by Andrew Willis

EUOBSERVER / LONDON – World leaders mixed hubris and humility on Thursday evening (2 April) as they sought to highlight the achievements of the G20 meeting of industrial nations, while admitting much still needs to be done to restore the world's economy.

"By any measure the London summit was historic," said United States President Barack Obama, adding that he had come to the meeting with the intention of listening and learning but also to provide American leadership.

British prime minister and chair of the event Gordon Brown declared: "The old Washington consensus is over, today we have reached a new consensus to take global action together to deal with the problems we face."

Later, Mr Obama agreed that the era of the lightly regulated market was indeed over, saying free markets could go "off the rails" if not properly controlled.

The International Monetary Fund was the day's main winner hands down. Showered with new resources and new tasks, its importance is set to grow in the coming years.

" Today you get the proof that the IMF is back," said its managing-director Dominique Strauss-Kahn.

Leaders agreed to triple the organisation's main lending facility from its current level of $250 billion (€186 billion) to $750 billion and will allow it to create a new Special Drawing Rights (SDR) allocation, essentially an overdraft facility, of $250 billion, with which to boost global liquidity.

The new SDR facility was one of the few concrete measures provided as a specific step to boost the world's economy rather than to help financial fire-fighting.

The new donations to the IMF, if and when they materialise, will mean the body wields a substantial $1.1 trillion chequebook with which to tackle the world's financial problems.

Added to this, $100 billion of additional lending will be made available to multilateral development banks in general.

A further sum of approximately $6 billion will be raised from the partial sell-off of the IMF's gold reserves, with the money going to help the world's poorest countries.

Sceptics were quick to point out however that some of the money had already been pledged in previous announcements and the exact breakdown of where the rest will come from remains unclear.

Mr Brown said China had agreed to provide $40 billion, possibly through the purchase of new IMF bonds.

China and a number of other emerging economies have made it clear in recent weeks that they expect the IMF's governance system to be reformed if they are to start making increasing donations.

While the group's communique says leaders are "determined to reform and modernise the international institutions," little change to the fund's voting rights is likely to take place before 2011, a date agreed by G20 finance ministers last month.

In its increased regulatory capacity, leaders agreed that the IMF should co-operate with the Financial Stability Forum, to be renamed the Financial Stability Board, in providing early warnings on the risks faced by the world's financial system and also propose suitable actions to meet these risks.

Added to this new macro-prudential role, the IMF will also monitor whether states have implemented new rules on financial regulation that include greater oversight of hedge funds.

Tax havens and trade

Leaders agreed to tone down language regarding a new OECD list of tax havens published on Thursday.

Rather than including the final list in the communique, leaders said they "took note" of the list and insisted they "stand ready to deploy sanctions to protect our public finances."

China is thought to have objected to the list's inclusion in the G20 communique because of sensitivities over Hong Kong and Macao.

G20 leaders repeated their pledge of last November to reject protectionism, despite a World Bank report since then which says 17 of the 20 states had increased trade barriers of one kind or another.

However they agreed that $250 billion would be donated to trade finance in a bid to unblock trade channels that are currently suffering from a lack of credit.

"Today's meeting will not solve the crisis but we have begun the process by which it will be solved," said Mr Brown.

The G20 looks set to meet again this summer or autumn.

Source: www.euobserver.com

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by Leigh Phillips

EUOBSERVER / LONDON - Amidst the tens of thousands of activists of various stripes targeting London's financial district as the G20 summit opened on Wednesday (1 April), one of the more colourful contingents of mostly youthful activists set up a 'Climate Camp' outside the European Climate Exchange, saying the same free-wheeling financial system that has led to the current economic crisis will not be able to save the planet from the climate crisis.

While outside the Bank of England a motley crowd tussled with police and a handful stormed a Royal Bank of Scotland office, resulting in 63 arrests, according to authorities, and elsewhere in the British capital peace campaigners voiced their opposition to the war in Afghanistan and the Israeli occupation of Palestinian territories, in this particular corner of London for some 2,000 students, academics and environmental campaigners, the centrepiece of the EU's climate change strategy, the Emissions Trading Scheme, was their key target during the G20 meeting.

The exchange, or ECX, is a pan-European platform for carbon emissions trading, whose buying and selling of contracts based on EU Allowances (EUAs) attracts some 80 percent of the exchange-traded volume in the European market.

At 12:30 on the dot, dozens of protester 'affinity groups' swooped in on Bishopsgate, home to the exchange, rapidly pitching a flock of stake-less green and blue pup tents, filling the street. Hanging colourful bunting across the street and affixing green and anti-capitalist posters and banners to building walls with red and yellow fake 'police line' tape that instead declared "capitalism means war," the protesters had control of the road within minutes.

A carnival atmosphere emerged with the plentiful sun and sudden appearance of brass bands and campers singing in the round. Two women dressed as mermaids held placards warning of rising sea-levels while others were partially successful in holding workshops on the science and politics of climate over bullhorns not loud enough to penetrate the din from the cheerful ruckus and the drone of the helicopters overhead.

In front of one tent, draped in a Bolivian flag, was placed something of a welcome mat, bearing the nigh-on ubiquitous visage of revolutionary Che Guevara and Evo Morales, the land-locked South American country's socialist president, quoting his anti-capitalist warning: "Under capitalism, Mother Earth doesn't exist: We are not human beings, but consumers."

A few metres away from the Bolivian tent meanwhile, beneath a banner demanding "Farmers' markets, not carbon markets," some climate camp activists dressed in tweed vests, green wellington boots and cloth caps in the English gentleman-farmer fashion had set out a stall with locally grown organic carrots, apples and freshly baked vegan cakes.

'Turning the atmosphere into a commodity'

Ian Duff, an organiser with the Climate Camp explained the pun while decrying the EU's ETS.

"Carbon markets employ the same processes, the same system that has resulted in the current economic crisis, and if governments embrace the ETS as a model, we will see the same situation, the same sort of collapse with carbon credits," he said.

"Carbon trading creates a commodity out of the atmosphere and leaves it to the same bankers that have created this mess to trade our way out of climate change."

"It is up to the market to set the price of carbon, which, with the economic slump, has plunged from around €30 a ton to just €10, which is not sending the price signal we need for industry to begin changing its ways."

Instead of providing a market incentive to reduce carbon output, emissions credits, most of which have been allocated for free, now provide a source of revenue for companies, he argued.

Moreover, carbon markets require that a single commodity - the equivalent of a ton of carbon - is universally exchangeable. But greenhouse gases are in the real world are produced in a variety of ways and have effects on the climate far more complex than this "imagined" tradable commodity. Not all tons of greenhouse gas emissions are the same, so they require regulation tailored to different industries rather than a market "oversimplification," he explained.

This oversimplification at the same time is then complicated by traders as carbon markets become as abstruse and tangled as the obscure world of derivatives, sub-prime mortgages, credit default swaps and other complex financial products, with carbon credits sliced and diced in a similar fashion.

"We've seen how these people cannot be relied upon to look after the economy, so we can't trust them to look after the planet," he said.

Instead of looking for market-based or technical fixes, global leaders need to begin shepherding society through more substantial economic changes.

"Farmers' markets are one aspect of a more sustainable economy," he said. "It's a half-serious joke rather than serious preaching, but about the sort of system-wide change we need to combat global warming, rather than the false solution offered by carbon markets."

‘Protesting doesn't get rid of the bankers'

Right next to the climate campers, a group of construction workers on a tea break watching the ruckus were split over the protesters. While trade unionists and farmers have played a prominent role in the demonstrations, strikes and wider unrest in other EU countries, in the UK, such protests as the climate camp and at the Bank of England have remained largely the preserve of youthful activists and NGOs.

Lester, a middle-aged man, did not think much of the demonstration at first: "They would do a better job if they were working. It's just a day off isn't it? If I'd a day off, I would've gone fishing. No time for this lark."

