Iran, perceiving threat from West, willing to attack on U.S. soil, U.S. intelligence report finds

A string of volatile incidents have occurred between the two countries in the past few months.

Πηγή: Washington Post
By Greg Miller
Jan 31 2012

U.S. intelligence agencies believe that Iran is prepared to launch terrorist attacks inside the United States in response to perceived threats from America and its allies, the U.S. spy chief said Tuesday.

Director of National Intelligence James R. Clapper Jr. said in prepared testimony that an alleged Iranian plot to assassinate the Saudi ambassador in Washington that was uncovered last year reflects an aggressive new willingness within the upper ranks of the Islamist republic to authorize attacks against the United States.

That plot “shows that some Iranian officials — probably including Supreme Leader Ali Khamenei — have changed their calculus and are now more willing to conduct an attack in the United States in response to real or perceived U.S. actions that threaten the regime,” Clapper said in the testimony, which was submitted to the Senate Intelligence Committee in advance of athreat assessment hearing Tuesday. “We are also concerned about Iranian plotting against U.S. or allied interests overseas.”

The assessment signals a potentially dire new direction in the adversarial relationship between the United States and Iran, at a time when there are indications that a covert campaign is already underway to thwart Iran’s alleged ambition to develop a nuclear weapon.

Clapper’s warning about Iran was delivered as part of the U.S. intelligence community’s annual overview of the nation’s most serious national security concerns. As the hearing got underway, Clapper signaled that the United States is seeking to avoid a violent confrontation with Iran, instead pushing for more and more sanctions while also monitoring the possibility of a preemptive strike by Israel.

“Our hope is that the sanctions ... would have the effect of inducing a change in Iranian policy toward their apparent pursuit of a nuclear capability,” Clapper said. “Obviously this is a very sensitive issue right now. We’re doing a lot with the Israelis.”

Clapper’s testimony also calls attention to a heightened concern over cyber-related threats, as well as the diminished but persistent danger to the United States posed by al-Qaeda.

This year’s assessment is the first to evaluate al-Qaeda’s capabilities since Osama bin Laden was killed in a U.S. commando raid in May. That blow, combined with the toll taken bysubsequent strikes and raids, has destroyed al-Qaeda’s core.

As a result, Clapper said in the testimony, the United States is entering a “critical transitional phase for the terrorist threat,” in which smaller-bore strikes from regional nodes are more likely than elaborate, mass-casualty plots.

If the pressure on al-Qaeda can be maintained, “there is a better-than-even chance that decentralization will lead to fragmentation,” Clapper said. The terrorist group “will seek to execute smaller, simpler plots to demonstrate relevance to the global jihad.”

The group’s affiliate in Yemen continues to be seen as the most likely source of plots targeting the United States. But the death of U.S.-born cleric Anwar al-Awlaki in a CIA drone strike in Yemen last year has at least temporarily eroded the affiliate’s ability to mount international attacks.

The indications of al-Qaeda’s declining potency were offset by the grim new concern about the potential for terror attacks from Iran.

In October, U.S. officials accused Iran of being behind the disrupted plot to assassinate Saudi ambassador Adel al-Jubeir. The convoluted scheme was to rely on assassins from a Mexican drug cartel to carry out the killing at a restaurant in Washington.

U.S. officials said the plot was devised by an Iranian American with ties to Iran’s Revolutionary Guard Corps. But the plan was foiled when the Iranian American mistakenly hired a paid informant of the Drug Enforcement Administration to carry it out. Iranian officials have denied any role in the plot.

At the time, Obama administration officials said they were unclear on “how high up” in the Iranian leadership approval of the alleged plan extended. Clapper’s reference to Khamenei marks the first time that U.S. officials have mentioned Iran’s supreme leader in connection with the plot, signaling new belief that the alleged willingness to authorize such attacks comes directly from the top.

The view of U.S. intelligence agencies on Iran’s nuclear intentions has not shifted since last year. Clapper said that Iran still appears to be “keeping open the option to develop nuclear weapons,” but that “we do not know” what the republic will decide.

Iran has blamed the United States and Israel for a series of mysterious developments, including the apparently targeted killing of yet another Iranian nuclear scientist in Tehran on Jan. 11, as well as a crippling cyberattack on the country’s largest uranium enrichment facility.

In his State of the Union address last week, President Obama raised the threat of military intervention to halt Iran’s alleged pursuit of an atomic bomb, saying he would “take no options off the table to achieve that goal.”

But the administration insists that it has refrained from violent measures so far. Earlier this month, Secretary of State Hillary Rodham Clinton denied “any United States involvement in any kind of act of violence inside Iran.”

U.S. deficit to top $1 trillion, smallest since ’09

Πηγή: Washington Post
By Lori Montgomery

Jan 31 2012

The federal budget deficit will top $1 trillion for a fourth straight year, congressional budget analysts said Tuesday, but is likely to be the smallest since the Great Recession began taking a toll on the budget in 2009.

