Saturday, 5 February 2011

"Stand for freedom"

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William Kristol gets it right on Egypt:

Stand for Freedom

Read the entire article here.

Obama´s Egypt envoy Frank Wisner - a total failure

When you put close friends of socialist dictator Mubarak in charge of dealing with the popular uprising in Egypt, you get what you deserve - a total failure.

Obama´s Egypt crisis envoy, former Enron man and close friend of Mubarak, Frank Wisner now openly sides with Mubarak and his henchmen:

"Egyptian President Hosni Mubarak must stay in power for now to steer the political transition, President Obama's special envoy for Egypt told reporters Saturday.

"We need to get a national consensus around the preconditions for the next step forward. The president must stay in office to steer those changes," Frank Wisner told a security conference in Munich, Germany, during a video conference from Washington, Reuters reported.

Wisner, former U.S. ambassador to Egypt and India who is seen as having a good relationship with the Mubarak regime, was dispatched to Cairo earlier this week by Obama to meet with Egyptian leaders.
"There is a chance to move forward," Wisner told the security conference Saturday. "It's fragile, it's the first stage, things could go wrong. But the direction is promising".

Read the entire LA Times article here.

I have sad it before, and I said it again: The inexperienced Obama has totally misjudged the situation in Egypt by putting Mubarak´s close friends Hillary Clinton and Frank Wisner in charge. To ignore the wishes of the great majority of Egyptians, who demand the immediate removal of Mubarak, is something the US is going to regret.

People are ready to sign almost anything - if its about the environment

This Penn and Teller video is not new, but the message it conveys is still very true; people easily can be duped into signing almost anything - particularly if it is in some way related to the environment or e.g. global warming. That´s why we should not take all the polls presented to us as facts seriously.

Watch the video here.

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Ronald Reagan - a great American

Man is not free unless government is limited.
Ronald Reagan

Ronald Reagan - once so despised and ridiculed by "progressive" European leaders, journalists and "intellectuals" - would have been 100 on February 6. This weekend there will be a great number of articles about the centenary in newspapers all over the world. I will only refer to one of them, written by the veteran Washington Post journalist Lou Cannon, author of several books on Reagan:

On the eve of Ronald Reagan's election as president of the United States in 1980, a radio reporter asked him what it was that Americans saw in him. Reagan hesitated and then replied: "Would you laugh if I told you that I think maybe they see themselves and that I'm one of them?"

Thirty years and four presidents later, Americans still see themselves in Reagan. In a Gallup poll in 2009 they ranked Reagan as the best president, just ahead of Abraham Lincoln and John F. Kennedy.

This highly generous assessment is based on more than likeability. Reagan left the world safer and the United States more prosperous than he found it. Even some liberal scholars who disdained Reagan when he was in the White House now acknowledge his effectiveness as a leader, especially his role in ending the Cold War. Former Soviet leader Mikhail Gorbachev, his partner in that enterprise, said at Reagan's funeral that the U.S. president was "an extraordinary political leader" who had "decided to be a peacemaker."
Reagan was at once a man of conviction who thought seriously about the great issues of his time and an ordinary American, never braggy, who treated his audiences -- all of us, really -- with consideration and respect. His greatest single quality was his self-deprecating humor, which came naturally to him and was honed into an effective political weapon. He made fun of his age, his work habits, his vanities, his ideology, his alleged lack of intelligence, and his supposed domination by his wife. When he was speaking to a political rally in Florida and a wind blew his speaking cards off a podium, Reagan picked them up, shuffled them together, and quipped that it really didn't matter what order they were in. When a reporter during the first gubernatorial campaign brought Reagan a studio picture showing him with the title chimpanzee in the movie "Bedtime for Bonzo," Reagan signed it and wrote, "I'm the one with the watch." On Air Force One he signed a picture of a sleeping Marlin Fitzwater, his press secretary, with the inscription, "Marlin, we're only supposed to do this at cabinet meetings."

Read the entire article here.

