THE UNBIASED OBSERVERS, Issue 5


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Wednesday, 13 July 2011

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The purpose of the newsletter is to provide the latest news in the Balkans region in an objective, balanced and multiple-perspective way. All sources are quoted for the sake of convenience of the readers. By reading the newsletter you’ll learn in less than half an hour all regional top-headlines in politics and economy.

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Coverage: Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Greece, Kosovo, Macedonia, Montenegro, Romania, Serbia, Turkey

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Today’s Topics:

Politics and others:

  • 15 suspected Al-Qaeda members arrested in Turkey
  • 16th anniversary of Srebrenica massacre marked in Bosnia
  • Rallies of protest hit Cyprus amid a serious energy crisis and failed tourist season
  • The U.S. anti-ballistic missile systems will cover the entire Bulgarian territory
  • EC commits to invest EUR 5.5 B for reforms in Western Balkans and Turkey
  • Media freedom faces challenges in Macedonia

Economy:

  • Free trade zone option between the Customs Union and the EU
  • Results from EU banks’ stress tests to be reported 15 July
  • Bulgaria Greenlights Burgas – Alexandroupolis Pipeline
  • Bulgaria prepares for the EU Financing 2014-20 round
  • Athens adamantly against any default options

BALKANS – POLITICS

Ankara (Turkey).

15 suspected Al-Qaeda members arrested in Turkey

Turkish police have thwarted an imminent attack and arrested 15 suspected Al-Qaeda members in the past two days, the interior ministry said 12 July, AFP reported. One man was arrested on 11 July in a suburb of the capital Ankara “as he was about to carry out an operation,” a statement said without elaborating. “Several weapons and ammunition, as well as documents belonging to the organisation were seized,” it added.

The interior ministry said 14 other suspects were subsequently detained in and around Ankara as well as in the northwestern towns of Bursa and Yalova. A Turkish Al-Qaeda cell was blamed by the authorities for 2003 attacks in Istanbul on two synagogues, the British consulate and the HSBC bank that left 63 dead, including the consul. Last year, the man who took over from Osama bin Laden as the head of the terror network, Egypt’s Ayman al-Zawahiri, issued clear threats against Turkey as it prepared to assume command of the NATO force in Kabul.

Belgrade (Serbia)

16th anniversary of Srebrenica massacre marked in Bosnia

An estimated 40,000 people on 11 July marked the 16th anniversary of the fall of the Bosnian safe haven of Srebrenica, with the internment of an additional 613 bodies of victims in the Memorial Center in nearby Potocari, reported the Radio Television Serbia (RTS).The event was attended by Croatian President Ivo Josipovic, the European Union High Representative in Bosnia and Herzegovina (BiH) Valentin Inzko, Deputy Turkish Prime Minister Bulent Arinc, and the U.S. Ambassador in BiH, Patrick Moon.In 1995, Srebrenica was seized by the Bosnian Serb forces. In the aftermath, an estimated 7,000 to 8,000 men and boys were killed.

“There are those who insist that killers are not killers, that victims are not victims and that the dead are not dead. But this will disappear, the truth will prevail, even among those who stubbornly hide from it,” said European Union High Representative Inzko.

Nicosia (Cyprus).

Rallies of protest hit Cyprus amid a serious energy crisis and failed tourist season

Thousands of protesters marched on the Greek Cypriot presidential palace in anger on 12 July, demanding heads roll a day after a deadly munitions blast killed 12 people, AFP reported. “We want (President Demetris) Christofias out, because he’s responsible for all this and we are very angry,” one of the demonstrators, Petros Pavlopoulos, told AFP. The protesters, including men and women of all ages, broke through an outer gate of the presidential palace in Nicosia despite the presence of riot police after marching from Eleftheria Square. They gathered following calls on networking sites and mobile texts to organise demonstrations against what they perceived as government negligence in not preventing the Mediterranean island’s worst peacetime military accident.
A police officer put the number of protesters at 2,000 to 3,000 but told AFP that the demonstration was growing.

A huge blast on 11 July in a seized Iranian arms cache at a Greek Cypriot naval base on the south coast killed 12 people and injured 62, two of whom remained in critical condition on. The commander of Cyprus’s navy, Andreas Ioannides, was among the dead, as was the commander of the Evangelos Florakis naval base, Lambros Lambrou.
Four other members of the armed services, including 20-year-old twin brothers, and six firefighters also died. The explosion sparked severe power outages that come at the height of a scorching summer, with afternoon temperatures in Nicosia approaching 40 degrees Celsius (104 Fahrenheit).

