Massenbach-Letter: NEWS 18/10/13

Massenbach-Letter

Udo von Massenbach

Guten Morgen.

DB Research – Ausblick Deutschland: Deutschland nach der Wahl
Exclusive: Obama forewarns Netanyahu that sanctions against Iran will soon be partially lifted *

Massenbach* The EU economy needs an effective monetary union

October 09, 2013 01:12 AM

The Daily Star

A project as ambitious and idealistic as the European Union is bound to attract its share of skeptics, and many have pounced on the economic woes of the past several years as proof of their doubts. While we cannot deny the depth and complexity of the current crisis, we should acknowledge that important institutional changes are on the way, and that such reforms will lead to a stronger union. That said, the eurozone remains fragile, and attempts to restore confidence and stability are still underway.

Over the past decade, we’ve seen significant and unhealthy price divergence, combined with a buildup of high levels of private and public debt. Unfortunately, it is extremely difficult to reduce relative price levels and debt levels simultaneously: Reducing the ratio of debt to gross domestic product requires more nominal GDP growth, while price competitiveness can only be restored by lower inflation rates, which reduces nominal GDP growth in the short term. It is a paradoxical situation.

To solve this problem, the average inflation rate in Europe should be stabilized at 2 percent. The fact that it has instead been falling since the beginning of 2012 suggests that the relative price adjustment is occurring in an asymmetric way.

Another major issue concerns the creation of an appropriate institutional framework for monetary union. The current setup is a precariously incomplete institutional framework, especially where the financial supervisory structure is concerned.

Even before the adoption of the euro, there were economists who argued that monetary union needed to be accompanied by a truly European financial and banking system. Essentially, they were saying that a currency union can only be stable if the banking system is European and supervised and regulated at European level. And they were correct.

During the eurozone’s economic crisis, there was a dire lack of transnational supervision. National supervisory agencies overlooked the degree to which banks throughout the eurozone had become integrated in the wholesale market and how they were fragile to “sudden stop” phenomena. Risks were accumulated and there was no international supervisory agency to sound the alarm. Then, when the crisis hit, financial institutions retreated along national borders. The resulting financial fragmentation has undermined growth and is extremely difficult for affected economies to overcome.

We need a proper infrastructure for truly European financial and banking systems, with real supervision and banking resolution mechanisms. There is broad acknowledgment of this now, and a plan has been launched to create a banking union, but it is a slow process – it is like trying to get fire insurance when the house is already burning.

A complex political environment overarches these problems. The European Union is made up of sovereign nations, so what might from an economist’s supranational standpoint seem the logical way out of the crisis is vitiated by political considerations at the national level, where democratically elected leaders can only go so far before they encounter resistance to reforms.

While public spending, for instance, needs to be constrained, many eurozone nations are struggling with high unemployment rates, made worse by austerity measures. Meanwhile, Germany has in effect become the veto player in the eurozone, which naturally creates international political tensions.

Once we have a sound, effective monetary union built on a strong foundation of international regulation and supervision, economic improvements will follow. But it will be a slow and challenging process. It will have to be accompanied by structural reforms, including reforms in labor market institutions, as well as growth-supportive reforms in Germany.

The process of adjustment cannot be rushed. There has to be some cushioning through the transition, and nations that are struggling fiscally may need outside support to make the necessary labor market reforms.

Despite the current situation, there is hope for the future. But we need to make sure the monetary union works properly. We need to upgrade the infrastructure, achieve adjustment and implement reform. Only then will the economic situation begin to improve.

Guntram B. Wolff has been the director of Bruegel – a leading, Brussels-based think tank specializing in economics – since June 2013. A member of the French prime minister’s Conseil d’Analyse Economique, he previously worked for the European Commission on the macroeconomics of the euro area and the reform of its governance. This commentary originally appeared at The Mark News (www.themarknews.com).

A version of this article appeared in the print edition of The Daily Star on October 09, 2013, on page 7.

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Policy = res publica

Bärbel Freudenberg-PilsterFreudenberg-Pilster* Blick hinter Potemkins Fassaden *
Das Cato-Institut diskutiert den NSA-Skandal

10.10.2013 · Beim libertären Cato-Institut in Washington konnte man am Mittwoch erleben, wie der NSA-Skandal etablierte politische Schlachtordnungen der amerikanischen Politik verändert.

Im Auge des Hurrikans ist Windstille. Während Republikaner und Demokraten den von Samuel Huntington prognostizierten „Clash of Civilisations“ praktischerweise gleich am Fluss Potomac proben, der Washington durchzieht, reden beim in der Stadt ansässigen Cato-Institut Politiker beider Parteien friedlich miteinander. Die dem libertären Flügel der amerikanischen Politik zuzurechnende Denkfabrik veranstaltete am Mittwoch eine Konferenz über die NSA und deren Überwachungspraktiken: „Was wissen wir? Und was ist zu tun?“, so lautete das Thema.

Es ging um nichts anderes als die Zukunft der amerikanischen Verfassung. Welche Bedeutung hat sie noch in den Zeiten digitalisierter Lebenswelten? In welchem Kontext stehen Bürgerrechte und Privatsphäre, wenn praktisch jeder Schritt eines Bürgers von den Sicherheitsbehörden nachvollzogen werden kann?

Obama und Boehner wären sich einig gewesen

Wie sehr das Internet unsere Lebenswelten verändert hat, lässt sich schon an diesem Artikel erkennen. Von Deutschland aus kann man ohne großen technischen Aufwand live eine Konferenz verfolgen, die mehr als 6.500 km entfernt stattfindet. Man findet über den Kurznachrichtendienst Twitter Kommentare und Zitate zu der Veranstaltung. Das alles wäre vor 20 Jahren wie eine Utopie erschienen. In Washington wurde deutlich, wie überrascht wir alle von einer Folge sind: Nämlich dass es sich nicht um die schöne neue Welt grenzenloser Freiheit handelt, sondern wir, ohne es zu bemerken, in einem Überwachungsstaat gelandet sind.

