Massenbach-Letter: NEWS 13.05.16

Massenbach-Letter. News

· Panama Papers – das Manifest von John Doe

· UAW: Tell Volkswagen to negotiate with Chattanooga workers

· Speeches: Remarks at the East-West Center on "Next Steps in the U.S. – Southeast Asia Economic Partnership"

· Meilenstein in der Krebs-Ursachen-Forschung durch CTK-Tumor-Chirurgen Prof. B. Bruecher

· Geopolitical Futures:The Spread of Euroskepticism

· From our Russian news desk:Cost of Rebuilding Middle East; Russian -China Relations

· Rainer Hermann:Islam und Demokratie. Offen für jedes politische System

· Radio Vatikan: Jordanischer Prinz fordert Marshall-Plan für Nahost


· BAKS: Dokumentationsband des "Deutschen Forums Sicherheitspolitik 2015: Wie sicher ist Deutschland – in einer Welt aus den Fugen"


Massenbach* Geopolitical Futures: The Spread of Euroskepticism.

May 11, 2016 Recent polls show growing anti-EU sentiment in some of Europe’s biggest economies.

By Jacob L. Shapiro

Two polls were released on May 9 that go straight to the question of the future of the European Union. In Italy, a television programed called Piazzapulita commissioned a poll that reported the Five Star Movement (a political party with a founder who has described himself as a populist and who wants to hold a referendum on whether Italy should remain in the European Union) was the most popular political party in the country ahead of local elections scheduled for next month. A poll by British research group Ipsos MORI appeared on the same day and reported that of the nine EU countries surveyed, representing roughly three-quarters of the EU’s total population, 45 percent believed that their country should hold a referendum on whether to remain in the EU.

Reuters tried to explain the Italian poll numbers as relating to a spate of scandals that have undermined public confidence in current Prime Minister Matteo Renzi’s Democratic Party. But this is Italy we’re talking about, the same country that brought us Silvio Berlusconi. The country is no stranger to political scandals. A few instances of corruption would not be enough to make an anti-establishment party like the Five Star Movement as popular as it has apparently become.

The problem in Italy, as we forecast at the end of last year, is economic. Unemployment in at least four of Italy’s southern provinces is over 18.8 percent, and in the other southern provinces is between 12 percent and 18.7 percent, according to Eurostat. And Italy hasn’t found a way to deal effectively with its non-performing loan problem to the satisfaction of the European Central Bank (ECB) and its own population. Italy has made some of its own depositors liable and it has tried to bend ECB rules as much as possible. The result has been a series of half measures that haven’t changed the fundamental reality.

There are two simultaneous phenomena occurring here. The first is disillusionment with the Italian government. What was an economic problem has become a political problem, and since Italy is a democracy, its leaders can be voted out of office. The next general election is not until 2018, but if developments continue to unfold in Italy as we have forecast, the situation is only going to get worse for mainstream political parties.

However, the second, deeper question is about whether Italy should stay in the European Union. This is a Euroskeptic party becoming the most popular political party in the eurozone’s third largest economy. Whether that translates into real political power remains to be seen, but that caveat should not suspend one’s capacity for wonder at the reality.

This is also where the Italian poll intersects with the British research company’s poll. The sample size of the Ipsos MORI poll is small (around 6,000 people total were surveyed in the EU and Britain) but even so, one of its most striking results was that 58 percent of Italians wanted a referendum on EU membership and 48 percent would have voted to leave the EU. In France, one of the twin pillars of the EU, 55 percent of survey respondents agreed a referendum should be called and 41 percent said they would vote to leave.

Much of the attention being paid to the upcoming British vote on whether to leave the European Union has focused on what the consequences will be for Britain – whether Scotland might push for another independence referendum and join the EU on its own terms, or whether and how much in terms of money and jobs the U.K. would lose as a result of a decision to exit. But what has been less well covered is how Britain’s stand against the EU and the public debate is already affecting the rest of Europe. In February, Prime Minister David Cameron negotiated a series of exceptions so that even if the U.K. remains, it will have a new set of understandings with Brussels. If the U.K. stays, other countries may be even more emboldened to openly flout more EU regulations than they already are. If Britain leaves and does not revert to an apocalyptic depression, the numbers in the Ipsos MORI survey might begin to trend upward – and they don’t have a long way to go to become the majority in some of the EU’s most influential states.