The nonpartisan Congressional Budget Office projected that the gap between government spending and tax collections would continue to fall, dropping sharply in 2013 and through the decade if policymakers follow through with major changes in both tax policy and government spending now on the books.

The $1.1 trillion deficit is the smallest deficit figure — both in nominal terms and as a percentage of the economy — since the Great Recession.

The CBO said that allowing the George W. Bush tax cuts to expire on schedule in January and making deep cuts to the Pentagon and other agency budgets would shrink future deficits and begin to tame the national debt.

Still, the nation would pay an economic price for such austerity measures, the CBO said. Raising taxes and cutting government spending would slow economic growth and increase unemployment. The CBO projected that the jobless rate would hit 8.9 percent by the end of this year and rise to 9.2 percent by the end of 2013.

CBO director Douglas Elmendorf said the changes would make “a very large difference” in what the government takes in and what it spends in the next fiscal year, which would amount to nearly $400 billion in 2013 alone. “So the amount of higher revenue and lower spending that would occur under current law is really quite sharp,” Elmendorf said. “We think that will be pushing down the economy as other factors are starting to push the economy up.”

If policymakers instead choose to short-circuit those changes, the nation’s financial health could suffer, the CBO said. Extending the Bush tax cuts would reduce revenues by $5.4 trillion over the next decade. Extending other temporary tax policies, such as the tax break for corporate research and development, would add another $1 trillion to deficits, as would a decision to forego the agency spending cuts agreed to during the battle over the debt-limit last summer.

All told, unless policymakers are willing to ask voters to make significant sacrifices, they risk adding another $11 trillion to the $15.2 trillion national debt through 2022, according to CBO figures.

The Congressional Budget Office takes stock of the federal budget at least three times each year: in January, upon receipt of the president’s budget and again in August. The agency’s projection for the 2012 deficit has increased slightly since August, primarily because of corporate tax receipts and the extension of the Social Security payroll tax holiday through the end of this month.

Lawmakers in both parties want to extend the tax break, which reduces the payroll tax rate from 6.2 percent to 4.2 percent, through the rest of this year. If Congress cannot agree on spending cuts or tax increases to replace the lost revenue, the new extension would add another $75 billion to the 2012 deficit, the CBO said.

Even then, the 2012 budget gap would mark an improvement over the past three years, when the deficit topped out at $1.4 trillion. The budget gap has fallen steadily as a share of the slowly growing economy — dropping from 10 percent in 2009 to a projected 7 percent this year — as individual tax collections have begun to recover and spending on the social safety net has shrunk.

The accumulation of large deficits has required the nation to borrow heavily, and the portion of the debt held by outside investors has doubled since 2007. The CBO projects that it will rise to more than 72 percent of the economy by the end of this year — the highest level since World War II — and then begin to drift downward if Congress and the next president let the Bush tax cuts expire and maintain other austerity policies now scheduled to take effect.

Without those changes, however, the national debt would continue to soar, the CBO said, with the portion held by outside investors rising to 94 percent of the economy by 2022.

“How much or how quickly the deficit declines will depend in part on how well the economy does over the next few years,” the CBO report said. “Probably more critical, though, will be the fiscal policy choices made by lawmakers as they face the substantial changes to tax and spending policies that are slated to take effect within the next year.”

In a statement after the report was released, Senate Budget Committee Chairman Kent Conrad (D-N.D.) called on lawmakers to work together to support the economic recovery. “We will not solve this problem unless both sides, Democrats and Republicans, are willing to move off their fixed positions and find common ground,” he said. “Republicans must be willing to put revenue on the table and accept a tax code where everyone, including the wealthiest, pays their fair share.”

House Budget Committee chairman Paul Ryan (R-Wis.) echoed Conrad and said that he is committed to “building a bipartisan coalition for a principled reform agenda.”

“The CBO’s latest alarm bell couldn’t be more ominous,” Ryan said in a statement. “For years, politicians from both political parties have failed to be honest with the American people about the size and scope of the debt threat. The CBO’s report today confirms that it is past time for serious leaders to put aside politics and start forging solutions.”

Germany's Role in Europe and the European Debt Crisis

Πηγή: Stratfor
By George Friedman
Jan 31 2012

The German government proposed last week that a European commissioner be appointed to supplant the Greek government. While phrasing the German proposal this way might seem extreme, it is not unreasonable. Under the German proposal, this commissioner would hold power over the Greek national budget and taxation. Since the European Central Bank already controls the Greek currency, the euro, this would effectively transfer control of the Greek government to the European Union, since whoever controls a country's government expenditures, tax rates and monetary policy effectively controls that country. The German proposal therefore would suspend Greek sovereignty and the democratic process as the price of financial aid to Greece.

Though the European Commission rejected the proposal, the concept is far from dead, as it flows directly from the logic of the situation. The Greeks are in the midst of a financial crisis that has made Greece unable to repay money Athens borrowed. Their options are to default on the debt or to negotiate a settlement with their creditors. The International Monetary Fund (IMF) and European Union are managing these negotiations.

