations
H.E. Sir Mark Lyall Grant, Ambassador and Permanent Representative, Permanent Mission of the
United Kingdom to the United Nations
H.E. Mr. Mootaz Ahmadein Khalil, Ambassador and Permanent Representative, Permanent Mission
of the Arab Republic of Egypt to the United Nations

3:45 pm-4:00 pm
Reflections: From members of the High-Level Panel on post-2015 framework:
Betty Maina, Member, SG’s High-Level Panel on Post-2015 Development Agenda; Chief Executive
Officer, Kenya Association of Manufacturers
Patricia Espinosa, Member, SG’s High-Level Panel on Post-2015 Development Agenda; Secretary of
Foreign Affairs, Government of Mexico

4:00 pm-5:00 pm
Q&A Session: Moderated by Barbara Adams
Questions and comments to Member State panelists and High-Level panelists will be taken from the
audience as well as via social media from those watching the livestream.

5:00 pm – 5:30 pm
Concluding Reflections
Jan Eliasson, Deputy Secretary General, United Nations
Alejandro Toledo, President of Peru (2001-2006); Member, Club de Madrid

5:30 pm – 5:40 pm
Organizers’ Wrap-up
Clem McCartney, Policy and Content Coordinator, Shared Societies Project, Club de Madrid
Werner Puschra, Executive Director, Friedrich-Ebert-Stiftung, New York Office

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Posted on Sustainabilitank.info on July 29th, 2012
by Pincas Jawetz (PJ@SustainabiliTank.com)

How dare the world shun Israel on terrorism

José María Aznar

Published at 12:01AM, July 24 2012

Forty years after Munich, we are wrong to freeze out the country most affected by atrocities.

When we are about to mark the 40th anniversary of the terrorist attacks at the Olympic Village in Munich, in which 11 Israeli athletes were killed by Palestinian terrorists, it is a real paradox to see Israel excluded from the first meeting of the Global Counter-terrorism Forum.

This initiative, led by the United States and attended by 29 countries and the European Union, took place last month in an effort to improve the co-ordination of counter-terrorism policies at global level. Why wasn’t Israel invited? The meeting was held in Istanbul and no one wanted to “provoke” the host, the Islamist Government of the Turkish Prime Minister, Recep Tayyip Erdogan.

Worse still, in July, the forum organised its first victims-of-terrorism meeting. Not only was Israel excluded, but Israeli victims had no place in its official speeches. When we see deadly terrorist attacks such as the recent one in Bulgaria, targeting tourists simply because they were Israeli, the marginalisation of Israel is totally unacceptable.

As a terrorism victim myself, who was fortunate to survive a car-bomb attack, I cannot understand or justify the marginalisation of other terrorist victims just for political reasons. If we extrapolate Israel’s experience of slaughter to Britain, it would mean that in the past 12 years about 11,000 British citizens would have died and 60,000 would have been injured in terrorist attacks. In the case of the United States, the figures would be 65,000 dead and 300,000 injured. Israel’s ordeal is far from insignificant.

It is even more poignant if one considers Israel’s willingness to face up to terrorism and the practical experience that it has acquired to defeat it. Israel has much to contribute in this area and everyone else has a lot to learn if we really want to defeat the terrorists.

Fiamma Nirenstein, the vice- president of the Foreign Affairs Committee of the Italian Chamber of Deputies (and a member of the Friends of Israel Initiative) has made a proposal that is as fair as it is attractive — to hold a moment of silence at the London Olympics in memory of the 1972 massacre. Remembering is important, first, because of the victims, but also because many Europeans adopted the wrong attitude towards Palestinian terrorism after the Munich attack. The culprits who were arrested were later quietly released for fear of further attacks. And because of that initial fear the terrorists knew how to take advantage of the situation and to press for more rewards.

I have experienced terrorism at first hand. Many of my friends and some political colleagues have been killed by terrorists whose only merit was to have a hood, a gun or a bomb. Nonetheless, even in the most difficult times, I have always believed that weakness and appeasement are the wrong choices. Terrorism is not a natural phenomenon; it doesn’t happen spontaneously; it’s not something ethereal. It can and must be fought using all the tools provided by the law and democracy — and most importantly, it can be defeated if there is the will to defeat it. Israel has provided ample proof that it possesses that will, since its own existence is at stake.

To marginalise or isolate Israel to avoid irritating Turkey is a big mistake. All of the Middle East, from Morocco to the Gulf, is undergoing profound, although not always peaceful, change, which is yielding very disturbing results. Although the elections in Tunisia, Libya and Egypt are something new and promising for the region, Syria is immersed in civil war and there is a danger that the region’s largest arsenal of chemical weapons will spin out of control and become available to anyone — as happened with Libya’s portable anti-aircraft missiles, which disappeared after the fall of of Colonel Gaddafi. In Egypt, the rise of Islamism threatens economic and political stability. Hezbollah is still in Lebanon, keeping alive its goal of eliminating Israel — just as members of Hamas do in Gaza. Despite sanctions, Iran is moving forward with the development of a nuclear bomb in its effort to become the regional leader and to export its Islamist and revolutionary ideology as widely as possible. There are also other areas in turmoil that directly affect Europe, such as the Sahel region of Africa, south of the Sahara, which is now becoming dominated by al-Qaeda.

Isolation not only renders Israel weaker against its enemies, but also makes all Westerners weaker. And the practitioners of terrorism know all too well how to exploit our differences.

Remembering Munich 40 years on should be a useful reminder of our successes and failures. It should help us to enhance our collective abilities to fight terrorism. Israel is key in this fight. Israel is a part of the West. Israel is not the problem; it is part of the solution. We will become the problem if we continue to cold-shoulder Israel, the country most affected by terrorism and, possibly, the one that knows best how to defeat it.

————

José María Aznar was Prime Minister of Spain from 1996 to 2004

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Posted on Sustainabilitank.info on July 24th, 2012
by Pincas Jawetz (PJ@SustainabiliTank.com)

The Road to Absurdistan: A European Policy Dilemma.

A Kurt Bayer Commentary

July 23, 2012

 kurtbayer.wordpress.com/2012/07/2…

It is not that significantly new measures have not been tried: a few days ago, the Eurozone finance ministers backed a 100 bn € bank rescue fund for Spain (after Ireland, Portugal and Greece), so Spain could rescue its ailing banks. As “conditionality” required by the finance ministers, the ECB and the IMF, the Spanish prime minister had just pushed through another 65 bn € austerity package, in order to prove that Spain was serious about “savings”. At the same time, the Spanish government lowered its already measly GDP forecast for 2013 from 0.4% to a minus -0.5%. This, of course, will once again make it more difficult to repay the old and the newly incurred Spanish debt. And this even more so, as the financial markets “rewarded” the Spanish and European efforts (to repay them) by increasing the requested yield on Spanish government bonds to a staggering 7.2% – a rate far from affordable, let alone sustainable.

If the reader is confused, she has any right to be so: Spain’s previous government was one of the poster-children of the Eurozone: low government debt, budget surpluses, strict banking supervision. Then the real estate bubble, mainly fed by regional banks which also had been re-financed by some of the largest European banks, burst, the non-performing loans of savings banks increased, the government tried to save them and racked up sizeable government debts and deficits. Unfortunate merging decisions of ailing Cajas were made, and suddenly Spain was deemed more than high-risk by its international lenders. One of the rating agencies recently downgraded Spanish government bonds to junk status. The newly formed government, whose leader when in opposition had rejected participation in budget consolidation, caved in to the requests of the “markets” and the Troika and imposed another severe austerity burden on the already suffering Spanish economy.  Let us not forget, that Spanish unemployment is above 20% and youth unemployment more than 50%! Many commentators had rejoiced that finally the new Spanish government had been brought to heel by the markets…

But, as Spain undergoes this counter-productive consolidation program, in order to please markets and EZ governments, the markets decide that this reduces Spain’s ability to service its debt. I am no sympathizer of the new Spanish government, but what should the poor blokes do? At high political cost, at the danger of having the country erupt in anarchy and protest, they have done what markets and EZ governments asked them to do: their reward is even steeper re-financing costs, an economy in deep recession with unemployment exploding – and with one region after the other coming to the central government for financial help.

At their last summit, EU heads of state made some important, if tentative and incomplete steps into the right direction: to create the semblance of a banking union with joint supervision, with banks being able (in the too-distant  future) to be re-capitalized directly by the European Stability Mechanism, etc.  And private creditors of Spain being given the assurance (at the cost of 100 bn €) not to lose their money. But then the markets and EZ governments  wanted “guarantees” from Spain (Finland even got  extra collateral for part of its credit), that the country, i.e. taxpayers would contribute to solving the Spanish debt problem. Spain’s government duly responded – and gets punished once more by downgrades and higher yield requests.

The EU has already poured a lot of money into “peripheral” countries. The EZB has gone extraordinary ways to provide liquidity and to calm the fears of the markets of government defaults. The result is ever more rising debt ratios, deep recessions spreading to the whole EU – and beyond – and ever increasing demands from the financial markets. It is high time that the EU authorities, and the member states, realize that this carousel with gigantic private gain generation, serviced by staggering public (taxpayer) debt leads to deep recession, and can never be won – unless the model of financing government debt by private “investors” is radically altered. It is utterly irresponsible to have democratically elected governments thrown before the greedy teeth of profit-seeking private investors. Their legitimate interest is not to increase the welfare of citizens, but to feed their own pocket books. This model has worked remarkably well (for them) for the last 30 years, but has brought the world economy to the brink of collapse. Government finance must be put in the hands of democratically elected institutions and be accountable to the taxpayers. There is no room for private profit in government executing its fiduciary role for its populations!

In the short run, however, it becomes clearer every day that the debt burdens of governments  (and some banks) cannot be repaid in full. To shift them to the next generations, in the hope that future economic growth will make repayment, or at least the interest repayments, possible, is provingan illusion. The EU policy of requesting fast and significant budget and debt consolidation is driving the EU economies down. Taxpayers are saddled with extremely high repayment costs for decades to come. Thus, the most urgent task is the swift introduction of a government debt restructuring mechanism, in addition to a bank default mechanism. The debt burdens must be borne in any case: either by generations of taxpayers (and at the expense of more productive government expenditures), or by those private and public creditors who recklessly lent gigantic sums of money, driven on by gurus of “new economic thinking” who had espoused the wisdom that business cycles were a way of the past and a new blissful age of permanent growth (and thus limitless repayment capacity) had been reached.

EU heads of state and finance ministers in general are a sober lot. They need to live up to the fact, belatedly but still in time, that they have been taken for a ride by financial market actors: they allowed them to take immense risks, take all the gigantic profits and shift the risk on to the unwitting taxpayer  - and at the same time take the world economy down. This game should be over, the welfare of the people must dominate once more.

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Kurt Bayer, according to his bio, since November 2004 he is the Deputy Director General forEconomic Policy and International Financial Institutions, Austrian Ministry of Finance.  Does the Austrian Government at least listen to him? Above Commentary is from his blog.

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Posted on Sustainabilitank.info on July 7th, 2012
by Pincas Jawetz (PJ@SustainabiliTank.com)


Back, February 20, 2011, the RIO+20 headletter was used by the UN information office in Vienna to note that the World conference of 2012 is started on that day in Austria with a call for “Justice in a Finite World” and gave the impression that this will be about the initiatives that stretch from RIO92 to RIO+20.

By now, having watched the preparation in New York of the RIO+20 “Outcome Document” –  that was supposed to be growing organically out of the initial “Zero Document” – with all 195 UN seats occupied – we are rather convinced that the June 2012 meeting in RIO is aspiring to become the RIO-20 event instead – or a reformulation of targets as if AGENDA 21 has never been accepted in 1992.

With this observation in my right breast-pocket, let us see the awakening of real Vienna as depicted in these last three days, the end of the week before the week that will see New York attempting another 5 days of haggling about the Outcome Document.

I will be reviewing here several meetings that were held in Vienna.

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(1) On Tuesday May 22nd the Modul University at Kahlenberg, Vienna, an institution that has strong programs on Tourism, sponsored an event titled “Did Tourism become more Sustainable?”