Asked what he thought of economic crisis, however, he said he did not have much time for the financial world either: "The bankers have destroyed this country, brought it to its knees. None of them should have been bailed out."

His co-worker, Philip, slightly younger than his friend, then piped up that he would be at the protest himself if he were not at work. "It's fantastic. We need more protests like this. In fact, there should be more people here. I don't know why there aren't."

Lester then thought twice about what he had said a moment earlier: "What I mean is, it's not going to change anything is it? It's not going to work. Just protesting doesn't get rid of these guys, does it?"

A few streets over, a more hardened crowd of anarchists and anti-globalisation protesters did indeed engage in more militant actions.

Mid-morning, demonstrators smashed the windows of an RBS office and chucked out into the street a stream of computers, filing cabinets and other office equipment before the bank was stormed by riot police with dogs.

For the most part, however, the convergence of protesters on Threadneedle Street and the surrounding roads - sealed in by riot police - maintained a peaceful, festival atmosphere, with jugglers, the dreadlocked and the heavily tattooed basking in the April sun.

A statue of the Duke of Wellington now sported a black anarchist flag, a skull on a stick and a banner calling for "worldwide direct action against homelessness".

An Osama bin Laden look-a-like busker sung "Sweet Home Al-Qaeda" in front of a placard that read "Quantititavely ease me". He joked with the crowd that the economic crisis had been tough for terrorism too. "We've had to let go 40 jihadists this week alone," he lamented.

Elsewhere, 11 protesters who had brought their own tank to the demo were arrested for being dressed as police and had their armoured but unarmed vehicle impounded.

Anarchists in Starbucks

While many shops and cafes were closed or even boarded up, surprisingly, a Starbucks, long-time target of anti-globalisation protesters since the famous ‘Battle in Seattle' almost a decade ago, remained open. More surprising still, not a few anarchists popped in throughout the day for snacks, drinks and the toilet. One young man dressed as Death, complete with a black hood and cape, bought a lollipop and a yoghurt smoothie.

Students engaging in a sit-down in the street complained that they were baton-charged by police, but otherwise, apart from reaction to the attack on the bank and the sealing off roads and steady, tightening advance of police - a process known as ‘kettling' - the 5,000 police drawn from across the country took a largely hands-off approach until the mid-afternoon, when protesters at the Bank of England pushed through police lines. Military police soon filed in, containing the situation.

However, late in the evening, officers moved in to break up the climate camp as well, provoking running battles in the neighbouring streets that eventually petered out around 1 am.

Source: www.euobserver.com

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by Andrew Willis

EUOBSERVER / LONDON - Leaders of the G20 industrial nations finished breakfast on Thursday (2 April) morning at London's Excel Centre and began the final phase of tough negotiations on how to reform the International Monetary Fund (IMF) and boost its resources.

"You need to appoint someone democratically at the IMF," said Irish campaigner and former pop singer Pop Geldof on the summit's sidelines.

Mr Geldof, who for many years has put pressure on Western leaders to increase aid to developing countries, said the days of European and American domination of the world's multilateral lenders, such as the IMF and the World Bank, have to come to an end.

He added that leaders must live up to aid commitments given at the 2005 G8 meeting held at Gleneagles in Scotland at which they promised to increase aid by $50 billion (€37 bilion) annually by 2010.

G20 leaders are currently negotiating the exact amount of new funding to be handed to the IMF, following an agreement by G20 finance ministers on 14 March to make a "substantial increase."

Last month the US surprised the world by saying the fund's resources should be tripled to $700 billion (€524 billion).

UK financial secretary to the treasury Stephen Timms told reporters on Thursday at the summit that he was confident G20 leaders would agree on a final figure for the summit's communique.

"We are certainly looking at a doubling," he said. "We will have a figure by the end of the day."

Douglas Alexander, the UK's secretary of state for international development, told reporters that the partial sale of the IMF's sizeable gold reserves was being considered as a means to supplement the fund's lending capacity.

Beyond stigma

He added that past hang-ups associated with seeking a loan from the IMF were disappearing rapidly and he welcomed Mexico's announcement on Wednesday to apply for a $47 billion credit line.

"The new facility that Mexico is taking advantage of shows we have gone beyond the era of stigma," said Mr Timms.

Mexico's move is significant, as it marks the first time a Latin American country has applied for a loan from the Washington-based multilateral lender since it fell out of favour with the region in the 1990s.

Mr Timms also said that leaders were discussing ways to fight the growing threat of rising protectionism since the onset of the financial crisis, suggesting the final communique would contain measures to "name and shame" states implementing new trade barriers.

He was confident that the Doha round of global trade negotiations could be completed this year saying he felt there was an imminent "window of opportunity."

Tax-havens are also firmly on the agenda of Thursday's meeting.

Mr Timms indicated that leaders would agree on a system of sanctions for those states that refused to share banking information, adding that the list of states to receive such sanctions would be produced in "due course."

Source: www.euobserver.com

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by Leigh Phillips

EUOBSERVER / BRUSSELS - Despite considerable advances in recent years, the social situation for gays, lesbians, bisexuals, transsexuals and transgendered (LGBT) people throughout the European Union remains a problem, particularly in the east, according to a major new survey.

Discrimination, bullying, harassment and attacks occur across the EU. Politicians in a number of eastern member states seem to side with or turn a blind eye to perpetrators, while the ability of victims to report crimes is undermined by lack of police training, leading to significant underreporting, according to a 160-page report on the social aspects of homophobia from the EU's Fundamental Rights Agency.

Even in those member states where attitudes are more tolerant and anti-discrimination laws stricter, there are areas where homophobia is more prevalent, such as in secondary schools and within sports culture, the study says.

Moreover, while most attackers are young men, often in groups, there is a worrying incidence of attacks from the far-right and ethnic minorities.

In June 2007 the European Parliament asked the Fundamental Rights Agency to develop a comprehensive, comparative report on the situation regarding homophobia and discrimination based on sexual orientation. In June last year, the first part of the report, on the legal situation for LGBT people in the EU was published, and on Tuesday (31 March), the second part, on the social situation is to be released.

The paper finds that major differences between member states exist regarding public opinion towards gays and lesbians. Citing a range of data and surveys, the report notes that while the overwhelming majority of Dutch people - 82 percent - as well as strong majorities in Sweden (71%) and Denmark (69%) are in favour of same-sex marriage, this drops to 14 percent in Cyprus, 12 percent in Latvia and 11 percent in Romania at the other end of the scale.

Additionally, while in the Netherlands 91 percent of the population feels comfortable with having a homosexual as a neighbour, in Romania only 36 percent of people are of the same opinion.

The attitudes of politicians vary widely as well, in particular in the case of the right to freedom of assembly. Pride parades and human rights demonstrations have been obstructed in a number of member states either by public authorities or by "counter-demonstrator" attacks. Such incidents were reported in five member states (Bulgaria, Estonia, Latvia, Poland and Romania).

In these, and in six additional Member States (Bulgaria, Czech Republic, Cyprus, Hungary, Italy and Malta), calls for improving the rights of LGBT people "have invariably been met with negative responses from some politicians and representatives of religious institutions or groups."

Such marches have been met with bans or administrative impediments notably in Estonia, Latvia, Lithuania, Poland, Romania and Bulgaria, while in some member states, public authorities have not been able, or willing, to ensure the safety of participants in LGBT demonstrations from attacks by counter-demonstrators. Within the last five years attacks of this kind have occurred in Sweden, Estonia, Latvia, Poland, Czech Republic, Hungary, Italy, Romania and Bulgaria. Such incidents were often accompanied by homophobic public statements or hate speech from political leaders.

