Massenbach-Letter: NEWS 15/11/13


Udo von Massenbach

Guten Morgen.

World Toilet Day, 19 November 2013

Wall Street Journal: Europe Loses Trust in Obama *

Italian FM: West is preparing for contest to establish ties with Iran

Massenbach* *Europe Loses Trust in Obama *

The U.S. president’s turnabouts on Syria and Iran—coupled with his policy fumbles at home—have diminished European allies‘ traditional respect for the White House.

John Vinocur

Nov. 11, 2013 3:11 p.m. ET

Back in 2011, when the United States killed Osama bin Laden in the middle of the Pakistani night, Barack Obama said that "as a nation, there is nothing we can’t do." Mr. Obama told the world that America would be "relentless in defense of our citizens and our friends and allies."

Two and a half years later, the Obama Administration doesn’t seem to be relentless in defense of anything beyond its direct domestic political interests—with the exception of its undiscerning spying operations on countries that pass as extended family.

What’s novel here is that in Europe, doubts about America’s wisdom, strength and resolve are increasingly focused on the person of the president. Beyond the espionage, think of Mr. Obama’s hesitations on Iran and turnabouts concerning Syria—or his role in lengthening the U.S. budget shutdown, or in providing America with a new but crippled national health program.

These days, and to varying degrees, the governments of France, Britain and Germany regard Mr. Obama as a problem. No longer expressed only in private, the notion represents a decline in the reflexive acceptance and respect that had cushioned European attitudes about his historic presidency.

In Germany, Die Welt, a consistently pro-American newspaper, regretted things were now at a point where it appeared the U.S. was trying to confirm every prejudice against it. This was happening, the paper’s publisher wrote in a front-page editorial last month, "under an American president who was once longed for in Europe like the Messiah, and whom Old Europeans finally saw as one—a president who didn’t arrive wearing Texas cowboy boots, and instead tucked his copy of Kant under his pillow. But that was fiction."

Enlarge Image

Barack Obama and Angela Merkel at Berlin’s Brandenburg Gate in June. Getty Images

Last Thursday, just as negotiations with Iran picked up in Geneva, I heard doubts from a high-level European security official, somewhat akin to Saudi Arabia and Israel’s concerns, about how much reality Mr. Obama wanted to deal with concerning Tehran’s drive toward atomic weapons.

The main subject of an hour’s conversation was whether Iran believed the U.S. and the West would attack if Tehran refused to dismantle its nuclear program. In relation to Syria, where President Bashar al-Assad holds on to power in increasing comfort, Mr. Obama had stated on American television in September, "My suspicion is that the Iranians recognize they shouldn’t draw a lesson that we haven’t struck [Syria] to think we won’t strike Iran.“

Referring at first to circumstances in January, when the Obama Administration pulled away from a plan to furnish military assistance to the Syrian rebels alongside France and Britain, the European official said, "it remains true that Iran doesn’t believe the U.S. and the West will strike."

He added: "This is even more the case since the most recent Syrian episode. The Iranians have discarded the idea." The U.S. announced Friday that it was withdrawing one of its two aircraft carriers operating in the Persian Gulf region—a gesture certain not to add to Iran’s caution.

Mr. Obama has also described a combination of "credible threat of force" and "rigorous diplomatic effort" as being able to lead to "a deal" with the Iranians. He accompanied this with an assurance that regime change in Iran is not an American goal.

The European official’s view of this approach was negative. Rather, he said, to create adequate pressure on the Tehran leadership, "You have to challenge the Iranian homeland and the Islamic Republic as a unique world model."

One of the allies‘ problems in dealing with the president, according to the official, is that Mr. Obama "does not do consultation, and he doesn’t do discussion with allies. He reports, and he describes his analytical process."

This was in remarkable contrast to the public assertions in Geneva of total solidarity among the nations of the West—France, Britain, Germany and the U.S.—pressing for an end to Iran’s development of nukes.

But there is a striking public side to the concerns about Mr. Obama.

In " Angela Merkel : The Chancellor and Her World," a biography by veteran journalist Stefan Kornelius that was published in Germany in July, Mrs. Merkel is described as regarding the president as inscrutable. According to the book, the chancellor has exchanged expressions of discomfort with Nicolas Sarkozy and Gordon Brown about why Mr. Obama is "so peculiar, so unapproachable, so lacking in warmth" (my translation).

