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Crimea votes to join Russia as EU leaders push Ukraine diplomacy | Reuters

Crimea votes to join Russia as EU leaders push Ukraine diplomacy | Reuters.

BY ALISSA DE CARBONNEL

SIMFEROPOL, Ukraine Thu Mar 6, 2014 6:16am EST

Uniformed men, believed to be Russian servicemen, walk near a Ukrainian military base in the village of Perevalnoye, outside Simferopol, March 6, 2014. REUTERS-Vasily Fedosenko

(Reuters) – Crimea’s parliament voted to join Russia on Thursday and its Moscow-backed government set a referendum within 10 days on the decision in a dramatic escalation of the crisis over the Ukrainian Black Sea peninsula.

The sudden acceleration of moves to formally bring the Crimea, which has an ethnic Russian majority and has effectively been seized by Russian forces, under Moscow’s rule came as European Union leaders gathered for an emergency summit to seek ways to pressure Russia to back down and accept mediation.

The Crimean parliament voted unanimously “to enter into the Russian Federation with the rights of a subject of the Russian Federation”, the RIA news agency reported. Its vice premier said a referendum on the status would take place on March 16.

The announcements, which diplomats said could not have been made without Russian President Vladimir Putin’s approval, raised the stakes in the most serious east-west confrontation since the end of the Cold War.

EU leaders had been set to warn but not sanction Russia over its military intervention in Ukraine after Moscow rebuffed Western diplomatic efforts to persuade it to pull forces in Crimea back to their bases. It was not immediately clear what impact the Crimean moves would have.

French President Francois Hollande told reporters on arrival at the summit: “There will be the strongest possible pressure on Russia to begin lowering the tension and in the pressure there is, of course, eventual recourse to sanctions.”

Russian Foreign Minister Sergei Lavrov refused to meet his new Ukrainian counterpart or to launch a “contact group” to seek a solution to the crisis at talks in Paris on Wednesday despite arm-twisting by U.S. Secretary of State John Kerry and European colleagues. The two men will meet again in Rome on Thursday.

Tension remained high in Ukraine’s southern Crimea region, where a senior United Nations envoy was surrounded by a pro-Russian crowd, threatened and forced to get back on his plane and leave the country.

The EU summit in Brussels seemed unlikely to adopt more than symbolic measures against Russia, Europe’s biggest gas supplier, because neither industrial powerhouse Germany nor financial centre Britain is keen to start down that road.

U.S. READY TO SANCTION

The United States has said it is ready to impose sanctions such as visa bans, asset freezes on individual Russian officials and restrictions on business ties within days rather than weeks.

Russia’s ruble currency weakened further on Thursday despite central bank intervention due to what analysts at VTB Capital called the political risk premium.

The short, informal EU summit will mostly be dedicated to displaying support for Ukraine’s new pro-Western government, represented at the Brussels talks by Prime Minister Arseny Yatseniuk, who will attend the lunch although Kiev is neither an EU member nor a recognized candidate for membership.

After meeting European Parliament President Martin Schulz, Yatseniuk appealed to Russia to respond to mediation efforts to end the crisis.

The European Commission announced an aid package of up to 11 billion euros ($15 billion) for Ukraine over the next couple of years provided it reaches a deal with the International Monetary Fund, entailing painful reforms like ending gas subsidies.

Diplomats said that at most, the 28-nation EU would condemn Russia’s so far bloodless seizure of Ukraine’s Black Sea province and suspend talks with Moscow on visa liberalization and economic cooperation, while threatening further measures if President Vladimir Putin does not accept mediation efforts soon.

But they will hold back from further reaching steps both in hopes of a diplomatic breakthrough to ease tensions in Ukraine and out of fear of a tit-for-tat trade war with Russia, a major economic partner of Europe.

France has a deal to sell warships to Russia that it is so far not prepared to cancel, London’s banks have profited from facilitating Russian investment, and German companies have $22 billion invested in Russia.

Before the summit, European members of the Group of Eight major economies will meet separately, diplomats said, in an apparent effort to coordinate positions towards Russia, due to host the next G8 summit in Olympic venue Sochi in June. They have so far stopped participating in preparatory meetings and Canada has said G7 countries may meet soon without Russia.

ILLEGITIMATE

The crisis began in November when Ukrainian President Viktor Yanukovich, under strong Russian pressure, turned his back on a far reaching trade deal with the EU and accepted a $15 billion bailout from Moscow. That prompted three months of street protests leading to the overthrow of Yanukovich on February 22.

Moscow denounced the events as an illegitimate coup and refused to recognize the new Ukrainian authorities.

Russia kept the door ajar for more diplomacy on its own terms, announcing on Thursday a meeting of former Soviet states in the Commonwealth of Independent States (CIS), including Ukraine, for April 4 and saying it would be preceded by contacts between Russian and Ukrainian diplomats.

Lavrov said attempts by Western countries to take action over the Ukraine crisis via democracy watchdog OSCE and the NATO military alliance were not helpful.

“I want to very briefly say that we had a meeting with U.S. Secretary of State John Kerry on the situation in Ukraine in relation to the actions that our partners are trying to take via the OSCE, the NATO-Russia council and other international organizations – action that does not help create an atmosphere for dialogue and constructive cooperation,” he said in a statement issued by the ministry on Thursday.

In a move that may alarm some of Russia’s neighbors and the West, Russian Prime Minister Dmitry Medvedev announced steps to ease handing out passports to native Russian speakers who have lived in Russia or the former Soviet Union.