Of all the speeches Reagan gave, I think this one, deservedly, is the one that most people, at least in Europe, will remember and cherish:

EU to become "most climate-friendly region in the world"

Remember a few years ago, the European Union announced that by 2010 it would be  "the most competitive and dynamic knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion". The programme that would produce this miraculous achievement was called the Lisbon Strategy. Well, 2010 is history now - and so is the failed Strategy.

But that does not stop the EU from dreaming up similar "strategies". The latest one was this week announced by the unelected EU "climate comissioner", former Danish journalist Connie Hedegaard:

As Commissioner for the new DG Climate Action, it is Connie Hedegaard’s ambition that, in five years’ time, Europe is the most climate-friendly region in the world. With this in mind, she was quick to stress the role that space can play in tackling climate change.
In her opening address, Commissioner Hedegaard said, "Today, we are focusing on the tools needed for the International Climate Change Policy Regime. In that respect, space is not just nice to have; it’s a need to have.
"We need science, knowledge and facts to formulate European policies. With those policies in place, we then need the tools to monitor them"
While stressing that Earth observation is essential for monitoring, reporting and verification, Commissioner Hedegaard also pointed to satellite navigation as an important space tool, "The transport sector accounts for 27% of all European emissions. Satellite navigation can help develop intelligent traffic systems to limit those emissions"
With climate change a priority, Commissioner Hedegaard is working with Vice-President Antonio Tajani to develop a joint strategy on space and climate. As part of this, Commission Hedegaard invited experts from the space sector to provide inputs for consultation.

If, for a change, the EU climate strategy actually would succeed, it would mean a decisive blow to EU economic competitiveness. But that does not worry the warmist Hedegaard and her likes.
It is also interesting to note that Hedegaard, without naming Galileo, tries to promote the economically disastrous European Galileo satellite navigation project. Climate change (former global warming) can be used for all kinds of purposes.  

Friday, 4 February 2011

Mubarak´s and Ben Ali´s parties were members of the Socialist International

This is how the Socialist international defines itself:

PROGRESSIVE POLITICS for a fairer world

The Socialist International is the worldwide organisation of social democratic, socialist and labour parties. It currently brings together close to 170 political parties and organisations from all continents. (List of members in full)

If you click the present list of members, you will not find dictator Mubarak´s National Democratic Party or  Ben Ali´s  Tunisian Constitutional Democratic Assembly among the members. However, until the 31 January Mubarak and his party were highly regarded members of this socialist elite group priding itself on working "for a fairer world". Ben Ali and his party belonged to the Socialist Interntional until 17 January.

That it took popular uprisings to remove the two dictators from the "progressive" club says something about the socialist brotherhood.

Unelected EU "foreign minister" lectures Egyptians on "deep democracy"

Baroness Ashton, EU "foreign minister" still today refused to demand the immediate removal of Mubarak. Instead the unelected Labour Baroness lectured the Egyptians about "deep democracy" in an article published in the GuardianWilliam Dove, writing in the International Business Times comments:

The international reaction to the ongoing political chaos in Egypt took an amusing turn today when the European Union's High Representative for Foreign Affairs, Baroness Catherine Ashton, penned an article in The Guardian saying she wanted to see "deep democracy" take root in Egypt.
Baroness Ashton repeated the line emerging from Washington and London that there should be a swift "transition" from the reign of Hosni Mubarak to something as yet unknown.
However she also warned that Egypt should not become what she called a "surface democracy" with votes and elections, but should be a "deep democracy" with the rule of law, an independent judiciary, free speech, free trade unions and etc.
The irony of this is of course that Baroness Ashton came to her present high office through neither "deep" nor "surface" democracy but by working her way up through the British quangocracy before finally being appointed one of the top jobs in the quango of quangos, the EU.

The truth about the pro Mubarak "demonstrators"

German Der Spiegel describes the pro regime thugs, paid by the criminal Mubarak regime to fight peaceful demonstrators in Egypt:

In exchange for the equivalent of a few euros, poor seasonal workers have taken part in street fighting in Cairo on the side of Egyptian President Hosni Mubarak. The thugs, who fight with iron bars, knives and clubs, have been recruited by privileged members of the regime, including party officials, security forces and rich business people with lucrative state contracts.