The book goes on to describe contact with the president as "revealing another Obama than the public image would let you suspect." According to the book’s account of the chancellor’s thinking, she has diminishing confidence that Mr. Obama’s politically "dysfunctional" America is capable of understanding itself. And she is irritated by stereotypes like "Obama, the Angel of Peace."

An English translation of Mr. Kornelius’s book, bearing the added words "The Authorized Biography" on its jacket, is scheduled for publication this week in the U.S. The book’s "authorized" aspect was legitimized by Mrs. Merkel’s presence at the Berlin launch party for the original German edition.

All of this came before the disclosure that the U.S. was spying on the chancellor’s cellphone calls. The man she defeated for re-election in September, Peer Steinbrück, suggested a week ago it was unlikely that Mr. Obama was not aware of her surveillance.

The French and the British are observant of the chancellor’s struggle to revive her trust in Mr. Obama. When it comes to the president, France and Britain’s different histories, and their different sense of nuance and diplomatic opportunity, shape their own real doubts.

Mr. Vinocur is former executive editor of the International Herald Tribune.


Exclusive: German parties reach deal on banking union – sources

By Andreas Rinke and Matthias Sobolewski

BERLIN (Reuters) – Angela Merkel’s conservatives and the Social Democrats (SPD) have struck a deal on the contours of a European banking union under which a body attached to European finance ministers, not the European Commission, would decide when to close failing banks.

Several sources involved in coalition talks between the parties told Reuters the two camps had also agreed funds from the European Stability Mechanism (ESM) should not be directly available for winding down financial institutions.

The sources said a number of legal questions needed to be resolved but the goal is to sign off on the agreement early next week so Finance Minister Wolfgang Schaeuble can go to a meeting with his EU colleagues on Thursday with a firm German position on the issue.

The EU wants to agree a deal on bank resolution by year end but uncertainty over Berlin’s stance after September’s election that led to complex coalition talks has sowed doubts about whether it can meet the deadline.

"The talks on this issue are going full steam ahead. Both parties are still far from an agreement on the questions of procedure and content," SPD spokesman Benjamin Seifert said.

In Brussels, a spokeswoman for Michel Barnier, the European commissioner responsible for the banking union reform, said he was open to the idea that the agency for the closure of failed banks would not be linked to the Commission.

After the ECB’s demand on Friday for a single fund to pay for the cost of bank failures, she said this was important for the "credibility of the overall system".

The so-called Single Resolution Mechanism (SRM) is a pillar of a broader banking union that aims to break the "doom loop" between failing banks and sovereign governments – a major problem for the euro zone during its debt crisis.

The compromise stems from a meeting on Thursday between Schaeuble, his party colleague Herbert Reul and SPD politicians Peer Steinbrueck, Martin Schulz and Olaf Scholz.

It satisfies an SPD demand that the ESM not be used to wind down banks while addressing concerns in Merkel’s conservative camp about giving the European Commission resolution powers.

The sources said until a common resolution fund, to be financed by the banks, had built up sufficient liquidity, national states would have to shoulder the burden of winding down their own banks. Should states run into financial problems, they could turn to the ESM for aid, as Spain has done.


The creation of a special body attached to the Ecofin council, the group of 28 EU finance ministers that meet monthly, would address Schaeuble’s concerns about the democratic legitimacy of ceding resolution powers to the Commission.

A simple majority of Ecofin states would be able to decide on the winding down of a bank under the plan, the sources said.

EU ministers will meet in Brussels to discuss building the second pillar of banking union, the scheme to close or salvage troubled banks. Settling those issues is necessary before the euro zone can complete one of the biggest projects since the start of the single currency.

The banking union would both police banks and find joint solutions to their problems.

Creating a body attached to Ecofin rather than the Commission would raise the problem of a legal basis for the single resolution authority.

The Commission has proposed itself as the resolution body because that was the only way to avoid changing the EU treaty – a lengthy and risky process. Attaching the SRM to the Ecofin council would either require a change to the EU treaty or creating a separate intergovernmental treaty like the one on which the bailout fund is based.

