An Innovative Europe

20 januari 2006

Although rarely reflected in the main media, there is a new debate across Europe on the necessity of doing more in the fields of research, development and higher education.

The brutal fact is that we are slipping behind in particular the United States.

It’s not that our brains are inferior. That’s unlikely – particular in view of the fact that some of the most stellar scientific advances in America have been done by men and women coming from Europe.

In the past they were fleeing from war and persecution in Europe. Hopefully those days are gone.

Now they are fleeing to the better resources and rewards in the United States. Before it was an issue of survival – now it’s often a question of money.

These issues can and must be addressed by the leaders of Europe.

A report issues today by a high-level group chaired by the former Prime Minister of Finland Esko Aho will hopefully give some fuel to the debate.

It’s worth reading.

EUROPA – Investing in European Research

Crisis Coming?

19 januari 2006

The news that Russia intends to cut back on electricity exports to Finland by 30 % in order to avoid an acute crisis in St Petersburg really underscores the fragility of the energy situation in Russia.

We have already seen the reports of reduction in gas deliveries to Central Europe. Now it’s the electricity system that is feeling the strain of the winter.

There is serious underinvestment throughout the entire Russian energy and power system.

Partly this is the result of energy prices being too low, not generating enough money for the necessary investments. Partly it’s because of pure political neglect.

But the consequences could easily become serious. If major population centers start to lose heating and power in the middle of the winter it’s very soon a humanitarian issue that rapidly turns into a political one.

And on the broader front it increases the question marks around the possibility of Russia to really deliver on its export promises.

If there are not very major increases in investment as well as structural reform.

Neither of which looks very likely at the moment.

But a crisis could change everything.

YLE uutiset

Bosnia Moving

19 januari 2006

Prior to the 10th anniversary of the Dayton Agreement, US representatives were telling everyone in sight that a major new constitutional deal was going to be signed in Washington at that occasion.

Out of that came very little. A short paper that could be interpreted as either everything or nothing was eventually signed. The grandiose initiative didn’t end to grand.

But at the least talks continued, as had been agreed, and has now evidently resulted in something. Without having seen the text it’s difficult to judge it in detail, but to me it seems as if it represents a sensible small step forward.

American representatives are disappointed, but the European Commission representative is more positive:

If everything which was agreed with regard to the Council of Ministers was implemented, Bosnia and Herzegovina will get a strong and functioning government with a full responsibility for the European integration process.

That’s not bad.

In discussions on these issues I often stress two points:

The first is that most things that is needed as part of the European integration process can be achieved within the broad framework of the existing constitution. Some evolution is called for – not rvolution.

The second is that I’m afraid of the politicians of Bosnia spending too much time quarrelling over constitutional issues and too little time adressing the fundamental economic and social issues.

At the end of theday, it is on the economic and social issues they will be judged.

So – in spite of the negative headlines – it might have been a good day for Bosnia. ”

To Jerusalem

19 januari 2006

The Carter Center in Atlanta has now officially announced the multinational election observation mission that will oversee the Legislative Council elections in Palestine January 25th.

There will be President Carter, myself, former Albanian President Meidani and former Spanish Foreign Minister Palacio.

All, I have to say, good friends that I enjoy working with. President Carter remains amazing in his knowledge of the area and its issues – we spent nearly a week there together a year ago for the presidential elections.

Important times. I hope we can make a small difference.

Jimmy Carter to Lead Multinational Carter Center/NDI Delegation to Observe Jan. 25 Legislative Council Elections in Palestinian Territories

Can Russia Deliver?

19 januari 2006

Now the spell of very cold whether is injecting a new dimension in the discussion on the energy security of Europe.

Suddenly customers in Central Europe is seeing their gas deliveries from Russia reduced by 20 percent as the network is under heavy strain by increased demand.

And for some countries it might be even worse. Serbia, Montenegro and Bosnia could be much worse affected, and they have hardly any gas storage facilities to handle the situation.

Sarajevo can be a very cold place during the winter. It’s heating is dependent on the pipelines coming from Russia.

The situation now underlines the enormous need for Russia to invest in new production if it should have any possibility of actually meeting all the commitments it is now entering into.

It’s one thing to build pipelines – it’s another thing to fill them with gas from very remote and difficult locations.