Den Konferenzteilnehmern stand diese Überraschung immer noch ins Gesicht geschrieben. Sie hat auch einen Namen und einen Zeitpunkt: Die Enthüllungen Edward Snowdens seit Juni diesen Jahres. Es verändert eingeschliffene Reaktionsmuster und schafft neue politische Konfliktlinien. So kämpfen gerade im Haushaltsstreit der amerikanische Präsident Barack Obama und dessen Gegenspieler im Repräsentantenhaus, John Boehner, in der alten Washingtoner Schlachtordnung vergangener Jahrzehnte. Auf dieser Konferenz wären beide auf der verwaisten Seite des Podiums zu finden gewesen: Bei den entschiedenen Befürwortern der gegenwärtigen Überwachungspolitik. Sie hätten es mit zwei Republikanern aus dem Repräsentantenhaus zu tun bekommen, Justin Amash und F. James Sensenbrenner, sowie dem demokratischen Senator Ron Wyden.

Die Nutzlosigkeit von „checks and balances“

Sie sind in Europa weitgehend unbekannt, und in der Sozialpolitik trennen sie Welten voneinander, aber sie eint eine schockierende Erkenntnis. Die völlige Nutzlosigkeit des bisher so effektiven amerikanischen Systems des „checks and balances“. Amash, der der „Tea Party“ nahesteht, machte das an verschiedenen Beispielen deutlich. Etwa die Nutzlosigkeit der Geheimdienstausschüsse im Kongress, die sich darauf beschränkten möglichst geschickt „20 Fragen zu stellen“. Ausschüsse, die von dem, was Snowden berichtete, nichts mitbekommen haben. Oder dass die Selbstkorrekturmechanismen innerhalb der Sicherheitsbehörden nicht funktionieren. Einem Whistleblower wie Snowden, das machte Amash deutlich, hätte er schlicht nicht helfen können. So hält Wyden die richterliche Kontrolle der NSA für einen Witz, der sich darauf beschränkt, einen Stempel unter die NSA-Anträge zu setzen. Der behauptete Schutz der Privatsphäre sei „das Papier nicht wert, auf dem es geschrieben worden ist“. Die NSA unterliege damit gesetzlichen Einschränkungen, die nur den Zweck haben, deren Verletzung als Regelfall zu legitimieren.

Deutlicher als Amash oder Wyden können aktive Politiker nicht werden. Ihnen muss der Grundrechteschutz in den Vereinigten Staaten vorkommen wie ein Blick hinter Potemkins Fassaden. Selbst deren Baumeister wurden benannt, etwa in Person des Direktors der amerikanischen Geheimdienste, James Clapper, der den Kongress schlicht angelogen hatte. Amash sieht in der bisher folgenlosen Lüge eine Gefahr für die „moralische Autorität“ des Kongresses. Es geht wohl um mehr. Nämlich um die Frage, ob der Kongress in seiner Funktion als Machtausgleich zur Regierung noch ernstzunehmen ist.

Das Äquivalent zur Standortdebatte

Bisher sitzen allerdings die Sicherheitsbehörden fest im Sattel. Die Regierung kontrolliert sie nicht, sondern lässt sie die Sicherheit der Amerikaner schützen. Obama wirkt wie die Zarin Katharina, die sich an der Baukunst ihres ersten Mannes in Staat und Bett erfreut. Wyden und die anderen Kritiker der NSA auf der Konferenz wissen das, wenn auch von Katharinas Potemkin nicht die Rede war. So formulierte man zwei Argumente, die nicht nur in den Vereinigten Staaten immer noch die größte Wirkung versprechen. Wyden bestritt jenen kausalen Nexus zwischen dem Anlegen gigantischer Datensammlungen und dem Schutz der Amerikaner vor terroristischen Anschlägen. Das habe in sechs Jahren nur in „ein oder zwei Fällen geholfen.“ Im übrigen warte er seit zwei Jahren auf eine Antwort der NSA bezüglich der Effektivität ihrer Überwachungspraxis. Man muss wissen, welchen Preis das hat. Es geht darum, ob die Ablösung des konkreten Tatverdachts durch den Generalverdacht gegen alle Staatsbürger den alten Rechtsstaat von den Füßen auf den Kopf stellen wird.

Das zweite Argument betraf die ökonomischen Folgen dieser Politik. Wyden sah die Reputation der amerikanischen Hightech-Industrie in Gefahr, wenn Unternehmen wie Google oder Microsoft nicht mehr die Sicherheit der Daten ihrer ausländischen Kunden garantieren könnten. Wyden kennt natürlich deren Verstrickung in die flächendeckende Überwachung. Es ist auch kein Geheimnis, dass etwa Googles Geschäftsmodell auf den gleichen Prinzipien beruht wie das Sicherheitsverständnis der NSA, nämlich möglichst alles von allen zu erfahren. Aber das Argument, Google könnte am Ende von immer weniger ausländischen Kunden etwas erfahren, ist das amerikanische Äquivalent zur deutschen Standortdebatte. Hierzulande sorgt man sich allerdings mehr um die Autoindustrie oder den Maschinenbau.

Revitalisierung der amerikanischen Politik

Wyden weiß, mit wem er es zu tun hat. Er ernannte seine Gegner in Politik und Sicherheitsbehörden zu Apologeten des „business as usual“. Sie werden mit allen Mitteln versuchen, dieser Debatte durch kosmetische Zugeständnisse den Wind aus dem Segel zu nehmen. Dazu gehört auch die Diskreditierung der darüber berichtenden Medien als Sicherheitsrisiko und deren Einschüchterung über offene Schikane, wie sie nicht nur der „Guardian“ in Großbritannien erleben musste. Trotzdem war der erste Versuch des Abgeordneten Amash, den Sicherheitsbehörden legislative Ketten anzulegen, im Repräsentantenhaus nur knapp gescheitert. Dessen Kollege Sensenbrenner hatte nach den Anschlägen vom 11. September den „Patriots act“ eingebracht. Es ist nicht ohne Ironie, wenn er am Mittwoch beim Cato-Institut die nächste Initiative namens „Freedom act“ ankündigte, um den Datensammlern der NSA ihre Grenzen aufzuzeigen.