Texas powerless after ice storm - Mexico unable to help

The huge ice storm affecting great areas of the US has caused rolling blackouts in the state of Texas. The lone star state had hoped to get power from neighbouring Mexico, but now the Mexicans say that they cannot help, becouse they also are freezing ....

And remember, according to the Nobel laureate Al Gore, this is all because of global warming ...

MEXICO CITY — Mexico said Thursday it was temporarily suspending an offer to provide electricity to Texas to help the U.S. state weather an ice storm that forced rolling blackouts, because of severe cold in Mexico's own territory.
Mexico's Federal Electricity Commission had said Wednesday it had agreed to transmit 280 megawatts of electricity to Texas.
But on Thursday, the commission said it was temporarily suspending the transfer because below-freezing temperatures in northern Mexico have caused some damage to the generating capacity of its own plants, causing some power outages in several parts of Chihuahua state and a reduction of about 3,800 megawatts in generation.

Read the entire article here.

Thursday, 3 February 2011

Obama misjudged Egypt

Timing is of utmost importance in a crisis. I am afraid that Obama - and also the Europeans - missed the opportunity by not early enough loudly and clearly demanding the immediate resignation of dictator Mubarak. I hope I am wrong, but by sending its thugs to attack peaceful demonstrators the corrupt regime may very well have succeeded in intimadating people enough to be able to cling to power. Part of the Mubarak tactics is that they pretend to "understand" the grievances of the "youth". The only way the pro-democracy side can regain the initiative, is to bring huge numbers of supporters out on the streets again, as soon as possible.

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Putin interviewed

Fínally, there is a US  reporter, who dares to put all the tough questions straight to Vladimir Putin!
Read the entire interview here.

"Time for Obama to cut Mubarak loose"

Jonathan Chait in the New Republic says it:
The Egyptian populace seems almost totally united in opposition to Mubarak, with the only significant support coming from those in Mubarak's pay. The opposition has all the nationalist and religious legitimacy it needs. At this point Obama needs to forcefully cut Mubarak loose. The only delay, I would hope, is his slowness to respond to events, a trait he has consistently displayed since the campaign. Sometimes that caution has served him well, but here it hasn't. If Obama does not act soon it will be a black mark.

Wednesday, 2 February 2011

Hillary Clinton - friend of Mubarak - not the right person to deal with his departure

Barrack Obama - who has no real foreign policy crisis experience - seems to be relying on Hillary Clinton´s advice on dealing with events in Egypt. She is unfortunately a very bad choice. How on  earth could Clinton, a family friend of the Mubaraks, contribute to getting Mubarak removed as quickly as posssible?

Politico offers this analysis:

But proximity has its perils. In a 2009 interview with Al Arabiya television, Clinton defended the relationship with the Egyptian president and his wife when asked about human rights abuses by the Mubarak regime, saying, “I really consider President and Mrs. Mubarak to be friends of my family. So I hope to see him often here in Egypt and in the United States.”
That led to a Washington Post editorial, questioning her ability to challenge autocratic regimes — and raised questions about Clinton’s repeated claim that the administration has long pressured Mubarak to enact much needed democratic and economic reform.
Activists are pressuring the administration to move even more quickly – and publicly acknowledge the pitfalls of helping to prop up corrupt regimes.

Clinton also came up with the idea of sending formen ambassador and Enron man Frank Wisner to Egypt. Not the ideal representative, either.

Forget global warming: More cold winters ahead

Be prepared for more cold winters, says AccuWeather´s Chief Long Range forecaster Joe Bastardi, whose predictions usually have been very reliable:

Bastardi thinks that not only will the next few winters be colder than normal for much of the U.S., but that the long-term climate will turn colder over the next 20 to 30 years.
"What's interesting about what we're seeing here is that [the current La Niña] is starting so cold," said Bastardi, "and it's coinciding with bigger things that are pushing the overall weather patterns and climate in the Northern Hemisphere and, in fact, globally over the next 20 to 30 years that we have not really dealt with, nor can we really quantify."
"That ties into a lot of this arguing over climate change," he added.
Bastardi has pointed out that the Pacific Decadal Oscillation (PDO), which is a pattern of Pacific climate variability that shifts phases usually about every 20 to 30 years, has shifted into a "cold" or "negative" phase.
Over the past 30 years or so, according to Bastardi, the PDO has been "warm" or "positive."
This change to a cold PDO over the next 20 to 30 years, he says, will cause La Niñas to be stronger and longer than El Niños. Bastardi adds that when El Niños do kick in, if they try to come on strong like they did last year, they will get "beaten back" pretty quickly.
"When you have a cold PDO and lots of La Niñas, when El Niños do come on, you generally tend to have cold, snowy weather patterns across the U.S.," Bastardi said. "That's what we saw in the 1960s and 1970s."

Read the entire story here.

Weather Services International, another long range forecaster, is saying the same thing, as pointed out in an earlier post.

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US secretly backed Egyptian opposition

According to leaked US Cairo embassy cables (Wikileaks) the US secretly supported a leader of the Egyptian opposition movement, reports the Telegraph:

In a secret diplomatic dispatch, sent on December 30 2008, Margaret Scobey, the US Ambassador to Cairo, recorded that opposition groups had allegedly drawn up secret plans for “regime change” to take place before elections, scheduled for September this year.
The memo, which Ambassador Scobey sent to the US Secretary of State in Washington DC, was marked “confidential” and headed: “April 6 activist on his US visit and regime change in Egypt.”
It said the activist claimed “several opposition forces” had “agreed to support an unwritten plan for a transition to a parliamentary democracy, involving a weakened presidency and an empowered prime minister and parliament, before the scheduled 2011 presidential elections”. The embassy’s source said the plan was “so sensitive it cannot be written down”.
Ambassador Scobey questioned whether such an “unrealistic” plot could work, or ever even existed. However, the documents showed that the activist had been approached by US diplomats and received extensive support for his pro-democracy campaign from officials in Washington. The embassy helped the campaigner attend a “summit” for youth activists in New York, which was organised by the US State Department.

Read the entire article here.

Good work by the American embassy! But it does not alter the fact that the general US approach has been the wrong one, as pointed out by e.g. David Brooks in the NYT. (See previous post).

Tuesday, 1 February 2011

David Brooks on the US reaction to events in Egypt and other uprisings

David Brooks column in the New York Times is one of the best he has ever written. Why is it that the US and other Western goverments almost always misjudge popular uprisings?:

The other thing we’ve learned is that the United States usually gets everything wrong. There have been dozens of democratic uprisings over the years, but the government always reacts like it’s the first one. There seem to be no protocols for these situations, no preset questions to be asked.
Policy makers always underestimate the power of the bottom-up quest for dignity, so they are slow to understand what is happening. Last week, for example, Secretary of State Hillary Clinton declared that the Egyptian regime was stable, just as it was falling apart.
Then their instinct is to comfort the fellow members of the club of those in power. The Obama administration was very solicitous of President Hosni Mubarak during the first days of the protests and of other dictators who fear their regime may be next.
Then, desperately recalibrating in an effort to keep up with events, they inevitably make a series of subtle distinctions no one else heeds. The Obama administration ended up absurdly calling on Mubarak to initiate a reform agenda. Surely there’s not a single person in the government who thinks he is actually capable of doing this. Meanwhile, the marchers heard this fudge as Obama supporting Mubarak and were outraged.
The Obama administration’s reaction was tardy, but no worse than, say, the first Bush administration’s reaction to the uprisings in the Baltics and Ukraine. The point is, there’s no need to be continually wrong-footed. If you start with a healthy respect for the quest for dignity, if you see autocracies as fragile and democratic revolts as opportunities, then you’ll find it much easier to anticipate events.

Read the entire column here.

Massive snow storm hits large areas of the US - it´s global warming according to Al Gore

On Tuesday, snow, ice, and powerful winds began hitting hit a wide swath of the US. As the blizzard finishes in the Midwest and the rain exits the Southeast, snow, ice and rain will target the Northeast. At least 100 million people will be impacted by this colossal "winter beast". Two dozen states are in the line of fire, according to the Weather Channel.

