The Gazprom executive board heard on December 6 that the natural gas monopoly’s subsidiaries in 2002 would produce 521.7 billion cubic metres of natural gas, which is 9.7 billion cubic metres more than last year. The company said in a press release that gas supplies to Russian consumers in 2002 would amount to about 320 billion cubic metres. Gas exports to Western and Eastern Europe have increased to 128.6 billion cubic metres. Supplies to the Commonwealth of Independent States and Baltic states will amount to 90.4 billion cubic metres of gas, including 52.9 billion cubic metres of Russian gas. Gazprom’s share in these supplies will amount to 43.1 billion cubic metres. It is planned that in 2003 gas production will be increased to 531.9 billion cubic metres, with gas exports to outside the CIS up to 134 billion cubic metres. Production of gas condensate and oil in 2002 is expected to amount to 10.5 million tonnes, which is 345,300 tonnes more than last year.
The Gazprom executive board has approved the main indicators of a plan for socioeconomic development and the company’s budget for 2003, and also forecasts until 2005, the company said in a press release. The board confirmed a preliminary limit for financing capital investment in 2003 of 188.1 billion rubles, and a programme to reduce spending amounting to 42.9 billion rubles. In the first nine months of 2002 Gazprom invested 98.5 billion rubles, including 31.5 billion rubles in gas production, 44.8 billion rubles in transportation, 1.4 billion rubles in refining and 2.1 billion rubles in underground storage.
Gazprom said it lifted all restrictions on the supply of Central Asian gas to Commonwealth of Independent States member-nations on December 5. This decision was made possible by Itera paying its October debt to Gazprom for gas delivery services, it said. On November 25, Gazprom reduced the supply of Itera’s gas to Ukraine by 50 percent, and on November 29, by 65 percent.
The government-owned stake in Slavneft, a Russian oil company, could sell for over USD three billion, TV programme Vesti Nedyeli quoted Chairman of Russia’s Audit Chamber Sergei Stepashin in an interview on December 8. He said that Audit Chamber experts and analysts carried out control checks on the company before making any conclusions about its value.
At the same time, Stepashin did not question the USD 1.7 billion starting price of the stake that is being put up for auction. Stepashin said that the Property Ministry will estimate the costs. Stepashin said the sale of the government’s interest in Slavneft would become the biggest privatisation deal in Russian history.
Russian oil major YUKOS is expecting to become the principal owner of the Russian part of an oil pipeline to be constructed from Angarsk in the Irkutsk region to China’s Daqing, YUKOS CEO Mikhail Khodorkovsky told a press conference in Angarsk last Monday.
Several months ago, YUKOS sent a proposal to the government on consolidating ownership rights in the pipeline. Members of a consortium of oil companies should launch a company, in which YUKOS is expecting to acquire about 50 percent of the shares, Khodorkovsky said. After this initiative is enacted, YUKOS will step up its efforts in promoting the project, he said. The bill on ownership rights should be enacted no later than the first quarter of 2003, so as not to break the project implementation schedule, Khodorkovsky said.
YUKOS is so far not responsible for the pipeline’s construction, and investments in this project have so far been purely “charitable,” Khodorkovsky noted. He added that if the state does not support the YUKOS initiative and the pipeline remains the property of pipeline company Transneft, implementation of the project could be dragged out. According to Russian law, an oil pipeline is accessible proportional to the volume of oil extracted. Taking into account the volumes of oil extracted by YUKOS, it can currently count on only 18 percent of the pipeline’s throughput capacity.
Interfax quoted Khodorkovsky as saying he has fulfilled his job as a person authorised by the Russian oil consortium to hold negotiations with the Chinese side. A protocol on the price and schedule of Russian oil supplies has been signed, and the parties are currently considering signing a contract on oil supplies with conditions.
The Russian Energy Ministry, YUKOS, Transneft, the Chinese State Planning Committee, and the Chinese National Oil and Gas Corporation signed a general agreement on carrying out a feasibility study for the pipeline’s construction. It is expected that YUKOS will provide at least 50 percent of oil shipments through the pipeline.
Under the agreement, the signatories should coordinate working drawings and surveys by July 2003.
The 2,400-kilometre long pipeline should be completed by 2005. The agreement, which will be in force for 25 years, also stipulates the volume of Russian oil supplies, which should be 20 million tonnes annually from 2005 to 2010, and 30 million tonnes annually from 2010 to 2030.
While Russia rapidly expands its oil exports, the condition of the tankers it uses increasingly endangers the world’s seas, as the recent wreck off the Spanish coast demonstrated.
Over the past three years oil shipments by the world’s second largest exporter after Saudia Arabia rose by a third to almost four million barrels a day. Because of limitations in overland transportation by pipelines Russian companies are increasing exports by sea, chartering tankers that analysts say are often worn out and accident-prone.
Like the doomed tanker Prestige, every second vessel that hauled Russian oil to the West this year via the Baltic Sea and Black Sea was single-hulled, with no “second skin” to prevent leaks in the event of a hull breach, dpa reported, citing Lloyd’s Marine Intelligence Unit. Of these, 65 percent were more than 20 years old. “These are the really dangerous ones,” The Moscow Times quoted James Ryder, oil trade analyst at Lloyd’s, as saying on December 2. So far only half of the world’s tankers have been replaced by new double-hulled vessels. Western oil companies also continue to use the dinosaurs of their own tanker fleets along the African coast.
Loaded with 77,000 tonnes of fuel oil when it sank, the 26-year-old Prestige belonged to the Swiss-registered Crown Resources, a subsidiary of the Alfa Group of Russian entrepreneur Mikhail Fridman, named in 2001 as “Businessman of the Year” by the leading business newspaper Vedomosti. Despite an outcry from ecological groups, Crown Resources three weeks ago ordered another 26-year-old, single-hulled tanker, the Byzantio, to leave the Baltic republic of Estonia for Rotterdam with 53,000 tonnes of oil. The tanker was allowed to weigh anchor after checks by the Estonian authorities.
The environmentalists protested in vain. Alfa Group is not alone in chartering ageing tankers. Russia’s largest oil company, LUKoil, this year sent half of its sea exports on old single-hulled vessels.
Meanwhile, the company intends to sell its fleet of 10 modern tankers. A new oil terminal began operating one year ago in Primorsk by the northern port of St Petersburg in a further expansion of exports via the Baltic Sea.
To accelerate shipments to the United States, the Russian oil companies LUKoil, YUKOS, Sibneft and Tyumen Oil Company (TNK) also plan to build a pipeline from Western Siberia to the Arctic port of Murmansk. The shortest route will be through the vulnerable White Sea, where the cold water may not be as capable of cleansing itself after spillage.