The main guest speaker was Mr. Eugenio Yunis who was former Chief of Sustainable Development of Tourism Department, World Tourism Organization headquartered in Madrid, Spain, and is now Exrcutive Vice-President of all tourism in Chile – FEDETUR. He was very outspoken about Rio, saying things he never would have said earlier  - while still with the UN.

With him on the panel was Manfred Pils,  President of Vienna based Naturefriends International.

The moderator was Professor Dagmar Lund-Durlacher, Head of the Department of Tourism, and Dean, Tourism and Hospitality Management, Modul University, Vienna. Their motto is BUILDING EXCELLENCE FOR SUSTAINABLE TOURISM.

The obvious question was – How do we teach Sustainable Tourism? Yunis said that at WTO – that was their main mission – to do research on how to make tourism more sustainable.

THERE WAS NO SUSTAINABLE TOURISM MENTIONED IN AGENDA 21 of RIO 1992. But tourism is an important part of World economy. With growth of 4%/year it constitutes 5% of World GDP, and makes for 6-7% of World’s Jobs (direct and indirect).

It was only at CSD 7 – in 1999 – that Sustainable Tourism entered the Sustainability talks at the UN. By the time of RIO+10 at Johannesburg in 2002, Sustainable Tourism already rated for 6-7 articles in the Jo’burg outcome document.

Manfred Pils added that he personally got involved in what became ST (Sustainable Tourism) even before the word Sustainable was coined – the talk in 1981 was of SOFT TOURISM – the kind that uses muscles and not machines. They led to the first Green Suitcase awards – but this failed.

Today we have TOI – the Tourism Operators Initiative and we think of how to use tourism to make more sustainable the rest of the society.

Listening to the introductory speeches I tried my hand at a definition of Tourism – and came up with:

SUSTAINABLE TOURISM – THE MAXIMIZATION OF SOCIAL, CULTURAL, AND ECONOMIC GOALS, WHILE CREATING MINIMUM ENVIRONMENTAL DAMAGE ON LOCATION, AND ENHANCING AWARENESS ABOUT ENDANGERED SPECIES.

Mr Yunis took a liking to this definition. In effect there is already an Environmental Degradation Tourism. While there is controlled tourism in Costa Rica, Spain, New Zealand, Botswana, Bhutan that limits numbers of tourists – while Kenya and Senegal say the more the better.  Mr. Yunis was ready even to name chains of hotels as involved in eco-tourism and Sustainable Tourism – these like the ACCOR hotels that include the Sofitels, but in the end it is in the hands of the consumers – if they demand it – it will happen.

China generates already 15 million outboard tourists/year – traditionally big tourism travelers – Germany have only 4-6 million. There will have to be a more regulated movement of people. Talking regulation, Mr. Yunis continued that in general, we must move from the former liberal capitalist society to a more regulated society – this is an INFLECTION POINT to  MORE STATE INVOLVEMENT.

Problem points – IN TRANSPORTATION and the smaller places have bigger problems. Bigger cities have actually more of a chance of tackling the problem.

Mr. Yunis provided an example – Andes Latina operators who try to use only local leaders, use locally produced and grown food – they have a list of 25 points – questions they ask the hotels. Also the TUI travel operators who originally were German, but now have many Nations involved,  manage to work in direction of a more Sustainable Tourism.

Moving to the subject of RIO+20 Mr. Yunis said it comes at a very bad time and to be honest – he has no great expectation all together.

Turning back to ST – tourism needs more planning, more regulation – it is not a tree that can be let to grow by itself.

RIO+20 MUST TAKE STOCK OF DEVELOPMENT.  NOW WE HAVE ISSUES OF GLOBAL DEVELOPMENT AND GLOBAL SOCIAL DEVELOPMENT. We have now issues that were not part of the text in 1992 – tourism is realy  just a small part of this situation.

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When planned and managed in a sustainable manner, tourism is one of the few sectors that ally socio-economic development and biodiversity conservation.

Tourism has shown a sustained and resilient growth over the last 50 years. According to the World Tourism Organization forecasts, this sector will pursue its growth and, every year, more people will be in motion than ever before.

There is now recognition that uncontrolled growth in tourism aiming at short-term benefits often results in negative impacts, harming the environment and destroying the very basis on which tourism is built and thrives. On the contrary, when tourism is planned, developed and managed using sustainable criteria, its benefits can spread through society and the natural environment.

This fact is now widely recognised and, as a part of this recognition, the interrelations between biodiversity conservation and sustainable development of tourism are reflected in various major documents such as:

- The Plan of implementation of the World Summit on Sustainable Development (2002) contains an article on sustainable tourism (43) and an article on biodiversity (44) referring to “sustainable tourism, as a cross-cutting issue relevant to different ecosystems, sectors and thematic areas.”
- The Quebec Declaration on Ecotourism (2002)
- The CBD Guidelines on Biodiversity and Tourism Development (2003)
- The special recommendations of the V World Park Congress (2003):  ”Tourism as a Vehicle for Conservation and Support of Protected Areas”

Besides these principles and guidelines, many tools and techniques exist that allow tourism developers to increase, among others, environmental sustainability in the sector, such as: Zoning, ecolabels and other certification schemes, environmental indicators, water and waste management in tourist establishments, congestion management at tourism sites, etc.

The World Tourism Organization has conducted studies and published works aiming at raising awareness among all tourism stakeholders (public and private). WTO activities and publications in this field can be found under link:      www.world-tourism.org/sustainable

The Organization also encourages local authorities, NGOs and universities to conduct research on the actual impacts of tourism activities upon ecosystems, biodiversity, as well as upon local and indigenous cultures and the socio-economic fabric of the tourism destinations. Indeed, it has to be clearly understood that no action aiming at reducing the impacts on the environmental sphere can be dissociated from the two other dimensions of the sustainable development, which are the social and the economic ones.

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The problem with my not having posted this earlier stemmed from my not having  completed the article by introducing the two other meetings. I give up at this time and post just what I already have, with the idea of a follow up later.


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Posted on Sustainabilitank.info on June 3rd, 2012
by Pincas Jawetz (PJ@SustainabiliTank.com)

George Soros Remarks at the Festival of Economics.

June 2, 2012

Trento, Italy

Ever since the Crash of 2008 there has been a widespread recognition, both among economists and the general public, that economic theory has failed. But there is no consensus on the causes and the extent of that failure. I believe that the failure is more profound than generally recognized. It goes back to the foundations of economic theory.

Economics tried to model itself on Newtonian physics. It sought to establish universally and timelessly valid laws governing reality. But economics is a social science and there is a fundamental difference between the natural and social sciences. Social phenomena have thinking participants who base their decisions on imperfect knowledge. That is what economic theory has tried to ignore.

Scientific method needs an independent criterion, by which the truth or validity of its theories can be judged. Natural phenomena constitute such a criterion; social phenomena do not. That is because natural phenomena consist of facts that unfold independently of any statements that relate to them. The facts then serve as objective evidence by which the validity of scientific theories can be judged. That has enabled natural science to produce amazing results.

Social events, by contrast, have thinking participants who have a will of their own.  They are not detached observers but engaged decision makers whose decisions greatly influence the course of events. Therefore the events do not constitute an independent criterion by which participants can decide whether their views are valid. In the absence of an independent criterion people have to base their decisions not on knowledge but on an inherently biased and to greater or lesser extent distorted interpretation of reality. Their lack of perfect knowledge or fallibility introduces an element of indeterminacy into the course of events that is absent when the events relate to the behavior of inanimate objects. The resulting uncertainty hinders the social sciences in producing laws similar to Newton’s physics.

Economics, which became the most influential of the social sciences, sought to remove this handicap by taking an axiomatic approach similar to Euclid’s geometry. But Euclid’s axioms closely resembled reality while the theory of rational expectations and the efficient market hypothesis became far removed from it. Up to a point the axiomatic approach worked. For instance, the theory of perfect competition postulated perfect knowledge. But the postulate worked only as long as it was applied to the exchange of physical goods. When it came to production, as distinct from exchange, or to the use of money and credit, the postulate became untenable because the participants’ decisions involved the future and the future cannot be known until it has actually occurred.

I am not well qualified to criticize the theory of rational expectations and the efficient market hypothesis because as a market participant I considered them so unrealistic that I never bothered to study them. That is an indictment in itself but I shall leave a detailed critique of these theories to others.

Instead, I should like to put before you a radically different approach to financial markets. It was inspired by Karl Popper who taught me that people’s interpretation of reality never quite corresponds to reality itself. This led me to study the relationship between the two. I found a two-way connection between the participants’ thinking and the situations in which they participate.

On the one hand people seek to understand the situation; that is the cognitive function. On the other, they seek to make an impact on the situation; I call that the causative or manipulative function. The two functions connect the thinking agents and the situations in which they participate in opposite directions.

In the cognitive function the situation is supposed to determine the participants’ views; in the causative function the participants’ views are supposed to determine the outcome. When both functions are at work at the same time they interfere with each other. The two functions form a circular relationship or feedback loop. I call that feedback loop reflexivity. In a reflexive situation the participants’ views cannot correspond to reality because reality is not something independently given; it is contingent on the participants’ views and decisions. The decisions, in turn, cannot be based on knowledge alone; they must contain some bias or guess work about the future because the future is contingent on the participants’ decisions.

Fallibility and reflexivity are tied together like Siamese twins. Without fallibility there would be no reflexivity – although the opposite is not the case: people’s understanding would be imperfect even in the absence of reflexivity. Of the two twins, fallibility is the first born. Together, they ensure both a divergence between the participants’ view of reality and the actual state of affairs and a divergence between the participants’ expectations and the actual outcome.

Obviously, I did not discover reflexivity. Others had recognized it before me, often under a different name. Robert Merton wrote about self-fulfilling prophecies and the bandwagon effect, Keynes compared financial markets to a beauty contest where the participants had to guess who would be the most popular choice. But starting from fallibility and reflexivity I focused on a problem area, namely the role of misconceptions and misunderstandings in shaping the course of events that mainstream economics tried to ignore. This has made my interpretation of reality more realistic than the prevailing paradigm.

Among other things, I developed a model of a boom-bust process or bubble which is endogenous to financial markets, not the result of external shocks. According to my theory, financial bubbles are not a purely psychological phenomenon.  They have two components: a trend that prevails in reality and a misinterpretation of that trend. A bubble can develop when the feedback is initially positive in the sense that both the trend and its biased interpretation are mutually reinforced. Eventually the gap between the trend and its biased interpretation grows so wide that it becomes unsustainable. After a twilight period both the bias and the trend are reversed and reinforce each other in the opposite direction. Bubbles are usually asymmetric in shape: booms develop slowly but the bust tends to be sudden and devastating. That is due to the use of leverage: price declines precipitate the forced liquidation of leveraged positions.

Well-formed financial bubbles always follow this pattern but the magnitude and duration of each phase is unpredictable. Moreover the process can be aborted at any stage so that well-formed financial bubbles occur rather infrequently.

At any moment of time there are myriads of feedback loops at work, some of which are positive, others negative. They interact with each other, producing the irregular price patterns that prevail most of the time; but on the rare occasions that bubbles develop to their full potential they tend to overshadow all other influences.

According to my theory financial markets may just as soon produce bubbles as tend toward equilibrium. Since bubbles disrupt financial markets, history has been punctuated by financial crises. Each crisis provoked a regulatory response. That is how central banking and financial regulations have evolved, in step with the markets themselves. Bubbles occur only intermittently but the interplay between markets and regulators is ongoing. Since both market participants and regulators act on the basis of imperfect knowledge the interplay between them is reflexive. Moreover reflexivity and fallibility are not confined to the financial markets; they also characterize other spheres of social life, particularly politics. Indeed, in light of the ongoing interaction between markets and regulators it is quite misleading to study financial markets in isolation. Behind the invisible hand of the market lies the visible hand of politics. Instead of pursuing timeless laws and models we ought to study events in their time bound context.

My interpretation of financial markets differs from the prevailing paradigm in many ways. I emphasize the role of misunderstandings and misconceptions in shaping the course of history. And I treat bubbles as largely unpredictable. The direction and its eventual reversal are predictable; the magnitude and duration of the various phases is not. I contend that taking fallibility as the starting point makes my conceptual framework more realistic. But at a price: the idea that laws or models of universal validity can predict the future must be abandoned.