Am Mittwoch sprachen Republikaner und Demokraten mit Respekt voneinander, trotz des Getöses, das Obama und Boehner veranstalten. Sie dokumentierten damit zugleich, warum das amerikanische System keineswegs gescheitert ist, wenn es auch vielen wie ein schlecht geführter Kindergarten vorkommt. Im Auge des Hurrikans ist zwar Windstille, aber es ist die Ruhe vor dem nächsten Sturm. In diesem Sturm wird es um die Relevanz der Verfassung in digitalen Lebenswelten gehen. Die alten Schlachtordnungen werden dabei keine Rolle mehr spielen. Insoweit wäre ein Revitalisierung der amerikanischen Politik zu erwarten, jenseits der überkommenen Washingtoner Rituale. Für viele Europäer sind die Vereinigten Staaten kulturell und politisch immer noch schwierig zu verstehen, trotz des Internets 6.500 km weit weg. Sie spielten beim Cato-Institut kaum eine Rolle. Es wäre wohl zu viel verlangt, wenn der Kongress jetzt auch noch den Grundrechtsschutz in Europa übernehmen soll. Die Bundesregierung vermittelte übrigens bisher diesen Eindruck.

http://www.faz.net/aktuell/feuilleton/debatten/ueberwachung/das-cato-institut-diskutiert-den-nsa-skandal-blick-hinter-potemkins-fassaden-12612024.html#Drucken

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‚What the Guardian is doing is important for democracy‘

On Thursday the Daily Mail described the Guardian as ‚The paper that helps Britain’s enemies‘. We showed that article to many of the world’s leading editors. This is what they said.

http://www.theguardian.com/world/2013/oct/10/guardian-democracy-editors

New York Times mastheadDer Spiegel mastheadHaaretz mastheadLe Monde mastheadEl Pais mastheadSlateThe HinduClarin.comFrankfurter AllgemeineThe Washington PostSuddeustcheLa RepubblicaAftenposten Dagens NyheterLa Stampa Neue Zurcher ZeitungTagesspiegelGazeta Wyborcza

PolitikenKnight Center for Digital MediaBuzzfeedORF TV

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Politics: From Vision to Action
Barandat* CASA-1000 Project Moves Forward Despite Security Risks
October 7, 2013 04:48 PM

Sangtuda-2 hydroelectric power plant in Tajikistan
On September 16–17, officials from Kyrgyzstan, Tajikistan, Pakistan and Afghanistan met in Islamabad to sign a Resolution on Contracting Structure and Commercial Principles in the effort to launch the CASA-1000 trade and energy project in 2014. The parties hope CASA-1000 will help bring electricity from Kyrgyzstan and Tajikistan to Afghanistan and Pakistan already in 2017 (tribune.com.pk, September 16).

If realized, the project would establish a regional electricity market, contribute to inter-regional development involving Central and South Asia, and promote further cooperation between the two poorly integrated regions of the world. But just like the TAPI pipeline—an ambitious energy initiative seeking to bring natural gas from Turkmenistan to Afghanistan, Pakistan and India—the CASA-1000 scheme faces security and geopolitical risks that make its implementation unrealistic for many skeptics. Some of these risks stem from water and border disputes in Central Asia, tense relations between Uzbekistan and Tajikistan, as well as friction between Pakistan and Afghanistan—all further affected and complicated by the planned withdrawal of international coalition forces from Afghanistan by the end of 2014.

The participants envisage that electricity transmission lines of the CASA-1000 project, estimated to cost $1 billion, will extend over 1,222 kilometers to initially supply 1,000 megawatts (MW) of electricity to Pakistan and 300 MW to Afghanistan. Australia, the United States, the United Kingdom, as well as the Asian Development Bank, Islamic Development Bank and the World Bank have all lent strong support to the project, with proponents pointing to major economic and security benefits from such an undertaking (casa-1000.org, nation.com.pk, September 17).

Indeed, Kyrgyzstan and Tajikistan lack fossil fuel resources but enjoy 80,000 MW in hydropower potential, of which only 10 percent has been utilized to date. Exporting their surplus electricity during summer summers would help generate revenue that could then be used to upgrade their crippled energy infrastructure. Tajikistan alone loses about $170 million–$200 million due to the lack of summer electricity exports (afghanistan.ru, January 21; casa-1000.org, September 17).

Pakistan and Afghanistan, where millions either live without electricity or suffer from recurring power outages, would benefit as well. Pakistan has faced frequent energy crises that have undermined the growth prospects of its economy, which experiences electricity shortages of up to 5,000 MW. Afghanistan, just like Pakistan, needs more power to feed its small yet growing economy. The energy demand of the two countries is a contributing factor to the broader rising energy demand in Asia, where gas and oil needs alone are expected to increase by 22–27 percent between 2007 and 2035 (regnum.ru, casa-1000.org, September 17; http://www.isn.ethz.ch, July 18, 2011). These energy demand dynamics, coupled with economic development imperatives, potentially enable Central Asian states—endowed with vast energy resources—to become important economic and security partners for South and East Asian countries.

In this context, the CASA-1000 project is viewed as a critical initiative. It would allow Tajikistan and Kyrgyzstan to increase electricity exports, and help Afghanistan and Pakistan to develop their economies, which remain hostage to electricity shortages and blackouts. The CASA-1000 project and the potential it holds for advancing cooperation in other areas would further assist with development and integration of Afghanistan into Central and South Asia as well as facilitate the growing, albeit still slow, connectivity of the two regions. Besides promoting broader regional security by advancing economic opportunities, the inter-regional cooperation is expected to open new vistas of collaboration of the two regions with other parts of Eurasia.

The World Bank and other institutions have expressed interest in funding the project. Russia is also seeking a major role in the scheme, in part because of its concerns about Washington’s push for inter-regional projects under the US Silk Road Initiative, launched in 2011, which Moscow fears is intended to weaken Russia’s influence in what it considers its near abroad. Moscow therefore actively seeks to retain a major role in the regional geopolitics, especially considering the exit of Uzbekistan from the Russia-led Collective Security Treaty Organization (CSTO) for the second time in 2012 and Tashkent’s resistance to other Moscow-led integration initiatives in Central Asia. However, just as its ties with Uzbekistan worsened, Russia has increased its engagement with Kyrgyzstan and Tajikistan, including in the hydropower sphere. Potential investment by Russia in the CASA-1000 project and its deepening collaboration with Bishkek and Dushanbe provide Moscow with leverage over Central Asian states and enable it to remain a key player in the region.