Any settlement will have three parts. The first is an agreement by creditors to forego repayment on part of the debt. The second is financial help from the IMF and the European Union to help pay back the remaining debt. The third is an agreement by the Greek government to curtail government spending and increase taxes so that it can avoid future sovereign debt crises and repay at least part of the debt.
Bankruptcy and the Nation State

The Germans don't trust the Greeks to keep any bargain, which is not unreasonable given that the Greeks haven't been willing to enforce past agreements. Given this lack of trust, Germany proposed suspending Greek sovereignty by transferring it to a European receiver. This would be a fairly normal process if Greece were a corporation or an individual. In such cases, someone is appointed after bankruptcy or debt restructuring to ensure that a corporation or individual will behave prudently in the future.

A nation state is different. It rests on two assumptions. The first is that the nation represents a uniquely legitimate community whose members share a range of interests and values. The second is that the state arises in some way from the popular will and that only that popular will has the right to determine the state's actions. There is no question that for Europe, the principle of national self-determination is a fundamental moral value. There is no question that Greece is a nation and that its government, according to this principle, is representative of and responsible to the Greek people.

The Germans thus are proposing that Greece, a sovereign country, transfer its right to national self-determination to an overseer. The Germans argue that given the failure of the Greek state, and by extension the Greek public, creditors have the power and moral right to suspend the principle of national self-determination. Given that this argument is being made in Europe, this is a profoundly radical concept. It is important to understand how we got here.
Germany's Part in the Debt Crisis

There were two causes. The first was that Greek democracy, like many democracies, demands benefits for the people from the state, and politicians wishing to be elected must grant these benefits. There is accordingly an inherent pressure on the system to spend excessively. The second cause relates to Germany's status as the world's second-largest exporter. About 40 percent of German gross domestic product comes from exports, much of them to the European Union. For all their discussion of fiscal prudence and care, the Germans have an interest in facilitating consumption and demand for their exports across Europe. Without these exports, Germany would plunge into depression.

Therefore, the Germans have used the institutions and practices of the European Union to maintain demand for their products. Through the currency union, Germany has enabled other eurozone states to access credit at rates their economies didn't merit in their own right. In this sense, Germany encouraged demand for its exports by facilitating irresponsible lending practices across Europe. The degree to which German actions encouraged such imprudent practices -- since German industrial production vastly outstrips its domestic market, making sustained consumption in markets outside Germany critical to German economic prosperity -- is not fully realized.

True austerity within the European Union would have been disastrous for the German economy, since declines in consumption would have come at the expense of German exports. While demand from Greece is only a small portion of these exports, Greece is part of the larger system -- and the proper functioning of that system is very much in Germany's strategic interests. The Germans claim the Greeks deceived their creditors and the European Union. A more comprehensive explanation would include the fact that the Germans willingly turned a blind eye. Though Greece is an extreme case, Germany's overall interest has been to maintain European demand -- and thus avoid prudent austerity -- as long as possible.

Germany certainly was complicit in the lending practices that led to Greece's predicament. It is possible that the Greeks kept the whole truth about the Greek economy from their creditors, but even so, the German demand for suspension of Greek national self-determination is particularly striking.

In a sense, the German proposal merely makes very public what has always been the reality. For Greece to have its debt restructured, it must impose significant austerity measures, which Athens has agreed to. The Germans now want a commissioner appointed to ensure the Greek government fulfills its promise. In the process, the debt crisis will profoundly circumscribe Greek democracy by transferring fundamental elements of Greek sovereignty into the hands of commissioners whose primary interest is the repayment of debt, not Greek national interests.
The Judgment of Athens

The Greeks have two choices. First, they can accept responsibility for the debts on the terms negotiated and accede to the constraints on their budget and tax discretion whether imposed by a commissioner or by a less formal structure. Second, they can default on all debts. As we have learned from corporate behavior, bankruptcy has become a respectable strategic option. Therefore, the Greeks must consider the consequences of simply defaulting.

Default might see them frozen out of world financial markets. But even if they don't default, they will be present in those markets only under the most constrained circumstances, and to the primary benefit of creditors at that. Moreover, as many corporations have found, borrowing becomes more attractive after default, as it clears the way to new post-default debt. It is not clear that no one would lend to Greece after a default. In fact, Greece has defaulted on its debt several times and managed to regain access to international lending.

More significantly, defaulting would allow Greece to avoid fueling its internal political crisis by forfeiting its national sovereignty. Much of the political crisis inside of Greece stems from the Greek public's antipathy to austerity. But another part, which would come to the fore under the German proposal, is that the Greeks do not want to lose national sovereignty. In their long history, the Greeks have lost their sovereignty to invaders such as the Romans, the Ottomans and, most recently, the Nazis. The brutal German occupation still lives in Greek memories. The concept of national self-determination is thus not an abstract concept to the Greeks. Its loss plus austerity imposed by foreign powers would create a domestic crisis in which the Greek state would be seen as an economic and political enemy of Greek national interests along with the commissioner or some other mechanism. The political result could be explosive.