Al Gore has a good explanation for the huge storm. Of course, it is all because of global warming ....
“A rise in global temperature can create all sorts of havoc, ranging from hotter dry spells to colder winters, along with increasingly violent storms, flooding, forest fires and loss of endangered species.”

EU continues to pour "climate change" money to corrupt Ethiopian government

"The Ethiopian government is routinely using access to aid as a weapon to control people and crush dissent. If you don’t play the ruling party’s game, you get shut out. Yet foreign donors are rewarding this behavior with ever-larger sums of development aid".
Rona Peligal, Africa director at Human Rights Watch

The European Union "climate change" madness continues in Ethiopia. Now the UPI reports that EU has decided to increase its aid to the corrupted government of Ethiopia:

The European community will give Ethiopia a $17.8 million grant to build a carbon-neutral economy, the European commissioner for development said.
European Commissioner for Development Andris Piebalgs met Monday with Ethiopian Finance Minister Sufian Ahmed to discuss a grant to implement the Global Climate Change Alliance in the country.

Neither the European Union, or any of the other international donors, seem to care about warnings issued by Human Rights Watch:

"Government services, funded by the European Union and other donors, are administered in a partisan way so that essential agricultural inputs, land, and even food for work programs are used as tools to reward loyal supporters and punish the families of members of the opposition, with serious humanitarian consequences," the rights group said in a statement.
Last year Human Rights Watch issued a report about the corruption if Ethiopia, one of the world´s largest recipients of development aid:
Local officials routinely deny government support to opposition supporters and civil society activists, including rural residents in desperate need of food aid. Foreign aid-funded "capacity-building" programs to improve skills that would aid the country's development are used by the government to indoctrinate school children in party ideology, intimidate teachers, and purge the civil service of people with independent political views.
Political repression was particularly pronounced during the period leading up to parliamentary elections in May 2010, in which the ruling party won 99.6 percent of the seats.

The "climate change aid" to Ethiopia is just a tiny example of the enormous - and in most cases useless, and even counterproductive - aid business of the "world´s biggest aid donor", the European Union. Nobody in Brussels cares about truth speakers, like the Kenyan economist James Shikwati, who already in 2005 had the following to say about the EU development aid to Africa:

SPIEGEL: Mr. Shikwati, the G8 summit at Gleneagles is about to beef up the development aid for Africa...
Shikwati: ... for God's sake, please just stop.
SPIEGEL: Stop? The industrialized nations of the West want to eliminate hunger and poverty.
Shikwati: Such intentions have been damaging our continent for the past 40 years. If the industrial nations really want to help the Africans, they should finally terminate this awful aid. The countries that have collected the most development aid are also the ones that are in the worst shape. Despite the billions that have poured in to Africa, the continent remains poor.
SPIEGEL: Do you have an explanation for this paradox?
Shikwati: Huge bureaucracies are financed (with the aid money), corruption and complacency are promoted, Africans are taught to be beggars and not to be independent. In addition, development aid weakens the local markets everywhere and dampens the spirit of entrepreneurship that we so desperately need. As absurd as it may sound: Development aid is one of the reasons for Africa's problems. If the West were to cancel these payments, normal Africans wouldn't even notice. Only the functionaries would be hard hit. Which is why they maintain that the world would stop turning without this development aid.

Monday, 31 January 2011

Egypt: EU in action

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The wheels of the awesome European Union foreign policy machinery have finally started to roll with regard to the events in Egypt. The EU "president", Belgian Herman Van Rompuy, also known as "Haiku Herman", has issued the following stern "statement":

"Since the events in Tunisia, I am following with great attention the developments in the region,"

People in Europe and Egypt have no need to worry. "Haiku Herman" is paying attention.

The "foreign minister" of the "soft super power" EU, Labour Lady Ashton, today contributed with this awesome statement:

"There needs to be a peaceful dialogue, an open dialogue to actually move forward,"
"We have worked closely with Egypt over many years to offer international support and we will be there for the short, medium and long term to help build democracy, the rule of law, all of those values coming into action."

Yes, for sure the EU has "worked closely with Egypt over many years", but why is it only now, when the Egyptian people have taken matters in their own hands, that the EU is beginning to talk about "building democracy, the rule of law and all those values"?