The report contrasts this situation with that in other, mainly western member states, recording that LGBT organisations celebrate pride events often with the participation of government ministers, political parties, and, in some cases, religious organisations, notably in the Netherlands, Austria, Sweden, Spain, and France.

Asylum deficit'

Meanwhile, across Europe, refugees seeking asylum from persecution in countries beyond the EU because of their sexual orientation or gender identity are often not believed or simply rejected, even if in the country from which they fled homosexuality is a crime.

There are significant differences in the social situation of LGBT people within member states as well, not just amongst them. Older people, men and the less educated tend to have more negative attitudes, and people across the board tend to react more negatively toward the idea of gays and lesbians caring for or teaching children or as close relatives than they do to the idea of them as friends or doctors. Young people meanwhile are the most affected by hate crimes and bullying, and lesbian and bisexual women are more likely to experience sexual assaults or assaults in private settings than gay or bisexual men.

One Polish woman quoted anonymously by the report said: "A group of young people from my town have harassed me many times to 'persuade' me that there is no place for lesbians here. They've assaulted me verbally and physically. Once, I was beaten, too. They threatened that they would rape me to show how good it is to be with a man, because I need a man."

Attitudes towards transgendered people are significantly more negative compared to attitudes towards lesbians, gay men and bisexuals.

The perpetrators are usually young men in groups. In recent years there have been several accounts of deadly assaults on transgender persons, and there are several examples of extreme right-wing groups harassing or attacking people, including incidents in Sweden, Poland, Estonia and Italy.

More sensitively, victim accounts sometimes identify ethnic minorities as perpetrators of anti-LGBT violence, the report says. Quoting a Dutch survey on Amsterdam, young men of Moroccan origin were over-represented as suspects of anti-gay violence.

Islam not to blame

However, these perpetrators of anti-gay violence are not inspired by religious beliefs, says the report, citing the Dutch survey. "Those ... who are Muslim have only a superficial knowledge of the Koran and rarely go to mosque. The motives of the Moroccan perpetrators are almost the same as those of the indigenous Dutch perpetrators: views and emotions regarding sex and gender ...Their over-representation is due to the street culture of the areas where many Moroccan boys live."

The report also warns that most member states lack the necessary tools for reporting attacks to the police, such as self-reporting forms or third party and assisted reporting. Police officers are not adequately trained to identify and deal with hate crime.

Finally, the report finds there to be "significant challenges" in the realm of sport, with homophobia expressed in different ways, both in fan culture and among athletes, and homophobic language is used to ridicule opponents or referees. Sporting associations, it laments, have only a limited focus on placing homophobia on the anti-discrimination agenda especially compared to otherwise quite robust efforts to tackle racism in sport.

Source: www.euobserver.com

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by Andrew Willis

A wave of economic bad news buffeted Europe on Monday (30 March), with European Central Bank president Jean-Claude Trichet saying he expected falling growth in each quarter of 2009.

"Latest information suggests economic activity has deteriorated further in the first quarter of 2009. Looking ahead, we expect demand to remain very weak throughout 2009, both at the global level and in the euro area," Mr Trichet told MEPs in Brussels.

A gradual recovery is now not predicted before 2010, while several European economies may have to wait until 2011 or later for signs of an upturn.

Rating agency Standard and Poors cut Ireland's top credit rating on Monday from AAA to AA+, making it more expensive for the government of the western isle to borrow money at a time when tax receipts have plummeted. The country is expected to borrow as much as €25 billion this year to plug the shortfall.

"This is bad news for Ireland at a very bad time. Standard & Poor's decision to downgrade Ireland's credit rating will make it even harder for the economy to recover," said Richard Bruton, the opposition spokesman on finance, reports Bloomberg.

S&P downgraded ratings for Spain, Portugal and Greece in January.

Spanish deflationary fears

Addressing the economy committee on Monday, Mr Trichet told MEPs that inflationary pressures "have diminished further."

"Looking ahead, we expect the inflation rate to remain well below two percent for this year and 2010," he said, but ruled out the prospect of deflation for the euro area as a whole.

However, for a number of individual countries the threat of deflation remains very real.

In Spain, the National Statistics Institute said on Monday that month on month inflation for March had fallen by 0.1 percent, marking the first time prices have fallen since the current measuring system began in 1997.

Dropping prices can convince shoppers to postpone purchases as they anticipate further falls, driving down consumption while at the same time increasing the real value of debt.

Deflation is also a concern in Ireland and the UK.

Fall in European economic confidence

On Monday, the European Commission reported that consumer and business confidence slumped to a record low in March.

The EU executive said its economic sentiment indicator for the euro area fell to 64.6 points in March, down from 65.3 points in February. This new level marks the lowest point ever recorded since the survey began in 1985.

For the EU27, the index fell to 60.3 points from 60.9, marking a slower rate of decline following a number of sharp drops since September 2008 when the US bank Lehman Brothers collapsed.

OECD warns of huge job losses

While many thousands have already lost jobs in Europe since the onset of the financial crisis, economists and unions warn that there is a natural time-lag before falling production is converted into job losses, indicating that the worst may still be to come.

A new report to be published on Tuesday (31 March) by the Organisation for Economic Co-operation and Development forecasts that unemployment rates will approach 10% in the OECD area by 2010, compared with the recent low of 5.6 percent in 2007.

If proven to be accurate, the numbers of unemployed in the OECD area will rise by about 25 million, by far the largest and most rapid increase in OECD unemployment in the post-war period.

"Governments need to take quick and decisive action to avoid the financial crisis becoming a fully-blown social crisis," OECD secretary-general Angel Gurria told G8 Labour and Employment Ministers in Rome on Monday.

The ECB is aware of this need for action, making a euro area interest rate cut from the current 1.5 per cent level highly likely when the board meets this Thursday. An announcement on a new policy to buy corporate bonds may also be included.

Source: www.euobserver.com

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by Honor Mahony

EUOBSERVER / BRUSSELS - The European Commission has warned that it will crack down on unscrupulous companies targeting vulnerable online consumers if no improvements are made to protect personal data from abuse.

Speaking at a conference on rise of the amount of personal data collected and used for commercial purposes, consumer affairs commissioner Meglena Kuneva on Tuesday (31 March) pointed out that citizens' online data - such as visited websites, purchases made and online friends - are routinely being used without their knowledge.

Businesses take the information to build up a profile of consumers so they can target the person who appears to be in debt with predatory loans, the person who appears to have a medical condition with certain drugs or even customise services in terms of price, based on whether the customer is likely to be late in payments, fall ill, or return goods that they buy.

"The new reality that internet consumers are paying for services with their personal data and exposure to ads," said the commissioner, adding that "most users are not aware of this."

The huge growth in internet use both by companies and consumers coupled with a lack in corresponding policy means the World Wide Web is "turning out to be the world 'wild west,'" she said.

While personal data is what makes the internet as an advertising-supported service "go round", actual privacy policies are either non-existent or at best intransparent, but "avoiding tracking is currently technically difficult if not impossible."

The commissioner pointed out that privacy policies are "not always easily accessible" and in some cases, a consumer is asked to submit personal data before the privacy policy is given or sometimes a web service will include a clause under which the consumer agrees to share data with other commercial partners.

"You are signing up to give these unnamed people your data," said Ms Kuneva.

Consumer policing of the internet is not enough, the commissioner, with most people not taking the time to read the long terms of online services.

She pointed to a recent "uproar" on Facebook. The social networking service quietly included a clause in their terms and conditions meaning that its users agreed to hand over their personal data to Facebook in perpetuity. It already had 175 million users before the change was noticed.

She called for "principles of transparency, clear language, opt-in or opt-out options that are meaningful and easy to use," allowing people to partake in an economic transaction "without selling [themselves] indiscriminately as commercial fodder to the entire world."

On commercial policies, she called for "guiding principles" with a recent study showing that people no longer use their own judgment when faced with an supposed expert.