And with a Kremlin policy that seems more interested in playing politics and creating personal wealth for key individuals, the room for bringing in needed massive foreign investment will remain limited.

All the more reason to think hard and long about the future energy security of Europe.

Russian Gas Cut to Europe Again

Nuclear Come-Back in Baltics?

18 januari 2006

As the leading growth region of Europe, the Baltic area has every reason to look carefully at its nuclear security.

Finland is already starting to build its 5th nuclear unit. The country simply does not want to become too dependent on imported energy. Pipelines to Russia have, as has recently been demonstrated, some limitations if you become too dependent on them.

And now the debate has reached the Baltic countries. It’s only the beginning.

Ignalina in Lithuania is the location for one of the Soviet RBMK-type nuclear power plants. More modern than Chernobyl, it still has some characteristics that were doubtful, and this lead to extensive safety enhancement of it during the 1990’s.

As part of the process of joining the European Union, Lithuania had to promise to close down Ignalina. Its first unit is already closed, and the second is planned to be closed in 2009.

Now, however, the wisdom of this is widely questioned, and not only in Lithuania.

There are probably two options for the future.

One is to continue with Ignalina 2 for the foreseeable future. The other is to build a brand new nuclear power plant using some of the infrastructure at the location. Since this will take time, extensions of Ignalina 2 and the building of a new station might be the realistic alternative.

There are certain to be wide interest in such a scheme. It could make a substantial contribution to the economy of Lithuania in the future, and it would increase the energy security of the region.

It might well be that there will be a need even for Russia to import electricity in a decades time or so.


War Drums Beating

18 januari 2006

It is difficult not to hear the sound of the war drums starting to beat in certain quarters.

Charles Krauthammer is an influential columnist in the Washington Post who is now one of the leading drummers.

Part of the show is naturally to pour scorn on the European diplomatic efforts. They have certainly not been fully succesful, but they have at the least managed the issue for some time. US diplomatic efforts with North Korea are hardly known for their immediate success either.

Now the policy line favoured by Krauthammer and others are sanctions of whatsoever sorts. But they are honest enough to acknowledge the distinct limitations of Europe imposing even total sanctions:

A cutoff of investment and high-tech trade from Europe would be a minor irritant to a country of 70 million people with the second-largest oil reserves in the world and with oil at $60 a barrel. North Korea tolerated 2 million dead from starvation to get its nuclear weapons. Iran will tolerate a shortage of flat-screen TVs.

But this leaves little else than the war option if Iran persists in its policy, more or less irrespectively of what that policy is.

Krauthammar assumes that they are only month away from a nuclear weapon – US intelligence assessments seems to put that more than five years and perhaps as much as a decade away. We can’t be certain.

That Europeans care about what happens after an initial military attack is something Krauthammar dislikes. One should have believed that Iraq should have thought some lessons in that regard.

It’s always easy to start a war, but it’s always good to have at the least an idea of how to conclude them.

Wars have an unfortunate tendency of always becoming bigger than what those that initiated them originally thought.

The Iran Charade, Part II

War With Iran?

16 januari 2006

It’s not a very comfortable conclusion, but it would be irresponsible not to acknowledge that we have seen the risk of a rather major war during the next few years rising rather substantially during the last few weeks.

I don’t think anyone really wants it. But war often comes when everyone has locked themselves into position they can not get out of, and where the one seemingly logical steps leads to a profoundly unlogical outcome.

A major war wsith Iran is suddenly a realistic possibility. Not imminent, but not unlikely within the next two years or so.

There is now an escalation of political steps in order to increase pressure on Iran on the nuclear issue. The IAEA Governing Board will be followed by the UN Security Council.

In the best of world’s this at some stage leads to the resumption of real negotiations that leads to a real deal. There are certainly formulaes that should be possible to use.

But the problem is that we don’t seem to know very much about what the different parts of the Iranian leadership wants. Some are likely to be deliberately seeking a confrontation with the West – some most certainly not.

At some point in time the reluctance against using military instruments to at the least slow down Iranian efforts to develop and to deploy nuclear weapons as well as more long-range missiles might be overcome.

Not because there are any good military alternatives. There are not. But because at some stage it might be that there are no real political alternatives left – and failure is not an option.

Some evenings ago I ended up in a discussion with some very experienced and informed Western military leaders.