Putin has cited the threat to Russian citizens to justify military action in both Georgia in 2008 and Ukraine now.

After a day of high-stakes diplomacy in Paris on Wednesday, Lavrov refused to talk to Ukrainian Foreign Minister Andriy Deshchitsya, whose new government is not recognized by Moscow.

As he left the French Foreign Ministry, Lavrov was asked if he had met his Ukrainian counterpart. “Who is that?” the Russian minister asked.

He stuck to Putin’s line – ridiculed by the West – that Moscow does not command the troops without national insignia which have taken control of Crimea, besieging Ukrainian forces, and hence cannot order them back to bases.

Kerry said afterwards he had never expected to get Lavrov and Deshchitsya into the same room right away, but diplomats said France and Germany had tried to achieve that.

Western diplomats said there was still hope that once Lavrov had reported back to Putin, Russia would accept the idea of a “contact group” involving both Moscow and Kiev as well as the United States and European powers to seek a solution.

The European Union formally announced it had frozen the assets of ousted Ukrainian president Yanukovich and 17 other officials, including former prime minister Mykola Azarov, suspected of human rights violations and misuse of state funds.

“RUSSIA! RUSSIA!”

In an awkward coincidence, just as EU leaders were gathering in Brussels, German Economy Minister and Vice-Chancellor Sigmar Gabriel traveled to Moscow for talks with his Russian counterpart and Putin.

Reflecting concern about how the long-planned trip might be seen in the midst of the Ukraine crisis, Gabriel dropped at the last minute plans to take along German industrialists with him. Germany has been accused in some quarters of soft-pedaling on sanctions in the light of its close economic ties to Russia.

Officials close to Gabriel said he was hoping to keep a low public profile on the trip, but if he meets Putin, as scheduled, he may have to appear in front of TV cameras.

U.N. special envoy Robert Serry had to abandon a mission to Crimea after being stopped by armed men and besieged inside a cafe by a hostile crowd shouting “Russia! Russia!” The Dutch diplomat flew to Istanbul after the incident.

In eastern Ukraine, a pro-Russian crowd in Donetsk, Yanukovich’s home town, recaptured the regional administration building they had occupied before being ejected by police. But police loyal to the new authorities in Kiev raised the Ukrainian flag over the building again on Thursday.

Putin has said Russia reserves the right to intervene militarily in other areas of Ukraine if Russian interests or the lives of Russians are in danger.

Dropping diplomatic niceties on Wednesday, the U.S. State Department published a “fact sheet” entitled “President Putin’s Fiction: 10 False Claims about Ukraine.”

“As Russia spins a false narrative to justify its illegal actions in Ukraine, the world has not seen such startling Russian fiction since Dostoyevsky wrote, ‘The formula “two plus two equals five” is not without its attractions,'” the State Department said in the document.

(Additional reporting by Lidia Kelly in Moscow, Tim Heritage in Kiev, John Irish and Lesley Wroughton in Paris; Writing by Paul Taylor; editing by Anna Willard)

Crimea votes to join Russia as EU leaders push Ukraine diplomacy | Reuters

Crimea votes to join Russia as EU leaders push Ukraine diplomacy | Reuters.

BY ALISSA DE CARBONNEL

SIMFEROPOL, Ukraine Thu Mar 6, 2014 6:16am EST

Uniformed men, believed to be Russian servicemen, walk near a Ukrainian military base in the village of Perevalnoye, outside Simferopol, March 6, 2014. REUTERS-Vasily Fedosenko

(Reuters) – Crimea’s parliament voted to join Russia on Thursday and its Moscow-backed government set a referendum within 10 days on the decision in a dramatic escalation of the crisis over the Ukrainian Black Sea peninsula.

The sudden acceleration of moves to formally bring the Crimea, which has an ethnic Russian majority and has effectively been seized by Russian forces, under Moscow’s rule came as European Union leaders gathered for an emergency summit to seek ways to pressure Russia to back down and accept mediation.

The Crimean parliament voted unanimously “to enter into the Russian Federation with the rights of a subject of the Russian Federation”, the RIA news agency reported. Its vice premier said a referendum on the status would take place on March 16.

The announcements, which diplomats said could not have been made without Russian President Vladimir Putin’s approval, raised the stakes in the most serious east-west confrontation since the end of the Cold War.

EU leaders had been set to warn but not sanction Russia over its military intervention in Ukraine after Moscow rebuffed Western diplomatic efforts to persuade it to pull forces in Crimea back to their bases. It was not immediately clear what impact the Crimean moves would have.

French President Francois Hollande told reporters on arrival at the summit: “There will be the strongest possible pressure on Russia to begin lowering the tension and in the pressure there is, of course, eventual recourse to sanctions.”

Russian Foreign Minister Sergei Lavrov refused to meet his new Ukrainian counterpart or to launch a “contact group” to seek a solution to the crisis at talks in Paris on Wednesday despite arm-twisting by U.S. Secretary of State John Kerry and European colleagues. The two men will meet again in Rome on Thursday.

Tension remained high in Ukraine’s southern Crimea region, where a senior United Nations envoy was surrounded by a pro-Russian crowd, threatened and forced to get back on his plane and leave the country.

The EU summit in Brussels seemed unlikely to adopt more than symbolic measures against Russia, Europe’s biggest gas supplier, because neither industrial powerhouse Germany nor financial centre Britain is keen to start down that road.