Meanwhile, as a country dependent on Tajikistan and Kyrgyzstan for water and aiming to become a major exporter of electricity to Afghanistan, Uzbekistan has resisted efforts of its neighbors to develop their electricity export capacities, citing environmental issues that could result from expanded production of electricity by the upstream countries. Uzbekistan has been accused in the past of going as far as cutting gas supplies and blocking railway transit to signal its displeasure and frustrate the efforts of cash-strapped Tajikistan and Kyrgyzstan to develop their hydropower sectors. Tashkent has allegedly offered Pakistan to build three hydroelectric power stations on the Swat River as a way to discourage Islamabad from pursuing the CASA-1000 initiative (topnews.tj, September 19, 2011; gazeta.tj, July 19, 2012).

The CASA-1000 project has its opponents in participating countries as well, including in Kyrgyzstan where critics suggest to instead work with Russia, India and China, who have the financial resources and willingness to develop the Kyrgyz Republic’s energy sector. They argue that the completion of the “Dataka-Kemin” power communication lines and other similar projects would allow Kyrgyzstan to export electricity to Kazakhstan and China at higher prices. Such cooperation, the argument goes, is more profitable than collaborating with the poorer and unstable Afghanistan and Pakistan (24kg.org, September 26; January 23, 2012).

The CASA-1000 skeptics do have a point. Besides possible unmarked landmines along proposed routes of the transmission lines, CASA-1000 faces major security and geopolitical risks. Afghanistan may see more instability ahead of the country’s presidential elections and following the pullout of coalition forces in 2014, while Pakistan is almost certain to continue its struggle with home-grown militant groups and terrorism. Meanwhile, corruption and the porous borders of all these states have facilitated trans-border drug trafficking and organized crime activity that many fear will only grow. It therefore remains to be seen if economic justifications for CASA-1000 will trump security concerns come 2014 and, the September agreement notwithstanding, whether the project’s broad vision becomes a reality in the long run.

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Suter* Greece must attract top R&D performers
by Alexander S. Kritikos

Alexander S. Kritikos University of Potsdam, DIW Berlin and IZA

Alexander S. Kritikos University of Potsdam,
DIW Berlin and IZA

Greece is still in dire straits. Some reform progress during the last three years has contributed to improving the economic outlook, but it has become clear that as much as the reforms are needed, the economy will not become prosperous simply by cutting costs and making institutional reforms. Shifting the emphasis from austerity to growth has dominated the political agenda almost since the beginning of the crisis, but as is often pointed out, the Greek growth model has not yet been defined.

While in recent years the most developed countries around the world have largely invested in building innovation-driven economies, Greece has not. Greece needs to use them as role models, aiming to create long-term sustainable wealth by focusing on innovative industries with high added value.

In Greece today, at a first glance, the preconditions for an innovation economy appear to be suboptimal, with only small parts of an innovation system being in place. The country spends around 0.5 percent of its gross domestic product on research and development activities, less than any other Eurozone economy. In addition, private R&D investments make up less than 0.2 percent of GDP. Sweden, at the other end of the spectrum, allocates 3 percent of its GDP to private R&D.

A closer look at research and innovation activities in Greece reveals that some excellent basic research institutes and a few small but innovative companies do exist around the country. However, given the high regulatory burden and the unfriendly environment toward innovative companies, great innovations in basic research cannot spill over into new business in Greece. Instead, these ideas are used by business abroad. Last but not least, while some networks have started to emerge very recently, most institutes still work in an isolated manner, and the majority of their top researchers leave the country.

Innovation is at the heart of the next EU programming period and Brussels is pushing regions and countries to concentrate on their innovative capacities. The Commission funding in the next programming period will be based on smart specialization strategies proposed by the regions, and it is only such projects that will be eligible for support from structural funds. In addition, a number of new measures are included in Horizon 2020, the upcoming program for research and innovation aimed at strengthening European and national research systems. These two new approaches are the most crucial opportunities for Greece to develop its innovation strategy at a national and regional level.

Of particular importance for Greece is the Teaming for Excellence program. The scheme will offer substantial funding on a competitive basis for projects aimed at developing cutting-edge research centers in less advanced EU regions. The proposals will be submitted by teams comprising an internationally recognized research institute – among those of the European elite – and people from the host region. The key objective is to provide a high-speed lift to excellence in research and innovation in countries such as Greece, allowing them to align high-quality science with technology-based entrepreneurship. Such an objective cannot be reached without the involvement of top research performers, who would be attracted by the establishment of new research centers. In fact, top scientists are most likely to make breakthrough discoveries and inventions, which can prompt new science, technology and industrial activities. The outstanding performance of top scientists will attract talented young researchers with strong motivations: The higher the reputation of the top scientists, the stronger and more competitive the research teams around them will be. Moreover, top research performers will be able to trigger private R&D activities and draw venture capital to them. Information and communications technology industries around Stanford, biotech around Harvard and MIT, the Berlin Adlershof Technology Park, and the research labs of private companies in Zurich, close to the Swiss Federal Institute of Technology (ETH), are all examples of premium private investment to get access to the best brains.

A strong prerequisite for the success of the teaming competition scheme is that the emphasis is placed on creating the conditions for top performers to relocate and play a leading role in enhancing an innovation-conducive environment in less advanced regions. With this perspective, the scheme is crucial for Greece, as it offers a concrete opportunity for the country to boost its innovation capacity and attract distinguished scientists from around the world, no matter whether these are Greeks or not.

The final choices will very much depend on the proactive involvement of potential stakeholders – regional authorities and governments, research managers, regional business associations – and the development of a convincing plan for such research centers to be developed.

In the very competitive process to obtain funding and launch a leading research center, Greece’s major assets are its current research potential, its culture and living conditions, as well as its distinguished diaspora. A Greek project will only have a chance if the key actors understand the magnitude of the task and are ready to compete with other European countries at the highest level.

This and other issues were discussed at the 1st Hellenic Innovation Forum organized by IZA and the Eugenides Foundation in Athens in cooperation with the EU Task Force for Greece on October 7 and 8.