ExxonMobil has paid USD 17 million to international traders that organised the first consignment to the US of YUKOS oil, Interfax quoted YUKOS as saying in a press release. This became possible after the Judge John Reiney in the Southern District Court in Texas overturned a suit filed by the company Dardana Ltd. (Cayman Islands) to seize this money. The judge said that even if a ruling from the Stockholm Arbitration Court can be used against YUKOS, Dardana may not seek to apply it by claiming a debt USD 17 million owed by a US company to international traders that organised the supply of Russian oil to the US. In 1995 the oil production company Yuganskneftegaz signed a contract for service work with the company Petroalliance. According to Petroalliance, Yuganskneftegaz did not pay in full for this work and the company filed a suit with the Stockholm Arbitration Court, which ruled that the company should be paid USD six million. Since then the total debt has reached USD 17 million. Dardana later acquired the right to demand the debt, from Petroalliance. The Stockholm Arbitration Court in 1999 declared YUKOS (Yuganskneftegaz is the main YUKOS production company) to also be a respondent in this case. In mid-July Dardana applied to the US federal court to freeze the payment owed to YUKOS for supplies of oil to the US In August the federal court transferred this case to the Texas court. The USD 17 million that ExxonMobil should have paid to the YUKOS trader was seized. This arrest has now been lifted. The first tanker with Russian oil arrived in the US at the start of July with 200,000 tonnes of YUKOS oil.
Representatives of the consortium building the Baku-Tbilisi-Ceyhan export pipeline, Azeri state oil company SOCAR and the KazMunaiGaz national company of Kazakhstan have reaffirmed their interest in Kazakhstan’s involvement in the project. This statement was disclosed by the Azeri embassy press service in Great Britain. The sides held negotiations in London and agreed to have their next meeting in the first quarter of 2003. The involvement of Kazakhstan will require the drafting of several documents, among them an intergovernmental agreement between Azerbaijan and Kazakhstan, agreements with the governments of the transit countries and other technical and commercial accords to define the rights and commitments of the sides. Representatives of Azerbaijan and Kazakhstan agreed to suggest to their governments the creation of working groups that would be authorised to hold negotiations and draft the agreements within a short period.
Tbilisi will take steps in response to the al Qaeda terrorist network’s recent statements threatening all US strategic facilities around the world. The country plans to heighten security measures at the Baku-Tbilisi-Ceyhan oil pipeline, which is currently under construction, Interfax quoted State Security Ministry spokesman Nika Laliashvili as saying last Monday. Laliashvili said that although there is no information that the pipeline is under immediate threat from al Qaeda, “everything possible will be done to ensure its complete security.” He said that US-trained Georgian military units “will play an active role in providing for the oil pipeline’s security and ensuring a secure environment for its further operations.”
The Organisation of Petroleum Exporting Counties (OPEC) is unlikely to discuss the possibility of changing its oil output quotas, as prices have stabilised, OPEC press official Abrurrahman al-Kharaigi said. Al-Kharaigi said the OPEC ministers would likely consider changing quotas at the next conference scheduled for March, adding that the cartel’s oil price is now within the range of USD 22-USD 28 per barrel.
Kazakhstan expects to produce about 47 million tonnes of oil in 2002, a five percent year-to-year rise, Minister of Energy and Mineral Resources Vladimir Shkolnik told parliament last Monday. The country’s fuel and energy balance drafted by his ministry will be presented to the government in late December, Shkolnik said. The document includes programmes for the development of Kazakhstan’s mineral resources until 2030 and the gas industry programme until 2015.
An oil industry development programme, which is also a component of this document, is almost ready. It will be adopted after the government approves a programme for the development of the Kazakh shelf of the North Caspian region, the minister said. That programme has been submitted to the government, and the chief of state is expected to sign it before the end of this year.
According to ministry programmes, Kazakhstan will produce slightly more than 50 million tonnes of oil in 2003. The amount for 2001 was nearly 40 million tonnes. About 43 million tonnes of oil were produced in Kazakhstan in January-November 2002.
Early figures showed that gas production in Kazakhstan in January-November this year amounted to 10.226 billion cubic metres, up 24.3 percent year-on-year, including natural gas production of 5.38 billion cubic metres (up 20.9 percent), Interfax quoted a source in the Kazakh government as saying.
KazMunaiGaz subsidiaries produced 1.21 billion cubic metres of gas in January- November (down 5.4 percent), including Ozenmunaigaz – 1.112 billion cubic metres (down 5.1 percent), and Embamunaigaz – 94.34 million cubic metres (up 3.2 percent). Companies with KazMunaiGaz participation produced 8.21 billion cubic metres of gas in the reporting period (up 30.4 percent year-on-year), including Tengizchevroil – 3.73 billion cubic metres (up 29.9 percent year-on-year), Karachaganak Petroleum Operating Co. (KPO) – 4.36 billion cubic metres (up 29.7 percent), Tenge – 84.396 million cubic metres (up 54.3 percent) and Arman – 27.24 million cubic metres (no change).
Other Kazakh companies produced 811.33 million cubic metres in the January-November (up 23.5 percent year-on-year), including Mangistaumunaigaz – 157.79 million cubic metres (10.2 percent), Aktobemunaigaz – 539.404 million cubic metres (19.6 percent), and Hurricane Kumkol Limited – 56.924 million cubic metres (27.8 percent).
Gas production in Kazakhstan in November this year amounted to 1.019 billion cubic metres (0.2 percent over target), including 534.19 million cubic metres of natural gas. KazMunaiGaz subsidiaries produced 108.1448 million cubic metres of gas last month, including Ozenmunaigaz – 99.41 million cubic metres, and Embamunaigaz – 8.734 million cubic metres.
Iraqi Ambassador to Moscow Abbas Khalaf has reaffirmed Baghdad’s intention to continue cooperation with Russian oil companies. “In light of strategic interests, we have always focused on Russian oil companies and will continue doing so. They have very good prospects for working in our country,” Khalaf pointed out.
By proposing to curtail the UN humanitarian Oil for Food programme, the US administration is trying to hamper the operations of Russian oil companies in Iraq. The aim of these attempts is to undermine Russia financially, Interfax quoted him as saying. Russian oil companies buy 40 percent of the Iraqi crude under the Oil for Food Programme, Interfax quoted him as saying. “The US administration, for which nothing is sacred except for its dollar, wants to inflict economic damage on Russia, our chief partner,” he said.
Washington had to agree to prolong the programme, he said. Washington is “well aware that Americans will soon need allies in the UN Security Council to have a resolution (on Iraq) adopted,” and therefore, it agreed for the extension, he added.