It is unclear if the Greeks will opt not to default. The certain price of default -- being forced to use their national currency instead of the euro -- actually would increase national sovereignty. There will be economic pain if the Greeks continue with the euro, and there will be economic pain if the Greeks leave the euro; the political consequences of losing sovereignty in the face of such pain could easily be overwhelming. Default, while painful to Greece, might well be less painful than the alternative.
The German Dilemma

The Germans are caught in a dilemma. On the one hand, Germany is the last country in Europe that could afford general austerity in troubled states and the resulting decline in demand. On the other hand, it cannot simply tolerate Greek-style indifference to fiscal prudence. Germany must have a structured solution that to some degree maintains demand in countries such as Spain or Italy; Germans must show there are consequences to not complying with the orderly handling of debt without default. Above all, the Germans must preserve the European Union so they can enjoy a European free-trade zone. There is thus an inherent tension between preserving the system and imposing discipline.

Germany has decided to make an example of the Greeks. The German public largely has bought into Berlin's narrative of Greek duplicity and German innocence. German Chancellor Angela Merkel has needed to frame the discussion this way, and she has succeeded. The degree to which the German public is aware of the complexities or the consequences of a generalized austerity for Germany is less clear. Merkel must now satisfy a German public that questions bailouts and sees Greece as simply irresponsible. Capitulation from Greece is necessary for her as a matter of domestic politics.

The German move into questions of sovereignty has raised the stakes in the debt crisis dramatically. Even if the Germans simply back off this demand, the Greek public has been reminded that Greek democracy is effectively at stake. While Greece may have borrowed irresponsibly, if the price of that behavior is yielding sovereignty to an unelected commissioner, that price not only would challenge Greek principles, it would bring Europe to a new crisis.

That crisis would be political, as the ongoing crisis always has been. In the new crisis, sovereign debt issues turn into threats to national independence and sovereignty. If you owe too much money and your creditors distrust you, you lose the right to national self-determination on the most important matters. Given that Germany was the historical nightmare for most of Europe, and it is Germany that is pushing this doctrine, the outcome could well be explosive. It could also be the opposite of what Germany needs.

Germany must have a free-trade zone in Europe. Germany also needs robust demand in Europe. Germany also wants prudence in borrowing practices. And Germany must not see a return to the anti-German feeling of previous epochs. Those are several needs, and some of them are mutually exclusive. In one way, the issue is Greece. But more and more, it is the Germans that are the question mark. How far are they willing to go, and do they fully understand their national interests? Increasingly, this crisis is ceasing to be a Greek or Italian crisis. It is a crisis of the role Germany will play in Europe in the future. The Germans hold many cards, and that's their problem: With so many options, they must make hard decisions -- and that does not come easily for postwar Germany.

Defying ban, 'occupy' protesters stay put in Washington

Πηγή: New Kerala
By Arun Kumar
Jan 31 2012

Washington: Defying a noon police deadline to remove their camps or face arrest, Occupy protesters in Washington have erected a "tent of dreams" around a statue as part of their protest against eviction.

The camps at McPherson Square and Freedom Plaza, a couple of blocks from either end of the White House, are the group's most visible sites after the one in New York, where the Occupy Wall Street movement against corporate greed began in September, was cleared out in November.

Things began to heat up last week when National Park Service officials were called before Congress to explain why Occupy protesters have been allowed to illegally camp on park land. In response, the Park Service ordered protesters to cease camping by Monday.

On the day the US Park Police planned to enforce a no-camping rule, the mood was festive in McPherson Square. Some chanted Occupy slogans. Others milled around waiting for a noon deadline.

As the deadline neared, hundreds of people gathered around the statue of James McPherson, an American Civil War general. Then, protesters pulled a massive tarp over the statue symbolizing what they say is their right to camp here.

Last week, the police notified the two Occupy camps in Washington that they would enforce the camping ban. Protesters must clear out camping materials, but they may keep some structures as long as one side is open.

Police in Oakland, California made more than 400 arrests over the weekend when factions loosely affiliated with the Occupy movement clashed with police.

Stressing that the Occupy movement, which seeks better economic equality, is non-violent, protesters in Washington say they don't want that to happen here.

Russian Missile Maker Lost $790 mln over Libya War

Πηγή: RIANovosti
Jan 31 2012

Russian air-launched missile maker Russian Tactical Missiles (TRV) suffered a loss of $791.22 million worth of contracts with Libya in 2011 due to the civil war there, the corporation’s General Director Boris Obsonov said on Tuesday.

Russia lost around $4 billion in sales to Libya due to the war and the resultant UN sanctions on Tripoli, according to data from Russian arms sales company Rosoboronexport and the Federal Military-Technical Agency.

“In total, export contracts that were not fulfilled totaled 600 million euros,” Obsonov said. “Also, it is impossible not to note the fact that a contract was signed with Libya for our Bal-E coastal defense missile system. Unfortunately it was not fulfilled.”