None of them believed that there were any light or easy options. No one wanted to use military means – but all had been doing thinking on what could be done if an order after all was given.

One believed that the only real alternative was to descend on the key installation with an airborne brigade or so, clear everything out and then get out as soon as possible. This would involve establishing air supremacy over a fairly large area, and mounting the entire operation from a considerabled distance.

Not easy.

Another talked about striking at 30 – 40 different target sets, a substantial number of which would be air defence installations to assure access to the targets.

Here, success in achieving the desired destriction was far less certain than in the first case.

And everyone was most concerned with what would be the next steps.

That the Iranians would try to close the Strait of Hormuz was taken for granted. They might succeed for a week or so, with profound effects on oil prices. But at the end the US Navy was likely to win that fight.

Then they would in all probability use political allies to launch major attacks against all sorts of American and Western presence in both Iraq and Afghanistan. Southern Iraq and Baghdad would very suddenly become very dangereous places.

And then there were other possibilities discussed.

Each of these possible Iranian counter-moves would obviously lead to another American or Western counter-counter move.

And this is where it all risks descending into a rather major war engulfing the region from Herat to Baghdad and dragging in the Gulf states as well.

There is no guarantee that such a war can be won easily. Iran is a nation of 70 million people and inheritors of the second-oldest civilisation on Earth.

This development is a far less unlikely development now than only some weeks ago.

We might be facing years of war.

Will Iran Be Next?

The Week Ahead

16 januari 2006

Just back from a weekend of discussions on European and internaional security affairs in Switzerland I’m facing a week of work in a wintry Stockholm.

On the wider stage, I would expect that the Moscow visit of Angela Merkel will attract much attention. And later during the week the French Prime Minister comes to Berlin for talks, as well as for presenting his vision of Europe. In Strasbourg, the European Parliament will be hearing the Austrian Presidency presents its plans for the coming months.

And on Saturday I’m off again in the direction of Jerusalem.

The Hotbed of Hebron

16 januari 2006

If you want to experience true political tension, Hebron is clearly the place to go.

The West Bank city is the final resting place of no lesser authority than the prophet Abraham. But it is also a city where Palestinian and Jewish ambitions and fundamentalists claims meet more clearly than in many others.

The city’s Jewish settlements – including one heavily guarded right in the city center – has attracted an unusually fundamentalist population, wih few if any pretentions of wishing to live in peace with their neighbours.

The last few days have seen tensions escalating between these fundamentalist settlers and the Israeli soldiers there to guard them.

An officer is saying that ”we are facing Jews who are conducting pogroms against Arab property.” And that is something the Israel Defence Force will prevent as being illegal.

The Hebron tension illustrate the increasing tensions between a fundamentalist minority in Israel bent on confrontation at any cost, and a majority that is ready for a more realistic political course in the years ahead.

And on the Palestinian side there are the same divisions. Tensions have made Hebron a hotbed also for the Hamas political forces.

A place to watch.
Haaretz – Israel News – IDF, police gird for 1000s of Jews coming to Hebron

Merkel Making Her Mark

15 januari 2006

There is no doubt that Angela Merkels first months as Chancellor of Germany have been good ones.

Opinion polls have shown not only a remarkable increase in her popularity¨, but also an equally remarkable surge in confidence in the prospects of the German economy. The ”Angst” of the past few years seems – at the least for the time being – to be gone.

These days she’s making her mark on the wider international stage. In the last few days she has been to Washington seeing President Bush, and tomorrow she will be in Moscow seeing President Putin.

The Washington visit seems to have gone very well. She certainly did rise issues on which there are divided opinions – notably Guantanamo – but did this within the context of a strengthened relationship overall.

If the media reporting is to be believed, it was to a large extent the Iran issue that dominated the talks, although one would expect that they spanned over a rather broad area.

The talks lasted three hours – almost unique in Bush’s Washington.

Moscow will be different. The girl from former GDR meets the spy from former GDR. They can converse in either German or Russian.

The basic lines of German policy will hardly change, but we are likely to see a clear distancing towards the rather naive camaraderei that characterized the Schröder years. Putin will encounter a lade of firmness.

Here, Iran is as likely to be an important subject. Merkel can give fresh messages and impressions from Washington, as well as representing the policy line agreed byt the EU3 in their discussions in Berlin a few days ago.