The true cost of "green" wind power: "Pollution on a disastrous scale" in China

The Daily Mail has done some remarkable investigative reporting on the true cost of going green in Britain (and other Western countries):

Vast fortunes are being amassed here in Inner Mongolia; the region has more than 90 per cent of the world’s legal reserves of rare earth metals, and specifically neodymium, the element needed to make the magnets in the most striking of green energy producers, wind turbines. (Neodymium is also used in "green" hybrid cars - NNoN)
Live has uncovered the distinctly dirty truth about the process used to extract neodymium: it has an appalling environmental impact that raises serious questions over the credibility of so-called green technology.
The reality is that, as Britain flaunts its environmental credentials by speckling its coastlines and unspoiled moors and mountains with thousands of wind turbines, it is contributing to a vast man-made lake of poison in northern China. This is the deadly and sinister side of the massively profitable rare-earths industry that the ‘green’ companies profiting from the demand for wind turbines would prefer you knew nothing about.
Hidden out of sight behind smoke-shrouded factory complexes in the city of Baotou, and patrolled by platoons of security guards, lies a five-mile wide ‘tailing’ lake. It has killed farmland for miles around, made thousands of people ill and put one of China’s key waterways in jeopardy.

Rusting pipelines meander for miles from factories processing rare earths in Baotou out to the man-made lake where, mixed with water, the foul-smelling radioactive waste from this industrial process is pumped day after day. No signposts and no paved roads lead here, and as we approach security guards shoo us away and tail us. When we finally break through the cordon and climb sand dunes to reach its brim, an apocalyptic sight greets us: a giant, secret toxic dump, made bigger by every wind turbine we build.
The lake instantly assaults your senses. Stand on the black crust for just seconds and your eyes water and a powerful, acrid stench fills your lungs.
For hours after our visit, my stomach lurched and my head throbbed. We were there for only one hour, but those who live in Mr Yan’s village of Dalahai, and other villages around, breathe in the same poison every day.
Retired farmer Su Bairen, 69, who led us to the lake, says it was initially a novelty – a multi-coloured pond set in farmland as early rare earth factories run by the state-owned Baogang group of companies began work in the Sixties.
‘At first it was just a hole in the ground,’ he says. ‘When it dried in the winter and summer, it turned into a black crust and children would play on it. Then one or two of them fell through and drowned in the sludge below. Since then, children have stayed away.’

The sad truth is that the British and European tax payer subsidised climate madness is contributing to enormous misery in China and the destruction of wast unspoiled countryside in Europe, all in the name of saving us from the imaginary threat of human induced "climate change". But this does not seem to bother our politically correct leaders. However, when the true story is beginning to reach the voters, the present political elite may regret what it has created ....

Read the entire article here

Putin´s anti-terrorism programme - a total failure

 “Over the last 11 years in Russia, the number of terrorist attacks has risen dramatically. From 2000 to 2009, they have increased more than sixfold and reached the astronomical figure of more than 750 incidents a year. This is obviously a total failure of the country’s anti-terrorism program.”
Boris Nemtsov

The terrorist bombing at the Moscow Domodedovo airport was the latest proof that Vladimir Putin´s anti-terrorist policies are a disaster. As the brave opposition politician Boris Nemtsov has pointed out , the number of terrorist acts has grown radically in spite of Putin´s get tough policy.

Newsweek offers an interesting analysis of Putin´s failure:

Vladimir Putin rose to power nearly a dozen years ago promising to defend Russia from secessionist Chechen terrorists. In September 1999, responding to a series of still unexplained apartment-house explosions that killed 293 people in Moscow and southern Russia, the Army rolled into the breakaway republic with overwhelming force. Thousands of people were killed, and thousands more were driven from their homes. But the terrorist threat has not disappeared, instead mutating from nationalist violence to insatiable vendettas, only worsened by a deepening descent into a holy war inspired by Al Qaeda. Government moves against suspected terrorists, sometimes justified and sometimes not, have only provoked lethal retaliation. There were 29 suicide attacks in Russia over the past 12 months; 108 Russians were killed by terrorists, compared with only nine Israelis in the same period.