Alexander S. Kritikos | October 9, 2013 at 10:00 am | URL: http://wp.me/p3cqoR-pX

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Middle East

Asia Times: Fear and loathing in House of Saud

Every sentient being with a functional brain perceives the possibility of ending the 34-year Wall of Mistrust between Washington and Tehran as a win-win situation.

Here are some of the benefits:

The price of oil and gas from the Persian Gulf would go down; Washington and Tehran could enter a partnership to fight Salafi-jihadis (they already did, by the way, immediately after 9/11) as well as coordinate their policies in Afghanistan to keep the Taliban in check post-2014; Iran and the US share the same interests in Syria; both want no anarchy and no prospect of Islamic radicals having a shot at power. An ideal outcome would balance Iranian influence with a power-sharing agreement between the Bashar al-Assad establishment and the sensible non-weaponized opposition (it does exist, but is at present marginalized); With no more regime change rhetoric and no more sanctions, the sky is the limit for more trade, investment and energy options for the West, especially Europe (Iran is the best possible way for Europeans to soften their dependence on Russia’s Gazprom); A solution for the nuclear dossier would allow Iran to manage civilian use of nuclear energy as an alternative source for its industry, releasing more oil and gas for export; Geopolitically, with Iran recognized for what it is – the key actor in Southwest Asia – the US could be released from its self-imposed strategic dogma of depending on the Israeli-Saudi axis. And Washington could even start pivoting to Asia for real – not exclusively via military means. Ay, there’s the rub. Everybody knows why the Israeli right will fight an US-Iran agreement like the plague – as Iran as an „existential threat“ is the ideal pretext to change the debate from the real issue; the occupation/apartheid regime imposed on Palestine. As for the House of Saud, such an agreement would be nothing short of Apocalypse Now. I’m just a moderate killer It starts with Syria. Everybody now knows that shadow master Bandar bin Sultan, aka Bandar Bush, has been fully in charge of the war on Syria since he was appointed Director of National Intelligence by his uncle, Saudi King Abdullah. Bandar is taking no prisoners. First he eliminated Qatar – the major financier of the so-called Free Syrian Army (FSA) – from the picture, after having a helping hand in Qatar’s emir, Sheikh Hamad, deposing himself to the benefit of his son, Sheikh Tamin, in late June. Then, in late July, Bandar spectacularly resurfaced in public during his now famous „secret“ trip to Moscow to try to extort/bribe Russian President Vladimir Putin into abandoning Syria. Notoriously, the House of Saud’s „policy“ on Syria is regime change, period. This is non-negotiable in terms of dealing a blow to those „apostates“ in Tehran and imprinting Saudi will on Syria, Iraq, in fact the whole, mostly Sunni Levant. In late September, the Jaish al-Islam („Army of Islam“) entered the picture. This is a „rebel“ combo of up to 50 brigades, from supposedly „moderates“ to hardcore Salafis, controlled by Liwa al-Islam, which used to be part of the FSA. The warlord in charge of Jaish al-Islam is Zahran Alloush – whose father, Abdullah, is a hardcore Salafi cleric in Saudi Arabia. And the petrodollars to support him are Saudi – via Bandar Bush and his brother Prince Salman, the Saudi deputy defense minister. If this looks like a revamp of the David Petraeus-concocted „Sunni Awakening“ in Iraq in 2007 that’s because it is; the difference is this Saudi-financed „awakening“ is geared not to fight al-Qaeda but towards regime change. This (in Arabic) is what Alloush wants; a resurrection of the Umayyad Caliphate (whose capital was Damascus), and to „cleanse“ Damascus of Iranians, Shi’ites and Alawites. These are all considered kafir („unbelievers“); either they submit to Salafist Islam or they must die. Anybody who interprets this stance as „moderate“ has got to be a lunatic. Incredibly as it may seem, even Ayman al-Zawahiri – as in al-Qaeda central – has issued a proclamation banning the killing of Shi’ites. Yet this „moderate“ tag is exactly at the core of the present, Bandar Bush-concocted PR campaign; sectarian warlords of the Alloush kind are being „softened“, so they are palatable to a maximum range of Gulf sources of funds and, inevitably, gullible Westerners. But the heart of the matter is that Jaish al-Islam, essentially, sports just a slight chromatic difference with the Islamic State of Iraq and al-Sham (ISIS) – the al-Qaeda-linked umbrella which is the prime fighting force in Syria; as in a bunch of weaponized fanatics on varying degrees of (religious) crystal meth addiction. Paranoia paradiseTo complicate matters, the House of Saud is in disarray because of the succession battle. Crown Prince Salman is the last son of King Abdul Aziz, the founder of the Saud dynasty, to have a shot at power gradually by age. Now all bets are off – with hordes of princes engulfed in the battle for the great prize. And here we find none other than Bandar Bush – who is now, for all practical purposes, the most powerful entity in Saudi Arabia after Khalid Twijri, the chief of King Abdullah’s office. The nonagenarian Abdullah is about to meet his Maker. Twijri is not part of the royal family. So Bandar is running against the clock. He needs a „win“ in Syria as his ticket to ultimate glory. That’s when the Russia-US agreement on Syria’s chemical weapons intervened. The House of Saud as a whole freaked out – blaming not only the usual suspects, UN Security Council members Russia and China, but also Washington. No wonder the perpetual foreign minister, Prince Saud al-Faisal, snubbed his annual address to the UN General Assembly last week. To say he was not missed is an understatement. The House of Saud’s nightmare is amplified by paranoia. After all those warnings by King Abdullah for Washington to cut „the head of the snake“ (Iran), as immortalized on WikiLeaks cables; after all those supplications for the US to bomb Syria, install a no-fly zone and/or weaponize the „rebels“ to kingdom come, this is what the House of Saud gets: Washington and Tehran on their way to reaching a deal at the expense of Riyadh. So no wonder fear, loathing and acute paranoia reign supreme. The House of Saud is and will continue to do all it can to bomb the emergence of Lebanon as a gas producer. It will continue to relentlessly fan the flames of sectarianism all across the spectrum, as Toby Matthiesen documented in an excellent book. And the Israeli-Saudi axis will keep blossoming. Few in the Middle East know that an Israeli company – with experience in repressing Palestinians – is in charge of the security in Mecca. (See here and here (in French)). If they knew – with the House of Saud’s hypocrisy once more revealed – the Arab street in many a latitude would riot en masse. One thing is certain; Bandar Bush, as well as the Saudi-Israeli axis, will pull no punches to derail any rapprochement between Washington and Tehran. As for the Bigger Picture, the real „international community“ may always dream that one day Washington elites will finally see the light and figure out that the US-Saudi strategic alliance sealed in 1945 between Franklin D Roosevelt and King Abdul Aziz ibn Saud makes absolutely no sense. Pepe Escobar is the author of Globalistan: How the Globalized World is Dissolving into Liquid War (Nimble Books, 2007), Red Zone Blues: a snapshot of Baghdad during the surge (Nimble Books, 2007), and Obama does Globalistan (Nimble Books, 2009). http://www.atimes.com/atimes/World/WOR-02-111013.html************************************************************************************************************** Shah Deniz II Images http://www.epcengineer.com/projects/details/126/shah-deniz-ii BP is the operator of a number of these major upstream and midstream projects in Azerbaijan, Georgia, and Turkey. The Production Sharing Agreement for the developments of Azeri-Chirag-Gunashli (ACG) field, so called the Contract of the Century, was signed in 1994. The field is now fully operational, and oil is being produced from the following platforms: Chirag, Central Azeri, West Azeri, East Azeri and Deepwater Gunashli. The 1768 km long Baku-Tbilisi-Ceyhan (BTC) pipeline has been built to address the export solutions for Azerbaijan. The pipeline crosses the territories of three countries – Azerbaijan, Georgia and Turkey, starting from the Sangachal terminal at the Caspian Sea and finishing with the Ceyhan terminal in the Turkish coast of the Mediterranean, from where ACG oil is delivered to the international markets. The Shah Deniz project is a gas condensate development in the Azerbaijan sector of the Caspian Sea with gas export to markets in Azerbaijan, Georgia and Turkey. The South Caucasus pipeline (SCP) is a gas pipeline to transport Shah Deniz gas from Azerbaijan through Georgia to the Turkish border. All these developments converge at the Sangachal Terminal, located 55 km south of Baku and covering an area of 540 hectares. It includes ACG oil and gas storage and processing facilities, BTC oil export project’s head pump station, Shah Deniz/SCP project’s main gas compression station. The terminal also processes associated gas produced offshore which is delivered to SOCAR (State Oil Company of Azerbaijan Republic) to serve the domestic markets. http://www.bp.com/sectiongenericarticle.do?categoryId=9028956&contentId=7053899