But we should expect also the issues of energy security to figure rather prominently. The gas dispute has had its effects on German perceptïons as well.

It’s the Merkel months on the European scene.

”A Very Good Start” | Germany | Deutsche Welle | 14.01.2006

Jerusalem Go Ahead

15 januari 2006

Today, the Israeli cabinet finally formally decided to allow voting for the Palestinians in East Jerusalem in the upcoming January 25 parliamentary elections.

There are some restrictions on Hamas which might create problems, but overall there is now no reason to assume that these important elections will not go ahead as planned.

That also means that a week from today I will be in Jerusalem as co-leader of an international group monitoring the elections. I did the same last year for the presidential elections.

So you can count on some comments on the issue over the coming weeks on this place.


No Good Options

13 januari 2006

It was hardly unexpected that the EU3 at their meeting in Berlin yesterday called for an emergency meeting of the Governing Board of the IAEA to discuss the latest nuclear moves by Iran, and that they now advocate that the issue the one way or the other should be brought before the UN Security Council.

But it is important to read the fine print as well.

There is considerable uneasiness in European policy circles over where we are heading. The latest maneuvers of Teheran left the EU3 with no real alternative, but the move they are now taking is a move they would have preferred to avoid.

The reason is that it is very unclear what a discussion at the Security Council could achieve.

It will certainly give Iran a public platform that is rather effective. And one shouldn’t overlook the fact that Teheran does have some arguments on its side.

Why is everyone increasing cooperation with an India that never even adhered to the Non-Proliferation Treaty and that went on and acquired nuclear weapons? We might argue that India, after all, is a democracy, while Teheran is a regime of a very different character and orientation. But part of the world will see it as us applying double standards.

And then there is the issue of the application of sanctions. Can it be done? And – if it is done – what effect will it have?

Will they drive the regime into a desperate rush to get nuclear weapons as it develops a fortress mentality even more acute than at the moment? Or will it force it to open up, perhaps under the pressure of an increasingly frustrated middle class of the country?

There is simply no way of knowing.

Add to that the risk that a failure by a UN Security Council process to secure a rapid resolution of the issue might be used as a pretext by those advocating taking unilateral military action against Iran.

And on that point there is a unanimous view in Europe that it would be disastrous.

The possibilities for Iran to strike back are numerous – the fragile states of Iraq and Afghanistan, or the energy supply line of Asia and Europe through the Strait of Hormuz. Add to this that a military strike is most unlikely to stop the nuclear ambitions of the country – it might slow them down technically, but will certainly solidify a political determination to eventually get there.

When Israel attacked the nuclear reactor Saddam Hussein was building at Osirak, it certainly destroyed that facility, but caused the overall program to accelerate using different and more hidden facilities.

It is however in the nature of foreign affairs that you have to play the hand that you have. There are sometimes no good options.

As I head for a weekend in Switzerland with discussions about the international security challenges of the year, I’m as certain as can be that this will be the issue that will be at the very top of the agenda of our talks.

Iran’s Present Government Is Stranger To Compromise and Detente (Iran Press Service)

Skype Part of the Great Firewall of China?

12 januari 2006

Has Skype now joined the companies that de faco have become part of the Chinese censorship system? The question is certainly a serious one.

In the latest issue of Business Week one finds a detailed story of the Great Firewall of China. It’s nothing revolutionary new, but a good summary of the sorry state of affairs.

Beijing has a vast infrastructure of technology to keep an eye on any potential online dissent. It also applies lots of human eyeballs to monitoring. The agencies that watch over the Net employ more than 30,000 people to prowl Web sites, blogs, and chat rooms on the lookout for offensive content as well as scammers.”

But worth noting is that the story says that Skype has now entered an agreement that effectively makes Skype part of the censorship authorities of China.

If that’s the case, I’ll certainly end my Skype account.

The Great Firewall of China

End of Fool’s Paradise

12 januari 2006

Issues of energy continue to gain prominence on the European political agenda.

Yesterday there was a major public debate in Brussels over these and related issues in which I participated. The occasion was a presentation of and debate on the new version of its Global Scenarios that Shell has produced.

Coming out of a mandate from the European Council meeting in Hampton Court last year, the Commission is now working on a major proposal to be presented to the March meeting of the European Council.