Until recently, my interpretation of financial markets was either ignored or dismissed by academic economists. All this has changed since the crash of 2008. Reflexivity became recognized but, with the exception of Imperfect Knowledge Economics, the foundations of economic theory have not been subjected to the profound rethinking that I consider necessary. Reflexivity has been accommodated by speaking of multiple equilibria instead of a single one. But that is not enough. The fallibility of market participants, regulators, and economists must also be recognized.  A truly dynamic situation cannot be understood by studying multiple equilibria.  We need to study the process of change.

The euro crisis is particularly instructive in this regard. It demonstrates the role of misconceptions and a lack of understanding in shaping the course of history. The authorities didn’t understand the nature of the euro crisis; they thought it is a fiscal problem while it is more of a banking problem and a problem of competitiveness. And they applied the wrong remedy: you cannot reduce the debt burden by shrinking the economy, only by growing your way out of it. The crisis is still growing because of a failure to understand the dynamics of social change; policy measures that could have worked at one point in time were no longer sufficient by the time they were applied.

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Since the euro crisis is currently exerting an overwhelming influence on the global economy I shall devote the rest of my talk to it. I must start with a warning: the discussion will take us beyond the confines of economic theory into politics and the dynamics of social change. But my conceptual framework based on the twin pillars of fallibility and reflexivity still applies. Reflexivity doesn’t always manifest itself in the form of bubbles. The reflexive interplay between imperfect markets and imperfect authorities goes on all the time while bubbles occur only infrequently. This is a rare occasion when the interaction exerts such a large influence that it casts its shadow on the global economy. How could this happen? My answer is that there is a bubble involved, after all, but it is not a financial but a political one. It relates to the political evolution of the European Union and it has led me to the conclusion that the euro crisis threatens to destroy the European Union. Let me explain.

I contend that the European Union itself is like a bubble. In the boom phase the EU was what the psychoanalyst David Tuckett calls a “fantastic object” – unreal but immensely attractive. The EU was the embodiment of an open society –an association of nations founded on the principles of democracy, human rights, and rule of law in which no nation or nationality would have a dominant position.

The process of integration was spearheaded by a small group of far sighted statesmen who practiced what Karl Popper called piecemeal social engineering. They recognized that perfection is unattainable; so they set limited objectives and firm timelines and then mobilized the political will for a small step forward, knowing full well that when they achieved it, its inadequacy would become apparent and require a further step. The process fed on its own success, very much like a financial bubble. That is how the Coal and Steel Community was gradually transformed into the European Union, step by step.

Germany used to be in the forefront of the effort. When the Soviet empire started to disintegrate, Germany’s leaders realized that reunification was possible only in the context of a more united Europe and they were willing to make considerable sacrifices to achieve it.  When it came to bargaining they were willing to contribute a little more and take a little less than the others, thereby facilitating agreement.  At that time, German statesmen used to assert that Germany has no independent foreign policy, only a European one.

The process culminated with the Maastricht Treaty and the introduction of the euro. It was followed by a period of stagnation which, after the crash of 2008, turned into a process of disintegration. The first step was taken by Germany when, after the bankruptcy of Lehman Brothers, Angela Merkel declared that the virtual guarantee extended to other financial institutions should come from each country acting separately, not by Europe acting jointly. It took financial markets more than a year to realize the implication of that declaration, showing that they are not perfect.

The Maastricht Treaty was fundamentally flawed, demonstrating the fallibility of the authorities. Its main weakness was well known to its architects: it established a monetary union without a political union. The architects believed however, that when the need arose the political will could be generated to take the necessary steps towards a political union.

But the euro also had some other defects of which the architects were unaware and which are not fully understood even today. In retrospect it is now clear that the main source of trouble is that the member states of the euro have surrendered to the European Central Bank their rights to create fiat money. They did not realize what that entails – and neither did the European authorities. When the euro was introduced the regulators allowed banks to buy unlimited amounts of government bonds without setting aside any equity capital; and the central bank accepted all government bonds at its discount window on equal terms. Commercial banks found it advantageous to accumulate the bonds of the weaker euro members in order to earn a few extra basis points. That is what caused interest rates to converge which in turn caused competitiveness to diverge. Germany, struggling with the burdens of reunification, undertook structural reforms and became more competitive. Other countries enjoyed housing and consumption booms on the back of cheap credit, making them less competitive. Then came the crash of 2008 which created conditions that were far removed from those prescribed by the Maastricht Treaty. Many governments had to shift bank liabilities on to their own balance sheets and engage in massive deficit spending. These countries found themselves in the position of a third world country that had become heavily indebted in a currency that it did not control. Due to the divergence in economic performance Europe became divided between creditor and debtor countries. This is having far reaching political implications to which I will revert.

It took some time for the financial markets to discover that government bonds which had been considered riskless are subject to speculative attack and may actually default; but when they did, risk premiums rose dramatically. This rendered commercial banks whose balance sheets were loaded with those bonds potentially insolvent. And that constituted the two main components of the problem confronting us today: a sovereign debt crisis and a banking crisis which are closely interlinked.

The eurozone is now repeating what had often happened in the global financial system. There is a close parallel between the euro crisis and the international banking crisis that erupted in 1982. Then the international financial authorities did whatever was necessary to protect the banking system: they inflicted hardship on the periphery in order to protect the center. Now Germany and the other creditor countries are unknowingly playing the same role. The details differ but the idea is the same: the creditors are in effect shifting the burden of adjustment on to the debtor countries and avoiding their own responsibility for the imbalances. Interestingly, the terms “center” and “periphery” have crept into usage almost unnoticed. Just as in the 1980’s all the blame and burden is falling on the “periphery” and the responsibility of the “center” has never been properly acknowledged.  Yet in the euro crisis the responsibility of the center is even greater than it was in 1982. The “center” is responsible for designing a flawed system, enacting flawed treaties, pursuing flawed policies and always doing too little too late. In the 1980’s Latin America suffered a lost decade; a similar fate now awaits Europe. That is the responsibility that Germany and the other creditor countries need to acknowledge. But there is now sign of this happening.

The European authorities had little understanding of what was happening. They were prepared to deal with fiscal problems but only Greece qualified as a fiscal crisis; the rest of Europe suffered from a banking crisis and a divergence in competitiveness which gave rise to a balance of payments crisis. The authorities did not even understand the nature of the problem, let alone see a solution. So they tried to buy time.

Usually that works. Financial panics subside and the authorities realize a profit on their intervention. But not this time because the financial problems were reinforced by a process of political disintegration. While the European Union was being created, the leadership was in the forefront of further integration; but after the outbreak of the financial crisis the authorities became wedded to preserving the status quo. This has forced all those who consider the status quo unsustainable or intolerable into an anti-European posture. That is the political dynamic that makes the disintegration of the European Union just as self-reinforcing as its creation has been.  That is the political bubble I was talking about.

At the onset of the crisis a breakup of the euro was inconceivable: the assets and liabilities denominated in a common currency were so intermingled that a breakup would have led to an uncontrollable meltdown. But as the crisis progressed the financial system has been progressively reordered along national lines. This trend has gathered momentum in recent months. The Long Term Refinancing Operation (LTRO) undertaken by the European Central Bank enabled Spanish and Italian banks to engage in a very profitable and low risk arbitrage by buying the bonds of their own countries. And other investors have been actively divesting themselves of the sovereign debt of the periphery countries.

If this continued for a few more years a break-up of the euro would become possible without a meltdown – the omelet could be unscrambled – but it would leave the central banks of the creditor countries with large claims against the central banks of the debtor countries which would be difficult to collect. This is due to an arcane problem in the euro clearing system called Target2. In contrast to the clearing system of the Federal Reserve, which is settled annually, Target2 accumulates the imbalances. This did not create a problem as long as the interbank system was functioning because the banks settled the imbalances themselves through the interbank market. But the interbank market has not functioned properly since 2007 and the banks relied increasingly on the Target system. And since the summer of 2011 there has been increasing capital flight from the weaker countries. So the imbalances grew exponentially. By the end of March this year the Bundesbank had claims of some 660 billion euros against the central banks of the periphery countries.

The Bundesbank has become aware of the potential danger. It is now engaged in a campaign against the indefinite expansion of the money supply and it has started taking measures to limit the losses it would sustain in case of a breakup. This is creating a self-fulfilling prophecy. Once the Bundesbank starts guarding against a breakup everybody will have to do the same.

This is already happening. Financial institutions are increasingly reordering their European exposure along national lines just in case the region splits apart. Banks give preference to shedding assets outside their national borders and risk managers try to match assets and liabilities within national borders rather than within the eurozone as a whole. The indirect effect of this asset-liability matching is to reinforce the deleveraging process and to reduce the availability of credit, particularly to the small and medium enterprises which are the main source of employment.

So the crisis is getting ever deeper. Tensions in financial markets have risen to new highs as shown by the historic low yield on Bunds. Even more telling is the fact that the yield on British 10 year bonds has never been lower in its 300 year history while the risk premium on Spanish bonds is at a new high.

The real economy of the eurozone is declining while Germany is still booming. This means that the divergence is getting wider. The political and social dynamics are also working toward disintegration. Public opinion as expressed in recent election results is increasingly opposed to austerity and this trend is likely to grow until the policy is reversed. So something has to give.

In my judgment the authorities have a three months’ window during which they could still correct their mistakes and reverse the current trends. By the authorities I mean mainly the German government and the Bundesbank because in a crisis the creditors are in the driver’s seat and nothing can be done without German support.

I expect that the Greek public will be sufficiently frightened by the prospect of expulsion from the European Union that it will give a narrow majority of seats to a coalition that is ready to abide by the current agreement. But no government can meet the conditions so that the Greek crisis is liable to come to a climax in the fall. By that time the German economy will also be weakening so that Chancellor Merkel will find it even more difficult than today to persuade the German public to accept any additional European responsibilities. That is what creates a three months’ window.

Correcting the mistakes and reversing the trend would require some extraordinary policy measures to bring conditions back closer to normal, and bring relief to the financial markets and the banking system. These measures must, however, conform to the existing treaties. The treaties could then be revised in a calmer atmosphere so that the current imbalances will not recur. It is difficult but not impossible to design some extraordinary measures that would meet these tough requirements. They would have to tackle simultaneously the banking problem and the problem of excessive government debt, because these problems are interlinked. Addressing one without the other, as in the past, will not work.

Banks need a European deposit insurance scheme in order to stem the capital flight. They also need direct financing by the European Stability Mechanism (ESM) which has to go hand-in-hand with eurozone-wide supervision and regulation. The heavily indebted countries need relief on their financing costs. There are various ways to provide it but they all need the active support of the Bundesbank and the German government.

That is where the blockage is. The authorities are working feverishly to come up with a set of proposals in time for the European summit at the end of this month. Based on the current newspaper reports the measures they will propose will cover all the bases I mentioned but they will offer only the minimum on which the various parties can agree while what is needed is a convincing commitment to reverse the trend. That means the measures will again offer some temporary relief but the trends will continue. But we are at an inflection point.  After the expiration of the three months’ window the markets will continue to demand more but the authorities will not be able to meet their demands.

It is impossible to predict the eventual outcome. As mentioned before, the gradual reordering of the financial system along national lines could make an orderly breakup of the euro possible in a few years’ time and, if it were not for the social and political dynamics, one could imagine a common market without a common currency. But the trends are clearly non-linear and an earlier breakup is bound to be disorderly. It would almost certainly lead to a collapse of the Schengen Treaty, the common market, and the European Union itself. (It should be remembered that there is an exit mechanism for the European Union but not for the euro.) Unenforceable claims and unsettled grievances would leave Europe worse off than it was at the outset when the project of a united Europe was conceived.