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*Massenbach’sRecommendation*
European Companies Contracting to Buy Azerbaijani Gas
Publication: Eurasia Daily Monitor Volume: 10 Issue: 170

September 25, 2013 03:23

On September 19, in Baku, nine European energy companies signed contracts to purchase Azerbaijani natural gas from the Shah Deniz field, Phase Two of production.

All nine contracts cover a period of 25 years, starting with the first gas flow into Europe from the Azerbaijani-led Trans-Anatolia Pipeline (TANAP), feeding into the planned Trans-Adriatic Pipeline (TAP) toward Italy and onward into Western Europe. The first gas flow into Europe is projected for 2019. All buyers have contracted for fixed annual gas volumes that will remain constant during the contract period.

Gaz de France will buy a total of 65 billion cubic meters (bcm), at an annual rate of 2.6 bcm during the contract period. The German E.ON Ruhrgas will purchase 40 bcm, at a rate of 1.6 bcm per year during that same period. Gas Natural Fenosa of Spain will procure 25 bcm, at an annual rate of 1 bcm in the same time frame. Bulgaria’s Bulgargaz will also purchase 25 bcm at a rate of 1 bcm per year during the contract period. The Italian Hera Trading (part of the Hera Group of municipal energy utilities) will buy 7.5 bcm, at a rate of 300 million cubic meters per year. (Gaz de France, E.ON Ruhrgas, Gas Natural Fenosa press releases, September 23, cited by Trend, September 23; Novinite [Sofia], September 19).

Royal Dutch Shell, Axpo Holding of Switzerland (energy utilities of six Swiss cantons), the Italian ENEL (Ente Nazionale per l’Energia Elettrica, national electricity champion, partly state-owned), and Greece’s DEPA (Natural Gas Public Corporation, in charge of procurement and supply) have also signed the 25-year contracts. Their procurement volumes have not yet been announced.

The multinational consortium of Shah Deniz producers is a party to each contract as the gas supplier. The contracts will enter into force upon the adoption of the final investment decision (FDI) by the Shah Deniz consortium to develop Phase Two of production. According to Azerbaijan’s State Oil Company (SOCAR) president, Rovnag Abdullayev, total revenues from these supply contracts are anticipated at $200 billion on preliminary estimates (Trend, September 19).

Multiplicity of buyers is the most salient characteristic of this commercial arrangement. It corresponds with Azerbaijan’s preference for apportioning gas volumes among a wide range of customers along the designated route, carving out market niches on long-term contracts. Such a strategy mitigates risks, enhances security of demand, and avoids competing volume-to-volume against bigger suppliers. Thanks to the TANAP pipeline project, initiated and majority-owned by Azerbaijan, the country is physically connecting with the customer countries in the European Union.

Those nine companies have been selected from among 15 European companies that had proposed earlier this year to buy gas volumes from the Shah Deniz Phase Two project. Reflecting robust, long-term gas demand in Europe, those proposals totaled at least twice as much as the anticipated production of Phase Two.

Shah Deniz Phase Two will produce 16 bcm per year on average, reaching the plateau at that level by 2022 as currently anticipated. Of that amount, 6 bcm per year are set aside to supply Turkey from 2018 onward, and another 10 bcm are now contracted to European companies from 2019 onward (contingent on the Shah Deniz FDI—see above). Shah Deniz holds 2.1 trillion cubic meters in proven reserves (not including deeper levels with probable reserves). The Shah Deniz project’s lifetime runs until 2036. Additional export volumes are expected from Azerbaijani gas fields other than Shah Deniz. Those should come on stream after 2020, which will necessitate capacity increases in the TANAP and TAP pipelines to handle those new volumes. Gas supply from Turkmenistan remains a distinct possibility; that from Iraq’s Kurdish region, however, seems a longer shot.