Sofia (Bulgaria).

The U.S. anti-ballistic missile systems will cover the entire Bulgarian territory

The U.S. anti-ballistic missile systems will cover all of Europe, including the entire Bulgarian territory, Ellen Tauscher, U.S. Under Secretary of State for Arms Control and International Security Affairs assured at a meeting with MEPs in Washington DC, attended by Buglarian MEP Ivaylo Kalfin. Ms. Tauscher noted some Bulgarian territories were not placed under protection before the revision of the plan.

The possible deployment of a NATO missile defense shield in Europe is the only disputable point between Russia and NATO, Russian Foreign Minister Sergei Lavrov said cited by Russia’s RIA Novosti. During the NATO-Russia Council in Sochi on July 4, the military bloc refused to provide legally binding guarantees that its missiles would not be directed against Russia, which Moscow says is the only way to prevent a new arms race.

Western Balkans.

EC commits to invest EUR 5.5 B for reforms in Western Balkans and Turkey

The European Commission announced on 12 July the finalization of its plans for financial support for ongoing reforms in in the Western Balkans. The countries included are: Albania, Bosnia and Herzegovina, Croatia, Iceland, the former Yugoslav Republic of Macedonia, Serbia, Turkey, as well as Kosovo for 2011–2013. Bulgaria’s Novinite. Com reports that EC will inject EUR 5.5 B for reforms in Western Balkans and Turkey.  The plans, called Multi-Annual Indicative Planning Documents (MIPDs), outline a revised strategy for funding under the EU’s Instrument for Pre-Accession assistance (IPA).

“The funds should act as a catalyst to drive forward reform in the enlargement countries and support the countries along their path of European integration.”, said European Commissioner for Enlargement and Neighborhood Policy Stefan Fule. EC points out the funding will focus on areas such as reform of the judiciary and public administration, enhancing regional cooperation in the fight against organised crime and corruption, building up a vibrant civil society, fostering reforms and regional cooperation in education, as well as underpinning sustainable recovery from the economic crisis through investment in strategic infrastructure projects.

Skopje (Macedonia)

Media freedom faces challenges in Macedonia

The Vienna-based South East Europe Media Organization (SEEMO), an affiliate of the International Press Institute (IPI), has expressed concern over the latest media developments in Macedonia. SEEMO is worried in particular by the closure of critically-oriented media outlets; it points out that currently Prime Minister Nikola Gruevski can count on friendly coverage by the majority of the Macedonia’s national print and broadcast media.

At the same time, the journalists face increasing pressure from politicians and media owners, and independence and pluralism are seriously endangered, the organization points out. SEEMO believes that a healthy democracy can only function properly if there are critical media and public broadcasters that serve the public interest. Since the beginning of 2011, critical voices in the Republic of Macedonia have been silenced through media closures, selective tax-related investigations against media owners, the selective allocation of government-sponsored advertising, pressure by companies, labor disputes, self-censorship, fear of job loss and other forms of pressure, according to SEEMO.

On 3 July 2011, three dailies – Shpic, Vreme and Koha e Re – closed down. The newspapers allegedly owe the state EUR 1 M in unpaid taxes. The revenue office closed their accounts, which left them with no means to pay wages and basic printing costs. In addition, A1 TV, the popular critically-oriented private television station, has already reduced its programming as a first step towards rationalizing operations and possible closure. A1 TV allegedly owes nine million Euros in unpaid taxes. The owner of A1 TV, Velija Ramkovski, was detained in December 2010 and accused of tax evasion and financial irregularities.

As a result of international pressure on the authorities in Skopje, several media outlets supportive of government policies jointly signed an open letter calling on the authorities not to bow to pressure exerted by the European Commission, OSCE and Amnesty International, among others. These institutions had urged the government to allow the indebted media companies to pay their bills in installments, so they could continue to work. The Gruevski government earlier ruled out letting them pay their debts in installments.