U.S. READY TO SANCTION

The United States has said it is ready to impose sanctions such as visa bans, asset freezes on individual Russian officials and restrictions on business ties within days rather than weeks.

Russia’s ruble currency weakened further on Thursday despite central bank intervention due to what analysts at VTB Capital called the political risk premium.

The short, informal EU summit will mostly be dedicated to displaying support for Ukraine’s new pro-Western government, represented at the Brussels talks by Prime Minister Arseny Yatseniuk, who will attend the lunch although Kiev is neither an EU member nor a recognized candidate for membership.

After meeting European Parliament President Martin Schulz, Yatseniuk appealed to Russia to respond to mediation efforts to end the crisis.

The European Commission announced an aid package of up to 11 billion euros ($15 billion) for Ukraine over the next couple of years provided it reaches a deal with the International Monetary Fund, entailing painful reforms like ending gas subsidies.

Diplomats said that at most, the 28-nation EU would condemn Russia’s so far bloodless seizure of Ukraine’s Black Sea province and suspend talks with Moscow on visa liberalization and economic cooperation, while threatening further measures if President Vladimir Putin does not accept mediation efforts soon.

But they will hold back from further reaching steps both in hopes of a diplomatic breakthrough to ease tensions in Ukraine and out of fear of a tit-for-tat trade war with Russia, a major economic partner of Europe.

France has a deal to sell warships to Russia that it is so far not prepared to cancel, London’s banks have profited from facilitating Russian investment, and German companies have $22 billion invested in Russia.

Before the summit, European members of the Group of Eight major economies will meet separately, diplomats said, in an apparent effort to coordinate positions towards Russia, due to host the next G8 summit in Olympic venue Sochi in June. They have so far stopped participating in preparatory meetings and Canada has said G7 countries may meet soon without Russia.

ILLEGITIMATE

The crisis began in November when Ukrainian President Viktor Yanukovich, under strong Russian pressure, turned his back on a far reaching trade deal with the EU and accepted a $15 billion bailout from Moscow. That prompted three months of street protests leading to the overthrow of Yanukovich on February 22.

Moscow denounced the events as an illegitimate coup and refused to recognize the new Ukrainian authorities.

Russia kept the door ajar for more diplomacy on its own terms, announcing on Thursday a meeting of former Soviet states in the Commonwealth of Independent States (CIS), including Ukraine, for April 4 and saying it would be preceded by contacts between Russian and Ukrainian diplomats.

Lavrov said attempts by Western countries to take action over the Ukraine crisis via democracy watchdog OSCE and the NATO military alliance were not helpful.

“I want to very briefly say that we had a meeting with U.S. Secretary of State John Kerry on the situation in Ukraine in relation to the actions that our partners are trying to take via the OSCE, the NATO-Russia council and other international organizations – action that does not help create an atmosphere for dialogue and constructive cooperation,” he said in a statement issued by the ministry on Thursday.

In a move that may alarm some of Russia’s neighbors and the West, Russian Prime Minister Dmitry Medvedev announced steps to ease handing out passports to native Russian speakers who have lived in Russia or the former Soviet Union.

Putin has cited the threat to Russian citizens to justify military action in both Georgia in 2008 and Ukraine now.

After a day of high-stakes diplomacy in Paris on Wednesday, Lavrov refused to talk to Ukrainian Foreign Minister Andriy Deshchitsya, whose new government is not recognized by Moscow.

As he left the French Foreign Ministry, Lavrov was asked if he had met his Ukrainian counterpart. “Who is that?” the Russian minister asked.

He stuck to Putin’s line – ridiculed by the West – that Moscow does not command the troops without national insignia which have taken control of Crimea, besieging Ukrainian forces, and hence cannot order them back to bases.

Kerry said afterwards he had never expected to get Lavrov and Deshchitsya into the same room right away, but diplomats said France and Germany had tried to achieve that.

Western diplomats said there was still hope that once Lavrov had reported back to Putin, Russia would accept the idea of a “contact group” involving both Moscow and Kiev as well as the United States and European powers to seek a solution.

The European Union formally announced it had frozen the assets of ousted Ukrainian president Yanukovich and 17 other officials, including former prime minister Mykola Azarov, suspected of human rights violations and misuse of state funds.

“RUSSIA! RUSSIA!”

In an awkward coincidence, just as EU leaders were gathering in Brussels, German Economy Minister and Vice-Chancellor Sigmar Gabriel traveled to Moscow for talks with his Russian counterpart and Putin.

Reflecting concern about how the long-planned trip might be seen in the midst of the Ukraine crisis, Gabriel dropped at the last minute plans to take along German industrialists with him. Germany has been accused in some quarters of soft-pedaling on sanctions in the light of its close economic ties to Russia.

Officials close to Gabriel said he was hoping to keep a low public profile on the trip, but if he meets Putin, as scheduled, he may have to appear in front of TV cameras.

U.N. special envoy Robert Serry had to abandon a mission to Crimea after being stopped by armed men and besieged inside a cafe by a hostile crowd shouting “Russia! Russia!” The Dutch diplomat flew to Istanbul after the incident.

In eastern Ukraine, a pro-Russian crowd in Donetsk, Yanukovich’s home town, recaptured the regional administration building they had occupied before being ejected by police. But police loyal to the new authorities in Kiev raised the Ukrainian flag over the building again on Thursday.

Putin has said Russia reserves the right to intervene militarily in other areas of Ukraine if Russian interests or the lives of Russians are in danger.