But the likelihood is that the euro will survive because a breakup would be devastating not only for the periphery but also for Germany. It would leave Germany with large unenforceable claims against the periphery countries. The Bundesbank alone will have over a trillion euros of claims arising out of Target2 by the end of this year, in addition to all the intergovernmental obligations. And a return to the Deutschemark would likely price Germany out of its export markets – not to mention the political consequences. So Germany is likely to do what is necessary to preserve the euro – but nothing more. That would result in a eurozone dominated by Germany in which the divergence between the creditor and debtor countries would continue to widen and the periphery would turn into permanently depressed areas in need of constant transfer of payments. That would turn the European Union into something very different from what it was when it was a “fantastic object” that fired peoples imagination. It would be a German empire with the periphery as the hinterland.

I believe most of us would find that objectionable but I have a great deal of sympathy with Germany in its present predicament. The German public cannot understand why a policy of structural reforms and fiscal austerity that worked for Germany a decade ago will not work Europe today. Germany then could enjoy an export led recovery but the eurozone today is caught in a deflationary debt trap. The German public does not see any deflation at home; on the contrary, wages are rising and there are vacancies for skilled jobs which are eagerly snapped up by immigrants from other European countries. Reluctance to invest abroad and the influx of flight capital are fueling a real estate boom. Exports may be slowing but employment is still rising. In these circumstances it would require an extraordinary effort by the German government to convince the German public to embrace the extraordinary measures that would be necessary to reverse the current trend. And they have only a three months’ window in which to do it.

We need to do whatever we can to convince Germany to show leadership and preserve the European Union as the fantastic object that it used to be. The future of Europe depends on it.

————————-

And from todays’s New York Times: “In the United States, the ease of borrowing has not made it politically easier to increase the pace of spending. Instead, there is the possibility of “Taxmageddon,” the threat that the unwillingness of politicians to compromise could lead to a combination of big automatic spending cuts and tax increases in 2013 that could devastate economic growth. All this is taking place in the midst of an election campaign that is widely expected to be the nastiest ever.

Moreover, the consensus that financial regulation should be strengthened and standardized has evaporated. In Europe and the United States, banks say that institutions across the Atlantic have unfair advantages, and regulators complain that the other continent has not taken the needed steps.

In the United States, a major push by the banks to weaken rules may or may not have been badly damaged by the multibillion-dollar trading loss suffered recently by JPMorgan Chase. But many in Congress, primarily but not exclusively Republicans, have gone back to the old belief that it was excessive government regulation that created the problem.

The widespread pessimism could dissipate as rapidly as it accumulated. Some surprisingly good economic news in the United States and China would help. More important would be for Europe’s leaders to reach agreement on a course of action that offered hope for recovery in the most stricken areas of the Continent while assuring that the common financial system would have the support of common institutions if needed. Europe has previously managed to cobble together something when disaster appeared to loom, and perhaps it could do so again.

Germany — the country that would have to pick up most of the bill to rescue its neighbors — could decide that not spending the money created greater dangers. The United States could find ways to help out despite fiscal pressures and Congressional hostility to foreign aid. A new consensus on common bank regulation could emerge. But, for now at least, the outlook is far darker than it seemed to be only a couple of months ago.”

www.nytimes.com/2012/06/03/business/in-economic-deluge-a-world-thats-unable-to-bail-together.html?nl=todaysheadlines&emc=edit_th_20120603

NEWS ANALYSIS

In Economic Deluge, a World That’s Unable to Bail Together

By 
Published: June 2, 2012

Less than four years ago, with the world’s financial system in danger of collapsing, major countries managed to come together on a coordinated course that averted a global depression.

Central banks pumped vast amounts of cash into economies, and banks were bailed out, with vows that they would be subject to stronger regulation.

By early 2009, financial markets had bottomed out and begun strong recoveries. Economies were slower to follow; by last year, slow growth seemed to be the global pattern, spurring hope that the crisis had passed.

But within the last few weeks, much of that hope seems to have faded.

In Europe, the crisis has grown worse, not better, and thedisputes among European leaders have intensified as much of the Continent appears to have drifted into a newrecession. In China, growth remains robust by Western standards. But concern is rising over the possible end of a property boom that had been fueled in part by local government borrowing and spending.

In the United States, which had been an oasis of relative calm with a growing economy and rising employment, job growth in May, reported Friday, was a puny 69,000. To make the outlook even gloomier, earlier numbers were revised lower. That capped a series of three disappointing monthly reports.

Moreover, there seems to be little willingness — or perhaps lit-tle ability — for the major countries to act together again. Squabbles have grown, some countries are in fiscal distress, and others face daunting domestic problems. The European situation is the most pressing. Banks are under pressure in many countries, for a combination of reasons. They did not raise as much capital as they might have when markets were more buoyant last year. In some cases, they appear to have been slow to recognize their real estate loan losses.


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Posted on Sustainabilitank.info on May 17th, 2012
by Pincas Jawetz (PJ@SustainabiliTank.com)

There is ‘no need to fear a more federal Europe’

Europe needs to rediscover its élan and purpose or we will sleepwalk into disintegration and disunity – warns MEP and ALDE group leader

11/05/2012

There is ‘no need to fear a more federal Europe.’

by Guy Verhofstadt

Europe needs to rediscover its élan and purpose or we will sleepwalk into disintegration and disunity – warns MEP and ALDE group leader

The French and Greek elections last weekend both delivered a body blow to Europe’s austerity drive designed to rein in national over-spending and reduce the enormous debt mountains that have been accumulating over the past 30 years or more. That Francois Hollande picked up on the anti-austerity theme was probably as much to do with pragmatic politics as ideology. He knows very well that he will not be able to keep all his policy commitments from the campaign trail.

France is not Greece, but it does not have any laurels to rest on either. It was recently downgraded by one rating agency, has high youth unemployment at 25 per cent and a budget that has not been balanced in three decades. That the people voted for a candidate promising a brighter future, reversing pension reforms, creating thousands of new jobs and re-negotiating Europe’s fiscal compact is little surprise – but may shortly be rudely confronted by reality.

At least Hollande is a democrat and a good European. Nicolas Sarkozy was too when he took up office. His interventions in the European Parliament during the French Presidency of the European Union could not be faulted by federalists. And his energy and dynamism were deployed in the common interest. That is until he found himself facing likely defeat to his socialist challenger. He then turned abruptly to the right in a vain effort to woo the voters of Marine Le Pen. Time and again, EU leaders who experiment with populist messages have only served to strengthen – rather than weaken – the hand of the initiators of such messages. In the Netherlands, Finland, Greece and elsewhere – populist, racist and extremist parties have all benefitted from such heightened rhetoric. Why vote for a copy when you can vote for the original?

At the other end of the Mediterranean, the Greek elections delivered an anarchic result in which the two main parties rightly got punished for the decades of corruption and clientilism. But the anti-establishment parties that have reaped the benefit and filled the vacuum have largely vented their anger against the EU and international financial institutions that have imposed tough austerity measures in return for bailing them out from certain bankruptcy. The result leaves no party in Greece able to form a government and everyone promising to voters what cannot be delivered.

So the beleaguered Greek citizen continues to suffer from an inept and self-serving political class that now counts neo-Nazis among its ranks. On the other side of the spectrum is a new far left party, Syriza, which has blatantly and opportunistically capitalised on the country’s woes and the tough adjustment plan imposed by external creditors. It is disingenuous of the party leader to pretend he can tear up the bailout conditions, so painfully negotiated over the last two years, and offer a painless alternative.

The tendency of politicians in both France and Greece to blame foreigners – Brussels bureaucrats or third country migrants – for their country’s travails is a telling indicator that the construction of Europe over the last 60 years still remains a fragile structure that can be so easily and quickly overturned by irresponsible and populist rhetoric – leading to a recrudescence of the kind of nationalism that led us into two world wars, in the first half of last century. Growing Euroscepticism across member states must be countered by a radical renewal of those who are convinced Europeans. We cannot afford to become complacent or indifferent to events that are now shaping public opinion. Europe needs to rediscover its élan and purpose or we will sleepwalk to disintegration and disunity.

Ending the current economic crisis must be everyone’s top priority. No stone must be left unturned in finding a solution, even if that means further pooling of sovereignty. Germany for instance is currently deaf to some practical solutions, such as a European debt redemption fund – which would combine discipline with solidarity – because it fears a loss of sovereignty and accepting responsibility for other people’s debt. But the alternative – never-ending taxpayer funded bailouts – is surely worse.

It is too simplistic and economically nonsensical to argue that austerity is wrong and growth is good. They are two sides of the same coin. Governments cannot invest in growth if they are paying huge interest rates on their borrowing to cover their debts. Annual deficits need to be reined in by reducing unnecessary expenditure so that the resources subsequently liberated can be invested in productive jobs and growth strategies. Some countries have more to do than others in this regard but the rules agreed by European leaders and recently enshrined in a political pact on budgetary discipline remain sensible for long-term budgetary planning.

In this week when we commemorate the speech on May 9, 1950, by French foreign minister, Robert Schuman. The words launched the idea of European integration and pooled sovereignty. His message remains as relevant now as it did then. Europe will not stand still. It will either collapse under the weight of growing nationalism and scepticism or it will recover its sense of purpose, agree to make a qualitative leap in integration in response to the crisis and therefore offer the next generation the kind of peace and stability that we have enjoyed over the past half century. It is not enough to hope that the latter scenario will prevail for there are forces actively working to destroy it. There is no need to fear a more federal Europe, but every reason to embrace it.

Guy Verhofstadt MEP is leader of the Alliance of Liberals and Democrats for Europe group in the European Parliament
 www.alde.eu/press/press-and-relea…

[This article has been also published on PSblicserviceeurope.com and www.EUobserver.com ]

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Posted on Sustainabilitank.info on May 13th, 2012
by Pincas Jawetz (PJ@SustainabiliTank.com)

Greek Tragedy.

By ARIANNA HUFFINGTON
Published, The New York Times as Opinion: May 12, 2012

{please note – she writes this on Mothers’ Day Weekend – and she knows how to write – then she must have inherited as well some genes from her unsuccessful father attempts at owning media. Clearly – for the Greeks it is all in the family – and  EU is not family.}

——

As I follow the modern Greek tragedy unfolding in Europe, I flash back to the 18 years I spent in Athens, walking to school in Plaka (the old part of the city), on the same streets that have recently been filled with protesters and violent clashes.

When I was growing up, my family was a tiny microcosm of the current Greek economy. We were heavily in debt; my father’s repeated attempts to own a newspaper ended in failure and bankruptcy. Eventually, my mother took my sister and me and left him. We all lived in Athens and we continued to see my father, though we had our own one-bedroom apartment. (It wasn’t the bankruptcy that got to my mom in the end, but the philandering; “I don’t want you interfering in my private life,” my father had told her when she complained.)

Further austerity was coming, but my mother was clear about one thing: she would cut back on everything except our education and good, healthy food. She owned two dresses and never spent anything on herself. I remember her selling her last pair of little gold earrings. She borrowed from anyone she could, so that her two daughters could fulfill their dreams of a good education — me at Cambridge, and my sister at the Royal Academy of Dramatic Art in London. At the time, Greek girls still offered dowries to be married. My mother used to tell me, “Your education is your dowry.”

As I contemplate the statistics — especially the 54 percent unemployment rate among young Greeks — I think of all the stories behind this appalling data. All the dreams dashed. All the promise unfulfilled. And all the guilt, shame and fear that so often go hand in hand with intractable unemployment and little hope for a better future.

The punitive path of austerity and relentless economic contraction is, not surprisingly, likely to lead to further stagnation in 2013 and cannot be allowed to continue. And as last week’s election results show, the Greek people are not going to allow it to continue; they will instead demand change through either the ballot box or violence in the streets — or some combination of both.

The dangers of violent protest are obvious. But there are dangers in the ballot box, too: an extreme right-wing anti-immigration party received almost 7 percent of the vote, while Pasok, the establishment party of the left, lost 119 seats in Parliament in a humiliating third-place finish. If the European Central Bank does not abandon its destructive obsession with austerity, Greece will have few options but to leave the euro zone. This would be fraught with its own dangers, of course, but the European Union has left Greece with few sustainable alternatives.