Skopje (Macedonia)

Macedonian government’s line-up and program to be known by 15 July

Talks between the VMRO-DPMNE and the Union for Democratic Integration (DUI) ended up successfully, writes Macedonian Vecer newspaper. It is expected by the end of the week for mandate-holder Nikola Gruevski to announce the line-up and the programme of the new government.  Vecer remarks that despite the speculations the positions in the security and customs services will be given to the VMRO-DPMNE.  Former members of the National Liberation Army will not get a pension, while at the recommendation of the International Criminal Tribunal for the former Yugoslavia, the parliament should give authentic interpretation of four cases of war crimes, which are heard at the Macedonian courts.
DUI has undertaken the engagement to secure compensations for the resettled people during the conflicts.

 

BALKANS ECONOMY

Economy

Eurozone

Free trade zone option between the Customs Union and the EU

Russia, Belarus and Kazakhstan, which comprise the Customs Union (CU), are ready to start negotiations with the European Union (EU) about formation of the free trade zone, Russian Prime Minister Vladimir Putin said on Tuesday in a speech to a CU forum, Xunhua Agency writes. Putin the three countries could offer “prospective topics” for dialogue with the EU and other regional unions like European Free Trade Association.Putin admitted that the free trade zone between the EU and CU is a complicated objective. He added that the CU countries would promote their common interests in the Asia-Pacific region, too.

Results from EU banks’ stress tests to be reported 15 July

European Union (EU) governments will uphold banks that fail the banking stress test after the results are disclosed on 15 July this week, EU finance ministers said. As per a report of Xinhua Agency, the private sector will be asked in the first place to bolster capital of the banks that fail the tests and if necessary the public sector will also step in. The EU wide stress test this year was carried out on 91 banks representing 65 percent of total assets of the banking sector, according to the European Banking Authority which coordinated the test.

The banks will be asked to maintain a Core Tier 1 capital ratio of 5 percent under adverse scenarios which include an economic contraction of 0.5 percent of the eurozone.

The EU conducted a similar stress test of major European banks last year, but the test was blamed as not rigorous enough after Ireland had to seek a bailout due to problems in its banking sector.

Athens (Greece)

Athens adamantly against any default options

Under a headline “Greece, EU dance around issue of default,” Ekathimerini newspaper informs that Athens rejects possibility as eurozone tries to find formula for private sector involvement in bailout

There was a difference of opinion at the European level on 12 July over whether members of the eurozone are prepared to allow Greece to default, a possibility that Athens still rejects, following talks between finance ministers. Greece’s Evangelos Venizelos said that it was not yet clear how the private sector would be involved in helping Greece overcome its debt problems.

“European Central Bank President Jean-Claude Trichet told me that there are 36 different scenarios being examined with regard to private sector involvement,” Venizelos told journalists in Athens. “Selective default is not a real event, it is an assessment. We must not convert a perception into reality, into a self-fulfilling prophecy.”

In the meantime, Athens will push for the EU and the International Monetary Fund to arrive at a decision about a second bailout. Government sources said Greece would need to receive its next loan installment by 14 September. Greece’s Prime Minister Papandreou will have the opportunity to press his EU counterparts at an emergency summit on 15 July.

Meanwhile, Eurozone is turning a crucial corner as Italy, and Spain, two big economies compared with debt-hit nations like Greece, Ireland and Portugal are nearing a fresh crisis. Italy is by far the country with the greatest sensitivity to rising debt servicing costs. Experts are saying that burden of a bailout for Spain or Italy would weigh much more than saving Greece out of crisis. Huryiet Daily comments that in a bid to keep Italy and Spain from the same fate as Greece, Portugal and Ireland, euro zone finance ministers promised on 11 July cheaper loans, longer maturities and a more flexible rescue

Sofia (Bulgaria)

Bulgaria Greenlights Finally Burgas – Alexandroupolis Pipeline

The Bulgarian government has approved a contribution to the Bulgarian state company for the construction of the vastly troubled Burgas-Alexandroupolis oil pipeline, which is at the bare minimum for keeping the project alive. With its decision, the Borisov Cabinet has agreed to increase the capital of the state-owned Project Company “Burgas-Alexandroupolis Oil Pipeline” BG EAD by issuing bonds worth EUR 75K (US$ 106K) that will be acquired by the Finance Ministry, Bulgaria’s Novinite.com reports.

The sum is the minimum amount of money required for maintaining the operation of the company, which holds on behalf of Bulgaria a share of 24.5% in the Trans-Balkan Pipeline company, a joint venture of Bulgaria, Greece, and Russia. The money will also be used to supporting the operation of Trans-Balkan Pipeline after Bulgaria has been repeatedly slammed by its partners Greece and Russia for failing to provide its contributions on time.