SOCAR considers the possibility of undertaking the “gasification” of Albania (introducing gas usage for the first time in that country, supplying the volumes, and building a distribution grid). The Albanian government welcomes the prospect enthusiastically. This has become possible as a collateral effect of the planned TAP pipeline, which will cross Greece and Albania en route to Italy. SOCAR has recently acquired a minority ownership stake in TAP (as have other Shah Deniz gas producers). But gasification of Albania does not necessarily depend on TAP, since SOCAR has recently won the tender for 66 percent ownership of Greece’s DESFA (Public Gas Transmission System Operator) and could build a branch-off line from the Greek pipeline system into Albania if warranted.

Current plans envisage the following timeline for implementing this vast project in all its components:

Shah Deniz Phase Two: final investment decision by the end of 2013; start of construction work in the second half of 2014 at the field; first export flow in 2018 to Turkey and 2019 to Europe.

Trans-Anatolia Pipeline (Georgia-Turkey border to Turkey-Greece border): start of construction expected in 2014 for completion by 2018. Information on the planned expansion of the pipeline through Georgia seems difficult to obtain in the public domain.

TAP pipeline (Greece-Albania-Italy): start of construction work in 2015 for completion by 2019.

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Qatargas, E.ON arm sign 5-year LNG supply deal

Qatargas 4 and E.ON Global Commodities, the energy trading business of E.ON, one of the world’s largest investor-owned power and gas companies, yesterday signed a „flexible SPA“ for five years, starting from 2014 and covering a volume of approximately 1.5mn tonnes of LNG a year.

The LNG will come from Qatargas 4 (Train 7), a joint venture between Qatar Petroleum and Shell, and will be delivered on-board Q-Max LNG vessels to the Gate LNG Terminal in Rotterdam, Netherlands.

HE the Minister of Energy and Industry Dr Mohamed bin Saleh al-Sada, also Qatargas chairman, signed the SPA at the Four Seasons in Doha on behalf of Qatargas 4, while Christopher Delbrück, CEO of E.ON Global Commodities, and Richard Baylis, director (LNG) signed on behalf of E.ON. Klaus Schäfer, E.ON chief financial officer, also took part in the ceremony. Al-Sada described the SPA as „another milestone in Qatar’s supply of clean energy to the world“. He said: „We are very pleased with this agreement as it marks the beginning of a relationship between Qatargas, the largest LNG producing company in the world, and E.ON SE, one of the world’s largest investor-owned power and gas companies.“

Qatargas chief executive officer, Sheikh Khalid bin Khalifa al-Thani said: „The signing of this agreement represents a significant step for Qatargas in the development of its global strategy. We are delighted to have E.ON Global Commodities as a partner. „Qatargas continues to be committed to building strong relationships with its customers based on trust, reliability, flexibility and operational excellence.“ Delbrück said: „This contract represents a significant step in the development of our global growth strategy and is a major achievement in forging a long-term partnership with Qatar.“ Baylis said: „I am very pleased that we have been able to conclude this agreement with Qatargas. It is the culmination of a lot of effort from both companies over a number of years to find a suitable agreement in a rapidly changing LNG marketplace. The deal works well because it utilises our existing regasification position and provides Qatargas with access to arguably the most diverse European end user portfolio and, as a result, a new commercial home for their volumes.“

Roper said: „This agreement shows our commitment to developing our presence in one of the world’s most important energy-focused regions. EON has been engaged with Qatargas for many years and we have developed a sound working relationship. It is through both company’s openness in discussion that we have been able to find a formula for the delivery of Qatari LNG into the EON gas portfolio that will provide flexibility and materiality for both companies.“

Qatargas delivered its first LNG cargo to The Gate receiving terminal in Rotterdam in July of this year under a master sales and purchase agreement (MSPA) signed between the two companies in 2011.

© Gulf Times 2013

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Azerbaijan and the Southern Gas Corridor to Europe: Implications for U.S. and European Energy Security

On Friday, September 13, The Jamestown Foundation hosted an event at the Carnegie Endowment for International Peace entitled, „Azerbaijan and the Southern Gas Corridor to Europe: Implications for U.S. and European Energy Security.“ The event consisted of three panels, which discussed the game-changing nature of the opening of a new energy transit route into Europe, natural gas and energy implications for Southeastern Europe and the Eastern Mediterranean, as well as U.S. and EU policy regarding the Southern Gas Corridor and European energy security. Notable speakers included Jamestown Senior Fellow Vladimir Socor, who presented an in-depth analysis of Azerbaijan’s Trans-Anatolian Pipeline project; Ambassador Matthew Bryza, who discussed the profound region-wide implications of the opening of the Southern Corridor with the selection of the Trans-Adriatic Pipeline; the State Department’s Deputy Assistant Secretary for Energy Diplomacy Amos Hochstein, who provided the U.S. government’s perspective; EU Commission representative Christian Burgsmüller; as well as Margarita Assenova, the Jamestown Foundation’s Director for the Balkans, Caucasus and Central Asia, who described recent energy developments in the Balkans and Southeastern Europe.

Full video of the conference can be found below:

Watch “Azerbaijan and the Southern Gas Corridor, Pt. 1” by Glen E. Howard: http://vimeo.com/74745231

Watch “Azerbaijan and the Southern Gas Corridor, Pt. 2” by Glen E. Howard: http://vimeo.com/74745230

Watch “Azerbaijan and the Southern Gas Corridor, Pt. 3” by Glen E. Howard: http://vimeo.com/74745232


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Shah Deniz full field development : Watch Shah Deniz video in high quality

http://b-webcasts.com/bp/hr/sd2/shahsdeniz/
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Shah Deniz Stage 2, or Full Field Development (FFD) is a giant project that will add a further 16 billion cubic meters per year (bcma) of gas production to the approximately 9 bcma produced by Shah Deniz Stage 1.