He stressed that the amount was lost profit and not a financial hole. “These lost opportunities – that which we call lost profit – are pretty serious for the corporation and not just in the financial sense,” he said.

“In addition, there were several contracts still in the final stages of discussion,” he added.

TRV hopes to export $527.5 million worth of missiles in 2012, Obsonov said

“We delivered about $390 million worth of missiles in 2011, up 14 percent on the previous year. We expect to deliver at least as much this year,” he says.

Civil war broke out in Libya in February 2011 after protests against the rule of Muammar Gaddafi developed into full-scale insurrection. A UN resolution was passed in March 2011 setting up a no-fly zone, and NATO aircraft began attacking Gaddafi’s forces immediately after.

Gaddafi was killed in October and NATO operations ended at the end of that month.

TRV, based in Korolev near Moscow, is Russia’s main maker of tactical air-launched missiles, and combines the former Vympel, Zvezda-Strela and Raduga design and manufacturing organizations.

Germany to set the terms for saving the euro

German chancellor Angela Merkel and European commission president José Manuel Barroso at the EU summit in Brussels

Πηγή: The Guardian
By Ian Traynor
Jan 31 2012

Germany's campaign to set the terms for saving the euro was crowned with success when EU leaders sealed agreement on a new "fiscal compact" for the single currency zone, enshrining Berlin's insistence on rigour and discipline and establishing a new punitive regime for budgetary profligacy.

Chancellor Angela Merkel returned to Berlin with the new treaty in the bag, but also appeared more isolated in Europe in her hard line on Greece and how to save the country from defaulting on its debt.

All EU countries except Britain and the Czech Republic signed up for the new pact on Monday night, although Poland and France sparred over who would be allowed to take part in the twice-a-year eurozone summits which are a feature of the new regime.

President Nicolas Sarkozy sought to restrict the summitry to the 17 countries of the eurozone, while the Polish prime minister, Donald Tusk, insisted that non-euro countries who sign up to the new pact should be allowed to attend.

"It's very symbolic," said a senior EU diplomat. "A matter of national flags and national pride for the Poles."

At German insistence, the treaty for the first time empowers the European Court of Justice as the enforcer of fiscal rectitude in the eurozone, makes it possible to levy quasi-automatic fines against countries in persistent breach of the new rules, and obliges all eurozone countries to introduce binding legislation or constitutional amendments abolishing governments' rights to run up excessive levels of national debt.

"The debt brakes will be binding and valid forever," said Merkel.

"Never will you be able to change them through a parliamentary majority."

While the impact of the treaty will not be felt in the short term and will have little quick effect on Greece's plight or on Europe's sovereign debt crisis, Berlin insists it is needed to resolve the fundamental issue of excessive indebtedness in part of the eurozone, that it will prevent a rerun of the current crisis, and that it should have a calming effect in the bond markets.

While the rest of Europe reluctantly bowed to the German agenda, Berlin, however, found itself increasingly alone on how to fix Greece.

Anger in Athens over leaked German plans last week that Greece should surrender power over its budget to the EU since it was incapable of delivering on its bailout pledges mushroomed into strong criticism from some of Berlin's habitual allies.

Helle Thorning-Schmidt, the Danish prime minister who has just taken over the EU presidency, said that Brussels would defend Greece against any assault on its democracy, a reference to the German demand for Athens to forfeit control over budget policy.

The Austrian chancellor, Werner Faymann, who has been on the German side of the creditor-debtor argument for the past 18 months, was also critical of Berlin.

Jean Asselborn, Luxembourg's foreign minister, went further. "It's not in order that German politicians say that we need commissars and that Greece be put under supervision … The biggest country in the EU, Germany, should be more careful."

Merkel beat a hasty retreat from the German demands for a takeover of the Greek budget, declaring that "we are holding a discussion that we should not be holding … We don't want a controversial discussion but one that is successful, successful for the people of Greece."

Despite being the most pressing issue facing the EU, Greece was kept off the agenda of the summit which, apart from finalising the fiscal pact, largely focused on a debate about how to create jobs and stimulate growth in the EU while simultaneously engaging in savage spending cuts and ruling out any public spending on soaring unemployment levels.

A small group of EU leaders, however, ended the summit with a private meeting with the Greek prime minister.

EU leaders are waiting for a report on Greece's compliance with the terms of its bailout – expected to be highly critical – from the European Commission, European Central Bank, and International Monetary Fund before deciding what to do about a second €130bn bailout which needs to be launched in March to avoid a Greek default.

Acquiescence to Berlin on the new stiff fiscal rules may make it easier to come up with more help for Greece, as well as increasing the firewall of bailout funds intended to stabilise the euro and ward off the risk of contagion from Greece to Italy and Spain.

The view in Brussels and other EU capitals is that Merkel needs the new euro regime to demonstrate to German public opinion and parliament in Berlin that the rest of the eurozone has adopted sound and strict rules before she can countenance increased aid for Greece.