Corruption that pervades Putin´s Russia is one major reason why terrorism thrives:

Even then, the terrorist threat might be relatively containable if not for Russia’s wider ills. “The reason Russia is losing the war on terror is corruption,” says Elena Panfilova, director of Transparency International in Moscow. “Security systems cannot work in a country rotten with corruption.” Police at Moscow’s airports notoriously spend much of their time shaking down dark-skinned travelers for bribes instead of doing their jobs. In 2004 two female suicide bombers were detained by police at Domodedovo airport—but were released after making a payoff. The women then boarded a plane without tickets by allegedly bribing an airline employee. Ninety passengers and crew members were killed when the plane exploded. “The president relies on the decisions of corrupt bureaucrats and law-enforcement agencies,” says the Parliament security committee’s Gudkov. “The result is that terrorism has spilled from the North Caucasus and spread all across Russia. Hundreds of people die, all across the country.”

Read the entire article here.

Sunday, 30 January 2011

Czech president Klaus´s global forecast

Czech president Václav Klaus is one the very few politicians, who´s speeches and articles always are interesting to read. In his recent speech at the Com.Sult congress in Vienna Klaus offers the following forecast for the next two years:

1. the European single currency, the Euro, will survive its current acute crisis but we will pay a very high price for it in long-term economic slowdown if not stagnation, in a heavy burden of inter-country fiscal transfers, in the further loss of sovereignty of the EU member states, in increasing centralization of decision-making in Brussels, in a growing democratic deficit;
2. eurodebt crisis à la Greece or Ireland will reach other eurozone countries. The costs of helping them will be increasing but these costs will be – reluctantly and unwillingly – paid by the tax-payers in the rest of the EU;
3. economic growth in Central and Eastern European countries, including the Czech Republic, will be faster than in Western Europe. The gap in the level of economic development between the European East and West will keep diminishing;
4. economic growth in the U.S. will continue to be weak. It will be taken as a disappointment and Obama’s administration will have more and more problems. It becomes clear that – because of structural deficiencies – Obama’s fiscal stimulus cannot rescue the U.S. economy. It stimulates employment more in China and India than in America;
5. global economic growth will continue to depend on new dynamic economies in Asia and Latin America. The BRIC countries will grow fast and their catching-up process will continue. The BRIC economies as a group are practically as important to the global economy as the United States economy already now and their role in the world economy will grow.

Read the entire speech here. The analysis in the first part of the speech is strongly recommended reading.

The climate in Europe is deinitively changing.. which is proved by the fact that at the Vienna Congress the whole audience (700 participants) applauded loudly and were shouting "bravo" after President Klaus said the following sentense: "As someone who spent almost fifty years living in an oppressive, visibly irrational and hopelessly inefficient communist system, I hope I can afford to say that I see more similarities between communism and the current EU than it is considered politically correct to admit".

My comment to Klaus´s points:

"Mrs. Merkel and I will never, never allow the Euro to fail"
 Nicolas Sarkozy

"Let me say this very clearly again. The euro is our currency. And it is much more than just a currency. It is the embodiment of Europe today. Should the euro fail, Europe will fail"
Angela Merkel  

If one considers what Merkel and Sarkozy said a couple of days ago in Davos, Klaus´s (from a eurorealist point of view) rather pessimistic forecast looks very plausible, but I think there is another scenario that may lead to an accelerated demise of the euro in its current form. This scenario takes a more pessimistic view of the development in China as its point of departure:

It now seems very likely that the Chinese property bubble will burst in the near future, causing huge problems for countries now relying on exports to China.

The present strong economic growth in Germany - the euro paymaster - is very dependent on exports to China. A crisis in the Chinese economy would thus have major repercussions for Germany (and of course many other countries). In that kind of a situation Germany will - despite Merkel´s and Sarkozy´s fine words in Davos - not hesitate to change its attitude towards the common currency. An entirely new ballgame would follow. It could lead to the formation of e.g. a "Northern euro" consisting of those countries that are capable of playing on the same level as Germany, or some other similar arrangement.