At the center of the European Union – as well as the Italian poll, the Ipsos MORI poll and even Brexit – is the question of Germany. The International Monetary Fund said yesterday in a statement that it was “a bit more optimistic” about the outlook for Europe’s largest economy. Geopolitical Futures, in partnership with Mauldin Economics, will be publishing a detailed study of the German economy in the coming week. But suffice it to say for now that we believe the German economy has thus far been able to avoid the crisis of the exporters that has affected every other major exporting country in the world, from the producers of manufactured goods like China and South Korea to commodity exporters like Russia and Saudi Arabia.

Just two weeks ago, the U.S. Treasury Department announced that the U.S. had placed five countries on a monitoring list for potential currency manipulation: China, Japan, Korea, Taiwan and Germany. The report noted that Germany has built up a significant bilateral trade surplus with the U.S., in addition to holding the second largest current account surplus in the world, at approximately 8.3 percent of GDP, according to an April OECD report. It isn’t currency manipulation that has Germany on this monitoring list. It is the fact that as European and Chinese demand for German products has fallen, the U.S. has become the destination for Germany’s exports in order to make up the difference.

There are a number of factors besides exports that go into Germany’s current account surplus. Germany has become a significant creditor, rising from almost zero net foreign assets in the 1990s to almost 40 percent of GDP by the end of 2010, according to economic scholar Jörg Bibow. Interest rates are low, and German banks are viewed as a safe haven in the European Union for stashing money. But since Germany is a creditor, many of the assets on German books are the unpaid debts of other eurozone countries, which means Germany is deeply exposed to a eurozone that still has not meaningfully recovered from the 2008 crisis.

Most of the time, one would look at a current account surplus and see it as a positive. If Germany has a surplus of 8.3 percent of GDP, why not use that surplus to stimulate domestic demand? Germany must be either unwilling or unable to use the surplus to stimulate domestic demand, in part because Germany is a creditor and invests abroad and in its own banks and companies. And this gets at the root of the entire problem. Germany exports almost half of its GDP. Germany imposed austerity on the EU after 2008, which has resulted in stratospherically high unemployment rates in southern Europe. Demand has not returned to pre-financial crisis levels. Germany has been able to skirt the crisis while most of Europe is either still suffering or is in the doldrums. There are limits to U.S. demand or tolerance of German exports to the U.S. market. Exporting to the U.S. is a Band-Aid on a deeper wound.

Yesterday was one of those rare days when a number of important pieces of information all appeared around the same time. The Italian poll, the British research poll and the IMF’s hollow optimism about Germany offer different prisms through which to see how the European Union’s connective tissue is fraying as the bloc’s economic logic becomes increasingly illogical.


Alleged female spy from Russia’s FSB said to be executed by ISIS

DEBKAfile May 11, 2016, 3:21 PM (IDT)

The official magazine of ISIS in the Russian language claimed Tuesday that Elvira Karaeva, an agent from Russia’s FSB intelligence service who infiltrated the terrorist organization in the Caucasus region, was discovered, interrogated and executed by hanging. According to the report, she provided photographs, the locations of hideouts and organizational information on senior figures of the organization in the Caucasus to the Russian authorities for four years. The magazine also claimed that Karaeva was directly responsible for the deaths of four men and one woman.

From Russian news desk:

The Cost of Rebuilding the Middle East

Countering the threats from the Middle East

The “Two Sessions” in China

Development of Russian–Chinese Trade, Economic, Financial and Cross-Border Relations

International conference “Russia and China:Taking on New Quality of Bilateral Relations”

Task Force on Cooperation in Greater Europe Position Paper

The context

Large swathes of the Middle East have collapsed into a state of violence, chaos and division, causing unimaginable amounts of human suffering. We now face a highly dynamic and very dangerous situation in the Middle East, with the prospect of further instability, but also some hope for improvement following a pause in the Syrian civil war.

During our recent meetings in Moscow, London and Ankara, members of this Task Force engaged in substantive, detailed and often intense discussions on the situation in the region. [1] In many cases, we have expressed and continue to hold diverging views regarding the assessment of the developments on the ground and of the policies of regional and external actors. The differences between our countries and the incompatibility of some of the objectives pursued by them in the region should not be dismissed.

Some major points of ongoing discussions include:

· – The responsibility of President Assad, opposition, and external actors for outbreak and continuation of the Syrian conflict;

· – Preferred characteristics of a post-conflict Syrian political leadership;

· – Broader issues of what should be the lasting foundations of regional order in the Middle East.

Agenda for cooperation

We consider the situation as too serious to focus only on the divisive factors. We would like therefore to suggest a constructive agenda of cooperation, based on some common points of our understanding of the situation.