Argentina, which defaulted and restructured beginning in 2001, offers a point of comparison. The austerity crowd warned that Argentina would collapse if it stopped pegging the peso to the dollar and defaulted on its debt. There are many differences between Argentina and Greece. But Argentina’s default was followed by a few short months of economic crisis and then many years of steady economic growth — a dramatically different direction than the one Greece is now taking toward a potentially endless path of contraction that is destroying millions of lives and crippling the indomitable Greek spirit.

Yes, the Greeks acted irresponsibly before the economic collapse — the same way my father had acted irresponsibly in his private and professional life. But that is not reason to punish the children, to destroy their future as part of a remedy for a past for which they bear no responsibility.

I spent many nights last summer in Syntagma Square, directly across from the Greek Parliament. The protesting crowd was mixed, full of young people and old, self-employed, unemployed, activists, pensioners. Millions of outraged Greeks — who famously relish connection, expansiveness, intimacy — used social media to connect with the rest of the country and the world; those in the square itself connected and organized the old-fashioned way, face-to-face.

Everywhere waiters, taxi drivers, salespeople, storekeepers, people at the table next to you at dinner, were talking about the same thing. They were — and still are — giving voice to a desire for more say in their own future, a future with more choices than those on offer from the European Central Bank.

When George Papandreou, who was prime minister at the time but resigned last November, visited The Huffington Post newsroom, he expressed the same feelings: “People think they’re being punished unjustly, because they feel they weren’t to blame for this crisis,” he said.

Greece, like my mother, has always been devoted above all else to its children. When the future of those children is diminished, the future — and life — of the country will be diminished, too.

My favorite picture from the protests shows a young man pumping his fist at a line of riot police officers while his mother stands beside him, holding his jacket, to make sure he doesn’t catch a cold. If Greece stays on its current dead-end path of austerity-fueled recession, the children will revolt, and the parents will be right there beside them, cheering them on and watching protectively over them.

And if having a future means leaving the euro, that’s most likely what the Greeks will choose. They invented democracy, and now it’s time to rekindle that Greek spirit of innovation and ingenuity — before economic trouble generates further despair and its dangerous progeny in the streets and in the ballot box.

——-

Arianna Huffington is President and editor in chief of The Huffington Post Media Group, and author, most recently, of “Third World America.”

=======================================

Recent elections in France and Greece pose significant challenges to the strict economic austerity policies Germany has called for in response to the eurozone sovereign debt crisis. Still, Germany has resolutely rebuffed any efforts to alter the European fiscal compact agreed to late last year, explains Council on Foreign Relation’s Sebastian Mallaby. “There’s a battle coming up between Hollande and his European partners as to quite what a growth agenda might mean,” he says. At the same time, the political situation in Greece is “more potentially cataclysmic in its consequences,” Mallaby argues, because it could not only signal a Greek exit from the eurozone, but also undermine European financial institutions and facilitate further sovereign debt contagion.

Voters in Greece rejected the country’s mainstream political parties, and, by extension, the latest EU-IMF bailout. In France, voters elected François Hollande to implement pro-growth policies in a worsening economic climate.What are the implications of these recent elections on EU efforts to resolve the eurozone debt crisis?

In the case of France, what François Hollande has done by defeating current President Nicolas Sarkozy is basically to put on the agenda a “growth pact.”

The question is how to define that rebalancing of European policies away from the austerity formula that has driven it so far.

We suggest – read some of the material that goes into the RioDialogues, throw out the books on Economics 101, and start formulating new economic policies that bring the interest in FUTURE GENERATIONS into your present CURRENT ACCOUNT policies. Oh Well! we know it is hard to create change when under pressure – but talk please to the mothers of Greece as depicted by Arianna Huffington.

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Posted on Sustainabilitank.info on May 13th, 2012
by Pincas Jawetz (PJ@SustainabiliTank.com)

The RioDialogues can provide new ideas to a World that tries on anew the clothes of Jean Renoir’s old Europe of the 30s. We see a future of Resource Wars, of Societal Financial Aristocracy, and stand-up of the societal Financial Oppressed.

The RIO+20 meetings are met by a city of hotel sharks that makes it difficult to attend – not for the government delegates – but for civil society that has the ideas. The alternative is to stay home and send instead your computer to Rio. In Renoir’s World there were no computers so you had to watch flesh and blood acting in front of you. Not important how you do it – but please activate your mind and see the path we are on.

===================================

Michael T. Klare | Oil Wars on the Horizon
Michael T. Klare, TomDispatch
Klare writes: “The seeds of energy conflicts and war sprouting in so many places simultaneously suggest that we are entering a new period in which key state actors will be more inclined to employ force – or the threat of force – to gain control over valuable deposits of oil and natural gas. In other words, we’re now on a planet heading into energy overdrive.”
READ MORE

Goldman Sachs: Blood in the Water
Bethany McLean, Vanity Fair
McLean writes: “The op-ed heard round the world – Greg Smith’s scathing New York Times attack on Goldman Sachs, his employer of nearly 12 years – dealt another blow to the firm’s reeling reputation. Now the questions are louder than ever: Will C.E.O. Lloyd Blankfein have to go? Who might succeed him? And does it matter?”
READ MORE

Spain’s ‘Indignants’ Return to the Streets
Al Jazeera
Al Jazeera reports: “Spain’s ‘indignants’ are taking to the streets in 80 cities and towns to decry economic injustice in a show of strength one year after the birth of their movement shook the political establishment.”
READ MORE

—————————–

Above are choices made by Reader Supported News of 12 May 12 PM. But here comes a review of an old Renoir film that ties it all up for us in its modern version.

Will the world just watch the film or call up to action to avoid irretrievable loss?

Jean Renoir’s Timely Lessons for Europe
By A. O. SCOTT in the New York Times of May 13, 2012

Jean Renoir directed the classic “Grand Illusion” (1937) starring Pierre Fresnay, left, and Erich Von Stroheim.

Renoir’s “Grand Illusion,” from 1937 (and now newly restored), may have lessons for a Europe bitterly divided at present.

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Posted on Sustainabilitank.info on April 21st, 2012
by Pincas Jawetz (PJ@SustainabiliTank.com)

The news from the elections in France: At a time of crisis in the economy right is wrong and the large majority of the populus say it is left to the needed help in rather quiet ways.

Messieur Holande will replace Messieur Sarcozy and Mr. Romney will not replace Mr. Obama.

Further, 2012 will see more switches from right to left and blocking of right trying to take leadership from left.

Above is contagious and will spread over both ends of the Atlantic.

The Sunday April 22, 2012 – first round results in France are:

Exit polls from the French presidential elections show Socialist candidate Francois Hollande with 28.4% of the vote and President Nicolas Sarkozy with 25.5%, French officials announced Sunday.

A presidential candidate must receive more than 50% of the vote to win office. If no one claims a majority in the first round of voting, the top two vote-getters advance to a second round of voting. The runoff would take place May 6.

From the total of 10 candidates – In addition to Sarkozy and Hollande, candidates that got significant results were:

Marine Le Pen on the extreme right with 20%, Jean-Luc Melenchon on the extreme left with 11.7%, and centrist Francois Bayrou with 8.5%.

Considering that the Le Pen vote was mainly from the working class conservatives they are not expected to transfer their vote automatically to Mr. Sarcozy who represents the bourgeois – rich. This leaves Holande as the best alternative for all those that did not vote Sarcozy in the first round.

The strong showing by the left and anger on the political extremes seemed to reflect a desire for change in France after 17 years of centrist, conservative presidents. And it could continue an anti-incumbency trend that began with the economic crisis in Western Europe, where center-right governments dominate from Britain to Spain to Germany.

It may also represent the first stirrings of a challenge to the German-dominated narrative of the euro crisis, which holds that public debt and runaway spending are the main culprits and that austerity must precede growth. Over the weekend, the Dutch government was left tottering after failing to gain a majority in support of austerity measures, and demonstrators in the Czech Republic turned out in the greatest numbers since 1989 to protest a tax increase and budget cuts.

The French vote “is a reaction against austerity, and austerity is you,” Mr. Hollande’s campaign manager, Pierre Moscovici, said to the leader of Mr. Sarkozy’s party, Jean-François Copé.

But the vote was also about an electorate that has grown increasingly disenchanted with politics and the political class.


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Posted on Sustainabilitank.info on April 9th, 2012
by Pincas Jawetz (PJ@SustainabiliTank.com)

Der Standard of Austria of April 4, 2012, continues a stream of information about Shale-Gas development North of Vienna – in the Wein-gardens of Poysdorf.

WEINVIERTEL –  Kein Ende im Schiefergas-Krieg.

by ROSA WINKLER-HERMADEN, 04. April 2012

Geheime Bohrungen, gefährliches Fracking und ein Landeschef im Vorwahlkampf: Warum die Bürger dem Frieden mit der OMV nicht trauen.

please see the full April 4, 2012 article at -

derstandard.at/1332323983885/Weinviertel-Kein-Ende-im-Schiefergas-Krieg

The original article was of   December 17, 2011, and we posted it following a meeting of Eurosolar Austria.

=================================================

(c) DiePresse

vergrößern (means enlarge the map)

Bedeutung der „Bruderschaft“ nimmt ab.

——

Like all the rest of Europe, Austria switched from oil to natural gas. This is a less polluting energy carrier and emits less CO2, but then – where do you buy the gas?

From the Netherlands – that is OK, or what about North Africa, Russia, Central Asia, and that means dependence on sources that may be friendly today but may use political pressure tomorrow?  The import of the gas via pipelines or huge boats of liquefied gas, means also serious outflow of Euro, dollars, or whatever National currency you have – not very good at times of budding recession.

Further – bringing the gas in by ship requires the building of high pressure unloading stations that people do not consider safe in their backyards;  pipelines depend very much on the countries in transit, and a dispute relations of the Ukraine and the Russian Federation had serious impact on the gas supplied to the European Union.  The Austrian OEMV got involved in plans for the Nabucco pipeline from Central Asia via Turkey to Austria, and found that Russia will retaliate by directing the planned South Stream pipeline not to touch Austrian land. The recent announcement by OEMV of huge finds of Shale-gas, just North North-East of  Vienna, must be viewed in above context.

A small, integrated oil-shale operation has been conducted at Puertollano since about 1922 by a French company, Sociedad Mimora y Metalurgica de Penarroya, hereinafter referred to as “Penarroya”, but only during WWII have the potentialities of the Spanish oil-shale deposits been recognized.

Empresa Nacional “Calvo Sotelo” do Combustibles y Lubricantes, hereinafter designated as “Calvo Sotelo,” which was created in 1942 by the National Industrial Institute of Spain to produce liquid fuels from oil shales, has made marked progress in the design and construction of a complete oil-shale plant at Puertollano. Penarroya is mainly a coal-mining company, and the oil-shale operations were on a small scale of approximately 220 tons a day in October 1947. It is an integrated operation comprising oil-shale mining and retorting and shale-oil refining. Motor gasoline, Diesel fuel oil, light burner fuel oil, lubricants, paraffin wax, cresols, and ammonium sulfate were manufactured.

The problem is in the nature of the finding. Shale is a stone – it contains hydrocarbons in a polymeric form called Kerogen. When heated in a retort the kerogen breaks down and yields oil and gas. In 1959 I watched this being done in above-ground retorts at the Puertollano plant, the Ciudad Real region of Spain. The governmental Calvo Sotelo company was doing this with lubricants as the prized product. The plant was planned still during WWII by the Franco government, and became a reality only after the war with the help of French engineering companies. The original idea was to produce liquid fuels as a substitute for the petroleum that was hard to obtain during the war years. The Puertollano plant was dismantled, and sold for scrap metal in 1968, as by then Petroleum was cheap and plentiful on the global market. With the first energy constraint of 1972-1973 there was general interest in oil-shales but the  Spanish experience was history by that time.  Brazil picked up with a company called Petrosix,  and in the US The Oil Shale Corporation was formed, with competition from Paraho, The Occidental Company, and Exxon.


The Brazilian Oil Company Petrobras started oil shale processing activities in 1953 by developing Petrosix technology for extracting oil from oil shale of the Irati formation.
A 5.5 metres (18 ft) inside diameter semi-works retort (the Irati Profile Plant) with capacity of 2,400 tons per day, was brought on line in 1972, and began limited commercial operation in 1980. The first retort that used the Petrosix technology was a 0.2 meters (0.7 ft) internal diameter retort pilot plant started in 1982. It was followed by a 2 metres (6.6 ft) retort demonstration plant in 1984. A 11 meters (36 ft) retort was brought into service in December 1991, and commercial production started in 1992. At present, the company operates two retorts which process 8,500 tons of oil shale daily.