Russia has opposed a US military attack against Iraq. Moscow’s position is influenced by traditional ties with Baghdad and bilateral plans for economic cooperation worth USD 40 billion over the next decade, including oil exploration projects.
Moscow said recently that by meeting the deadline to declare any potential weapons of mass destruction programmes, Iraq has confirmed its commitment to abide by the UN Security Council’s resolution.
Meanwhile, Baghdad has no intention of allowing US and British oil companies to pump crude even after UN sanctions are lifted, Khalaf said. “We are pursuing a course of independence, including in the oil sector. We do not want to open access to our oil riches to the Americans. Their appetite is boundless,” Khalaf said.
Before the 1990 war in the Persian Gulf, Iraq and the United States maintained “normal relations,” he said. However, US oil companies were not allowed to implement projects in Iraq even then, he said. “How can we open access to them now that they have become our enemy?” he added.
Although Iraq wants to maintain normal relations with all countries, including the United States, Russian oil companies will be given preferential treatment, he said. “We have always focused on Russian oil companies and will continue doing so due to the deep historic roots” of Russia-Iraq ties, he said.
Iraq is a major oil producer in the Organisation of Petroleum Exporting Countries (OPEC), but does not have a production quota. Its oil exports are restricted in keeping with UN sanctions imposed after the Gulf War. Iraq spends the proceeds on food and medicine as well as on reparation payments.
Analysts were quoted as saying that “an American protectorate” in Iraq would deal a strong blow to defiant OPEC and especially, Libya, Iran and Venezuela.
Moreover, it would allow US companies to develop the Iraqi oil fields and increase their independence from Saudi Arabia, which is increasingly seen as a nation harbouring Islamic militants.
There is a growing concern in Community circles for development of the charges having brought last February to Mr. Socrates Kokkalis, the Chairman and Chief Executive of Intracom group, the big business conglomerate which in the past decades has benefitted from many Community programmes, while it is active also in Community tenders, for five offences at felony degree. Mr. Socrates Kokkalis, has been accused by the Public Prosecutor, Mr. Demetris Papangelopoulos, of (a) Espionage based on the evaluation of official documents of Stazi, the then secret service of the People's Republic of Germany (DDR) at felony degree, (b) Fraud, (c) Misappropriation at felony degree, (d) Legitimisation of income from illegitimate acts, and, (e) Bribing by custom and by profession. The case is with the 9th Ordinary Investigator of Athens Mrs. Simitsis who is expected to invite the Intracom chief executive to testify. (726)
Anyone thinking Austria will get a new government before the Christmas-New Year break better think again. Politicians said what people could be sure of is that Chancellor Wolfgang Schuessel’s conservative People’s Party would be a senior partner in any coalition that is developed.
The People’s Party clinched the elections last month with 42.3 percent of the vote. Mr. Waltraud Klasnic, the governor of Styria Province, said talks on the formation of the coalition should not be hurried. “The government won’t be set up this year, but at the beginning of next,” Mr. Klasnic said on television. According to dpa reports, the People’s Party believed it had to focus on other things, primarily the Copenhagen summit on December 12-13. The other three parties in parliament, Social Democrats, Greens or Freedom Party, called on Schuessel’s party to choose in order to finalise the new government.
Klasnic said the People’s Party has held talks with all three parties, but nothing has been written in stone yet. Ms. Madeleine Petrovic, the deputy leader of the Greens, noted that she doesn’t believe a new government would be set up before 2003. The Greens underlined that if Mr. Schuessel chose to form a coalition with them, he should not consider working with the Freedom Party again. “Parallel negotiations were unthinkable,” Ms. Petrovic said. (727)
Kidnapping is a national pastime in Georgia. The former Soviet republic has been infiltrated from rebels operating in Abkhazia and Ossetia that often result to kidnapping for some extra cash. In the most recent development, the body of the father of LUKoil’s vice president was discovered, Georgian presidential press secretary Kakha Imnadze told journalists.
Georgian President Eduard Shevardnadze offered his deep condolences to the Sharifov family and expressed hopes that the murder would not aggravate relations between the Georgian and Azeri peoples.
Seventy-nine-year-old Sadi Sharifov was taken hostage in the village of Pantiani on December 1. Eight armed individuals in masks and camouflage burst into Sharifov’s home. The attackers took Sharifov hostage and escaped in his Niva. About 30 kilometres outside Tbilisi, they abandoned the car and fled. On December 5, Georgian media quoted a parliamentary source as saying that the abductors demanded USD 400,000 for the man’s release.
Meanwhile, the mother of Mrs. Dzhumber Tkebuchava, vice president of the oil company Slavneft, has been kidnapped in the Abkhaz town of Tkvarcheli, sources in Abkhaz law enforcement agencies were quoted as saying. According to the sources, several unidentified people entered the house of Tkebuchava’s mother, led her out, and drove her off to an unknown destination. Russian President Vladimir Putin has pushed Georgia to crack down on rebel forces. Some 60 rebels, including ethnic Arabs, may still be in the Pankisi Gorge, Georgian State Security Minister Valery Khaburdzania was quoted as saying. “The appropriate special services are working on cleansing the gorge of all armed people,” he said.
Georgian special services have been conducting an anti-criminal operation in the Pankisi Gorge since August. Before this operation, the Georgian authorities admitted the presence of up to 800 Chechen and Arab rebels in the gorge. (728)
Mrs. Cherie Blair’s dealings with Mr. Peter Foster, the boyfriend of her friend and adviser Ms. Carole Caplin, have created a political mess for UK Premier Tony Blair. Blair’s office initially denied, but later confirmed that Foster had helped Mrs. Blair buy two apartments in the western city of Bristol.
Tony Blair’s office denied last week new allegations about his wife’s dealings with an Australian conman as political opponents pressed for an inquiry into the case. The Scotsman newspaper, quoting unidentified legal sources, said Mrs. Blair had requested and read documents laying out both the government case for removing conman Foster from Britain and the defence prepared by his lawyers.
Whilst in Copenhagen for the EU summit, Mr. Blair dismissed the above and fiercely criticised the renewed questions about the issue. “I think everyone’s had their pound of flesh and now it’s time to move on,” he told reporters in Copenhagen. If anyone had any real evidence of anything criminal, illegal or improper, they should give it to the authorities, he added.
Meanwhile at Downing 10, Mr. Godric Smith, spokesman for the prime minister, said Mrs. Blair never saw the court documents. Mrs. Blair has said she didn’t know Foster’s criminal history before police told her a few weeks ago that a tabloid newspaper was trying to set her up in a meeting with him so it could publish a damaging story.