She is also keen to get the new system established before the decisive round of the French presidential elections in May since the leftwinger, François Hollande, has pledged to renegotiate the pact while outlining public spending plans that could put France in breach of the rules.

A Hollande victory could yet upset the calculations in Berlin as France will not be able to ratify the new deal in time. before the presidential contest is settled.

Imperial errors cost US the Middle East

Πηγή: Asia Times
By Dmitry Shlapentokh
Jan 31 2012

The United States' invasion of Iraq in 2003 was an important event in post-Cold War history that is well-placed in the context of a series of other "preventive" wars, such as against Serbia (1999), Afghanistan (2001), and, lately, Libya.

All of them were conducted under various excuses, but their geopolitical underpinning was clear. On one hand, the West, especially the US, is increasingly pressed by the economic rise of Asia - mostly China.
On the other hand, the West, the US in particular, tried to take advantage of a military superiority emerging after the collapse of the Soviet Union.

The attack against Iraq was designed not only to demonstrate the US's superior military power and disregard for international law and European allies, but also to provide the US with a hold over the strategic resources of oil and gas in the Middle East. The designs failed. Still, the US might yet turn this defeat, if not into victory, at least into some of advantage.

The US's major mistake in Iraq - in stark contrast to the United Kingdom during its colonial quest - is that it tried to engage in "regime change", where the entire state structure of the old regime was not superseded but destroyed. Later, the US tried to restore it, but the damage was irreversible.

Secondly, Washington, following the dictum that democracy should spread to any part of the world, launched what were the freest elections in Iraq's history. Both decisions were grave mistakes and led to disaster, at least from Washington's perspective.

The destruction of the state unleashed anarchy and a milieu where jihadis and other extremists could flourish. The election led to the Shi'ite majority - with its strong pro-Iranian sympathies - gaining power. Then the only force that would have been able to stabilize Iraq and prevent it from becoming Iran's proxy - US troops - left.

Essentially, Washington should have stayed in Baghdad indefinitely as the British would have done in their heyday of empire.

Still, Washington had no resources to do this. To start with, the Department of Defense - a huge and inefficient cash cow - made the soldiers' upkeep unbearably expensive.

As a result, the cost of the conflicts in Afghanistan and Iraq for a few years was the same amount of cash as had been for the arms race with the mighty "Evil Empire".

With an industrial base in the process of erosion and mounting debt and budget cuts, the hands of Washington were tied; and it would be naive to attribute the withdrawal from Iraq conducted recently to the naivete of President Barack Obama.

With the US's departure, a trend where Baghdad was drawing closer to Tehran has intensified, and Iraq supports the regime in Syria - Tehran's proxy.

At the same time, Sunni violence, with the possible participation of jihadis, has intensified. This also could be said to a lesser degree about the Kurds, who have not lost hope of building an independent state.

This process has provided an opportunity to Sunni jihadis, the enemy of not just Prime Minister Nuri al-Maliki's government but also that of his masters in Tehran.

Moreover, they could well reinforce the Taliban movement in Afghanistan, who are the enemy not just of the US but also of Iran. It is not surprising that Iran has engaged in moves not just to prepare for a potential war with the US/Israel but also started maneuvers near its borders with Afghanistan.

The Kurdish problem could be helpful for Washington for it creates permanent pressure for Ankara and might at least slow Turkey's slide toward Iran.

The US's defeat in the Middle East still could bring some benefits for Washington and Brussels; and it would not be surprising if the West were already at work on this scheme. Still, other powers are working on schemes of their own; and the situation in the region - and globally - has become unstable and, therefore, fluid.

Dmitry Shlapentokh, PhD, is associate professor of history, College of Liberal Arts and Sciences, Indiana University South Bend. He is author of East Against West: The First Encounter - The Life of Themistocles, 2005.

US says Assad's fall 'inevitable'

Πηγή: Aljazeera
Jan 31 2012

The US has said the rule of Syrian President Bashar al-Assad is coming to an end, as Western and Arab nations push for a UN Security Council resolution.

Washington is seeking to convince Russia not to stand in the way of the Arab League's initiative, to be presented to the Security Council in New York on Tuesday, calling for Assad to transfer power to help resolve the crisis.

"Assad's fall is inevitable," Jim Carney, the White House spokesman, said on Monday.

"As governments make decisions about where they stand on this issue and what steps need to be taken with regards to brutality of Assad's regime, it's important to calculate into your consideration the fact that he will go. The regime has lost control of the country and he will eventually fall."

Damascus dismissed Western criticism and said it would defeat what it called foreign attempts to spread chaos.

"We are not surprised at the lack of wisdom or rationality of these statements and regret that they are still issued by
countries that are used to making the Middle East an arena for their follies and failures," the state news agency quoted a foreign ministry source as saying.

"Syria, which is defending itself today against terrorism and will continue to do so, will be the exception which ... will
foil the policies of chaos adopted by these countries," it said.