The Petrosix 11 metres (36 ft) vertical shaft retort is the world’s largest operational surface oil shale pyrolysis reactor. It was designed by Cameron Engineers of the US. The retort has the upper pyrolysis section and lower shale coke cooling section. The retort capacity is 6,200 tons of oil shale per day, and it yields a nominal daily output of 3,870 barrels of shale oil (i.e., 550 tons of oil, approximately 1 ton of oil per 11 tons of shale), as well as 132 tons of oil shale gas, 50 tons of liquefied oil shale gas, and 82 tons of sulfur.

Petrosix – as per Qian, Jialin, Wang Jianqiu (2006-11-07) – he said at the “World oil shale retorting technologies” (PDF) - International Oil Shale Conference. AmmanJordan by Jordanian Natural Resources Authority –  it is one of five technologies of shale oil extraction, which is currently in commercial use.

It is an above-ground retorting technology, which uses externally generated hot gas for the oil shale pyrolysis (decomposition by heat). After mining, the shale is transported by trucks to a crusher and screens, where it is reduced to particles (lump shale). These particles are between 12 millimetres (0.5 in) and 75 millimetres (3.0 in) and have an approximately parallelepipedic shape. These particles are transported on a belt to a vertical cylindrical vessel, where the shale is heated up to about 500 °C (932 °F) for pyrolysis. Oil shale enters through the top of the retort while hot gases are injected into the middle of the retort. The oil shale is heated by the gases as it moves down. As a result, the kerogen in the shale decomposes to yield oil vapor and more gas. Cold gas is injected into the bottom of the retort to cool and recover heat from the spent shale.

Cooled spent shale is discharged through a water seal with drag conveyor below the retort. Oil mist and cooled gases are removed through the top of the retort and enter a wet electrostatic precipitator where the oil droplets are coalesced and collected. The gas from the precipitator is compressed and split into three parts.

One part of the compressed retort gas is heated in a furnace to 600 °C (1,112 °F) and recirculated back to the middle of the retort for heating and pyrolyzing the oil shale, and another part is circulated cold into the bottom of the retort, where it cools down the spent shale, heats up itself, and ascends into the pyrolysis section as a supplementary heat source for heating the oil shale. The third part undergoes further cooling for light oil (naphtha) and water removal and then sent to the gas treatment unit, where fuel gas and liquefied petroleum gas (LPG) are produced and sulfur recovered. Above tells us that this above ground retorting of the shale is done so that oil is the outcome and the by-product gasses are used to provide the energy for the process. One major problem is what to do with the heavy metals rich spent shale that cannot be discarded without damaging neighboring undergound water or rivers.

One further drawback of this process is that the potential heat from the combustion of the char contained in the shale is not utilized.  Also, oil shale particles smaller than 12 millimetres (0.5 in) can not be processed in the Petrosix retort. These fines may account for 10 to 30 per cent of the crushed feed. The above process was similar to the process used by the Spanish Calvo Sotelo company at Puertollano, and the Oil Shale Corporation method used in Colorado. A TOSCO II system, the reworked US Oil Shale Corporation technology, used a rotating drum and Alumina balls in the retort and the  spent shale is transferred to a furnace where residue-carbon is burned off to provide reheating of the balls.
The main advantages of the Tosco system are the relatively high throughput rates achieved inproportion to the size of equipment, and the production of high-BTU off-gas since there is no dilution thereof by combustion products. However, one serious disadvantage of the Tosco process has been just how to separate the alumina bals lfrom the spent shale.

As a result of the 1972-1973 energy crisis, the United States got interested in oil shales as a strategic fuel and I found myself involved first with TOSCO, then with the Hudson Institute in formulating what became the only Energy Policy the US ever had – that was the government funded “THE SYNFUELS CORPORATION” which allowed private companies to try to develop commercial technologies. Needles to say – the money was spent by the oil companies but no tangible results were returned to the government.

{My last involvement with oil shale technology was when I was contracted to write the issue paper on the use of shales for the 1981 UN Conference on NEW and RENEWABLE SOURCES OF ENERGY at Nairobi. Oil Shales, coal liquids and gases were the “NEW” sources of Energy at the UN – The Canadian tar sands and Venezuela’s heavy crudes were not part of the conference discussions.}

Wikipedia posted: “The Synthetic Fuels Corporation was a U.S. government-funded corporation established in 1980 by the Synthetic Fuels Corporation Act to create a financial bridge for the development and construction of commercial synthetic fuel manufacturing plants (such as coal gasification) that would produce alternatives to imported fossil fuels. The Great Plains coal gasification plant in Beulah, ND, still producing natural gas and sequestering carbon in 2009 , was built with the support of the Department of Energy and applied for further support by this corporation, partly as a result of efforts by Reagan’s Energy Secretary James B. Edwards. The corporation was abolished in 1985.

Oil Shales were part of these sponsored corporations as promoted during the Gerald Ford Presidency 1974-1977. The 1980 – “the Synthetic Fuels Corporation Act” was then passed under President Carter and eventually killed under President Reagan. Whatever the policy – it was still a pro-petroleum policy.

The Colony Shale Oil Project was an oil shale development project at the Piceance Basin near Parachute CreekColorado. The project consisted of an oil shale mine and pilot-scale shale oil plant, which used the TOSCO II retorting technology, developed by Tosco Corporation. Over time the project was developed by a consortium of different companies until it was terminated by Exxon on 2 May 1982 a day which is known amongst locals as “Black Sunday”.

Shale Oil History at Parachute Creek, Colorado:

The project started in 1964 when Tosco, Standard Oil of Ohio, and Cleveland Cliffs Iron Company formed the Colony Development joint venture.[4] The aim of the newly formed joint venture was to develop the Colony Oil Shale Project and to commercialize the TOSCO II technology. Starting in 1965 the consortium operated a shale oil pilot plant and in 1968 the Colony Development started preparatons to build a commercial-scale plant.[5]

In 1969 Atlantic Richfield Company joined the project acquiring part of Tosco’s stake.[5][6] However the commercial project was delayed by economic uncertainties and then resurrected in the 1970s after the Arab oil embargo. In 1972 the consortium stopped the pilot plant and the development of the commercial plant was suspended in November 1974 when more detailed economic studies indicated a more than three times higher cost than previously anticipated.[4][5][7][8]

In 1974 Ashland Oil and Shell Oil Company joined the project.[7][9] In the late 1970s Standard Oil of Ohio, Cleveland Cliffs Iron Company, Shell and Ashaland Oil sold their shares to Atlantic Richfield Company.[7][10][11] As a result of these transactions Tosco owned 40% of shares and Atlantic Richfield Company owned 60% of shares in the project.

In 1980 Atlantic Richfield Company sold its share to Exxon for $300 million.[6] In 1981 the Colony Development started a construction of the commercial scale shale oil plant.[3] On 2 May 1982 Exxon announced the termination of the project because of low oil-prices and increased expenses laying off more than 2,000 workers resulting in the date becoming known among locals as “Black Sunday”.[1][2][3] According to the shareholders agreement in a case of project termination Exxon had an obligation to buy out Tosco’s shares. It paid $380 million worth of compensation.[6]

During its existence the project produced 270 thousand barrels (43×103 m3) of shale oil.[4]

I felt obliged to talk first about the above-ground retorting of the oil-shale as this taught us about problems that will occur OUT-OF-SIGHT if one works underground as well.
The dislodgement of heavy metal compounds and the poisoning of water resources is to be expected – no surprise thereof.

Others, like the Schlumberger Corporation started to eye the Shale Gas & Liquids production in situ – thus avoiding the mess above-ground that made for easy criticism. But doing it underground – who will see that? The idea was – in situ retorting that involves heating the oil shale while it is still underground, and then pumping the resulting liquid to the surface.

To the Americans it sounded at first like a great idea: While oil shale is found in many places worldwide, by far the largest deposits in the world are found in the United States in the Green River Formation, which covers portions of Colorado, Utah, and Wyoming. Estimates of the oil resource in place within the Green River Formation range from 1.2 to 1.8 trillion barrels. Not all resources in place are recoverable; however, even a moderate estimate of800 billion barrels of recoverable oil from oil shale in the Green River Formation is three times greater than the proven oil reserves of Saudi Arabia. Present U.S. demand for petroleum products is about 20 million barrels per day. If oil shale could be used to meet a quarter of that demand, the estimated 800 billion barrels of recoverable oil from the Green River Formation would last for more than 400 years. In theory – for those pushing for the continuation on the dependence on an oil economy – this was a great idea. In practice it did not work – this because despite the great fires underground only very little oil came out above ground – and those were still the days that the industry was looking for oil and was not interested in developing sources of gas that had the potential to compete with their oil refineries.

For those interested in more about the US search for new feeds to the petroleum refinery – here a link to a RAND Corporation study:  http://ostseis.anl.gov/guide/oilshale/

But things change and the US has learned to use gas – this by learning it from the European experience.

So, now gas is in demand and gas can be obtained from these underground shales with us not seeing how it is done – and that is very important to realize!

WE DO NOT HEAR THUS OF SHALE OIL BUT OF SHALE GAS. WE DO NOT HEAR OF RETORTING BUT OF HYDRAULIC FRACTURING – FRACKING – IN EFFECT WE HEAR OF ROSY FUTURES BUT DO NOT HEAR HOW THIS IS ATTAINED.

THE PRESS IS FULL WITH ARTICLES ABOUT GAS COMING OUT WITH DRINKING WATER – SO YOU CAN LIGHT A FIRE WITH YOUR CIGARETTE LIGHTER APPLIED TO YOUR HOME DRINKING WATER TAP. WE HEAR OF CHEMICALS COMING OUT WITH THAT WATER – BUT WE DO NOT HEAR WHAT IS PUT IN WITH THE INFLOW TO THE THIS GAS MINING PIPE. WE HEAR ONLY OF THE OUTFLOW – THUS WE HAVE NO UNDERSTANDING OF THE UNDERGROUND PROCESS – IS IT HYDRAULIC, CHEMICAL, or THERMAL?

The US IS FULL WITH THE SO CALLED FRACKING TECHNOLOGY TO RELEASE GAS FROM SHALE, AND NOW IT SEEMS AUSTRIA IS LUCKY AS WELL – GAS WAS FOUND!

======================================

OMV findet riesiges Gasfeld in Niederösterreich.

Gas für mehr als 30 Jahre: Im Norden von Niederösterreich sollen gewaltige Erdgasmengen schlummern. Die OMV sucht nach Wegen, sie zu fördern.

The KURIER, LETZTES UPDATE AM 05.12.2011.

Poysdorf ist vor allem durch seine Weine – insbesondere den DAC – bekannt. Die Stadt im nö. Weinviertel könnte demnächst aber schon ein ganz anderes Image bekommen: Denn die OMV AG will rund um die Weinstadt Gas fördern. Nicht konventionelles Erdgas, sondern Shale-Gas, deutsch: Schiefergas. Dabei handelt es sich um natürliches Erdgas, das in Tonsteinen entsteht und gespeichert wird. Seine Gewinnung ist technologisch sehr anspruchsvoll, aber durch die steigenden Gaspreise zunehmend rentabel.

Das Gasvorkommen soll dort derart groß sein, dass der österreichische Inlandsbedarf auf lange Zeit – Insider sprechen von 30 Jahren und mehr – zu 100 Prozent abgedeckt werden könnte.

“Ja, das Shale-Gas-Vorkommen wird dort als sehr mächtig eingeschätzt. Bis wir aber so weit sind, dass wir das Gas auch fördern können, dauert es noch einige Jahre. Abgesehen davon muss die Förderung sowohl technisch möglich als auch wirtschaftlich sein”, bestätigte am Dienstag eine OMV-Sprecherin.

vergrößern (enlagement)

Bedeutung der „Bruderschaft“ nimmt ab.