Mrs. Blair earlier acknowledged in an emotional, televised statement that she had made mistakes, yet denied any wrongdoing. She said she spoke to Foster’s lawyers to check on how they were handling his case because she wanted to reassure her friend Ms. Caplin that everything was being done properly.
Ms. Caplin told the press that legal papers relating to Mr. Foster’s deportation were faxed to her at the Blair home, but that the prime minister’s wife refused to read them, saying it was inappropriate. “Cherie told me it would not be right for her to read them as it was not her case, so I folded them up, put them in my bag and took them home, basically,” she said in her first public comments about the case. (729)
The “Prestige” catastrophe is unveiling the most complex situation of the European merchant marine industry. The issue is primarily an issue of responsibility, which while on the part of the European Commission is taken seriously, when it comes to the level of Member States, things take a different approach.
On the “Prestige” catastrophe, first thing to be said is the responsibility of the Spanish authorities, who refused to take the damaged ship in the nearby La Coruna harbour, and allowed it to leak and be taken by the waves for six days. At this point we should say that to bring “Prestige” into La Coruna would have been highly risky but leaving it outside guaranteed its sinking. If “Prestige” had been docked a possibility exists that there would have been no disaster, only minor problems. Of course, if something would have gone wrong while the ship was docked at La Coruna, the disaster would be local and major. Second issue concerns inspections carried by Member States. Indeed, so far the Commission does not have gendarme role in policing its decision. This is a responsibility of Member States that do have the responsibility of guarding and implementing decisions, Directives, Regulations and the Treaty.
Number one case is France, which instead of inspecting the minimum number of 25 percent of the ships, it is hardly inspecting something like 10 percent. Certainly, if France, instead of always talking and asking and demanding and going on with empty rhetoric, had implemented the 25 percent inspection rule, “Prestige” would probably also have been inspected.
After the French come the Italians. In the case of Italy the problem seems to be of a linguistic nature. Indeed, in English language, “inspection” of a ship means an in-depth control of all parts of the vessel, something that takes at least five hours of solid work. The word inspection, in Italian translates into “Ispezione.” The difference between Inspection and Ispezione is that the cases, “Ispezione” usually takes only five minutes. Taking into account that in Italy much more than 25 percent of crossing ships are “ispezionati,” one can easily draw conclusions.
After Italians comes the Greek paradox. Greece owns the biggest commercial fleet in the world but under various flags of convenience. The reason is that the Greek government is trying to ensure, through tough legislation, jobs not only to sailors but to all kinds of jobless, thereby forcing ships under the Greek flag to hire extra staff that they do not really need (i.e. waiters etc.). Adding on top high taxation on tonnage, the Greek flag becomes very “inconvenient” and Greeks register under Liberia or Panama. I will not be surprised if some guys in Piraeus start registering on the …moon after a while. In this way not only can real safety rules not be seriously applied in many cases but the real owners also cannot be identified. This led to the absurd situation that no person can be found legally responsible for “Prestige” (it seems that it belongs to a company of convenience owned by a Greek who passed away sometime ago and now nobody knows who the owners are). Nevertheless, since publicity of the disaster was great and Spain had to get somebody to be responsible, the captain of “Prestige” has been arrested, although he had no responsibility at all. (730)
Voucher-fuelled enrichment let a handful of shrewd players
to amass real wealth
It was ten years ago that most Russians learned their first word of business English: voucher. The distribution of the brightly coloured pieces of paper on October 1, 1992, marked the start of Russia’s controversial privatisation drive after the Soviet collapse the previous year. At the instruction of President Boris Yeltsin, more than a third of the state’s assets was to be distributed among the population.
Having a nominal value of 10,000 rubles, each voucher was worth the equivalent of USD 32, a handsome sum at the time and a stake that people were assured would bear great dividends. But few Russians suspected their dream of voucher-fuelled enrichment would turn to dust within two years, leaving just a handful of shrewd players to amass real wealth.
Nowadays, many tend to grimace or curse upon hearing the name Anatoly Chubais, the architect of the “people’s privatisation”, who at the time was deputy prime minister in the cabinet of premier Yegor Gaidar. Gaidar’s government estimated the value of Russia’s industry and enterprises at four trillion old Soviet rubles (about USD six billion). Of this, a 37 percent share, or 1.5 trillion rubles, was to be divided between 150 million citizens who could place their voucher in an investment fund or swap it at a privatisation auction for shares in a particular enterprise. At first people were excited about the process and the sense of empowerment and ownership it gave them.
The “soft drug, of making vouchers available”, says the Moscow magazine Delo, numbed most of the population against the failed 1993 uprising against Yeltsin by the Communist-led parliament. Depriving the revolt of grass-roots support, the gentle doping of these same vouchers spared Russia from a bloodbath, the magazine argued.
Even Chubais admits a decade later that the voucher was intended to play a political rather than economic role, and bring the weakened Communist Party still further to its knees. In economic terms, most Russian analysts give a harsh appraisal to the privatisation process. The government went wrong by regarding distribution of assets as more important than establishing a free market for land, says Leonid Veryovkin of the Russian Academy of Science.
Resisting the process, enterprises would also delay holding mandatory privatisation auctions in order to reduce numbers of potential buyers of their shares. As a result, the validity of the vouchers had to be extended from December 31, 1993, by six months.
The value of the vouchers also went on a roller coaster, initially fetching USD 40 on the black market, then plummeting to five before settling at USD 20 in mid-1994. By then, privatisation funds had drawn 25 million vouchers which then proceeded to vanish, presumably into private hands. Another 40 million were invested by individuals, a few of whom were later to have little luck as shareholders, while 61 million vouchers were sold on the black market.
The net result: at a per-voucher price of USD 20, 37 percent of the country’s assets were squandered for a mere USD 1.2 billion. “This is unique in world history,” Chubais commented ambiguously. Meanwhile, more than a few of those early black-market voucher traders belong to today’s financial and industrial elite in Russia. The business magazine Dengi includes several of today’s oligarchs among the winners like Mikhail Fridman (Alfa Bank) and Vladimir Potanin, head of the Interros concern.
While still a university student, contemporary aluminium king Oleg Deripaska could be seen buying vouchers in the cold at the entrance to the Sayansk aluminium plant in Siberia in 1993, it wrote, while Kakha Bendukhidze, who now controls United Heavy Machineries, supposedly bought 18 percent of the company with 130,000 vouchers carried in the trunk of his car. The voucher may have helped avoid bloodshed during Russia’s transition from socialism to capitalism but many economists view this as its only redeeming achievement.
As for the voucher holder at large, many people later saw their own factories and workplaces get systematically stripped of assets by unscrupulous new owners. Many still blame Chubais and Gaidar for the rampant rise of the oligarchs while life for most of the population went from bad to worse in the ensuing years.