Dropping diplomatic niceties on Wednesday, the U.S. State Department published a “fact sheet” entitled “President Putin’s Fiction: 10 False Claims about Ukraine.”

“As Russia spins a false narrative to justify its illegal actions in Ukraine, the world has not seen such startling Russian fiction since Dostoyevsky wrote, ‘The formula “two plus two equals five” is not without its attractions,'” the State Department said in the document.

(Additional reporting by Lidia Kelly in Moscow, Tim Heritage in Kiev, John Irish and Lesley Wroughton in Paris; Writing by Paul Taylor; editing by Anna Willard)

A Bog of Corruption |

A Bog of Corruption |.

February 10, 2014 | Author 

‘Breathtaking’ Corruption in the EU

recent article at the BBC discusses the findings of a report by EU Home Affairs commissioner Cecilia Malmstroem on corruption in the EU. According to the report, the cost of corruption in the EU amounts to €120 billion annually. We would submit that it is likely far more than that (in fact, even Ms. Malmstroem herself concurs with this assessment). This is of course what one gets when one installs vast, byzantine bureaucracies and issues a veritable flood of rules and regulations every year. More and more people are needed to administer this unwieldy nightmare of red tape, and naturally the quality of the hires declines over time due to the sheer numbers required.

Moreover, many small to medium sized businesses would probably not be able to survive if they didn’t occasionally bribe officials. Big business considers bribes a perfectly normal cost of business anyway, especially when the business concerned involves milking tax cows. As you will see further below, the defense business – or better the war racket – is especially prone to corruption. Tax payers of course end up paying every cent. Another sector that is apparently subject to widespread corruption is health care – which should be no surprise, since health care provision is an almost fully socialistic enterprise in Europe. Bribes may well mean the difference between life and death in some instances. You will probably also not be overly surprised to learn that there was VAT fraud amounting to €5 billion in the bizarre and totally ineffective and useless ‘carbon credits’ market, which has turned into a boondoggle of amazing proportions. There’s simply no other way of making a mint in that market we suppose. From the BBC:

“The extent of corruption in Europe is “breathtaking” and it costs the EU economy at least 120bn euros (£99bn) annually, the European Commission says. EU Home Affairs Commissioner Cecilia Malmstroem has presented a full report on the problem.

She said the true cost of corruption was “probably much higher” than 120bn. Three-quarters of Europeans surveyed for the Commission study said that corruption was widespread, and more than half said the level had increased.

“The extent of the problem in Europe is breathtaking, although Sweden is among the countries with the least problems,” Ms Malmstroem wrote in Sweden’s Goeteborgs-Posten daily. The cost to the EU economy is equivalent to the bloc’s annual budget. For the report the Commission studied corruption in all 28 EU member states. The Commission says it is the first time it has done such a survey.

National governments, rather than EU institutions, are chiefly responsible for fighting corruption in the EU.

[…]

In some countries there was a relatively high number reporting personal experience of bribery. In Croatia, the Czech Republic, Lithuania, Bulgaria, Romania and Greece, between 6% and 29% of respondents said they had been asked for a bribe, or had been expected to pay one, in the past 12 months. There were also high levels of bribery in Poland (15%), Slovakia (14%) and Hungary (13%), where the most prevalent instances were in healthcare.

[..]

Last year Europol director Rob Wainwright said VAT fraud in the carbon credits market had cost the EU about 5bn euros.”

(emphasis added)

And that is merely what they actually know about. Remember, there are know unknowns and unknown unknowns here as well, and they probably dwarf what is actually known. One gets an inkling of how big the problem may really be when considering the case of Greece.


_72724992_eu_corruption_labels_624map(3)The EU corruption map according to the official report – via BBC.


Bribes Exceeding Greek Official’s Memory Storage Capacity

Greece is of course a special case in terms of official corruption. If you ever wondered how the country could go bankrupt in such short order after joining the euro zone, wonder no longer. Here are a few excerpts from a recent article in the NYTabout a lower level official in the defense ministry who received so many bribes that he cannot even remember them all anymore. The amounts involved are astonishing:

“When Antonis Kantas, a deputy in the Defense Ministry here, spoke up against the purchase of expensive German-made tanks in 2001, a representative of the tank’s manufacturer stopped by his office to leave a satchel on his sofa. It contained 600,000 euros ($814,000).

Other arms manufacturers eager to make deals came by, too, some guiding him through the ins and outs of international banking and then paying him off with deposits to his overseas accounts.

At the time, Mr. Kantas, a wiry former military officer, did not actually have the authority to decide much of anything on his own. But corruption was so rampant inside the Greek equivalent of the Pentagon that even a man of his relatively modest rank, he testified recently, was able to amass nearly $19 million in just five years on the job.”

One certainly wonders what more powerful officials were able to skim off. Unfortunately, corruption is so widespread and reportedly involves the highest echelons of the bureaucracy and the body politic in Greece, so that one must expect that we will never find out. No wonder there is a lot of tax evasion in Greece: who wants to hand over his hard earned money to such a gang of thieves? It is like paying off the mafia.

Meanwhile, the companies paying the bribes are of course just as guilty, and many of them come from countries that are themselves ranked relatively low on the corruption scale – e.g. Germany and Sweden. It seems to be an ‘opportunity makes thieves’ type situation.