At Tuesday's meeting, the commissioner raised a series of questions on the matter, including concerning when a commercial message oversteps the line to look like personal advice and to what extent companies should be allowed to discriminate among consumers in terms of price or message.

She left the questions unanswered but called on industry to establish a framework for "acceptable behaviour" or the commission, as a regulator, "will not shy away from [its] duties."

The commissioner also noted that the most confident group of internet users - 15 to 25-year-olds - use the internet even though they do not trust it, something the commissioner likened to "drinking ... water while thinking it might be slightly toxic."

Source: www.euobserver.com

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by Elitsa Vucheva

EUOBSERVER / BRUSSELS – The European Commission could in the first half of this year recommend lifting visa requirements for the Balkan countries that have carried out sufficient reforms, EU enlargement commissioner Olli Rehn said on Tuesday (31 March).

"Maybe this year we will be able to get concrete results as regards visa-free travel," Mr Rehn said at a conference organised by the Brussels-based European Policy Centre (EPC) think-tank.

"We analyse the reports for the moment and we will consider recommendations still before the end of the Czech EU presidency [in July] so that the Council [the EU member states] could in the course of this year…take a decision on visa-free travel for the most advanced countries of the western Balkans in terms of meeting the requirements and conditions," he added.

Visa requirements were imposed on the western Balkan countries in the aftermath of the 1990s Yugoslav war, with the EU promising as far back as 2003 to start talks with the countries' governments to lift these obligations.

Macedonia, Serbia and Montenegro are currently the most advanced in that respect, according to Brussels' assessment reports from November last year, while Albania and Bosnia and Herzegovina are the least prepared.

If the commission recommends scrapping the heavy visa obligations, a qualified majority of EU member states would have to back the measure for it to go through.

Visa liberalisation is "clearly our priority this year," Mr Rehn told MEPs from the European Parliament's foreign affairs committee later on Tuesday.

The commissioner also urged the EU not to use the global financial crisis as an excuse to slow down the enlargement process.

"Let's not make enlargement the scapegoat of economic recession, since it has not deserved this and it is not responsible for our social ills in the EU," Mr Rehn said.

"Our economic troubles are not the fault of a Serbian worker or a Croatian civil servant, rather they stem from the systemic errors of financial capitalism and originate from Wall Street, not from main street in Zagreb or Belgrade."

Slovenia and Croatia should avoid blame games

Commenting on the border dispute between Croatia and Slovenia, which has seen Ljubljana block Zagreb's EU talks since December, Mr Rehn urged the two countries to adopt a "constructive" approach in order to solve the issue, rather than blame each other for the stalemate.

"I am quite worried about the media and the media climate in both countries …Let's stop nationalistic rhetoric," he said.

The commissioner has proposed setting up a mediation group chaired by former Finnish president Martti Ahtisaari to help solve the border dispute.

Mr Rehn declined to confirm whether he had received a reply to his proposal from the two countries, or whether Mr Ahtisaari would participate in a meeting between himself and Croatia's and Slovenia's foreign ministers on Wednesday in a bid to break the deadlock.

He reaffirmed however that Zagreb was "still on track" to conclude EU accession talks by the end of this year, despite the current stalemate.

Croatia opened EU accession talks in 2005 and wants to become the bloc's 28th member state in 2011.

Source: www.euobserver.com

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by Andrew Willis

EUOBSERVER / BRUSSELS - The Czech EU presidency has indicated that the European Union and China are to hold a summit on 20 May in Prague, six months after the previous meeting was cancelled because of a diplomatic spat over Tibet.

When asked in Prague whether the rumoured date was accurate, Czech foreign minister Karel Schwarzenberg said: "Yes, there hasn't been any change," reports the French Press Agency.

The date for the EU-China summit was one of the topics discussed by EU foreign ministers who met in the Czech Republic last Friday (27 March).

China's mission to the EU told EUobserver that they were busily making preparations for the summit but were unable to confirm the date at present.

However, they did confirm that Chinese vice-premier Wang Qishan will visit Brussels in late April or early May as part of high-level bilateral trade co-operation and investment talks.

EU commissioner for external relations Benita Ferrero-Waldner is currently in China to discuss the preparations for the G20 meeting in London on 2 April, climate change and also the upcoming EU-China Summit.

The commission says discussions will also look at the current state of play of negotiations on a Partnership and Co-operation Agreement. The negotiations started in 2007.

A previous EU-China summit scheduled to take place in Brussels last December was cancelled by the Chinese side following French President Nicholas Sarkozy's announcement of his intention to meet the Tibetan spiritual leader, the Dalai Lama, in Poland.

The French government held the EU's rotating six-month presidency at the time and Mr Sarkozy's move was seen as antagonistic by a Chinese administration that is sensitive over the Tibetan question.

Since then, relations have improved following a fence-mending tour by Chinese premier Wen Jiabao in January and a trade delegation of about 200 Chinese entrepreneurs led by commerce minister Chen Deming in February.

However, the Chinese administration was incensed earlier this month when the European Parliament adopted a declaration marking the fiftieth anniversary of an uprising in Tibet against Chinese rule that saw the Dalai Lama flee to India, where he continues to reside.

The Dalai Lama was recently refused a travel visa to visit South Africa where he was due to attend a conference on football's role in promoting world peace.

Despite the South African government's statement that the move was intended to prevent the Tibetan leader from distracting the country's 2010 football world cup preparations, in reality the decision reflects the increasing unwillingness around the globe to upset China.

China has become a major investor in Africa as it seeks to secure improved access to raw materials.

Source: www.euobserver.com

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by Leigh Phillips

EUOBSERVER / BRUSSELS - With MEPs and European Union member states just inches away from clinching a deal on a sweeping revision of EU telecommunications rules, one major issue remains the sticking point: whether the flow of information on the internet will remain neutral or be split, with some data being privileged over other data.

Internet innovators, from Google to Skype to web-based start-ups are afraid that in the rush to get a deal on a telecoms package through the European institutions before the June parliamentary elections, so-called net neutrality is being left by the wayside.

Currently, wherever data comes from, whether from a silver-surfing Latvian granny blogging about her favourite traditional recipes or a multinational corporate content provider, the packets of information are treated equally, or neutrally, hence ‘net neutrality'.

Amendments to a proposal on the minimum levels of service provision by network operators backed by some centre-right MEPs however would permit telecoms companies and internet service providers to block or degrade some of the data passing through its lines while privileging other data.

Opponents of the amendments, largely from the left and green corners of the house, fear that this would instantly deliver two or more tiers to the internet, with some providers paying premium fees to prioritise their data.

The big content producers and service providers would be able to eclipse smaller publications and tiny internet start-ups.

Moreover, telecoms and ISPs may choose to block or otherwise restrict the data of providers of competing services or competitors or their partners.

Not co-incidentally, the provision of free or extremely cheap internet telephony from companies such as Skype, are the telcos' major competitors. Indeed, analysts believe internet telephony is digging the grave of the large telcos.

Internet search giant Google also opposes the amendments. "We could easily pay any additional premiums, but that's not the point. It's a point of principle. We started out as a small company. We wouldn't be able to do the same thing now, if this passes."

Jean-Jacques Sahel of Skype told EUobserver: "In a time of economic crisis, the EU should be enabling this sector to be more competitive and innovative as possible and this is going in the opposite direction. It protects the big boys and shuts out the small-time innovators."

Supporters of the amendments, including European telcos such as Telefonica and Orange, but also, crucially, US telcos AT&T and Verizon, for their part back a hands-off regulatory approach, saying that competition is enough to sort out any problems that may arise.

They also argue that any such protection of net neutrality inhibits their ability to co-ordinate traffic flows and guarantee quality of service. Many new video and gaming service suck up a lot of bandwidth, they say, arguing that data needs to be managed and prioritised so that internet provision to users is not diminished.