The OEMV company, intends to start first drilling experiments at Poysdorf and Herrnbaumgarten already February 2012 and aims at commercial production by 2014. The two mayors of the above named locations seem to go along with these plans and expect windfall of profits from the oil company.

The way OEMV has explained the project to the local people it says that the fracking process is a hydraulic pressure attack against walls of shale that stand between us and pockets of gas which they call shale gas rather then Natural Gas. I wonder if anyone has asked the oil people to explain the difference in clear terms. They also say that chemicals are needed in order to avoid biological processes that lead to the closing up of the pipes and state that they will not use pesticide chemicals but natural means. This is not clear to us and we wonder what other events will occur undergroup besides the application of pressure in mechanical ways. What chemical reactions, or thermal reactions, are intended and what organic chemicals and heavy metals are expected to be found in the returning water and in the effluents that will reach the underground water.

It seems that Poland, Germany, and France were also looking at production of shale-gas, but while in Poland there is high enthusiasm by a people that are struggling to disengage themselves from the dependence on Russian gas – a highly inflamed political and economic issue, in France the government has decided not to proceed to extract the gas. The protest from an environmentally conscious population  led to this stand by the government.

The gas production in Austria is intended at above two locations in the Wine-Quarter (Vineviertel) outside Vienna with some of the local people, led by local officials of the Green Party, state that the region lives from tourism, Wine, and ambiance and if known as the Gas-Quarter (Gasviertel) all this will be lost.

December 2 and 3, 2011 papers printed the news of a press conference in the Vine-Quarter as in:

diepresse.com/home/wirtschaft/economist/713891/Schiefergas-fuer-30-Jahre-OMV-will-nur-oekologisch-foerdern

diepresse.com/home/wirtschaft/international/717100/Der-Gasstrategie-der-OMV-droht-ein-herber-Rueckschlag

kurier.at/wirtschaft/4460260-die-omv-gibt-schiefer-gas.php

kurier.at/wirtschaft/4317428-omv-findet-riesiges-gasfeld-in-niederoesterreich.php

and today – December 17, 2011, the Wiener Zeitung had another series of three articles on the subject – both as related to Austria and Poland.

www.wienerzeitung.at/nachrichten/wirtschaft/oesterreich/419491_Es-heisst-ja-schliesslich-Weinviertel-und-nicht-Gasviertel.html

“It is, after all, wine district and not gas-quarters” - By Christian Roesner

  • Poysdorf and Mr. Baumgarten will take place in 2012 drilling.

It also mentions that Fritz Gall, head of Nonmuseums in  Baumgarten: said “Fossil energy is not the official line of Austria in terms of energy policy.” Gall is about to establish a platform and invite independent experts to the local population to offer also other perspectives than those of OMV.


 www.wienerzeitung.at/nachrichten/…

Ein Totenkopf gegen das Aufreißen: Frankreich gilt nach Polen als das Land mit dem höchsten Schiefergasvorkommen in Europa. Doch nach vielen Demonstrationen hat Paris im Sommer den Abbau von Schiefergas mittels hydraulischem Fracturing verboten.

Ein Totenkopf gegen das Aufreißen: Frankreich gilt nach Polen als das Land mit dem höchsten Schiefergasvorkommen in Europa. Doch nach vielen Demonstrationen hat Paris im Sommer den Abbau von Schiefergas mittels hydraulischem Fracturing verboten.

Huge shale gas reserves make Poland independent from Russia

Freedom, equality, gas

  • The price could be high for environmental damage.
  • Shale gas is the so-called “Game Changer” for Europe?

———-
 www.wienerzeitung.at/nachrichten/…

Drill deep cracks in the earth  - but only for 80 years.

By Eva Stanzl

  • Shale gas would quadruple natural gas deposits in Europe or tripled.
——–
People do worry about the effects of the gas production on the environment and things get worse when groups like EUROSOLAR Austria, get angree at this because they believe that there is no need to follow the dictum of the oil industry in order to stay dependent on oil and gas when renewable energy is possible and the sun is a main supplier.

Why let OEMV spend 130 million Euro, to just start these experimental drillings when the government provides only for 50 million Euro for the safer whole renewable energy yearly allowance? Investing in Renewables seems rather a safer way of detaching from fossil fuels – even in economic terms – not just environmental.
Thursday December 15, 2011, The monthly discussion table of the Vienna EUROSOLAR group had the time dedicated to Shale Gas – this being an exception as the group deals with renewables. This exception was obviously prompted by the worries that the shale gas project could derail the interest in renewables by creating in the minds of some of the people that this false saviour could answer the need for more energy independence – as it is felt seemingly in Poland.
Ing. Herbert Eberhart brought along the GASLAND documentary of the International WOW Company that showed the effects of shale oil production in the US.
The film talks about the Green River shale area in Wyoming, the old area of the attempt to produce Shale Oil, and moves to the Chesapeake area, to Pennsylvania’s Marcellus Shale up to New York State and the endangered Croton River water system that supplies the New York City water. We lean about the Cabot Oil & Gas Company and Halliburton – the company that was under the leadership of Vice President Dick Cheney.  Under Mr. Cheney’s days at the White House laws were changed and Federal Lands in the West opened to exploitation for oil and gas by private companies. It turned out that things were as in a song that said: “YOUR LAND – MY LAND – GASLAND” – and people were left in unhealthy conditions because of the effects of this drilling for gas.
What attracted my attention was a hearing in US Congress where the gas producing companies refused to divulge the chemicals they were using in those pipes and personally I was left with the uncertainty that perhaps we do not even know what actually is being done underground. The analysis of water from the home taps in the area of production shows the presence of some 596 chemicals including Naphthalene, Methyl Pyridine etc. –  as these are probably not chemicals used as inputs – it means they are results of breakdown of the Kerogene – thus reminding me of the spent shale from above ground retorting and this is an old NO! NO!
Important to note that the same companies working in the US are now lining up to work also in Europe – and Poland was their port of entree. Will Halliburton be as well the technological outfit that will be used by the Austrian OEMV?
From the Financial Times of December 17, 2011, we learn:

“The recent revelation that PetroChina successfully extracted natural gas from shale formations in China’s Sichuan Basin has confirmed the commercial viability of hydraulic fracturing, or “fracking”, in the country. The news also confirmed the major export opportunity that has emerged for the growing number of American companies that produce the array of equipment, chemicals and technologies that will be needed to exploit China’s vast shale gas reserves. At an estimated 1,275 trillion cubic feet, these reserves comprise the world’s largest source.”

“Chinese shale gas developments herald major US industrial export opportunities,” and “the companies with the know how are the American companies - oil field service majors like Baker Hughes, Halliburton, and National Oilwell Varco as well as ITT’s water treatment spin-off, Xylem. Barclays Capital oilfield services analyst, James West, expects US companies like these will add a combined USD 8 to 10bn in shale gas-related equipment and services economic activity over the next year.”

Will the results look like what one seen is GASLAND?

The Tursday evening event at EUROSOLAR turned out to be a five hours affair. After the 90 minutes documentary came the actual meeting of EUROSOLAR with a guest presentation by Green Member of Parliament of Lower Austria, Mrs. Amrita Enzinger who is active in bringing to the public’s attention the dangers inherent in the extraction of the shale gas as experienced in the United States. Lower Austria is not the county in Wyoming that has only 600 residents that was mentioned in the documentary – and that is why the issue deserves a more serious go-through then an agreement with two mayors that might be ill advised in their effort to bring some fast money to their area and forfeiting the future of the area.

The moderator of the evening was energy autarky proponent,businessman Hermann Mentil, former Member of Parliament and  present was also a specialist on energy from Poland.
The meeting was followed by a very interested Q&A period.

============================================================================================

Wiener Zeitung

19. Dezember 2011

Schlagwortsuche

Riesige Schiefergasvorräte machen Polen unabhängig von Russland

Freiheit, Gleichheit, Gas

  • Der Preis dafür könnten hohe Umweltschäden sein.
  • Ist Schiefergas der sogenannte “Game Changer” für Europa?

Wien/Warschau. (wak) Na Zdrowie – auf die Gesundheit! Auf die Unabhängigkeit. In Polen wird derzeit ein Glas nach dem anderen des nationalen Wodkas Ma… weiter

Tiefe Risse in die Erde bohren – aber nur für 80 Jahre

  • Schiefergas würde Erdgasvorkommen in Europa verdrei- oder vervierfachen.

Wien.OMV-Chef Gerhard Roiss will im Weinviertel vorhandene Schiefergas-Vorräte gewinnen, sofern es “ökologisch vertretbar” sei, wie er betont. Sein Fo… weiter

“Es heißt ja schließlich Weinviertel und nicht Gasviertel”

  • In Poysdorf und Herrnbaumgarten sollen 2012 Probebohrungen stattfinden.

Wien. “Als wir zum ersten Mal vom Schiefergasvorkommen in unserer Region hörten, haben wir gegoogelt und diese furchtbaren Infos gefunden, die uns und… weiter

###

Posted on Sustainabilitank.info on January 27th, 2012
by Pincas Jawetz (PJ@SustainabiliTank.com)

The New York Times OP-ED contributor from The World Economic Forum, Davos, Switzerland

At Davos, Debating Capitalism’s Future

By  Ed Miliband –  a member of the British Parliament and the leader of the Labour Party.
Published: January 26, 2012

IS 20th-century capitalism failing 21st-century society? Members of the global elite debated that unusual question on Wednesday at the annual World Economic Forum.

There was a time, not long ago, when such a debate would have been held only among the protesters who annually shelter in igloos farther down the Alpine slopes. So it is encouraging that more than three years since the global financial crisis, a belated process of soul-searching has begun in search of the right lessons to learn from it.

In Britain, members of the Conservative-led government — not least the prime minister, David Cameron — have echoed the Labour Party’s call for a more responsible capitalism.

There is a great difference, however, between being willing to talk about an issue and being ready to act.

It is a difference between those who still believe that all governments can do is get out of the way and those who believe there is a real role for governments in first reviving our economies, and then setting the right rules for future success. The challenge therefore is not just to capitalism but also to politics.

At the Group of 20 summit in London three years ago, Prime Minister Gordon Brown and President Obama led concerted action to guide the world economy from the brink. Three years later, some governments are engaging in a short-sighted fiscal protectionism that can only lead to stunted growth.

If we learned anything from the 1930s, it was that governments cannot shrug their shoulders and watch as their own people are consigned to unemployment. I find it tragic and astonishing that some governments need to learn this lesson again.

Nor should we forget the causes of the current growth and debt crisis as we seek to put our economies on a more sustainable footing.

Both the United States and Britain suffered because their economies were overly reliant on the financial sector’s artificial profits; living standards for the many worsened while the economic rewards skewed to the top 1 percent; a capitalist model encouraged short-term decision-making oriented toward quarterly profits rather than long-term health; and vested interests — from giant banks to media moguls —were deemed too big to fail or too powerful to challenge.

We need to recognize that the trickle-down promise of conservative theorists has turned into a gravity-defying reality in which wealth has flowed upward disproportionately and, too often, undeservedly. To address properly the squeeze in middle-class incomes on both sides of the Atlantic requires fresh thinking from governments about how people train for their working lives and what a living wage should be.

Governments can set better — not necessarily more — rules to encourage productive businesses that invest, invent, train, make and sell real products and services. We need rules that discourage the predatory behavior of those seeking the fast buck through hostile takeovers and asset-stripping that do not have the interests of the shareholders, the employees or the economy at heart.  In Britain, the Labour Party is considering how we can raise the bar for corporate takeovers so that companies’ futures are not determined by just a handful of speculators.

And governments must remember they are elected to serve the people, not the powerful lobbies who can pay for access or influence.

Too often the real enemies of market capitalism are some of the leading beneficiaries of the current model, which favors price-gouging cartels and consumer exploitation.

In Britain, airlines need to be more upfront about  the true cost of their fares, and pension firms cannot continue to sign up customers for products that can chip away at their retirement income through exorbitant management fees.

As President Obama noted in his State of the Union address on Tuesday, it is neither socially nor economically sustainable for the wealthiest and most powerful to avoid paying their fair share. I support proposals for a financial transactions tax levied equally on the major trading centers from Hong Kong and Singapore to Wall Street and the City of London. The British government needs to show more leadership on this issue in Europe — and all members of G-20 need to help make it happen.