Excluding the ESM from financing closing down banks will raise the problem of a financial backstop for the SRM, possibly delaying its proper operation for years – for as long as resolution financing remains in the hands of national governments.

Five years after the financial crisis erupted, many European banks remain in trouble, holding back the euro zone economy as it gradually recovers from recession.

Behind Germany’s demands are two chief concerns. Berlin does not want to be told by Brussels to close a German lender. Neither does it want to be left on the hook for the clean-up of bank crashes elsewhere.

The wishes of Germany, Europe’s biggest economy which has shouldered much of the cost of bailing out countries from Greece to Ireland, cannot be ignored. But Berlin can count on few allies for wholehearted support for its tough stance.

While Finland backs it, most countries, including France, Spain, Italy, Portugal and Belgium, are seeking to soften Germany’s stance. They hold out hope that it will allow a single European fund to mop up individual bank problems.



Policy= res publica

Bärbel Freudenberg-PilsterFreudenberg-Pilster* Gallup: Most Uninsured Americans Ignoring Health Exchange Sites

Summary: The majority of uninsured Americans are unfamiliar with the exchanges and relatively few have tried to access them to date, even among those who say that eventually, they will most likely get their insurance through an exchange website.

PRINCETON, NJ — In the midst of widespread news coverage of problems with the federal health exchange website, relatively few uninsured Americans (18%) — the primary target population for the exchanges — have so far attempted to visit an exchange website. The percentage is slightly higher, 22%, among uninsured Americans who say they plan to get insurance through the exchanges.

These results are based on a series of questions Gallup asked uninsured Americans about the health exchanges from Oct. 23-Nov. 6.

Gallup previously found that less than half of uninsured Americans (44%) who plan to get insurance say they will do so through an exchange, and about one in four say they are more likely to pay a fine instead of getting insurance. These findings help explain the low percentage of the uninsured who have attempted to access the exchange websites.

Still, the fact that less than a quarter of uninsured Americans who say they plan to get insurance through an exchange have visited one so far suggests that other factors are at work. It may be that many uninsured Americans are waiting to try out the health exchange websites until their highly publicized problems are fixed, or they may simply be putting off decisions about getting insurance until later.

Three in 10 uninsured Americans are somewhat or very familiar with the exchanges, and that lack of familiarity is similar among those who claim they will most likely buy insurance through the exchanges.

Overall, about 17% of U.S. adults interviewed between Oct. 23 and Nov. 6 reported having no health insurance, similar to the percentages found in the first three quarters of this year.


The health exchange websites are not only fraught with the technical problems that have led to so much news coverage in recent weeks, but have also generated relatively little interest or use among uninsured Americans — the primary target group for the exchanges. The majority of uninsured Americans are unfamiliar with the exchanges and relatively few have tried to access them to date, even among those who say that eventually, they will most likely get their insurance through an exchange website.

Survey Methods

Results for this Gallup poll are based on telephone interviews conducted Oct. 23-Nov. 6, 2013, on the Gallup Daily tracking survey, with a random sample of 854 uninsured adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia.

For results based on the total sample of uninsured adults, one can say with 95% confidence that the margin of sampling error is ±5 percentage points.

Interviews are conducted with respondents on landline telephones and cellular phones, with interviews conducted in Spanish for respondents who are primarily Spanish-speaking. Each sample of national adults includes a minimum quota of 50% cellphone respondents and 50% landline respondents, with additional minimum quotas by region. Landline and cell telephone numbers are selected using random-digit-dial methods. Landline respondents are chosen at random within each household on the basis of which member had the most recent birthday.

Samples are weighted to correct for unequal selection probability, nonresponse, and double coverage of landline and cell users in the two sampling frames. They are also weighted to match the national demographics of gender, age, race, Hispanic ethnicity, education, region, population density, and phone status (cellphone only/landline only/both, and cellphone mostly). Demographic weighting targets are based on the March 2012 Current Population Survey figures for the aged 18 and older U.S. population. Phone status targets are based on the July-December 2011 National Health Interview Survey. Population density targets are based on the 2010 census. All reported margins of sampling error include the computed design effects for weighting.



Politics: From Vision to Action* Shared goals draw India and Russia closer

By Zorawar Daulet Singh

Speaking Freely is an Asia Times Online feature that allows guest writers to have their say. Please click here if you are interested in contributing.