Energy security will be very much in the focus of that report, the first ideas of which were discussed by the Commission at its regular meeting yesterday.

But it’s not only the dispute between Russia and the Ukraine that has now focused the minds of policy-makers in Brussels and elsewhere. There are also very real energy-related issues involved in the now rapidly escalating dispute with Iran.

And some of us – including the key decision-makers in Brussels – spent most of the evening yesterday discussing what might happen and what can be done.

EUObserver quotes me from the public debate as saying that we so far have been living in a fool’s paradise in which issues of energy were strikingly absent from the political agenda.

But those days are now definitely gone.

Turmoil between Moscow and Zug

11 januari 2006

Coming back to Europe – in this case Brussels – from China one immedately finds that the gas dispute issues are still very high on the agenda.

I expect them to figure rather prominently in different discussions in Brussels during the day.

But the most obvious turmoil is in Ukraine, where a coaliktion of more Russia-leaning forces and ex-Prime Minister Timoshenko are doing their best to unseat the government before the March elections.

The vot in the Rada yesterday opens a Pandoras Box of copmplicated constitutional issues. From the beginning of this year the constitutional regime of the country has changed.

In all probability the coalition of the dissatisfied will continue to try to unseat the government – and in all probability they will fail. But turmoil there will be – before as well as after the elections.

There are undoubtedly some aspects of the deal that look rather questionable.

One is that Ukraine seems to have accepted that it can no longer buy gas from Central Asia and transit it through Russia. While Ukraine must accept to transit Russian export gas to Western Europe, it has now accepted that Russia does not accept to transit Central Asian export gas to Ukraine.

This of course leaves Ukraine in a strategic sense in a more vulnerable position.

The other dubious element is that everything now gas to go through a company called RosUkrEnergo. This was evidently a key demand from the Russian side.

This small company is now heading for stratospheric profits, but exactly who stands to gain from these profits is unclear in the extreme.

It’s a joint company between Gazprom and some individuals, and in order to assure that it is as non-transparent as possible it is registred in the Swiss municipality of Zug, known for its ”letter-box companies”. A law firm takes care of everything – Zug lives by beuing a cover for other things.

It might be noted that the joint Gazprom-German company that will build the discussed North European Gas Pipeline under the Baltic, and where former German Chancellor Schröder will be Chairman, is also registred in Zug.

Certainly in both cases to avoid taxes. But even more to avoid the transparency that would disclose which are the persons and interests to which the gas transit billions will now flow.

A certain amount of turmoil over that issue isn’t surprising.

It might even be healthy.
Ukrainian News

Persian Provocations

10 januari 2006

To make sense of what the regime in Teheran is doing these days is certainly not easy. An amount of both confusion and disagreement over policy seems almost certain to be there.

But the end result at the moment is a policy that is roughly as provocative against the international community as one can envisage. The resumption of certain nuclear activities only days before a planned meeting with the EU-3 that should explore the possibility of resuming negotiations can hardly be described in any other way.

The Iranian move also came in defiance of unusual separate messages delivered to the Tehran government over the weekend by Russia and China, as well as the United States, Britain and France. The messages warned Iran not to embark on further uranium activities.

Britain, France and the United States tried to have the five countries submit one joint declaration to Iran, but China, not wanting such a move to look like an attempt to gang up on Tehran, insisted that five separate messages be delivered.

But all the messages said much the same thing.

There is no knowing how this particular crisis will develop in the weeks and months ahead.

But unfortunately it is not too difficult to see scenarios which end up in very difficult and dangereous situation.

87899.pdf (application/pdf Object)

The Freedom Battle in China

08 januari 2006

I mentioned in my previous entry the freedom of the media and otherwise that is there here in the Special Administrative Region of Hong Kong.

The linked OpEd piece from today’s The Standard is worth reading.

It takes issue with those that say that since economic development is so impressive one doesn’t necessarily need to care that much of the issues of human rights and freedom of expression.

Yet freedom of expression has played a vital role in creating the prosperity that exists in all the world’s most successful economies. In China, the frontlines of the battle for freedom have moved uncomfortably in the direction of newspaper offices, radio studios and in the discreet environment of computer keyboards linked to the Internet.

That’s the way it is.