Furthermore, the additional revenues from preferred access fees could finance development of advanced new networks and other innovative services.

This approach is backed by the European Commission, which argues that if consumers feel their content is somehow being compromised, they will switch to other providers.

At the same time, according to sources close to the discussions, the UK and France do not favour net neutrality - the UK believing, similar to the commission, that competition alone is sufficient, and France supporting any moves that it believes will enable it to crack down on copyright infringement.

The debate has sparked off a furious round of lobbying, particularly from American firms.

US President Barack Obama made net neutrality a key issue while on the campaign trail, and at the beginning of March appointed Julius Genachowski, a strong backer of net neutrality, as the country's top telecommunications regulator. The big US telcos see the writing on the wall, and so the battlefield has shifted across the Atlantic.

"If they can deliver a result here in Europe that goes their way, this is something they can use to pressure policymakers with back in the US," said Mr Sahel.

Negotiations over the telecoms package between the parliament, the commission and the Council have all but concluded apart from haggling over the net neutrality issue, which dominated discussions between the three parties on Tuesday.

Compromise texts currently being floated from the parliament and being considered on Thursday evening appear to have caved into the anti-net-neutrality stance as MEPs pick their battles and choose other issues to make a stance over.

Further discussions are expected to take place on Monday night ahead of twin votes on the topic in the parliament's internal market and industry committees on 31 March. The full sitting of the house will consider the matter on 22 April.

Source: www.unobserver.com

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by Andrew Willis

EUOBSERVER / BRUSSELS - The volume of world trade is predicted to plunge by nine pecent this year, according to a World Trade Organisation annual report due out on Wednesday (25 March), in the largest contraction since World War II.

WTO director-general Pascal Lamy said the new forecast highlighted the need to kick-start world trade, with the 9 percent dip to help cause a one to two percent contraction in the world economy overall this year - the first time since the 1930s.

"Trade can be a potent tool in lifting the world from these economic doldrums," he said.

"In London, G20 leaders will have a unique opportunity to unite in moving from pledges to action and refrain from any further protectionist measure that will render global recovery efforts less effective."

Pressure is also increasing for a resumption of the Doha development round of trade talks that broke down last year.

The trade contraction in developed countries such as Germany, the world's largest exporter by volume, will be severe says the report, with WTO economists forecasting a 10 percent fall in exports.

Developing countries will see a smaller fall in the range of two to three percent, but their heavy reliance on exports for growth make this figure no less alarming.

Mr Lamy said the global credit shortage was exacerbating the problem as companies around the world struggle to finance deals.

"The depleted pool of funds available for trade finance has contributed to the significant decline in trade flows, in particular in developing countries," he said.

"As a consequence, many thousands of trade related jobs are being lost. Governments must avoid making this bad situation worse by reverting to protectionist measures that in reality protect no nation and threaten the loss of more jobs."

EU leaders also repeated the need to reject protectionism last Friday at the bloc's spring summit in Brussels, while on the same day French carmaker Renault announced its intention to move a production plant employing 400 workers from Slovenia to a site just outside Paris. The move was supported by French President Nicholas Sarkozy.

The promises of European leaders contrast sharply with the severity of the current situation, particularly in the automobile sector.

The European Automobile Manufacturers Association (ACEA) reports that passenger car registrations were down 18 percent in Europe in February 2009, compared to the previous year. The sector is a huge provider of jobs in Europe.

The WTO's report highlights the need to unblock the banking sector as a crucial first step in tackling the problem.

Under normal recessionary conditions, consumer reticence to spend is transferred into a larger pool of savings that in turn can be lent out to businesses that are keen to invest in future production.

However, current uncertainty over assets held by banks, means this process is not taking place.

The annual report also emphasises the unprecedented global nature of the fall in consumer demand that has effected all regions of the world, but suggests that some initial signs of recovery may be visible in parts of Asia.

Source: www.euobserver.com

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by Valentina Pop

EUOBSERVER / BRUSSELS – Some 80 percent of European consumers are set to have smart energy meters installed in their homes by 2020 as part of a deal on liberalising the EU's energy market.

The new agreement between the European Parliament and the Czech EU presidency updates proposals put forward by the EU executive in 2007, initially aimed at preventing big electricity and gas supply companies from owning both distribution networks and pipelines – the so-called unbundling policy.

After fierce opposition particularly from Germany and France - home of energy giants Gaz de France and EoN - the unbundling deal has been diluted by giving member states unbundling options while strengthening the role of national and EU regulators.

The European Parliament also managed to add a provision under which every household is to have "smart meters" allowing them not only to carefully screen and control energy consumption, but also to sell energy back to the network, for instance by installing solar panels on the roof.

"The price of electricity in particular is determined by when the peak hours are," British Labour MEP Eluned Morgan explained to journalists at a press conference. "So if you could take the peak hours out by getting people to use dishwashers or washing machines at night, you would get a more sophisticated way of using electricity. These smart meters can actually speak to the generator and tell it to stop putting up the amount of energy they use,"

The EU legislative also introduced a provision to fight "energy poverty" - when gas and electricity bills eat up so much of a user's income they cannot afford other basics.

Consumers will be able to change their energy provider within three weeks after the transposition of the EU agreement into national law, expected by the end of next year.

Gazprom clause strengthened

A "third-country clause" aimed at preventing energy giants or monopolies from countries beyond the EU such as Russian gas supplier Gazprom from buying energy networks and imposing their price on EU consumers was "re-inforced by the proposal," EU commission spokesman Ferran Tarradellas said at a press briefing.

It will rest under the competence of national regulators, whose independence has now been strengthened, to decide whether a given investment affects EU energy security or not and whether it is in compliance with EU rules.

Source: www.euobserver.com

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by Valentina Pop

EUOBSERVER/BRUSSELS – EU leaders on Friday agreed to double the existing €25 billion fund for troubled non-euro member states and to allocate €75 billion to the International Monetary Fund, after having haggled for three months over energy projects worth €5 billion.

"We agreed on three particular figures: five, 50 and 75 billion euros", Czech Prime Minister Mirek Topolanek said at the press conference at the end of the spring EU council.

"We agreed on €50 billion. It's a doubling of the amount available to them. If there is a need to help countries which are particularly hit by the crisis, we also put forward €75 billion for the IMF, to enable it to react better in the context of the crisis," he explained.

The €50 billion figure was initially excluded from the draft conclusions Friday morning, which read that the EU would "keep the ceiling for the Union's support facility for balance-of-payments assistance under review."

In the final conclusions, however, EU leaders welcome "the commission's intention to make a proposal for doubling the ceiling for the Union's support facility for balance-of-payments assistance to €50 billion."

According to several diplomatic and EU sources, Austria and the eastern member states pleaded for the precise figure to be mentioned. Germany and France, on the other hand, would have preferred no figure, so as not to give an 'alarmist signal' that the fund is insufficient and other member states need an international bailout.

Speaking later at a press conference, however, French President Nicolas Sarkozy chose to present the top-up as a French initiative. "The effort for our friends from the East has been doubled ... under a French proposal," he said.

Latvia and Hungary have already tapped the fund, leaving it at €15 billion, while Romania is currently also in talks for an EU-IMF loan, estimated at €20 billion. EU sources told this website that even after Romania tapped the fund, there would still be some €10 billion left, suggesting that the bigger share of the loan would come from the IMF.

"Romania's request can be covered by the €25 billion figure and this still gives us quite a big margin. We decided to double the ceiling at €50 billion, but there haven't been any specific requests apart from Romania. But should there be any future request, we wanted to show we are ready," commission president Jose Manuel Barroso said at the press conference.

Worst hit countries still get least energy funding

Paradoxically, it was the lowest figure, that of €5 billion allocated for energy, broadband and agriculture projects, which caused the most strife among member states. It was eventually agreed after Germany got its way and inserted a 2-year deadline for the funding, after which any unspent money would go back to member states.