For the Indian strategic community, the United States and China are the two dominant forces in foreign policy. Of the major bilateral visits this year, Prime Minister Manmohan Singh’s visit to Russia was relatively understated. Yet both from a global and regional security perspective, the Russia factor can no longer be ignored.

Russia and world order
The Syrian crisis has been a turning point. Most observers have been surprised at the resilience of Russia’s Syria policy. Many expected Moscow to ultimately buckle in the face of a Western onslaught. Yet, nimble diplomacy and a simultaneous maritime buildup in the eastern Mediterranean were able to steer the evolution of the crisis.

In September, the Russian Navy stated its Mediterranean deployments "can have a serious impact on the current military situation" around Syria. To be sure, the Obama administration did not appear inclined towards taking part in an escalatory game that could have spilled over onto its regional allies and undermined America’s regional position. Diplomacy became logical and the Russians persuaded the Syrians to concede to international oversight of their chemical weapons in return for security and sovereignty.

At a larger level, this is the restoration of a global order regulated by Westphalian norms with the UN Charter as the fulcrum of international relations that makes this geopolitical event more important. An October 21 India-Russia joint statement reaffirmed these principles.

Countering radicalism
The other convergence between Moscow and Delhi that found expression in their joint statement is a similar position on radical ideologies. Both states continue to confront the spillover effects of radical ideologies that are sustained outside Indian and Russian frontiers.

As Russian President Vladimir Putin recently remarked, "Some political forces use Islam, the radical currents within it … to weaken our state and create conflicts on Russian soil that can be managed from abroad."

The prospect of a failing and contested Afghanistan suggests a replay of recent history. During the 1990s, India and Russia along with Iran closely cooperated in shoring up the Northern Alliance as a bulwark against the Pakistan-sponsored Taliban. After 2001, India adapted its Afghanistan policy by explicitly supporting the Western intervention in the hope that this would transform South Asia’s geopolitical problems.

The Western strategy, however, could never overcome its internal contradictions: supporting an Afghan state-building effort, and, simultaneously relying on the Pakistani Army and the Inter-Services Intelligence, a covert sponsor of the Taliban, to pursue a counter-insurgency campaign across the Durand Line. The conflict of interests proved insurmountable, and, Afghanistan and its neighbors are bearing the consequences.

Russia has begun strengthening the Central Asia-Afghan frontier for precisely such a scenario. Russia has decided to double its air deployments in Kyrgyzstan to 20 Sukhoi jets even as the US is shutting down its only logistical base in Central Asia in nearby Manas, Kyrgyzstan. Tajikistan, which hosts 7,000 Russian troops, has extended Russia’s military presence until 2042.

Contrary to popular perception, it is the Collective Security Treaty Organization (CSTO), a Russian led-military alliance that includes post-Soviet states, and not the Shanghai Cooperation Organization (SCO) that is the principal security framework for Central Asia. For India to potentially assume any forward operational presence to secure its Afghan investments there must be bilateral regional entente with Russia and, by extension, an arrangement with the CSTO.

The main constraints on an expanded SCO stabilizing Afghanistan is that Russian and Indian threat perceptions do not converge with China on the question of the Taliban’s rehabilitation in Afghanistan. Arguably, China could adjust to a Taliban-Pakistan Army sphere of influence in southern Afghanistan to secure China’s Uyghur problem and Beijing’s economic investments in Afghanistan.

Russia’s eastern ‚pivot‘
Dmitry Trenin, a Russian analyst, recently observed that Russian foreign policy is likely to continue "a geopolitical shift toward Eurasia and the Asia-Pacific Region" and a "further distancing from the US and Europe". Another scholar, Igor Okunev, argues that Russia is "embarking on a pragmatic and sharp policy in the spirit of Realpolitik" and "moving away from its pro-European orientation".

Could Russia’s evolving worldview make it more amenable to a subservient alignment with China? Russia’s self-image as an independent great power rules out such a prospect. Even during the dominance of the Westernizers, Moscow refused to accept an unequal partnership with the West. It is unlikely to accept one with China.

Of China’s 14 neighbors, Russia and India are the most important in continental Asia. Historically, it was the Soviet decision to normalize ties with China in the mid-1980s that persuaded India to follow suit in 1988. By 2008, Russia and China had solved all their territorial disputes.