“Never before has an official opened such a wide window on the eye-popping system of payoffs at work inside a Greek government ministry. At various points, Mr. Kantas, who returned to testify again last week, told prosecutors he had taken so many bribes he could not possibly remember the details.

[…]

Mr. Kantas’s testimony, if accurate, illustrates how arms makers from Germany, France, Sweden and Russia passed out bribes liberally, often through Greek representatives, to sell the government weaponry that it could ill afford and that experts say was in many cases overpriced and subpar.

The 600,000 euros, for instance, bought Mr. Kantas’s silence on the tanks, which were deemed of little value in any wars Greece might fight, according to Constantinos P. Fraggos, an expert on the Greek military who has written several books on the subject. Greece went ahead and bought 170 of the tanks for about $2.3 billion.

Adding to the absurdity of the purchase (almost all of it on credit), the ministry bought virtually no ammunition for them, Mr. Fraggos said. It also bought fighter planes without electronic guidance systems and paid more than $4 billion for troubled, noisy submarines that are not yet finished and sit today virtually abandoned in a shipyard outside Athens. At the height of the crisis, when it was unclear whether Greece would be thrown out of the euro zone and long before the submarines were finished, the Greek Parliament approved a final $407 million payment for the German submarines.”

[…]

The Defense Ministry is hardly the only ministry suspected of being a hotbed of corruption. But the Defense Ministry makes a particularly rich target for investigators because Greece went on a huge spending spree after 1996 when it got into a low-level skirmish with Turkey over the Imia islets in the Aegean Sea.

One former director general of the Defense Ministry, Evangelos Vasilakos, calculated that Greece spent as much as $68 billion on weaponry over the next 10 years, much of it borrowed money. To win these deals, which involved the approval of military and Defense Ministry officials, as well as Parliament, arms dealers probably spent more than $2.7 billion on bribes, according to Tasos Telloglou, an investigative reporter for the Greek daily newspaper Kathimerini, who has written extensively on the subject.”

(emphasis added)

Buying $68 billion worth of largely useless weaponry is certainly quite a feat for a country of slightly over 11 million inhabitants. The Saudis may well be able to top that on a per capita basis, but they have a lot of oil money and haven’t required a bailout from anyone. Greece was not able to actually afford these expensive toys.

Even if the weapons were in perfect working order, this buying spree wouldn’t make any sense. Is Greece really going to fight a war with Turkey, a NATO partner? The very idea is absurd. Since we can rule this possibility out, what on earth are the weapons good for?

We can hereby amend Randolph Bourne’s famous saying: ‘War is the health of the State – and its minions and suppliers‘.

Greek tank

Say hello to a white elephant in the Greek shrubbery.

(Image author unknown)

EU report: Corruption widespread in the bloc – Europe – Al Jazeera English

EU report: Corruption widespread in the bloc – Europe – Al Jazeera English.

Corruption affects all 28 member countries of the European Union and costs their economies about $162.19bn (120bn Euros) a year, according to an European Union report.

The report, the EU’s first on corruption, was issued on Monday by Cecilia Malmstrom, EU Commissioner for Home Affairs, the AP news agency reported.

Malmstrom said in a statement that “corruption undermines citizens’ confidence in democratic institutions and the result of law, it hurts the European economy and deprives states of much-needed tax revenue.

Member states have done a lot in recent years to fight corruption, but today’s report shows that it is far from enough

Cecilia Malmstrom, EU Commissioner for Home Affairs

“Member states have done a lot in recent years to fight corruption, but today’s report shows that it is far from enough.”

The report said that an increasing number of EU citizens, who were surveyed as part of the report, thought it was getting worse.

Almost all companies in Greece, Spain and Italy believe it is widespread and, among businesses, belief is widespread that the only way to succeed is through political connections.

Corruption is considered rare in Denmark, Finland and Sweden, according to the report, a finding that reflects the work of Transparency International’s corruption perception index. It named Greece as the worst performer in the EU, sharing 80th place with China. Denmark was seen as the least corrupt.

Construction companies, which often tender for government contracts, are the most affected. Almost eight in ten of those asked complained about corruption.

Overall, 43 percent of companies see corruption as a problem. The cost to the European economy is almost equivalent to the size of the Romanian economy.

Corruption is commonplace

Eight out of ten EU citizens believe that close links between business and politics lead to corruption.

“Europe’s problem is not so much with small bribes on the whole,” Carl Dolan of Transparency International in Brussels, told Reuters. “It’s with the ties between the political class and industry.”

“There has been a failure to regulate politicians’ conflicts of interest in dealing with business,” he said.

“The rewards for favouring companies, in allocating contracts or making changes to legislation, are positions in the private sector when they have left office rather than a bribe.”

European Commission: the level of corruption across the EU is ‘breathtaking’

The European Commission recommended better controls and a redoubling of enforcement.

The report was published shortly after Romania’s former prime minister, Adrian Nastase, was sent to jail for four years for taking bribes. He was the first prime minister to be put behind bars since the collapse of communism in Europe in 1989.

The EU has repeatedly raised concerns about a failure to tackle corruption at high-level in Romania and Bulgaria, the bloc’s two poorest members. They have been blocked from joining the passport-free Schengen zone over the issue since their entry.

In October 2012, former European Health Commissioner John Dalli was forced to quit after an associate was accused of asking for 60 million euros from a tobacco company in return for influencing EU tobacco law.

Government under fire for rejecting European Union food bank funding | Society | The Guardian

Government under fire for rejecting European Union food bank funding | Society | The Guardian.