Like many economists, Veryovkin predicts the division and distribution of property in Russia is far from over because of the dearth of effective owners. “Most branches of industry have been paralysed. There is a lack of investment without which there can be no discernible upswing,” he said.
European Union negotiations on eastward expansion are on track for a year-end conclusion but weeks of tough bargaining still lie ahead, the bloc’s leading officials warned last Tuesday. “My impression is that the spirit among EU governments and candidate countries is excellent…everybody expects to conclude negotiations by the end of the year,” EU Enlargement Chief Gunter Verheugen told reporters. But with negotiations on thorny issues including competition policy, agriculture and financial arrangements still pending, “demanding and difficult times” lie ahead, cautioned Danish Foreign Minister Per Stig Moeller.
Verheugen and Moeller, whose country holds the current EU presidency, were speaking after another round of enlargement negotiations with 12 mainly central and eastern European states, which have applied to join the Union. EU enlargement will be a key issue at the bloc’s summit in Brussels on October 24-25, with the onus on France and Germany to resolve their differences over EU agricultural reform.
A Franco-German agreement will in turn clear the way for an internal EU accord on post-enlargement subsidies for new member states’ farmers and allow Verheugen to finalise negotiations on the farm chapter with the 12 applicant nations. Discussions on the financial status of the new member states in their first year of accession are also proving difficult. “In my view it is most important that we guarantee that new member states will not be net contributors to the EU budget in the first years of membership,” Verheugen insisted.
But EU foreign ministers meeting in Brussels Sunday failed to reach a final agreement on the issue. Verheugen also confirmed that long-awaited commission reports on which candidate countries would be concluding membership talks in December would be released on October 9.
The European Commission last Wednesday unveiled new proposals for a European Union-wide code for cross-border company take-overs, saying the common rules were needed to create an integrated EU capital market. But the proposals ran into immediate opposition from German members of the European Parliament who successfully torpedoed a first commission attempt to forge common takeover rules last summer.
Inside the 20-member executive commission itself, EU sources said three Commissioners – including Germany’s Guenter Verheugen, Michaele Schreyer and Frenchman Pascal Lamy – voted against the proposals. The commission’s new draft code – almost 13 years in the making – will need to be approved by a majority of EU governments as well as the European Parliament. But in a sign of the fight ahead, Klaus Heiner Lehne, a German member of the European Parliament said the new proposals did not go far enough to create a “common playing field” for takeovers among EU states.
Lehne also criticised the fact that minority shareholders would be allowed to retain double or multiple voting rights, giving them a controlling voice on company boards.
But commission officials said the new draft code was needed to set “common rules” for corporate restructuring involving the laws and the authorities of more than one member state.
The commission proposal insisted that shareholders, in particular minority shareholders, in companies being taken over will be afforded a minimum level of protection and equal treatment, based on a full bid for all of a company’s shares and a requirement than an “equitable price” be paid to all shareholders.
Management of the company being targeted for takeover will be entitled to put in place defensive measures but only after the “explicit authorisation” of a general meeting of shareholders consulted on the precise nature of the bid. “It is considered essential that the future of the company should be decided by the people who own it,” the commission insisted.
The board of the company on offer must act in the interests of the company as a whole, the commission added. “The aim of the proposal is to enable takeover bids to be made in the EU under the best possible conditions for all concerned,” said EU Internal Market Commissioner Frits Bolkestein. But critics warned that Bolkestein’s message was unlikely to find a favourable echo in Berlin.
Smokers in the European Union will soon start seeing large “smoking kills” warnings on their cigarette packets as tough new rules on tobacco sales go into effect September 30, the European Commission said last weekend. The general warning will cover no less than 30 per cent of the surface of cigarette packets and will include the slogans “smoking kills/smoking can kill” or “smoking seriously harms you and others around you.”
Tobacco manufacturers will have up to one year to start putting the labels on their cigarette packets. Even tougher rules lie ahead. Legislation requiring cigarette products display colour photographs showing the damaging health impact of tobacco will go into effect as of October 2003.
The European Pressphoto Agency (epa) will launch its new international photo service on May 1, 2003, it was announced last weekend. Epa was founded 18 years ago as the first and only European international photo service. During this period it has built up a high reputation for its unique European photo coverage, based on the daily production of its 14 member agencies – all market leaders in their respective countries – and on the dense network of epa staff photographers Europe-wide. For the production of pictures outside Europe, epa has relied on the international photo service of Agence France-Presse.
European Union hopeful Poland will have to spend a cool 40 billion Euro over the next 13 years in order to meet the bloc’s environmental standards, the Polish PAP news agency reported last Thursday. Up to 40 percent of the funding for a mass of revamping projects could come from EU pre-accession and later structural adjustment funds, Polish officials say, but admit they are worried about their ability to secure subsidies from Brussels.
Finding environmentally sound ways to dispose garbage and sewage are among the most pressing problems. Thirteen years after the advent of the market economy, an explosion in consumerism has seen the country’s landfills swell at an alarming pace. With virtually no recycling programmes, officials say 95 percent of post-consumer waste ends up at the dump, compared to only 15 percent in environmentally conscious Denmark. Officials say attention is also focused on updating municipal water and sewage treatment facilities.
The European Commission warned last Thursday that there had been only patchy progress in prising open European Union electricity and gas markets, with many small businesses and households still unable to select an energy supplier of their choice. “There is a need for new market opening measures,” the commission said in a report.
The fact that France, Luxembourg, Greece and Italy were not committed to a full opening up of their electricity and gas markets had resulted in a distortion of competition on the EU energy market, the report said. Also tariffs and conditions for allowing new energy suppliers access to networks were “unreasonable in some cases, in particular in Germany,” it added. The report also pointed to “insufficient interconnection infrastructure” between member states.
The commission insisted that the partial opening of the market to large consumers provided by existing directives “does appear to be working, especially for electricity” and said that most companies had tested the market, either by switching supplier or through a tendering process. But it warned that progress remained slow in Belgium, Greece and Portugal where fewer than 10 percent of companies had changed supplier and less than half had investigated the possibility of doing so.
One important result of the opening up of energy markets was a reduction in electricity bills in Austria, the commission said, adding that countries, which freed up most to competition had generated the largest benefits for consumers. Britain, currently the only EU country with a fully functioning open market for gas, had “afforded the greatest degree of protection against volatile wholesale gas prices,” the commission underlined.
Commission exposes illegal and mismanaged landfill sites in the EU
The name might sound funny but the underlying theme was dead serious at the last week’s seminar titled “Name, Shame and Fame” seminar on the subject of landfills organised by the European Commission.