Although it was designed to increase the capacity of eastern European member states to face new potential gas cuts from Russia, the project list only allocates €310 million of the total €1.5 billion to these countries. Eastern countries were the worst hit when Russia turned off the gas tap for three weeks in January.

Poland also gets an extra €80 million for a liquified natural gas terminal and €150 million together with Denmark and Sweden for a Baltic gas pipe.

The Nabucco pipeline designed to bring Caspian gas to central Europe via Turkey, Bulgaria, Romania, Hungary and Austria is earmarked to get €200 million, despite strong reserves from Germany. Berlin had argued that the project was fully commercial and would not need public funding.

Source: www.unobserver.com

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by Leigh Phillips

EUOBSERVER / BRUSSELS - European Union leaders, meeting in Brussels on Thursday (19 March) and Friday, have kicked a decision on committing funds for third world carbon reduction measures and adaptation to unavoidable climate change into the long grass.

"Significant domestic and external sources of finance, both private and public, will be required for financing mitigation and adaptation actions, particularly in the most vulnerable developing countries," read the conclusions of the summit.

But no firm figures were announced. Instead, the document says only that the EU "will take on its fair share of financing such actions in developing countries."

Last December at the UN climate talks in Bali, Indonesia, the EU had committed to putting an offer on the table by this summit.

Climate finance for the third world has become the main focus of discussion in the lead-up to the Copenhagen climate change summit in December. If the EU and US stump up significant chunks of cash for cutting emissions and climate adaptation, developing countries may in return commit to considerable CO2 reductions, even though it is the industrialised north that is responsible for most of the emissions that caused the problem.

Two weeks ago, European environment ministers declined to come up with any figure. The following week finance ministers kicked the decision up to the top table. Now it appears that no moves will be made until the June European Council, while Poland has said it would be content if no decision were taken until some time during Sweden's turn at the rotating EU presidency in the second half of the year.

At the June summit, the EU is set to decide on its overall approach to climate finance, how much it will offer and how much each of the EU member states should contribute.

Additionally, EU chiefs agreed that the bloc's commitment to expand its cut in carbon emissions from 20 percent to 30 percent on 1990 levels is no longer just contingent on other wealthy countries making similar commitments, but on leading developing countries also taking on board significant carbon reduction targets.

Bemused

Explaining why they had not come up with a funding proposal yet, the EU leaders said the priority should be on a common position the EU can take to the Copenhagen meeting.

Angela Merkel, Germany's chancellor, told reporters on Friday: "We want a success of this meeting and we are ready to allocate more funds but it is important that we prepare a negotiating position."

UK foreign minister David Miliband dismissed the concerns of the UN's top climate negotiator, Yvo de Boer, who this week accused the EU of backing down on commitments it had made in Bali last year.

"I've followed this debate with some bemusement," Mr Miliband told journalists at the end of the summit. "Far from backsliding, the EU is going into the last nine months before the Copenhagen summit with stronger and stronger offers, but also with an understanding of the responsibility of all countries.

"The European Union has also taken forward a serious debate on how we fund beyond the carbon finance system."

Sources close to the discussions confirm that Poland is the main opponent to sticking a price tag on EU climate finance for developing countries. Warsaw makes the argument that the economic crisis undermines the ability to make climate finance commitments and does not want to sign off on the mechanism for providing funding without first agreeing how to divide up the burden of the funding among member states.

Poland was backed by Italy, Latvia, Lithuania, Bulgaria and Hungary, who are opposed to the use of funds from the auctioning of emissions permits for climate finance. But according to the same sources, of the rest of the member states, the UK, Spain and Sweden also did not want to put forward any concrete figures. Only the Netherlands together with Slovenia and Belgium were ready to do so immediately.

Waiting for Godot

Green groups and development organisations said that the delays in coming up with an offer and the demand that leading developing countries commit to carbon reductions before any cash is put on the table is killing off the chance of a strong agreement at the UN climate conference.

"We understand that in times of financial crisis it is difficult to be generous and devote resources to other parts of the world, but turning the responsibility around and asking developing countries to put forward proposals for cutting their emissions is a recipe for defeat at the December climate summit in Copenhagen," said Stephan Singer, director of WWF's Global Energy Programme, in reaction to the news.

Joris den Blanken of Greenpeace described the EU as "waiting for Godot" - in reference to a play about absurd delays - and called on the EU not to wait for the June summit, but to make use of the forthcoming ministerial meetings under the Czech presidency to agree on a plan for climate finance.

Elise Ford, of development NGO Oxfam's Brussels office, said: "Europe is turning its back on poor countries just when they need help most."

"The EU is empty-handed and in no fit state to lead the world on the two biggest issues we face today – the economic and climate crisis. Europe's approach is putting millions of lives and livelihoods at peril."

Source: www.unobserver.com

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by Honor Mahony

US Secretary of State Hillary Clinton charmed her way through an hour-long session with a young audience in the European Parliament on Friday, answering ten questions with grace and humour and doling out enough compliments about the EU to earn herself a standing ovation.

She was introduced by an obviously delighted EP chief Hans-Gert Poettering, who underlined how “very great” everything about her was: her past achievements, her likely future achievements, her being in the parliament, the answers to the questions she gave. It was almost toe-curling, but he stopped just in time.

Before Clinton started the Q&A she said she was struck by how the hopes and anspirations of other young people around the world were largely the same. The young Welsh nationalist, who asked about the breaking away of regions such as Wales and Scotland in the EU, probably bucked this trend somewhat.

A young Moldovan got to ask a question by virtue of wearing an “I love Hillary” t-shirt. Clinton said she could not leave without being quizzed by him. He turned out to be a gay rights activists and asked about the rights of gays and lesbians. She started by giving a stock answer but ended on a less standardised note, speaking about the rights of an individual “no matter who that person loves.”

A seasoned politician, she neatly sidestepped a question on divisions between old and new Europe saying all of Europe “is our essential partner” and did enough beating of her home country on its climate change record to thrill her listeners – bright young things from the EU institutions.

She praised Europe, calling it a “miracle,” and was careful to give a nuanced answer to a question essentially asking whether she did not find all the layers of EU structure, leaders and member states rather complicated to deal with.

Democracy is by it nature complex she noted, giving a mini lecture on the dangers of “process for the sake of process.”

And that was that from her side – the highest ranking US visit to the parliament since Ronald Reagan in 1985.

You speak just like a European, Poettering marvelled before giving a rallying cry to Irish voters to say yes to the Lisbon Treaty so there can be a “united and strong” Europe. And then Clinton’s European Parliament hour was over.

Source: blogs.euobserver.com

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by Valentina Pop

EUOBSERVER / BRUSSELS – EU leaders on Thursday night put an end to a three-month long haggle over energy, broadband and agricultural projects worth €5 billion, finally agreeing the terms and the conditions for spending the funds, part of the EU's economic recovery plan.

"We have reached an agreement in principle on the allocation of this infrastructure recovery plan – gas, oil, energy infrastructure, broadband and rural development. We'll be carrying out projects in 2009 and 2010, with finance mechanisms that are sufficiently transparent," Czech Prime Minister Mirek Topolanek told a press conference after the first day of the meeting of heads of state and government.

The deal could only be reached by accepting a demand by Germany that the funding would only run for two years. A 'sunset clause' is to be attached under which all other projects that are not ready to go by the end of 2010 are not eligible for funding.

Commission president Jose Manuel Barroso was visibly relieved to see an agreement following months of criticism from member states over the idea of the fund and the amounts allocated to each member state.

Initially, the commission had proposed to use €5 billion of unspent money from 2008, but the idea was abandoned after protests from big EU donors like Germany who under EU law get the unspent community money back to the national budget.