Government under fire for rejecting European Union food bank funding

Critics say Conservative anti-EU ideology being put ahead of needs of the poor after UK officials turn down subsidy
food banks

The economic downturn has seen use of food banks in Britain increase dramatically in recent months. Photograph: Mercury Press & Media Ltd

The government has been accused of putting “anti-European ideology” before the needs of the most deprived people in society after Britain rejected help from a European Union fund to help subsidise the costs offood banks.

David Cameron, who was heavily criticised recently after Michael Gove blamed the rise in food banks on financial mismanagement by families, faced pressure to embark on a U-turn to allow EU funds to be spent on feeding the poor.

The government came under fire after British officials in Brussels said that the UK did not want to use money from a new £2.5bn fund – European Aid to the Most Deprived – to be used to help with the costs of running food banks. The use of food banks has increased dramatically in recent months, prompting Sir John Major to warn that the poor face a stark choice between paying for heating or food.

But British officials rejected EU funding for food banks, which could have reached £22m for Britain, on the grounds that individual member states are best placed to take charge of such funding.

A document from the Department of Work and Pensions explaining Britain’s position, which has been leaked to the Guardian, says: “The UK government does not support the proposal for a regulation on the fund for European Aid to the Most Deprived. It believes that measures of this type are better and more efficiently delivered by individual member states through their own social programmes, and their regional and local authorities, who are best placed to identify and meet the needs of deprived people in their countries and communities. It therefore questions whether the commission’s proposal is justified in accordance with the principle of subsidiarity.”

Richard Howitt, a Labour MEP who helped negotiate the new fund, accused the government of neglecting the needs of the poor. “It is very sad that our government is opposing this much-needed help for foodbanks on the basis that it is a national responsibility, when in reality it has no intention of providing the help itself. The only conclusion is that Conservative anti-European ideology is being put before the needs of the most destitute and deprived in our society.”

Howitt added that he hoped that a Westminster parliamentary debate on Wednesday would prompt a government U-turn. He said the debate “should be used to shame a government, which is taking food out of the mouths of the hungry, into a U-turn in time for Christmas”.

It is understood that in “trilogue” negotiations – between the European commission, the council of ministers and the European Parliament – British officials formed a blocking minority with three other EU member states to water down the fund which will run from 2014-2020. Under the original plans there would have been just one funding strand for the “distribution of material assistance” – sleeping bags and food. But Britain prompted the creation of a second funding strand known as “immaterial assistance” to cover counselling and budget maintenance but not food banks.

The position taken by UK officials means that Britain will draw down just €3.5m (£2.9m) from the fund compared with €443m for France which is around the same size as the UK. Britain is taking the same amount as Malta, the smallest EU member state with a population of 450,000.

The department for work and pensions said that Britain has not lost any money because the £22m would have come out of the UK’s EU structural fund pot. It said that ministers have not decided how to allocate the £2.9m earmarked for Britain from the fund, though this is expected to be spent on helping unemployed people find work.

A DWP spokesperson said: “We aren’t losing money – any funding the UK receives from the Fund for European Aid to the Most Deprived will be taken off our structural fund allocation. Instead we will use our structural funds to support local initiatives to train and support disadvantaged people into work. We have not yet decided how the €3.5m euro pot (£2.9m) will be spent – food aid is just one of the options for spending the money.”

Chris Mould, the executive chairman of Britain’s largest network of food banks, the Trussell Trust, told the Guardian: “We would welcome an opportunity to have discussions with DWP about how we could use that €3.5m to good effect. If the EU made a decision in the European Parliament that this money should be used for the assistance of people in severe need – and it has got a food aid tag on it – then we hope they will talk to us.”

On the signs that the government would like to spend the money in helping people into work, rather than on food aid, Mould said: “It is the decision of government at all times what its priorities are for the money it has available. But it does need to spend money in several places not in one place. The Trussell Trust has provided through its network of food banks emergency assistance for over 500,000 people since 2013 who are in financial crisis, who are going hungry who have been referred by more than 23,000 different professionals holding vouchers.

“If people don’t get help when they are in financial crisis they lose their home, their families break down, they suffer anxiety and depression. All these things have a significant financial cost to the state. It is very important that the government looks beyond the narrow single issue argument of spending all the money into employment. Of course that is important but they are spending massive of money on that which is good. But this EU money is extra and originally intended to be for food assistance.”

EU Commission fines banks $2.3 billion for benchmark rigging | Reuters

EU Commission fines banks $2.3 billion for benchmark rigging | Reuters.

European Union Competition Commissioner Joaquin Almunia addresses a news conference at the EU Commission headquarters in Brussels December 4, 2013. REUTERS-Yves Herman
European Union Competition Commissioner Joaquin Almunia addresses a news conference at the EU Commission headquarters in Brussels December 4, 2013. REUTERS-Yves Herman

1 OF 2. European Union Competition Commissioner Joaquin Almunia addresses a news conference at the EU Commission headquarters in Brussels December 4, 2013.

CREDIT: REUTERS/YVES HERMAN

(Reuters) – EU antitrust regulators fined six financial institutions including Deutsche Bank, Royal Bank of Scotland and Citigroup a record total of 1.71 billion euros ($2.3 billion) on Wednesday for rigging financial benchmarks.

The move confirms what a source familiar with the matter had previously told Reuters.