Violence escalating

The comments came as fighting seemed to escalate on the ground in Syria, where activists said about 100 people were killed on Monday.

Troops battled anti-Assad fighters in the central city of Homs and in suburbs of the capital, Damascus.

The Local Co-ordination Committees said the majority of the victims died in Homs province, many of them in the town of Rastan, where the army shelled residential buildings.

Rastan has long been the scene of battles between armed opposition and government forces.

At the edges of Damascus, fighting subsided by nightfall on Monday as members of the anti-Assad Free Syrian Army (FSA) pulled out to the edges of the capital's suburbs, activists said.

Several civilians and six FSA members were reportedly killed.

Meanwhile, Nabil Elaraby, the secretary-general of the Arab League, and Hamad bin Jassim Al Thani, the Qatari prime minister, held talks with diplomats in New York ahead of Tuesday's Security Council meeting on Syria.

A new draft resolution calls for a "political transition" in Syria. While it does not seek military action or UN sanctions against Syria, it does say that the Security Council could "adopt further measures" if Damascus does not comply with the terms of the resolution.

Russia, which along with China vetoed a previous draft in October, has not explicitly threatened to veto the resolution, but has said the draft is unacceptable in its present form.

'Diplomatic muscles flexed'

Hillary Clinton, the US secretary of state, said she would travel to the UN for the meeting to "send a clear message of support to the Syrian people: We stand with you".

France, the UK, and Portugal are sending their foreign ministers to take part in the meeting.

A vote on the resolution, drafted by European and Arab members of the council, could come before the end of the week, diplomats say.

Al Jazeera's Kristen Saloomey, reporting from the United Nations in New York, said that French diplomats were claiming that the resolution now had a majority of votes in the Security Council.

"All diplomatic muscles are being flexed here in New York in an attempt to win support for a resolution that is put forward by Morocco in the Security Council... But it comes down to China and Russia who have both expressed concern over the resolution."

As permanent members, both Russia and China have veto powers at the Security Council, so any binding resolution would require Moscow and Beijing to at least abstain from voting.

Earlier, Russia suggested to the government and the opposition that they should meet in the Russian capital for "informal contacts" without any preconditions.

Russia said Assad's government had agreed to talks, but a major opposition body rejected the offer.

"The resignation of Assad is the condition for any negotiation on the transition to a democratic government in Syria," Burhan Ghalioun, head of the opposition Syrian National Council, told the AFP news agency.

A Web of Financial Fraud and Criminality: America's Shadow Banking System

Πηγή: Global Research
By Ellen Brown
Jan 30 2012

The Wall Street Journal reported on January 19th that the Obama Administration was pushing heavily to get the 50 state attorneys general to agree to a settlement with five major banks in the “robo-signing” scandal. The scandal involves employees signing names not their own, under titles they did not really have, attesting to the veracity of documents they had not really reviewed. Investigation reveals that it did not just happen occasionally but was an industry-wide practice, dating back to the late 1990s; and that it may have clouded the titles of millions of homes. If the settlement is agreed to, it will let Wall Street bankers off the hook for crimes that would land the rest of us in jail – fraud, forgery, securities violations and tax evasion.

To the President’s credit, however, he seems to have shifted his position on the settlement in response to protests before his State of the Union address. In his speech on January 24th, President Obama did not mention the settlement but announced instead that he would be creating a mortgage crisis unit to investigate wrongdoing related to real estate lending. “This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans,” he said.

The Deeper Question Is Why

Whether massive robo-signing occurred is no longer in issue. The question that needs to be investigated is why it was being done. The alleged justification—that the bankers were so busy that they cut corners—hardly seems credible given the extent of the practice.

The robo-signing largely involved assignments of mortgage notes to mortgage servicers or trusts representing the investors who put up the loan money. Assignment was necessary to give the trusts legal title to the loans. But assignment was delayed until it was necessary to foreclose on the homes, when it had to be done through the forgery and fraud of robo-signing. Why had it been delayed? Why did the banks not assign the mortgages to the trusts when and as required by law?

Here is a working hypothesis, suggested by Martin Andelman: securitized mortgages are the “pawns” used in the pawn shop known as the “repo market.” “Repos” are overnight sales and repurchases of collateral. Yale economist Gary Gorton explains that repos are the “deposit insurance” for the shadow banking system, which is now larger than the conventional banking system and is necessary for the conventional system to operate. The problem is that repos require “sales,” which means the mortgage notes have to remain free to be bought and sold. The mortgages are left unendorsed so they can be used in this repo market.

The Evolution of the Shadow Banking System

Gorton observes that there is a massive and growing demand for banking by large institutional investors – pension funds, mutual funds, hedge funds, sovereign wealth funds – which have millions of dollars to park somewhere between investments. But FDIC insurance covers only up to $250,000. FDIC insurance was resisted in the 1930s by bankers and government officials and was pushed through as a populist movement: the people demanded it. What they got was enough insurance to cover the deposits of individuals and no more. Today, the large institutional investors want similar coverage. They want an investment that is secure, that provides them with a little interest, and that is liquid like a traditional deposit account, allowing quick withdrawal.