Top-up to €50 billion for Eastern Europeans

EU leaders are set to discuss on Friday morning the possibility to double the rescue fund for Eastern European countries, currently at €25 billion, and which has already been tapped by Hungary and Latvia as part of their EU-IMF bailouts. New EU member state Romania has also applied for joint funding, the figure floated so far being €20 billion.

Ukraine, which has received an IMF-only loan, has been actively pleading for the EU fund to be opened up for the bloc's neighbours as well, and not just its members, as it is currently the case.

Both Mr Topolanek and Mr Barroso said money could be made available to "whomever needs it", as the EU would also support a doubling of the IMF funds – a position agreed by EU leaders in the view of the G20 summit in London.

Another item on the Friday agenda is climate change in preparation for the UN conference in Copenhagen, aimed at striking a new global deal on reducing CO2 emissions.

Martian intermezzo

The otherwise technical press conference was interrupted by a question from a French female journalist saying that "I see six men sitting behind the podium. Is that what Europe is like?"

Mr Topolanek promptly answered, in Czech: "What did you expect - Martians?" His remark was followed by Czech finance minister Miroslav Kalousek who added: "I am a bit of a feminist myself."

Source: www.euobserver.com

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by Elitsa Vucheva

EUOBSERVER / BRUSSELS – EU leaders are meeting in Brussels on Thursday and Friday to discuss the best ways to get out of the economic crisis. But despite some calls to spend more to support the bloc's ailing economies, most of the attention is expected to be focused on the need for better regulation of the financial sector and on "fine-tuning" the existing European economic stimulus package.

The two-day summit comes just as the International Monetary Fund presented the outlines of a gloomy forecast for this year, saying the world economy would shrink by some 0.6 percent, instead of growing 0.5 percent as previously thought.

In the face of the persisting economic turmoil, France and Germany's leaders sent a letter to the Czech EU presidency and to the president of the European Commission on Tuesday reiterating what they see as an urgent need to reform the financial system.

"The top priority is building up the new global financial architecture. The European Union must affirm a common position and take the lead in this process," French President Nicolas Sarkozy and German Chancellor Angela Merkel wrote.

"The European Union shall propose that all hedge funds and other private pools of capital which may pose a systemic risk to be brought under appropriate registration, regulation and supervision," they added.

The EU summit will also aim to reach a common position among the 27 leaders on that issue ahead of a G20 meeting in London on 2 April.

"We are determined to reach at the London Summit concrete results for further action to strengthen international financial regulation," Ms Merkel and Mr Sarkozy wrote.

In a document the bloc's leaders are to adopt at the end of their two-day meeting, a specific annex has been dedicated to the EU's position for the G20, calling for more regulation of the financial markets and for better international coordination in order to ensure a quicker economic recovery and prevent further crises.

Spend more or regulate more?

France and Germany's letter came after recent calls from Washington that governments around the world should focus more on additional fiscal measures than on regulation as a reaction to the global turbulence.

On Wednesday, European Commission President Jose Manuel Barroso also advised the bloc's 27 members to spend more to stimulate their economies.

"If member states are in a position to do more, they should do more," he told reporters in Brussels.

But most EU states – not least France and Germany – estimate that the bloc is already spending enough.

The EU committed €200 billion in a recovery plan last year (around 1.5 percent of GDP), but it argues that it is in reality to spend about €400 billion (around 3.3 percent of GDP) in 2009 and 2010, including non-discretionary public spending, such as unemployment benefits - or the so-called "automatic stabilisers."

Its energy and broadband projects, worth up to €5 billion, have proven to be the most contentious element of the EU's economic recovery package.

No agreement has been reached so far on how this money should be allocated, and the issue is likely to push aside any debate on possible spending increase.

EU leaders are expected to "fine-tune" the €5 billion package at the summit and reach an agreement on the projects that should be included in it. "We are on the right track," one Czech diplomat said.

The bloc is also considering "topping up" a €25 billion emergency package for non-eurozone member states, notably from central and eastern Europe, hit hard by the crisis.

EU leaders are to tell the bloc's finance ministers and the European Commission to "rapidly examine the possibility of increasing the ceiling for the Union's support facility for balance-of-payments assistance."

Social issues

Part of their dinner on Thursday will also be dedicated to the preparation of a special summit on social affairs in Prague on 7 May.

"The rapid increase of unemployment is central to our concerns," the draft of the EU leaders' final statement reads.

With recent figures confirming the soaring unemployment levels in the EU – the average jobless rate reached 7.6 percent in January this year, Mr Barroso on Wednesday called on the bloc's leaders to "focus their minds on employment issues."

A general strike has been called on Thursday in France to protest against the worsening economic situation, with the previous one seeing more than one million people on the streets in January.

Energy security will also figure among the topics discussed at the summit, with a gas row between Russia and Ukraine earlier this year affecting the deliveries to many EU countries.

"Energy security is a key priority which needs to be enhanced by improving energy efficiency, diversifying energy suppliers, sources and supply routes, and promoting the Union's energy interests vis-à-vis third countries," read the draft conclusions of the summit.

Meanwhile, Irish Prime Minister Brian Cowen is to brief his counterparts on the state of play of Ireland's preparations for a second referendum on the Lisbon Treaty, while the Czech Republic is also to inform the other EU leaders on the state of its own ratification process.

Source: www.euobserver.com

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by Leigh Phillips

UOBSERVER / BRUSSELS - European Union leaders are adamant that the developing world must commit to carbon reductions if the EU is to stump up cash for making the adaptation measures to deal with climate change, the Danish prime minister said on Thursday (19 March).

Denmark's prime minister, Anders Fogh Rasmussen, described as "quite optimistic" the state of climate discussions between EU member states currently taking place in Brussels at the bloc's spring summit. The EU premiers and presidents are attempting to hammer out a common position to take to the upcoming United Nations climate change conference at the end of the year.

However, he told reporters that it was still too early for the EU to commit to any funds for the developing world for "climate finance."

The prime minister said that the leaders will consider the issue again on Friday morning and that afterward: "We expect to send a clear signal the the EU will take on a fare share of the burden and has to assist developing countries in support of adaptation and mitigation measures.

"Then at a later state develop some concrete figures [in terms of EU funds] - but then we must have concessions from these countries."

The Danish leader made the comments days after Yvo de Boer, the UN's climate change chief, accused EU leaders of welching on promises made at last year's Bali climate conference.

Speaking to the BBC on the eve of the EU summit, Mr de Boer said: "Quite frankly the language from [EU] ministers re-writes some of the fundamental agreements we made in Bali."

"I don't think it's constructive to enter into a negotiation by trying to change the fundamental principles on which you've just agreed the negotiation will be based," he said, adding that the EU needed to put some figures on the table before applying pressure to developing countries to commit to carbon reductions.

Mr Rasmussen told journalists that the UN official was wrong: "I don't agree with de Boer. The EU really is in the driver's seat. But we now need clear moves from our other partners."

Pressed whether the EU would commit to sums to take to the Copenhagen negotiations by the summer, the Danish leader said: "It's premature to make any predictions about a timetable.

"If there's progress in international negotiations, then we'll see."

He did say nevertheless that whatever figures are eventually decided upon, it will be fresh cash rather than previously announced funds.

"The member states have already committed to new and additional funds at Bali," he insisted.

Polish resistance

Poland appears to be the most resistant of the member states to committing to a negotiating position, something conceded by Mr Rasmussen.

"It is well known that Poland has a very particular view on climate," he explained, but went on to say that he thought Warsaw would commit to firm figures at some point. "We have to be able to unite all the points of view."

Polish leader Donald Tusk however suggested during the summit that it could be quite a long time yet before the the bloc agrees to any funding commitments, insisting that the EU mandate for Copenhagen climate talks must be taken at EU leaders' level (where Poland has a veto).