The penalty is the biggest yet to be handed down to banks for rigging the benchmarks used to determine the cost of lending, one of the most brazen violations of conduct since the financial crisis. It is also the highest antitrust penalty ever imposed by the Commission, the EU’s competition regulator.

The other banks penalized are Societe Generale, JPMorgan and brokerage RP Martin.

Deutsche Bank received the biggest fine of 725.36 million euros.

The European Commission said it would continue to investigate Credit Agricole, HSBC, JPMorgan and brokerage ICAP for similar offences.

The benchmarks involved are the London interbank offered rate, or Libor, the Tokyo interbank offered rate and the euro area equivalents. They are used to price hundreds of trillions of dollars in assets ranging from mortgages to derivatives.

“What is shocking about the Libor and Euribor scandals is not only the manipulation of benchmarks, which is being tackled by financial regulators worldwide, but also the collusion between banks who are supposed to be competing with each other,” EU Competition Commissioner Joaquin Almunia said in a statement.

LIKELY SANCTIONS

RP Martin and ICAP could not be immediately reached for comment. Deutsche Bank said it has set aside enough money to cover most of the 725 million euro fine.

JPMorgan confirmed its 79.9 million euro penalty in the Libor case but said it would defend itself in the Euribor case. [ID:nWNBB037YI]. Societe Generale declined to comment.

Unlike the six banks which admitted liability in return for a 10 percent reduction in their fines, Credit Agricole has refused to settle and will likely face sanctions next year. HSBC has also contested the EU’s proposed penalty.

Both banks are expected to be formally charged on Wednesday.

A spokesman for HSBC said the bank would defend itself vigorously in the Euribor case, while Barclays confirmed its cooperation with the Commission which helped it stave off a 690 million euros sanction.

RBS said its 391 million euro penalty had been fully provisioned for.

Authorities around the world have so far handed down a total of $3.7 billion in fines to UBS, RBS, Barclays, Rabobank and ICAP for manipulating rates, while seven individuals face criminal charges.

UBS paid a record fine of $1.5 billion late last year to the U.S. Department of Justice and the UK’s Financial Services Authority for rate-rigging.

EU fines can reach up to 10 percent of a company’s global turnover.

UBS blew the whistle on the Libor and Tibor cases and will not be fined as a result. Barclays will escape a fine in the Euribor case because it alerted the Commission to the offence.

(Additional reporting by Matthias Blamont in Paris, Steve Slater and Kirstin Ridley in London, Ludwig Burger and Clare Hutchison in Frankfurt, Lionel Laurent in Paris; Writing by John O’Donnell; Editing by Luke Baker and David Holmes)

 

Joe Oliver takes oilsands fight to Europe’s financial heart – Politics – CBC News

Joe Oliver takes oilsands fight to Europe’s financial heart – Politics – CBC News.

Natural Resources Minister Joe OliverNatural Resources Minister Joe Oliver spoke to more than 125 energy executives in London, England Tuesday, in his bid to get the European Union to change its proposed plan to label Alberta bitumen as dirtier than other sources of oil. (Canadian Press)

Joe Oliver brought new evidence against a plan to label Alberta’s bitumen dirtier than other oil to the financial heart of Europe.

Canada’s minister of natural resources told an audience of more than 125 energy executives at the Canada Europe Energy summit in London that the European Union’s proposed Fuel Quality Directive is a “bad policy.”

“As currently drafted, the FQD is unscientific, discriminatory, opaque and will discourage and harm the European refinery industry,” he said.

For the past couple of years Canada has been fighting plans by the EUto bring in the directive as part of the EU’s efforts to reduce emissions from transportation.

The FQD assigns values to three types of oil — bitumen, shale oil and conventional oil — based on emissions created during production.

The Canadian government disputes the value assigned to conventional oil, saying it’s too low.

Oliver’s department released a study last week by ICF International, a company that previously provided expert advice on energy to the European Commission. It looked at how Europe calculates the emissions from the oil it uses now and concluded the EU’s math is wrong.

The report points out the EU assigned average values for oil now used in Europe.

But, it concludes, that average doesn’t take into account that conventional oil has different emissions depending on where it comes from and how much flaring — or burning off of gas — occurs during production.

Oliver argues that makes conventional oil appear cleaner that it really is.

“This is basic energy science,” Oliver said “But the FQD doesn’t reflect it.”

Oliver wants the EU to create a new system of values for conventional oil.

Concern over effect in U.S., too

Canada recently signed a free trade with Europe and sees it as huge new customer for its petroleum. But a higher number attached to Canadian oil sands bitumen under the proposed Fuel Quality Directive would discourage EU members from using it.

Oliver warns the FQD could also give Alberta bitumen a black eye in the U.S.

The Obama administration is still mulling over a decision about the controversial Keystone XL pipeline.

“It could stigmatize the oil from Canada and impact on our access to some markets, Oliver told reporters. “I don’t see a direct tie-in with Keystone but it clearly would not be helpful,” he added.

As Oliver spoke protesters dressed in white hazmat suits outside London’s Canada House unveiled a mock oil spill clean up. The work, by artist Lucy Sparrow, showed geese, seals and other wildlife made of felt covered in oil as workers “mopped” up the spill around them.

“Joe Oliver has just sort of revamped his campaign to water down the Fuel Quality Directive to try and stop progressive EU climate legislation,” said Suzanne Dhaliwal from the UK Tar Sands Network.

“We wanted to bring this oil spill here today to show that animals are being destroyed, communities are being destroyed and ecosystems are being destroyed. And we wanted them to think about that when they go into these meetings today.”