Over $25 billion capital investment will be required to produce the gas and transport it to the Georgia-Turkey border. From there additional pipeline systems are planned to deliver 6 bcma of gas to Turkey and a further 10 bcma of gas to markets in Europe. Shah Deniz Stage 2, one of the largest gas developments in the world, will help increase energy security of European markets through the opening of the new Southern Gas Corridor.

Shah Deniz Stage 2 is currently in the front end engineering and design (FEED) phase. This is a key phase in the project during which engineering studies will be refined, further wells will be drilled, commercial agreements will be finalised and key construction contracts will commence.

The current concept for Shah Deniz Stage 2 includes:

  • two new bridge-linked offshore platforms.
  • 26 gas production wells which will be drilled with 2 semi-submersible rigs.
  • 500 km of subsea pipelines will link the wells with the onshore terminal.
  • upgrade of the offshore construction vessels.
  • expansion of the Sangachal terminal to accommodate the new gas processing and compression facilities.

Transportation of Shah Deniz gas from the Caspian Sea across 4,000 kilometres to Europe requires enhancement of some existing infrastructure and development of a chain of new pipelines.

  • South Caucasus Pipeline (SCP) will be expanded with a new parallel pipeline across Azerbaijan and Georgia.
  • In Turkey, Shah Deniz gas will be transported through a new Trans Anatolian Pipeline (TANAP).
  • In Europe, Trans Adriatic Pipeline will be built to take gas through Greece and Albania to Italy.

The Shah Deniz consortium is planning to make the final investment decision on Shah Deniz Stage 2 late in 2013. The target date for the first gas exports to Turkey is 2018 and to Europe in 2019.

http://www.bp.com/sectiongenericarticle.do?categoryId=9046884&contentId=7080518

South Caucasus Pipeline
Trans Anatolian pipeline (TANAP)
Trans Adriatic pipeline (TAP)

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Exclusive: Obama forewarns Netanyahu that sanctions against Iran will soon be partially lifted
DEBKAfile Exclusive Report October 10, 2013, 12:31 AM (IDT

President Barack Obama has notified Prime Minister Binyamin Netanyahu that his administration will soon start the partial and gradual easing of economic sanctions against Iran, debkafile reports exclusively from its Washington and Jerusalem sources. The reduction would apply to “non-significant” yet “substantial” sanctions, the message said.

Israel is the only American ally to receive prior warning of this decision – and the only one to be briefed in detail of the understandings Washington has reached with Tehran, including Iran’s concessions on its nuclear program. Neither European, nor Persian Gulf leaders led by Saudi Arabia have been let in on the scale of reciprocal concessions approved by Obama and Iran’s supreme leader Ayatollah Ali Khamenei.
These concessions will start coming to light when they are put on the table of the nuclear negotiations beginning in Geneva on Oct. 15 between Iran and the P5+1 group (five Security Council permanent members and Germany).

Meanwhile, high-ranking British, French and other European emissaries arrived in Jerusalem Thursday night. They said they were coming to discuss the latest developments on the Iranian question, but their real purpose was to discover the content of Obama’s message to the Israeli prime minister.
A high-placed American source told debkafile early Thursday: “The American-Iranian cake is already in the oven and half done.
In its next issue, out this coming Friday, DEBKA Weekly divulges in detail the content of the understandings reached between Washington and Tehran, how they were handled and the live wires acting as liaison in the secret exchanges. Exclusive articles will also discuss the strategic, political and military ramifications of the deals struck between Washington and Tehran.

http://www.debka.com/article/23341/
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DB Research – Ausblick Deutschland: Deutschland nach der Wahl

Unsere wichtigsten Aussagen:

  • Nach dem Wahlsieg von CDU/CSU in den Bundestagswahlen bewegt sich Deutschland in großen Schritten in Richtung einer Koalition der Mitte aus CDU/CSU und SPD. Es gibt drei gewichtige Gründe für diese Richtungsentscheidung: die Energiewende, die Verhandlungen zum fiskalischen Föderalismus und die Bankenpolitik erfordern eine enge Abstimmung zwischen Bundesregierung und Bundesrat, in dem neun SPD-geführte Regierungen vertreten sind. Auch anstehende Entscheidungen im Eurokrisenmanagement würden von einer breiten Parlamentsmehrheit profitieren. Die CDU/CSU wird erhebliche Konzessionen machen müssen, um die Koalition zustande zu bringen. Wir erwarten, dass dies geschieht.
  • Deutschland sticht fiskalpolitisch erneut aus dem Reigen der EU-Länder heraus. In Maastricht-Abgrenzung erwarten wir im laufenden Jahr eine schwarze Null im Gesamthaushalt sowie einen Rückgang des Schuldenstandes auf knapp 80% des BIP.
  • Wenn über die Auswirkungen der extrem niedrigen Zinsen diskutiert wird, stehen üblicherweise die negativen Folgen für die Sparer, die Einsparungen des Staates beim Schuldendienst, die Probleme der Lebensversicherungen und der betrieblichen Pensionsfonds sowie die Fehlallokation von Kapital bei den Unternehmensinvestitionen im Mittelpunkt. Doch Zinsen haben auch einen Einfluss auf die Konsum-Sparentscheidungen von Haushalten. Um dies zu untersuchen, haben wir für ausgewählte Länder gesamtwirtschaftliche Sparfunktionen geschätzt, und für viele Länder, insbesondere für Deutschland, einen positiven Zusammenhang zwischen dem Realzins und der Sparquote gefunden. Die niedrigen Zinsen dämpfen somit tendenziell die Sparneigung der privaten Haushalte.
  • der auf unserer Website verfügbar ist: http://www.dbresearch.de/MAIL/DBR_INTERNET_DE-PROD/PROD0000000000321168.pdf

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see our letter on:

Wir wünschen Ihnen ein angenehmes Wochenende. Ihr Team.

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Udo von Massenbach – Bärbel Freudenberg-Pilster – Jörg Barandat – Edith Suter

UdovonMassenbach Mail
Edith.Suter JoergBarandat

What the Guardian is doing is important for democracy‘ _ World news _ The G.pdf

PROD321168-Ausblick Deutschland-nach der Wahl 2013.pdf

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