"It doesn't matter to us whether its the June European Council or the first summit under the Swedish [EU] presidency," he said.

"[A successful outcome in Copenhagen] will be possible if EU member states know what is the mechanism for contributing for this fund and accept it."

He said he rejected what he called a "simplistic mechanism. You pay as much as you emit."

Source: www.unovbserver.com

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by Elitsa Vucheva

EUOBSERVER / BRUSSELS - European Commission chief Jose Manuel Barroso has one day before an EU summit in Brussels called on member states to put a special emphasis on the "social consequences of the economic crisis."

It would be a "fundamental error" to think that the EU can focus on financial regulation and supervision and not pay due attention to the "social consequences of the economic crisis," he told journalists in Brussels on Wednesday (18 March).

"Our public opinion would not understand, it would be unacceptable that EU leaders meet at the highest level and that they discuss the problems of the banks and not social problems. That they discuss the problems of the financial sector and not that of employment. That would be really unacceptable."

The remarks come ahead of an EU leaders' meeting in Brussels on Thursday and Friday. The Czech EU presidency has also tabled special summit on social affairs in Prague on 7 May.

The Prague event will be a good occasion "to see what has been done so far and what we can do for the future," Mr Barroso added.

A document to be adopted by EU leaders at the end of their meeting on Friday has been modified to include one specific point on "the social impact of the economic crisis."

"The rapid increase of unemployment is central to our concerns. Timely, temporary, and targeted measures are needed as a matter of priority to stimulate employment and to prevent and limit job losses and negative social impacts," reads a draft of the document seen by EUobserver.

"Particular attention should be given to the most vulnerable and to new risks of exclusion," it adds.

EU heads of state and governments are also to dedicate a part of their dinner on Thursday to the preparation of the May employment summit.

The statements come amid soaring unemployment in the EU.

The average jobless rate hit 7.6 percent in January this year, with the figure higher in some countries (15 percent in Spain, more than seven percent in Germany and eight percent in France).

Business Europe, the EU's main business lobby, predicts 4.5 million more jobs to go in the bloc this year.

Member states should do more

The commission president insisted on the need for member states to implement measures agreed in December to stimulate the European economy - the "European Economic Recovery Plan."

"What we need now is not words, but action. We need implementation of the recovery plan," Mr Barroso stressed. "If member states are in a position to do [even] more, they should do more."

Energy and broadband projects worth up to €5 billion have proven to be the thorniest part of the plan so far, with no agreement on the spending by member states.

A source from the Czech EU presidency indicated that a compromise on the €5 billion "seems to be approaching" and that it was realistic to expect this compromise to be reached at the summit.

"We are on the right track," the diplomat said.

Source: www.unobserver.com

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by Leigh Phillips

EUOBSERVER / BRUSSELS - A bill banning discrimination against people on the basis of age, disability, sexual orientation, belief or religion in the areas of education, social security, health care and goods and services including housing has been approved by the European Parliament's civil liberties committee.

In a 34-to-seven vote, with four abstentions, the law, a directive proposed by the European Commission last July, was endorsed by the MEPs.

Since 2000, the European Union has prohibited these forms of discrimination at work, but legal protection in the realms of public services, buying products or making use of commercial services was not covered.

The new legislation brings bans on these forms of discrimination in line with existing laws against racial or ethnic prejudice and on assuring equal treatment of men and women.

The deputies underlined that the bill covers both health care and transport, but agreed that transactions between private individuals that are not commercial or professional are to be excluded from anti-discrimination protection.

The bill will not affect national legislation on marriage or family law and the deputies insisted that the EU member states remain responsible for educational content.

The directive will have no affect on domestic legislation on the "secular character of the state" - a reference to French laws banning religious attire, including headscarves, from schools.

The changes also do not prevent governments from offering positive discrimination or beneficial quotas to groups in society that have historically been marginalised.

For handicapped individuals, enterprises and other organisations are expected to provide reasonable accomodation to their needs. Any measures however should not result in disproportionate costs - a key worry of small businesses - or fundamentally modify the nature of the goods or services in question.

Handicaps and age can still be taken into account by insurance companies or banks, as this is not considered discrimination, but a requirement of the determination of risk.

The bill also will not be a bonanza for youngsters who might have thought guns, beer and cars will now be as much at their disposal as they are for grown-ups. Age restrictions for such products are to remain acceptable.

They can console themselves in the knowledge that youth cards - and their retiree equivalents - for museums, swimming pools, buses and the like will still be permitted.

A vote of the full sitting of the parliament is expected on 1 or 2 April.

Source: www.unobserver.com

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by Andrew Rettman

EUOBSERVER / BRUSSELS - Swiss-based trading firm RosUkrEnergo is in the coming week aiming to lodge a hefty legal claim against Ukraine's Naftogaz, in what could start a domino effect ending in interruptions to EU supplies.

RosUkrEnergo shareholders say Naftogaz has illegally seized 11 billion cubic metres of its gas, which was being held in Naftogaz storage tanks. Ukraine customs has already rubber-stamped the change in ownership of 6.3 billion cubic metres.

Naftogaz took the disputed volume in lieu of a €1.7 billion RosUkrEnergo debt, which it bought as a financial instrument. Eleven billion cubic metres of gas is worth around €3 billion at today's market prices.

Ukrainian businessman Dmitry Firtash, who controls 50 percent of RosUkrEnergo, is preparing to file the complaint at the Arbitration Institute of the Stockholm Chamber of Commerce before 24 March. Russia's Gazprom, which owns the other 50 percent of RosUkrEnergo, must agree for the claim to go ahead.

"It's theft," Robert Shetlar-Jones, the CEO of Mr Firtash's holding company, Group DF, told EUobserver.

"As a private Swiss company faced with having assets expropriated by a Ukrainian government-owned company, it undermines faith in the Ukrainian government. It undermines faith in the Ukrainian government as an energy partner for Europe."

The dispute has already impacted EU energy supplies. RosUkrEnergo customers in Poland, Hungary and Romania are still receiving less gas than expected despite the end of the Russia-Ukraine gas crisis in January, which saw 18 EU states cut off.

Lawyers predict RosUkrEnergo and Naftogaz will settle in a few months' time. But if Naftogaz agrees to pay hundreds of millions of euros in damages, the cash-poor company could find it hard to make its monthly payments to Gazprom.

Russian Prime Minister Vladimir Putin on 5 March warned that if Naftogaz defaults, Gazprom will stop supplies to Ukraine, threatening EU transit in a repeat of the January events.

If the Firtash-Gazprom claim goes ahead, it could also damage the political entente between Mr Putin and Ukraine Prime Minister Yulia Tymoshenko, which underpins the pair's agreement on 19 January to restart Europe's gas supply.

Rocking the boat

Meanwhile, the RosUkrEnergo case is aggravating Ukraine political instability at a time when the country is fighting the risk of sovereign default and preparing for a major EU donors conference on 23 March on renovating energy infrastructure.

Two weeks ago, secret police loyal to President Viktor Yushchenko raided Naftogaz to prove that Ukraine customs illegally transferred ownership of RosUkrEnergo stocks. EU officials are hearing rumours that Ms Tymoshenko might be arrested in connection with the affair.

Opinion polls show that pre-Orange Revolution prime minister Viktor Yanukovych has a narrow lead ahead of upcoming presidential elections. Ms Tymoshenko is losing popularity, especially in Western Ukraine, where she is perceived as being too Putin-friendly. Mr Yushchenko has just 2 percent to 5 percent approval.

But with 30 percent to 40 percent of people saying they "don't know" or are "against all" the candidates, Internews-Ukraine analyst Volodymyr Yermolenko says all bets are off on who will take power over the next year.

"Ukraine has a democratic future. What is in danger is not so much formal democracy, but the rule of law and independence of the judiciary," he said.

Source: www.euobserver.com

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