The dynamic Environment Commissioner Margot Wallstrom put the spotlight on illegal and mismanaged landfills that still operate in the EU today. Wallstrom commented: “Our citizens are concerned about landfills. We receive a steady flow of complaints from people who are worried about the impact that illegal or badly managed landfills can have on their health. I therefore decided to organise this Name, Shame and Fame seminar to raise awareness, among both operators and the public about the importance of managing waste properly and to help ensure that Member States comply with the relevant EU legislation as soon as possible. Only if national authorities respect the legislation for landfilling can citizens be encouraged to trust landfilling as a environmentally viable option for waste management.”
According to a statement from the Commission, “The aim of the seminar was to make people more aware of how important it is to properly implement EU legislation on landfills, which is designed to ensure safe and efficient handling of waste. Landfills are of particular concern for citizens’ health and the environment as they have the potential if not properly managed – to create air emissions and odours, pollute soil and water and contaminate the groundwater.
Following numerous complaints from citizens about landfills, the Commission has taken legal action concerning 36 specific landfills in seven member states. Greece and Spain top the “shame” list (with 10 cases each), followed by Italy (with 8 cases), Ireland (5 cases), the UK, France and Germany (one case each).”
Commissioner Wallstrom co-hosted the Name, Fame and Shame seminar with Caroline Jackson, Chairperson of the European Parliament’s Environment Committee. Members of the European Parliament, representatives of the Member States, Accession Countries, EFTA Countries, Members of the Economic and Social Committee and of the Committee of the Regions, NGOs, other stakeholders and the media attended the seminar.
The European Union and South Korea failed to resolve their long-standing dispute over what Europe claims are artificially low Korean shipbuilding prices. The EU now takes the case to the Geneva-based World Trade Organisation (WTO). Commenting on the decision EU Trade Commissioner Pascal Lamy said: “We have negotiated in good faith to find an amicable solution to this problem with Korea but this has not proved to be possible. The Korean delegation has indicated that there is no support in the Korean industry for any of the proposals discussed with the EU. Korea has left us with no option that to go to the WTO”.
Earlier European Commission spokeswoman for trade Arancha Gonzalez told reporters, “Negotiations have failed.” “Despite numerous efforts made by the EU to reach a mutually acceptable compromise solution, the Korean delegation rejected all the proposals, insisting on a lack of support from Korean industry for such an agreement,” Gonzalez said.
The EU wanted an increase in prices of South Korean ships but Seoul argued that prices should be set by the market, she said. However, “market prices are set by the dumping practices of the South Koreans,” Gonzalez added. Lamy has long argued that world ship prices are being depressed by South Korea’s production of low-cost vessels.
Lamy has called for tit-for-tat subsidies for European shipbuilders to match the allegedly unfair South Korean government aid schemes for local shipyards.
Environment: A challenge for both the EU and the candidate countries
The European Union stands at the historic moment of the largest expansion till date with 10 additional countries expected to join the 15 current member states. Moreover a marketplace of 350 million people will swell to over half a billion. Enhanced capital resources, additional natural resources and a wider platform of commercial opportunity are set to flood the continent. Addressing “Will an Enlarged Europe Be Better for the Environment? ” at the Labour Party Conference, Blackpool, (UK), Margot Wallstrom Member of the European Commission, responsible for Environment detailed the benefits to the member states.
The lack of funds, environmental awareness and consequent political difficulties all added up to the difficult task that candidate countries must adopt and implement all the Union’s legal acts, known in the EU jargon as the “acquis” explained Wallstrom. The Commissioner said, “The Union’s environmental acquis is a vast block of complex laws (around 270) that are often highly technical and require specific skills from those who implement them. This is a serious problem in many candidate countries, where the environmental sector lacks funds and has problems attracting skilled staff with adequate salaries.”
Elaborating further Commissioner Wallstrom said, “Secondly, let’s face it, putting these laws into practice can be expensive. Particularly so in the candidate countries, where environmental protection has not been a priority area in the past and where technologies used are often outdated … Thirdly, time is a crucial factor. In a relatively short period the candidate countries have had to pass hundreds of laws through their national legislatures.”
Allaying the fears rising out of extending the implementation deadline of certain environment directives leading to, “… environmental dumping: that lower environmental standards could give companies in candidate countries competitive advantages on the Single Market over their more strictly regulated EU counterparts,” the Commissioner said, “The EU defined already in the early stage of the negotiations that transitional periods for certain environmental directives would be out of question. For example, no transition periods should be accepted if they have a major effect on the Single Market. For example, that is why the EU has refused transition periods for the directives related to the product standards for fuel.” Moreover she said, “transition periods on legislation requiring very heavy investments … have been negotiated on a case-by-case basis, and accepted where they have been sufficiently limited in time and scope.”
Since the formal launching of the enlargement process in March 1998, and then negotiations in the environment chapter in 1999 there has been a swift progress in reaching the finishing line with the environment chapters. The Commissioner gave full marks to, “the Commission’s road map for enlargement, setting 2004 as first target date for accession.”
And its not just upgrading the laws in black and white but the EU directives after implementation would also bring very important benefits. Wallstrom stated, “Putting the EU directives into practice is about much more than just fulfilling the accession criteria. Up-grading the national environmental norms to match EU requirements will reduce air pollution, bring better quality of drinking water for millions and improve waste management. It will eliminate the worst health hazards and improve people’s living environment, for instance by reducing respiratory diseases. This is particularly important for exposed groups such as children.” Quoting from a Commission financed study on the benefits that the candidate countries can expect from EU environmental policy, Wallstrom said, “The total value of these benefits could range from 134 to 681 billion Euro for the period of 1999-2020 or 12 to 69 billion Euro annually.”
Citing the cross-border benefits she added, “For the EU, less air pollution from the candidate countries could imply public health benefits worth 6.5 billion Euro annually. This is also the case for countries such as Russia, Ukraine or Belorussia that can all expect cleaner air.”
As mentioned earlier all this changes cost money but the Commissioner pinpointed that, “the candidate countries are not left alone to bear the costs. The EU’s annual pre-accession aid has doubled from 1.5 billion Euro to 3 billion Euro for the period 2000-2006. Out of the total provided through the EU’s financial instruments, an important share – approximately 20 percent per year – goes to environmental investments.”
Concluding her remarks Commissioner Wallstrom hit the political chord saying, “But we can never forget the political context of the times in which we live. What we are talking about here is no less than the historic reunification of the European continent in little over a decade since the collapse of the Berlin Wall. I have tried to show you that we are doing so in a way that will improve the environment, public health and daily lives of ordinary citizens in both east and west. So, to answer the question of this seminar, yes an enlarged Europe will be better for the environment!”
Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, Slovenia, Cyprus, Malta and Turkey are the candidate countries although negotiations have not started yet with Turkey.
(Tito Singh/New Europe)
European Union’s relations with Morocco took a battering last Monday after European Commission President Romano Prodi said he was too busy to see Moroccan Foreign Affairs chief Benaissa Mohamed. A statement by the Moroccan diplomatic mission in Brussels said Rabat “deplored” Prodi’s decision to postpone a meeting with Benaissa because of “insistent pressure by Spain.” But Prodi’s spokesman denied there was any link to the Spanish-Moroccan spat over the Perejil island.
The Commission president had put off the encounter because of a “heavy agenda,” said his spokesman Jonathan Faull. European External Relations Commissioner Chris Patten would have been “perfectly happy” to meet Benaissa but the Moroccan minister had decided to cancel his visit, Faull said. A new date of October 15-16 for a meeting with Prodi was now being suggested to Rabat, he added. “I am sure the meeting will happen … We have very good and friendly relations with Morocco,” Faull said.
This summer’s Spanish-Morocco spat over the disputed Gibraltar Strait island of Perejil escalated again earlier in September after the Moroccan Foreign Ministry accused Spain of violating the country’s territory and an agreement brokered by US Secretary of State Colin Powell in July, which ended a military standoff over the tiny island off Morocco’s northwestern coast.
Spain rejected the accusations, saying that the Cessna plane belonged to a Spanish television station. The government admitted that a helicopter had flown over Perejil to observe the movements of a Moroccan vessel, but said it did not land on the islet.
European Central Bank (ECB) Governing Council member Ernst Welteke last weekend rejected the International Monetary Fund’s advice to cut interest rates to boost economic growth. “Monetary policy in the Eurozone is appropriate and does not constrain economic growth,” he told a press briefing before a meeting of the Group of Seven (G7) wealthy countries. The IMF said in its World Economic Outlook report last week that central banks should be prepared to ease interest rates to boost economic growth amid the sluggish global recovery. The Eurozone, said Welteke, suffered no fundamental imbalances but would benefit from labour market reforms. Falling stock prices had not hurt consumers too much because not many own shares, he said. Welteke also defended the European Commission’s decision to postpone a target date for balanced budgets from 2004 to 2006. Budget rules had not been weakened, he said, because member countries now have to cut their deficits by 0.5 percent a year. Welteke, who heads the German Bundesbank, said he thought growth in Germany would be just below 0.75 percent this year, compared to the IMF’s forecast of 0.5 percent. The G7 were meeting ahead of the weekend autumn session of the 184-member IMF and World Bank, which also brought thousands of anti-globalisation protesters to the tightly policed capital.
The European Union Commission last weekend whittled down its list of steel import safeguards to seven products, saying an expected surge in foreign-steel imports expected after the US raised its tariffs earlier this year had not occurred. EU steel imports had only gone up for seven products out of an original list of 15 items on which the EU slapped safeguard quotas and tariffs in March this year, the Commission said. Only imports of those seven products – including hot-rolled coils, sheets and plates, and cold-rolled sheets – from a mix of Eastern European, Asian and Middle Eastern nations, would be restricted, it added. The safeguards would be lifted when the US repealed its high tariffs, the Commission said.
Demands for debt cancellation at start of ACP-European trade talks
African, Caribbean and Pacific (ACP) states opened talks last weekend on a new trade pact with the European Union with an appeal for swift EU action to cancel their foreign debt. Europe’s focus on building ACP markets and promoting the region’s trade would mean little, if poor nations remained crippled by foreign debt amounting to billions of dollars, warned Jaya Krishna Cuttaree, Mauritian minister of Trade and Industry.
“The weight of our debt is such that it will not be possible in practise for ACP countries to develop…if we do not have additional resources or an end to our outgoing payments,” Cuttaree, who is also current chairman of the 76-member ACP group, told reporters. ACP revenues would also be slashed as import duties are reduced in the name of trade liberalisation, he cautioned. But EU officials insisted that debt cancellation remained a prerogative of national European governments.
“These trade negotiations are not a framework for dealing with the debt issue,” said European Development Commissioner Poul Nielson. Instead, Nielson and EU trade chief Pascal Lamy said reinforcing ACP nations’ export capacity and building local and region markets was a key priority. Trade liberalisation would also be backed up with financial assistance for developing countries struggling to meet Western food safety standards and upgrade their customs structures, he added.
“We firmly believe that trade needs to be accompanied by aid,” said Nielson.
Boosting ACP exports would also mean new funds for governments in the region, said Lamy, adding: “Creating larger ACP markets will contribute to attracting both local and foreign investors.” An EU plan to negotiate free trade agreements with ACP regional groupings would also deepen the process of ACP economic integration, he said. The free trade pacts under negotiation – formally called economic partnership agreements- were really about promoting ACP development, Lamy underlined. “We want first to construct ACP markets and them open them,” he said.
The EU and ACP states are expected to spend the next year discussing so-called general trade issues and principles of interest to all 76 members of the ACP group. Once these are agreed, negotiations on reducing tariffs will start in earnest with ACP regional groups. Lamy insisted, however, that he was ready to start talks on “substantial issues” with any regional organisation that was prepared to do so. “It is understood that some regions are more ready than others” to start the talks, he added.
Diplomats said West African countries had signalled an interest in opening immediate trade liberalisation talks with the EU while other groups in Africa wanted more time to adjust their economies to increased competition. The new agreements are expected to come into force in 2008, but diplomats say the provisions for full-fledged EU-ACP free trade will only be applied as of 2020.
Breast cancer is the leading cause of death in European women aged 35 to 55 years, the European Parliament said last Tuesday. “In the European Union, one woman is diagnosed with breast cancer every 2.5 minutes,” said a report presented by Karin Jons, a member of the European Union parliament and head of Europa Donna, the European coalition against breast cancer. “Every 6.5 minutes, a woman dies of breast cancer,” Joens said, adding: “In Germany every 9th woman falls ill with it.” Joens called on the 15 EU states to step up cooperation in their fight against breast cancer and to exchange information on the latest available treatments.
European Union governments look set to postpone a meeting next month with foreign ministers of the Southern African Development Community (SADC) because of concerns over Zimbabwe’s participation, EU diplomats said last Tuesday. SADC ministers are scheduled to meet their EU counterparts in Copenhagen on November 7 and 8. But diplomats said a number of EU countries were unwilling to relax a current Union travel ban on key members of the Zimbabwean government, including Foreign Minister Stan Mudenge. Since other SADC members were unlikely to attend a meeting without Zimbabwe, diplomats said EU governments were seriously considering postponing the November talks. Another option is to go ahead with the meeting but not at ministerial level. While 72 top Zimbabwean ministers and aides to President Robert Mugabe are currently banned from entering the EU, less senior officials in the government are not subject to the restrictions. The meeting could also be moved to Maputo in Mozambique. The EU travel ban is part of a package of EU sanctions imposed on Zimbabwe earlier this year in protest President Mugabe’s treatment of white farmers, repression of the media and other policies.