Britain loses billions of pounds in revenues because of outdated rules that allow our richest citizens to keep their money in off-shore tax havens. Tax authorities need to know about income and wealth hidden behind front companies, trusts and other complex financial products. If these rules cannot be changed by international agreement, progressive governments should go ahead and do it themselves.

As President Obama said in his State of the Union address this week, it is “common sense” to ask a billionaire to pay, proportionally, at least as much as his secretary in taxes. Indeed, in Davos this week, I will look around the room and ask myself who pays taxes at a higher rate — those eating the soup or those serving it?

In my country, I believe that changing the rules of capitalism will mean a change of government. But more generally, it will require a change in what citizens expect and ask of politics. The question is not so much whether 20th-century capitalism is failing 21st-century society but whether politics can rise to the challenge of changing a flawed economic model.

============================


George Soros’s essay in the forthcoming edition of the New York Review of Books: www.nybooks.com/articles/archives/2012/feb/23/how-save-euro.
The essay is adapted from a speech he delivered at the opening of the World Economic Forum in Davos.

All best from Michael Vachon

How to Save the Euro

George Soros

The upcoming issue of The New York Review of Books.

My new book, Financial Turmoil in Europe and the United States, tries to explain and, to the extent possible, predict the outcome of the euro crisis. It follows the same pattern as my other books: it contains an updated version of my conceptual approach and the application of that approach to a particular situation, and it presents a real-time experiment to test the validity of my interpretation. Its account is not complete because the crisis is still ongoing.

We remain in the acute phase of the crisis; the prospect of a meltdown of the global financial system has not been removed. In my book, I proposed a plan that would bring immediate relief to global financial markets but it has not been adopted.

My proposal is to use the European Financial Stability Facility (EFSF), and its successor the European Stability Mechanism (ESM), to insure the European Central Bank (ECB) against the solvency risk on any newly issued Italian or Spanish treasury bills they may buy from commercial banks. Banks could then hold those bills as the equivalent of cash, enabling Italy and Spain to refinance their debt at close to 1 percent. Italy, for instance, would see its average cost of borrowing decline rather than increase from the current 4.3 percent. This would put their debt on a sustainable course and protect them against the threat of an impending Greek default. I call this the Padoa-Schioppa plan, in memory of my friend who helped stabilize Italy’s finances in the 1990s and who inspired the proposal. The plan is rather complicated, but it is both legally and technically sound. I describe it in detail in my book.

The European financial authorities rejected this plan in favor of the Long-Term Refinancing Operation (LTRO) of the European Central Bank, which provides unlimited amounts of liquidity to European banks—not to states themselves—for up to three years. That allows Italian and Spanish banks to buy the bonds of their own country and engage in a very profitable “carry trade”—in which one borrows at low interest to buy something that will pay higher interest—in those bonds at practically no risk because if the country defaulted the banks would be insolvent anyhow.

The difference between the two schemes is that mine would provide an instant reduction in interest costs to governments while the one actually adopted has kept the countries and their banks hovering on the edge of a potential insolvency. I am not sure whether the authorities have deliberately prolonged the crisis atmosphere in order to maintain pressure on heavily indebted countries or whether they were driven to their course of action by divergent views that they could not reconcile in any other way. As a disciple of Karl Popper, I ought to opt for the second alternative. Which interpretation is correct is not inconsequential, because the Padoa-Schioppa plan is still available and could be implemented at any time as long as the remaining funds of the EFSF are not otherwise committed.

Either way, it is Germany that dictates European policy because at times of crisis the creditors are in the driver’s seat. The trouble is that the cuts in government expenditures that Germany wants to impose on other countries will push Europe into a deflationary debt trap. Reducing budget deficits will put both wages and profits under downward pressure, the economies will contract, and tax revenues will fall. So the debt burden, which is a ratio of the accumulated debt to the GDP, will actually rise, requiring further budget cuts, setting in motion a vicious circle.

To be sure, I am not accusing Germany of acting in bad faith. It genuinely believes in the policies it is advocating. Germany is the most successful economy in Europe. Why should not the rest of Europe be like it? But it is pursuing an impossibility. In a closed system like the euro clearing system, everybody cannot be a creditor at the same time. The fact that a counterproductive policy is being imposed by Germany creates a very dangerous political dynamic. Instead of bringing the member countries closer together it will drive them to mutual recriminations. There is a real danger that the euro will undermine the political cohesion of the European Union.

The evolution of the European Union is following a course that greatly resembles a sequence of boom and bust or a financial bubble. That is no accident. Both processes are “reflexive,” that is, as I have argued elsewhere, they are largely driven by mistakes and misconceptions.

In the boom phase the European Union was what the British psychologist David Tuckett calls a “fantastic  object”—an unreal but attractive object of desire. To my mind, it represented the embodiment of an open society—another fantastic object. It was an association of nations founded on the principles of democracy, human rights, and the rule of law that is not dominated by any nation or nationality. Its creation was a feat of piecemeal social engineering led by a group of farsighted statesmen who understood that the fantastic object itself was not within their reach. They set limited objectives and firm timelines and then mobilized the political will for a small step forward, knowing full well that when they accomplished it, its inadequacy would become apparent and require a further step.

That is how the European Coal and Steel Community was gradually transformed into the European Union, step by step. During the boom period Germany was the main driving force. When the Soviet empire started to fall apart, Germany’s leaders realized that reunification of their country was possible only in a more united Europe. They needed the political support of other European powers, and they were willing to make considerable sacrifices to obtain it. When it came to bargaining they were willing to contribute a little more and take a little less than the others, thereby facilitating agreement. At that time, German statesmen used to assert that Germany had no independent foreign policy, only a European policy. The process—the boom, if you will—culminated with the Maastricht Treaty in 1992 and the introduction of the euro in 2002. It was followed by a period of stagnation that turned into a process of disintegration after the crash of 2008.

The euro was an incomplete currency and its architects knew it. The Maastricht Treaty established a monetary union without a political union. The euro boasted a common central bank to provide liquidity, but it lacked a common treasury that would be able to deal with solvency risk in times of crisis. The architects had good reason to believe, however, that when the time came further steps would be taken toward a political union. But the euro also had some other defects of which the architects were unaware and that are not fully understood even today. These defects contributed to setting in motion a process of disintegration.

The fathers of the euro relied on an interpretation of financial markets that proved its inadequacy in the crash of 2008. They believed, in particular, that only the public sector is capable of producing unacceptable economic imbalances; the invisible hand of the market would correct the imbalances produced by markets. In addition, they believed that the safeguards they introduced against public sector imbalances were adequate. Consequently, they treated government bonds as riskless assets that banks could buy and hold without allocating any capital reserves against them.

When the euro was introduced, the ECB treated the government bonds of all member states as equal. This gave banks an incentive to gorge themselves on the bonds of the weaker countries in order to earn a few extra basis points, since the yields on those bonds were slightly higher. It also caused interest rates to converge. That, in turn, caused economic performance to diverge. Germany, struggling with the burdens of reunification, undertook structural reforms, principally in its labor markets, and became more competitive. Other countries, benefiting from lower interest rates, enjoyed a housing boom that made them less competitive. That is how the introduction of the euro caused the divergence in competitiveness that is now so difficult to correct. The banks were weighed down with the government bonds of less competitive countries that turned from riskless assets into the riskiest ones.

The tipping point was reached when a newly elected Greek government revealed that the previous government had cheated and the national deficit was much bigger than had been announced. The Greek crisis revealed the gravest defect in the Maastricht Treaty: it has no provisions for correcting errors in the euro’s design. There is neither a mechanism for enforcing payment by member states of the European debt nor an exit mechanism from the euro; and member countries cannot resort to printing money. The statutes of the ECB strictly prohibit it from lending to member states, although it lends to banks. So it was left to the other member states to come to Greece’s rescue.

Unfortunately the European authorities had little understanding of how financial markets really work. Far from combining all the available knowledge in the market’s movements, as economic theory claims, financial markets are ruled by impressions and emotions and they abhor uncertainty. To bring a financial crisis under control requires firm leadership and ample financial resources. But Germany did not want to become the deep pocket for bad debtors. Consequently Europe always did too little too late and the Greek crisis snowballed. The bonds of other heavily indebted countries such as Italy and Spain were hit by contagion—i.e., in view of the failure in Greece they had to pay higher yields. The European banks suffered losses that were not recognized on their balance sheets.

Germany aggravated the situation by imposing draconian conditions and insisting that Greece should pay penalty rates on the loans in the rescue package that Germany and other states provided. The Greek economy collapsed, capital fled, and Greece repeatedly failed to meet the conditions of the rescue package. Eventually Greece became patently insolvent. Germany then further destabilized the situation by insisting on private sector participation in the rescue. This pushed the risk premiums on Italian and Spanish bonds through the roof and endangered the solvency of the banking system. The authorities then ordered the European banking system to be recapitalized. This was the coup de grâce. It created a powerful incentive for the banks to shrink their balance sheets by calling in loans and getting rid of risky government bonds, rather than selling shares at a discount.

That is where we are today. The credit crunch started to make its effect felt on the real economy in the last quarter of 2011. The ECB then started to reduce interest rates and aggressively expand its balance sheet by buying government bonds in the open market. The ECB’s LTRO facility provided relief to the banking system but left Italian and Spanish bonds precariously balanced between the sustainable and the unsustainable.

What lies ahead? Economic deterioration and political and social disintegration will mutually reinforce each other. During the boom phase the political leadership was in the forefront of further integration; now the European leaders are trying to protect a status quo that is clearly untenable. Treaties and laws that were meant to be stepping stones have turned into immovable rocks. I have in mind Article 123 of the Lisbon Treaty, which prohibits the ECB from lending money directly to member states. The German authorities, notably the Constitutional Court and the Bundesbank, are dead set on enforcing rules that have proved to be unworkable. For instance, the Bundesbank’s narrow interpretation of Article 123 prevented Germany from contributing its Special Drawing Rights to a rescue effort by the G20. This is the path to disintegration. Those who find the status quo intolerable and are actively looking for change are driven to anti-European and xenophobic extremism. What is happening today in Hungary—where a far-right party is demanding that Hungary leave the EU—is a precursor of what is in store.

The outlook is truly dismal but there must be a way to avoid it. After all, history is not predetermined. I can see an alternative. It is to rediscover the European Union as the “fantastic object” that used to be so alluring when it was only an idea. That fantastic object was almost within reach until we lost our way. The authorities forgot that they are fallible and started to cling to the status quo as if it were sacrosanct. The European Union as a reality bears little resemblance to the fantastic object that used to be so alluring. It is undemocratic to the point where the electorate is disaffected and it is ungovernable to the point where it cannot deal with the crisis that it has created.

These are the defects that need to be fixed. That should not be impossible. All we need to do is to reassert the principles of open society and recognize that the prevailing order is not cast in stone and rules are in need of improvement. We need to find a European solution for the euro crisis because national solutions would lead to the dissolution of the European Union, and that would be catastrophic; but we must also change the status quo. That is the kind of program that could inspire the silent majority that is disaffected and disoriented but at heart still pro-European.

When I look around the world I see people aspiring to open society. I see it in the Arab Spring, in various African countries; I see stirrings in Russia, and as far away as Burma and Malayasia. Why not in Europe?

To be a little more specific, let me suggest the outlines of a European solution to the euro crisis. It involves a delicate two-phase maneuver, similar to the one that got us out of the crash of 2008. When a car is skidding, you first have to turn the steering wheel in the direction of the skid, and only after you have regained control can you correct your direction. In this case, you must first impose strict fiscal discipline on the deficit countries and encourage structural reforms; but then you must find some stimulus to get you out of the deflationary vicious circle— because structural reforms alone will not do it. The stimulus will have to come from the European Union and it will have to be guaranteed jointly and severally. It is likely to involve eurobonds in one guise or another. It is important, however, to spell out the solution in advance. Without a clear game plan Europe will remain mired in a larger vicious circle in which economic decline and political disintegration mutually reinforce each other.

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