 

Russia denies using gifts to spy on G20 leaders – World – CBC News

Russia denies using gifts to spy on G20 leaders – World – CBC News. (source)

Russian President Vladimir Putin speaks to the media during a news conference at the G20 summit in St. Petersburg on Sept. 6, 2013. The Kremlin is denying a report that spy devices were distributed as gifts at the summit.Russian President Vladimir Putin speaks to the media during a news conference at the G20 summit in St. Petersburg on Sept. 6, 2013. The Kremlin is denying a report that spy devices were distributed as gifts at the summit. (Alexey Maishev/RIA Novosti/Reuters)

Russia has denied reports that its intelligence services spied on hundreds of foreign delegates at a Group of 20 summit in St. Petersburg in September using gifts such as teddy bears, diaries and free USB keys.

Quoting a report from the European Council’s security office to Italian intelligence services, Italy’s Corriere della Sera daily has reported this week that at least 300 such devices were issued at the Sept. 5-6 summit and were revealed to be spy gear during security debriefing sessions last month.

The report fuels controversy over international espionage after reports that U.S. intelligence services had conducted telephone surveillance of allied countries and leaders.

Kremlin spokesman Dmitry Peskov said he did not know what the source of the latest allegations was.

“This is undoubtedly nothing but an attempt to shift the focus from issues that truly exist in relations between European capitals and Washington to unsubstantiated, non-existent issues,” he was quoted as saying by RIA news agency.

Tension between the United States and its allies has grown over reports that European leaders including German Chancellor Angela Merkel had been spied on by U.S. intelligence services.

Gifts showed signs of ‘manipulation’

According to Corriere della Sera, a regular debriefing with European Council President Herman Van Rompuy and other EU delegates revealed they had been given souvenir USB keys and cables to connect smartphones with personal computers.

It said EU officials alerted German intelligence services which conducted detailed tests on the devices.

“These are devices adapted to the clandestine interception of data from computers and mobile telephones,” the newspaper quoted an initial report as saying.

Daily La Stampa newspaper said the devices showed “anomalies” and signs of “manipulation” but it was not certain how much information had been collected by Russian spies.

The reports appear to show a more traditional pattern of intelligence gathering than the reported U.S. snooping.

The Guardian newspaper reported in July that British intelligence services had spied on G20 delegates at a summit in 2009, tricking some delegates into using free internet cafes apparently set up for their benefit.

 

Troika Wants To Strip Greece Of Defense, Auto Industries, Greece Balks: The Troika-Greece Can-Kicking Toxic Loop | Zero Hedge

Troika Wants To Strip Greece Of Defense, Auto Industries, Greece Balks: The Troika-Greece Can-Kicking Toxic Loop | Zero Hedge. (source)

While the world awaits with bated breath until the moment that Greece can no longer afford to pretend it is solvent and has to apply for its third bailout from Europe, or else threaten to take down Deutsche Bank and its tens of trillions in gross derivatives, the world has to listen to the constant jawboning from the Troika which for the past nearly 4 years continues to express its displeasure with Greece, and yet still provides every Euro of funding the imploding country requests. In the latest iteration of this charade, the Troika has apparently flexed its muscles and made it clear that if Greece wants to receive the next round of cash, it will have to shutter the state-owned Hellenic Defense Systems (EAS) and the Hellenic Vehicle Industry (ELVO). In short: shut down the domestic defense and auto industries, and we’ll talk. Oh, and if as a result you have to import your guns and cars from Germany (whose generous funding has kept you afloat so far), and have to take out Deutsche Bank loans to pay for them, so be it.

From Kathimerini:

The heads of the troika mission in Greece are due to return to Athens at the beginning of November, it was revealed on Tuesday as sources in Brussels insisted that the country’s lenders would not back down over their demands for further fiscal measures and the closure of Hellenic Defense Systems (EAS) and the Hellenic Vehicle Industry (ELVO).

The Greek government has balked at suggestions it may have to find as much as 2 billion euros more than it has planned in savings next year. However, EU sources told Kathimerini that the troika does not consider the draft 2014 budget reliable. Greece’s creditors believe the plan overestimates tax revenues and underestimates social spending.

As a result, the troika wants to thrash out more measures with the Greek government, ensuring that the deficit target for 2014 will be met. The European Commission, European Central Bank and International Monetary Fund agree with Athens’s positions that any extra savings should not come from “horizontal” cuts to wages and pensions.

The precise amount needed to cover Greece’s fiscal gap next year will not be assessed fully until the current troika review is completed. This requires Greece to meet the milestones agreed with its lenders, such as rounding off the first phase of a public sector mobility scheme. EU sources noted that Greece could survive without receiving its next loan tranche until spring, thereby underlining that the troika is not in a rush to complete the review.

With regard to EAS and ELVO, Greece’s lenders do not believe it is possible to save the two state firms as they are a drain on public finances, in contrast to other European countries, where companies in the defense industry are profitable.

Athens has been in contact with the European Commission over the past few days to respond to queries about its plans to keep the firms afloat. The government believes that it could turn EAS into a profitable company with two years. EU sources said Brussels had heard similar pledges from Greek governments over the past 20 years.

The last snarky sentence was from Kathimerini, not us.

And of course, all of the above would be dramatic if it wasn’t quite clear apriori that this is merely the latest iteration of the kick-the-can closed loop, best summarized by the schematic below.

 

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