Financial crunch gathers moss as global political uncertainty hangs heavy
After the worst quarter since the 1987 share crash, European markets last week trod gingerly into the final three months of the year which are likely to marked out by the build up to a war in Iraq along with on-going uncertainty about the global interest rate and economic outlook. Having cascaded down by almost six percent last Monday as a worldwide share sell-off took hold, the benchmark Euro Stoxx 50 edged forward by about 0.55 percent in pre-lunchtime trading last Tuesday with many analysts believing that last Monday’s losses might have been overdone.
Even so, with investment houses cutting back their corporate earnings forecasts and a “no economic recovery” scenario having been priced into markets, the outlook for shares in the run up to the end of the year appears less than promising. In the short term, Rolf Elgeti, European equity analyst with Commerzbank AG in London, sees European share markets possibly rising temporarily as a long-running forced sell-off of stocks by big financial houses draws to a close. “We should see a squeeze upwards,” he said. But he is more cautious about the prospects for the remainder of 2002, saying trading is likely to be “difficult for the rest of the year.” Indeed, the European economy is entering the final quarter with signs that domestic demand has been flattening out just as a weaker-than-expected world economic recovery has been hitting exports. “It’s a pure game of chance,” said one Frankfurt trader on how the German stock market might develop in the coming months. Adding to investors’ unease has been the growing uncertainty caused by a sudden upward shift in oil prices on the back of Washington’s push to lead a military campaign to oust Saddam Hussein.
As further evidence of the turbulent times for European investors, the Frankfurt Stock Exchange announced earlier that it was shutting down the Neuer Markt, Europe’s biggest high-tech share market. Once promoted as Europe’s answer to the Nasdaq, the Neuer Markt’s main Nemax index has lost about 96 percent of its value since hitting its peak in the height of high-tech stocks boom in March 2000.
The 12-member eurozone’s downcast economic picture is also offering the Euro little encouragement with the US dollar continuing to defy forex market forecasts that its popularity with investors was coming to the end. After breaching parity with the dollar in July, the Euro has slumped and has entered the new week trading at just under the critical 99 cents level. The Euro has also been suffering recently as a result of signs of moves among some European governments to push for more flexibility into the tough budget rules as set out in the Stability and Growth Pact, which is aimed at shoring up market confidence in the common currency. Nevertheless, most analysts see the Euro creeping up back past parity in the coming months with Ulf Krauss from HelabaTrust predicting a continuing strengthening of the common currency. But with a less-than-promising global economy casting a shadow over the eurozone’s export machine, some economists also believe the Euro’s current torpor might at least lend some support to the currency bloc building up foreign orders.
This, however, could change fairly fast if the White House’s military plans for ousting Hussein suddenly harden or if evidence of the much-feared double dip recession in the US emerges. Then, investors might be expected to finally abandon US dollar assets in favour of investments closer to home.
Equally, the manoeuvrings over Iraq and the rather unconvincing recovery are also clouding the outlook for European interest rates in the coming quarter. Meanwhile, the European Central Bank (ECB) is expected to maintain a wait and see policy, especially if pressures build for change in the eurozone’s strict budget rules. For the time being the main beneficiary of the current economic environment has been the European bond market, which has been enjoying a bull-run as hopes of a recovery have faded, stocks have fallen back and analysts have speculated about the chances of official rate cuts.
After sliding by more than 60 basis points over the last quarter, the yield on Europe’s benchmark 10-year Bund is now expected to dip below four percent by the end of the fourth quarter. Data released recently by the ECB showed the eurozone drawing in 10.6 billion Euro in net direct and portfolio investment in July. This followed an outflow of 1.3 billion Euro in June with the bank saying the rise in July stemmed from large inflows into bonds and notes.
The Czech Republic’s membership in the European Union does not require scrapping the Benes Decrees that legitimised expulsion of ethnic Germans from Czechoslovakia 57 years ago, according to a report submitted last Monday to the European Parliament. “Czech accession to the EU does not require the repeal of the Benes Decrees,” wrote report author Professor Jochen Frowein. “This opinion is based on the understanding that from accession, all EU citizens have equal rights in the territory of the Czech Republic,” Frowein added. EU accession conditions “do not refer to the past,” the report stated.
Czech rules governing restitution of property confiscated under the Benes Decrees cannot be questioned on the basis of EU law because this would apply only from the date of accession, the report said. The European Parliament is expected to use the Frowein report to issue a legal analysis of the Benes Decrees in the next few days.
The Council of EU Ministers last week approved the five Specific Programmes implementing the 17.5 billion Euro 6th EU Research Framework Programme (FP6 2003-2006). “I welcome this key vote,” said EU Research Commissioner Philippe Busquin. “All is now set for a rapid start to the Research Programmes with the first calls for proposals published before the end of this year. The rapid conclusion of the decision-making process on ambitious EU research programmes provides an additional strong basis for creating a true European Research Area.”
The agreement reached stipulates that some detailed implementation procedures and a more comprehensive legislative act will be put in place in order to better regulate the EU funding of research involving the use of human embryonic stem cells. It foresees that, until the end of 2003, the Commission will not fund research projects involving the use of human embryonic stem cells, with the exception of stem cells already banked or isolated in culture.
The European Union’s Council of Ministers last Monday called on Croatia to cooperate with the UN war crimes tribunal after Zagreb refused to extradite an indicted former army chief of staff. “Non-cooperation with the tribunal could jeopardise Croatia’s association with the European Union,” diplomatic officials in Brussels told Croatia’s HINA news agency.
The European Union reminded Croatia of the importance of cooperating with The Hague-based International Criminal Tribunal for the former Yugoslavia, but there are so far no indications of possible sanctions by the union, a diplomatic official said on the condition of anonymity. “This was a usual and expected first move by the EU which contained nothing alarming, but the apparently soft rhetoric,” the official said.
Janko Bobetko, 83, the week before last became the oldest and the highest ranking Croat to be charged with war crimes. He faces charges in a massacre of about 100 ethnic Serb civilians during the 1993 “Medak Pocket” operation, when troops under his command regained territory that had been held by rebel Serbs during the Croatian-Serbian war in the 1990s.
The government of Prime Minister Ivica Racan has announced that the retired general will not be extradited to The Hague.