Perhaps most importantly, we share the view that the turmoil in the Middle East and the risks emanating from the region represent a grave threat to all our states and societies. The spill-over of regional instability to Eurasia and beyond is already a fact. We are affected by the consequences of the civil wars in the region, the collapse of some states and overall weakening of the regional state-based system. We face massive migratory movements, an increase of radicalism and sectarian tensions, and the growing threat of terrorism, largely from the operations of ISIS [2] and its affiliates, but also from other organizations, such as the PKK.

We are also in agreement regarding the urgency of re-investing in multilateral diplomacy to tackle the Middle Eastern crisis. The resolution of the Iran nuclear crisis can be a good example of such approach in action. The policies towards the region pursued so far by all outside actors have not been based on broad cooperation between the most important stakeholders and consequently brought limited, if any, positive results.

In the course of our work, we have been able to identify three specific areas where – despite our differences – we believe that the countries of the Greater Europe area including Turkey and Russia should cooperate on the basis of their common interests. These three issues and our recommendations for working together are presented in more detail below.

I. Avoid an inter-state conflict over Syria

According to the latest report of the UN-mandated Independent International Commission of Inquiry on Syria, the conflict has evolved into a “multisided proxy war steered from abroad by an intricate network of alliances”. [3] In recent months, however, the danger of this proxy war turning into a direct interstate conflict has increased. Several external actors have stepped up their involvement in and around Syria in response to what they perceive as threats to their core national interests. The shoot-down of the Russian Su-24 aircraft by Turkey in November 2015 showed vividly that a direct confrontation is no longer inconceivable, even if the costs can potentially be catastrophic.

We note that the danger of the unintentional conflict diminished following ceasefire regime, promoted jointly by the US and Russia and also following the Russian President’s 14 March announcement on the reduction of Russian military presence in Syria, yet there are still significant dangers inherent in this situation.

A number of states seem to make the assumption that they have space for assertive unilateral actions in Syria, as ‘the other side’ will refrain from an actual confrontation. This assumption may be proven incorrect. Also, in the realities of the Syrian civil war, the states which are involved there exercise limited control over the activities of their allies, partners and proxies: some of these actors may have an interest in pushing their sponsors towards interstate confrontation. Finally, there is a danger that an accident, military incident or an unauthorised action could spark a conflict, especially in the absence of effective communication channels.

We call on all states involved to proceed with the utmost caution and avoid any aggressive actions or actions which may be misinterpreted as a direct attack on other states or their personnel.

In case of any incidents, we urge direct contacts between the leaders, bureaucracies and the militaries to avoid further escalation, as well as an early involvement of the UN Security Council as the main body responsible for maintaining international peace and security.

We also note that the developments around Syria confirm and reinforce the case made in our previous Position Paper regarding the need to work on a Memorandum of Understanding between NATO and the Russian Federation on the Rules of Behaviour for the Safety of Air and Maritime Encounters. [4]

Finally, we believe that lessening of tensions between Turkey and Russia, paving a way for the resumption of bilateral cooperation, would have a positive impact on the situation. We urge the political leadership in both countries to work towards reconciliation.

II. Re-focus on fighting ISIS and preventing its re-emergence

We deplore the savagery of ISIS in Syria, Iraq and in other parts of the Middle East, and also note that our own citizens have been the target of ISIS-linked terrorist attacks, including the ones in Ankara, Paris, Istanbul, Brussels, Dagestan, and against a Russian airliner in Egypt. [5] All states in the Greater European area remain exposed to the flow of radicalism, terrorists and terrorist recruiters. Prevailing over ISIS therefore represents our common cause.

Yet, we observe with concern that the shared interest of our states engaged in the Middle East, which is to defeat ISIS and its ideology, is being overshadowed by other issues and priorities. It would be a grave mistake to lessen the pressure on ISIS now. It may be currently losing territory it controls in Syria and Iraq, while its military capabilities and its sources of income are being diminished by our actions, but this organization can adapt, re-group, or change the patterns of its operations. Its fighters can launch operations in new areas, and it is still capable of conducting deadly terrorist attacks.

In order to defeat ISIS, we need to implement a realistic and effective strategy addressing all dimensions of its activity:

· We need to collectively support regional allies in rolling back ISIS territorial gains in Syria and Iraq, as well as suppress attempts to form ISIS “provinces” elsewhere (Libya, Yemen, Caucasus, Sinai).

Our countries should provide assistance and capacity-building support to strengthen the resilience of Iraq and other states in the region and to create inclusive domestic coalitions fighting ISIS, interested in maintaining the unity of their countries.