In June 2011, the Bulgarian government delayed further the controversial project for the Burgas-Alexandroupolis oil pipeline, returning its environmental assessment report for the second time to the Trans-Balkan Pipeline company, prompting Transneft President Nikolai Tokarev to describe the actions of the Bulgarian government as an insult.

The 280-km, planned to link the Black Sea port of Burgas to Alexandroupolis on the Aegean Sea, is designed to transport 35 million tons of oil a year, with a possible expansion to 50 million tons, to ease the tanker traffic burden in the Bosphorus and the Dardanelles straits.

Transneft does not rule out finding a route bypassing Bulgaria to deliver Russian oil through Greece to the Mediterranean, Tokarev said.

At present, Bulgaria has technically frozen the project for the Burgas-Alexandroupolis oil pipeline. On 17 February, 2011, a joint general meeting of the Shareholders and the Supervisory Board of Trans-Balkan Pipeline B.V. (ТВР), the Bulgarian-Greek-Russian company, held in Rome, Italy, gave the Bulgarian government March 20 as a deadline to settle all of its dues for the Burgas-Alexandroupolis oil pipeline. Trans-Balkan Pipeline B.V. was registered on 6 February, 2008, in Amsterdam (the Netherlands) in implementation of the tripartite agreement between the Governments of Russia, Bulgaria, and Greece on the construction and operation of the Burgas-Alexandroupolis oil pipeline, signed in Athens (Greece) on 15 March, 2007.

According to the Russian reports, Bulgaria owes EUR 7.3 M as a contribution to the budget of the joint project company; in December 2010, there were concerns by Russia that Bulgaria wants to kill the project by defaulting on its dues. A senior Greek government official commented at the time that Bulgaria was moving to shed the oil pipeline under pressure by American oil interests.

In November 2010, the Bulgarian Environment Ministry said the environmental impact assessment of the Burgas-Alexandroupolis oil pipeline is inadequate and needs to be reworked; the ultimate decision about whether Bulgarian will take part in the project has been put off for 2011. Bulgarian Prime Minister Borisov, however, has written off the project on a number of occasions, declaring that there is no way the ultimate environmental assessment would be positive.

Bulgaria, Greece and Russia agreed to build the pipeline between Burgas and Alexandroupolis, taking Caspian oil to the Mediterranean skirting the congested Bosphorus, in 2007 after more than a decade of intermittent talks.

The 280-km pipeline, with 166 km passing through Bulgaria, would have an initial annual capacity of 35 million tons of crude oil, which could be later expanded to 50 million tons. Its costs are estimated at up to EUR 1.05B (US$ 1.5B), up from initial estimates at EUR 634M (US$ 900 M).

The Russian participant in the project, Pipeline Consortium Burgas-Alexandroupolis Ltd, has a share of 51%. It was founded jointly by three companies: AK Transneft (33.34%), NK Rosneft (33.33%), and Gazrpom Neft (33.33%).

The Bulgarian Joint stock company “Project Company Oil Pipeline Burgas-Alexandroupolis – BG” AD has a share of 24.5%. It was initially founded as jointly by two state companies, Bulgargaz (50%) and Technoexportstroy (50%) but was transferred in full to the Finance Ministry in February 2010. The Greek participants are Helpe Thraki AE with 23.5% and the Greek government with 1%. The Helpe-Thraki AE was founded jointly by “Hellenic Petroleum” (25%) and “Thraki” (75%).

Sofia (Bulgaria)

Bulgaria prepares for the EU Financing 2014-20 round

Bulgaria will need at least EUR 11B (US$15.6) in the next programming period for EU financing – 2014 – 2020, according to the Minister of Regional Development and Public Works, Rosen Plevneliev says as quoted by Bulgaria’s Novinite.com. Currently Bulgaria disposes of a total of EUR 8 B, including State co-financing.

Minister for the Management of EU Funds, Tomislav Donchev, pointed out the possibility the EU will reduce the number of its operational programs from 6 to 5, starting in 2014 by merging the Technical Assistance and Administrative Capacity ones.

(Mariela Zamfirova, 13 July 2011)

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About Johann Brandstätter

Photojournalist and documentary photographer based in Bulgaria, working mainly in the Balkans and the Middle East. Conflicts & crises, social and environmental issues, defense & military, travel, transportation.
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