The Standard – China’s Business Newspaper

A Hong Kong Sunday

08 januari 2006

The Sunday edition of South China Morning Post didn’t contain too much this morning. The big local issue seems to be some fall-out of the disturbances during the WTO meeting here last month.

Hong Kong remains one of the most spectacular cities of the world. Even as Shanghai climbs up every ladder there is, Hong Kong remains in a category of its own.

I was certainly among those rather worried for its future as sovereignty was handed over from the United Kingdom to China. But in retrospect there is little doubt that Margaret Thatcher was right in handing it back.

In a China where repression rather seems to be on the increase, Hong Kong remains an island of the rule of the law, respect for human rights and freedom of expression, although certainly not a democracy in the proper sense of the world.

I can only judge the English-speaking press, but yesterday’s South China Morning Post certainly had a story highly critical of Microsoft for helping to censor the Internet in China, and in The Standard there was a vitriolic attack against what’s been happening to the journalists at Beijing News.

And the economy is doing very well again. Office rents in Hong Kong are up 150 % during the last two years, making it the third most expensive city in the world in this respect – after Washington and the London West End.

Today’s Hong Kong is highly intregrated into the Chinese economy. And the surrounding area of Southern China – primarily the Pearl River Delta (PRD) – has been perhaps the most spectacular of the success stories of the country since it started to open up in 1978.

Then, Guangdong province was poor, and certainly not in the top in China. But growth has been spectacular. If growth in China during this period has been over 9 % as an average, growth in the PRD has been over 19 % as an average. Today the province tops China as concerns GDP per capita.

And Hong Kong has been transformed. Manufacturing has moved, and the city is now the logistics, service and financial hub for the Southern China and South China Sea region. It is undoubtedly one of the premier hubs of the increasingly globalized economy.

Its vast container port is the largest in the world. It is truly an impressive sight. The new Chek Lap Kok airport is the largest freight airport in the world as well as number five in terms of passenger traffic. 40 % of China’s export passes through the area.

From Mainland China comes the news that the last of the infamous Gang of Four has passed away.

Yao Wenyuan was the Shanghai extremists whose review of a play in late 1965 was used by Mao Tsetung to launch that decade-long descent into terror and tragedy that was the so called Cultural Revolution. Its horrors continue to haunt the China of today.

But my task here is more concerned with the globalized economy.

Tomorrow starts the large car show in Detroit in the US, and the day thereafter starts the large toy show here in Hong Kong. Factories are starting to hum with the new products that will reach the consumers during the year to come.

And I will head to the Guangdong province tomorrow to look at some of these factories. – the online edition of South China Morning Post, Hong Kong’s premier English-language newspaper

Is a Post-Sharon Peace Possible?

06 januari 2006

It is impossible not to reflect on the consequences for the Middle East of Ariel Sharon’s almost certain departure from the political scene of Israel.

For all of his past, and the dubious nature also of some of his present policies, he was the man who opened up a realistic possibility of a peace in the years ahead.

He dared to break off from the dream of a Greater Israel – eventually understanding the nightmare that this would mean for the country – and start reorganizing the political scene of Israel accordingly.

The Gaza withdrawal, the break with Likud and the setting up of the Kadima party was the beginning – but only the beginning.

Now everything suddenly looks very uncertain. Can anyone assemble the strength and determination that will be required to take Israel to a realistic deal for peace?

Ehud Olmert will be the Prime Minister at the least up to the March Knesset elections, are there is little doubt that he wants to carry the recent Sharon line forward in the years ahead. Speaking last year, he phrased the task as this:

We are tired of fighting. We are tired of being courageous. We are tired of winning. We are tired of defeating our enemies. We want that we will be able to live in an entirely different environment of relations with our enemies. We want them to be our friends, our partners, our good neighbors. And I believe that this is not impossible.

In all of the uncertainty now, that at the least bring some hope. But fighting the extremists intent on blocking every move towards accomodation and peace will require both courage and strength.

It should be noted that things are getting increasingly complicated on the Palestinian side as well.

The Election Commission has just resigned, since their work was subject of political interference. The East Jerusalem issue is still open. The militant groups are ending their cease-fire. Turmoil seems to be the order of the day in Gaza.

I am still supposed to head to Jerusalem towards the end of the month in connection primarily with the Palestinian elections.

But under these circumstances nothing is certain.

Haaretz – Israel News