· We need to defeat the ISIS terrorist network which reach beyond the region, as confirmed by the range of attacks conducted during past months.

The particular danger of ISIS seems to be its potential of using radicalised citizens and residents of our countries with combat experience gained in the region. ISIS propaganda and guidance can also act as inspiration for ‘lone wolf’ attacks.

Our countries should move from necessary de-confliction of their antiterrorist air operations over Syria towards some form of coordination of military activities in the region; they should also step up information exchange between security and intelligence agencies on counter-terrorism; conduct joint operations to target the financial networks and sources of income of the organization, and work at the UN level and in other international organizations to strengthen the anti-terrorism legal framework.

· We need to counter the ideology of ISIS as a cult-like movement working towards establishing an Islamic caliphate and purging the infidels from Muslim lands.

This message, promoted through multiple channels including cyberspace, resonates with very small groups of individuals in our own countries. The real grievances of the Sunnis in Iraq and in Syria are also fueling recruitment into the ranks of ISIS.

Jointly, we could do more in terms of confronting the extremist ideology and ISIS propaganda. Cooperation here may include exchange of experiences on engaging the Muslim communities and Muslim scholars, countering radicalization, identifying best practices on rehabilitation and re-integration of violent extremist offenders, and also working on a joint action to counter ISIS propaganda in cyberspace.

· We cannot allow the void created by the weakening of ISIS and its ultimate demise to be filled by other terrorist organizations, including Jabhat al-Nusra or other al-Qaida affiliates.

That requires linking our efforts to fight ISIS with support for the resolution of the Syrian conflict and post-conflict reconstruction effort in the region.

III. Bring the Syrian conflict to a close

After five years of a vicious civil war, Syrian government forces seemed to regain the initiative in a number of areas. Yet, even if Syrian troops and their ground allies are able to make significant progress, it is unclear how to ensure stability and good governance in the regained territories, who will provide the enormous financial assistance needed for their recovery, and whether the displaced Syrians will be willing to come back to their homes. In other words, even if a military solution can be imposed and moderate opposition defeated, it could be just the beginning of a new phase of the Syrian crisis.

We support the efforts to maintain a cessation of hostilities between the government and its supporting forces and parts of the armed opposition, especially if it makes possible the delivery of humanitarian assistance. A cessation of hostilities, spearheaded by the US and Russia, creates a space for continuation of the talks between the government and opposition under the auspices of the UN and the International Syria Support Group and constitutes the best chance in years for halting the conflict. Yet, we remain deeply concerned about the longer-term durability of such ceasefire arrangements. We are worried that they may be used by all sides for strengthening and re-grouping of forces before the next round of fighting.

We need to work towards a realistic solution which would end the suffering of the Syrian people, create conditions for national recovery, bring to justice the perpetrators of gross human rights abuses, and ensure the continuation of Syrian statehood on a unitary basis, in line with the guidelines set in UN Security Council Resolution 2254. While the process will be Syrian-led, it is clear to us that the most important outside actors must reach an agreement on all the main elements of the process and on the desired end-state. It needs to go beyond wishful thinking and set up the parameters for the preparation of a new constitutional settlement.

The transition plan for Syria will need to include the prolongation of the existence of important elements of the current government and state apparatus, as well as offer a viable power-sharing arrangement with the moderate opposition, respect for minority rights, and guarantees of security and non-persecution for the combatants (except those responsible for terrorism and war crimes). The status of Kurdish-dominated areas in Syria also needs to be decided in an inclusive way in the process of the preparation of the new constitution, with respect for the territorial unity of Syria.

For a number of European states, the removal of President Assad has moved down the list of priorities, but the prospect of Assad staying in power beyond the end of the transition process remains a red line for them. Instead of avoiding this issue, they could suggest that Assad may pledge his resignation from office and ‘voluntary’ withdrawal from political life at a specific point of the transition. This decision should be linked with new presidential elections, giving Syrians the ultimate power to decide the leadership of their country.

The necessity of creating a new security system for the Middle East

While we consider the three areas we have raised above as the most urgent, we believe that the long-term stability of the region would be best served by creating an inclusive regional security system for the Middle East. We reject the view that the region and its borders need to be fundamentally re-developed, for example along the ethnic or sectarian, Shia-Sunni lines.

We are aware that many previous attempts to create such a system have failed, and it cannot be imposed on the region by outside powers. We suggest nevertheless that experience from the Helsinki process in Europe and the modalities of work of the OSCE could be useful for regional actors who want to pursue this objective, and we stand ready to support this process.

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05-10-16 The Cost of Rebuilding the Middle East.docx