In the contemporary phase, Russia and India’s China policies appear similar. At a global level, both find it beneficial to collaborate with China whether in the UN or in BRICS. For Russia, China is a useful partner to restrain any unilateralist impulses of the West. Regionally, and, on the Russian and Indian peripheries, however, the China factor becomes more complex and competitive pressures often form the backdrop to interactions.

Although neither Russia nor India want to participate in a regional cold war against China, neither is willing to entertain a Chinese sphere of influence in Asia. As Russia’s Foreign Minister Sergey Lavrov remarked last year, "It is important to prevent … the Asia Pacific Region from going beyond the limits of natural and mutually stimulating competition and following the negative path of heated rivalry or even confrontation."

Russia’s Asia-Pacific policy, Sergey Lavrov more recently stated, is "aimed at a stable balance of power". Russia’s conduct underscores this clearly.

In April this year, Russia and Japan began a new push to resolve their 70-year territorial dispute over the Kurile Islands and normalize relations. A former Japanese diplomat recently remarked, "The most important element for breaking a territorial stalemate is the international situation … the chance to settle the dispute is still there." For Japan, it is all about China.

For Russia, it is also part of a quest to restore some of its Pacific influence, develop new energy linkages and develop the Russian Far East. Russia has recognized that tapping maritime East Asia would require new transportation options such as shipped liquefied-natural gas (LNG) or sub-sea pipelines rather than its traditional focus on continental pipelines to Europe and China. Japan and South Korea are world’s largest LNG importers absorbing 50 percent of global supply. Japan imports 96% of its gas of which Russia’s present share is merely 8%. Russian gas would offer a secure and much shorter line of communication to an import-dependent Japan.

Both the foreign and defense ministers of Russia and Japan are starting a first round of dialogue this November. Russian President Putin and Prime Minister Shinzo Abe have held talks four times this year, most recently at the APEC summit in Indonesia.

On the Korean peninsula too, Russia’s eastern "pivot" is palpable. Both Russia and China are competing in leveraging their geopolitical location to offer new Eurasian lines of communication to East Asia, which have traditionally relied on the maritime route to Europe. In September, Russia opened a 54-km rail link to the North Korean port of Rajin as a pilot project to potentially link the entire Korean peninsula with the Trans-Siberian Railway network.

Moscow’s ties with South Korea have grown wider, with trade touching $25 billion in 2012. Russia has been assisting South Korea in developing its space program since 2004 and this August put another South Korean satellite into orbit. In industrial R&D, South Korean companies such as Samsung and LG rely on innovation and software development centers in Russia for their leading-edge consumer electronic products. In the automobile sector, South Korea is the only East Asian economy to have opened a complete manufacturing facility in Russia with a high degree of local components.

In Southeast Asia, Russia is pursing a clear policy of assisting Vietnam and Indonesia’s military modernization. Russia is now the third-largest foreign investor in Vietnam after Japan and Singapore. Russia is also helping Vietnam renovate Cam Ranh Bay, an old deep-water harbor that served as an important Soviet naval base during the Cold War. Importantly, the select capabilities that Russia is providing Vietnam – submarines, frigates and fighter aircraft armed with anti-ship missiles – all indicate an attempt at enhancing Vietnam’s interests in the South China Sea. By 2016, Vietnam will have six Kilo-class diesel submarines, which are more advanced than the subs Russia has supplied to China.

Russia is increasing the bargaining space for Vietnam and enabling it to engage China more confidently on the South China Sea dispute.

What can India draw from Russia
Too much of Indian security discourse is dominated by the China factor, often at the neglect of defining Indian interests in various areas or in assessing structural trends in global and regional security. The main challenge before India is to construct a role for itself in the Asia-Pacific region beyond simply reacting to China’s rise.

Russia’s sophisticated policy offers one model to pursue – an independent and positive role in the region while keeping a close eye on geopolitical stability and balance.

Speaking Freely is an Asia Times Online feature that allows guest writers to have their say. Please click here if you are interested in contributing. Articles submitted for this section allow our readers to express their opinions and do not necessarily meet the same editorial standards of Asia Times Online’s regular contributors.

Zorawar Daulet Singh is a PhD candidate at the India Institute, King’s College London.


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