The shadow banking system evolved in response to this need, operating largely through the repo market. “Repos” are sales and repurchases of highly liquid collateral, typically Treasury debt or mortgage-backed securities—the securitized units into which American real estate has been ground up and packaged, sausage-fashion. The collateral is bought by a “special purpose vehicle” (SPV), which acts as the shadow bank. The investors put their money in the SPV and keep the securities, which substitute for FDIC insurance in a traditional bank. (If the SPV fails to pay up, the investors can foreclose on the securities.) To satisfy the demand for liquidity, the repos are one-day or short-term deals, continually rolled over until the money is withdrawn. This money is used by the banks for other lending, investing or speculating. Gorton writes:

This banking system (the “shadow” or “parallel” banking system)—repo based on securitization—is a genuine banking system, as large as the traditional, regulated banking system. It is of critical importance to the economy because it is the funding basis for the traditional banking system. Without it, traditional banks will not lend and credit, which is essential for job creation, will not be created.

All Behind the Curtain of MERS

The housing shell game was made possible because it was all concealed behind an electronic smokescreen called MERS (an acronym for Mortgage Electronic Registration Systems, Inc.). MERS allowed houses to be shuffled around among multiple, rapidly changing owners while circumventing local recording laws. Title would be recorded in the name of MERS as a place holder for the investors, and MERS would foreclose on behalf of the investors. Payments would be received by the mortgage servicer, which was typically the bank that signed the mortgage with the homeowner. The homeowner usually thinks the servicer is the lender, but in fact it is an amorphous group of investors.

This all worked until courts started questioning whether MERS, which admitted that it was a mere conduit without title, had standing to foreclose. Courts have increasingly held that it does not.

Making matters worse for the servicing banks, Fannie Mae sent out a memo telling servicers that in order to be reimbursed under HAMP—a government loan modification program designed to help at-risk homeowners meet their mortgage payments—the servicers would have to produce the paperwork showing the loan had been assigned to the trust.

The hasty solution was a rash of assignments signed by an army of “robosigners,” to be filed in the public records. But the documents are patent forgeries, making a shambles of county title records.

Complicating all this are tax issues. Since 1986, mortgage-backed securities have been issued to investors through SPVs called REMICs (Real Estate Mortgage Investment Conduits). REMICs are designed as tax shelters; but to qualify for that status, they must be “static.” Mortgages can’t be transferred in and out once the closing date has occurred. The REMIC Pooling and Servicing Agreement typically states that any transfer significantly after the closing date is invalid. Yet the newly robo-signed documents, which are required to begin foreclosure proceedings, are almost always executed long after the trust’s closing date. The whole business is quite complicated, but the bottom line is that title has been clouded not only by MERS but because the trusts purporting to foreclose do not own the properties by the terms of their own documents.

John O’Brien, Register of Deeds for the Southern Essex District of Massachusetts, calls it a “criminal enterprise.” On January 18th, he called for a full scale criminal investigation, including a grand jury to look into the evidence. He sent to Massachusetts Attorney General Martha Coakley, U.S. Attorney General Eric Holder and U.S. Attorney Carmen Ortiz over 30,000 documents recorded in the Salem Registry that he says are fraudulent.

From Lending Machines to Borrowing Machines

The bankers have engaged in what amounts to a massive fraud, not necessarily because they started out with criminal intent, but because they have been required to in order to come up with the collateral (in this case real estate) to back their loans. It is the way our system is set up: the banks are not really creating credit and advancing it to us, counting on our future productivity to pay it off, the way they once did under the deceptive but functional façade of fractional reserve lending. Instead, they are vacuuming up our money and lending it back to us at higher rates.

“Instead of lending into the economy,” says British money reformer Ann Pettifor, “bankers are borrowing from the real economy.” She wrote in the Huffington Post in October 2010:

[T]he crazy facts are these: bankers now borrow from their customers and from taxpayers. They are effectively draining funds from household bank accounts, small businesses, corporations, government Treasuries and from e.g. the Federal Reserve. They do so by charging high rates of interest and fees; by demanding early repayment of loans; by illegally foreclosing on homeowners, and by appropriating, and then speculating with trillions of dollars of taxpayer-backed resources.

Not only has the system destroyed county title records, but it is highly vulnerable to bank runs and systemic collapse. In the shadow banking system, as in the old fractional reserve banking system, the collateral is being double-counted: it is owed to the borrowers and the depositors at the same time. This allows for expansion of the money supply, but bank runs can occur when the borrowers and the depositors demand their money at the same time. And unlike the conventional banking system, the shadow banking system is largely unregulated. It doesn’t have the backup of FDIC insurance to prevent bank runs.

That is what happened in September 2008 following the bankruptcy of Lehman Brothers, a major investment bank. Gary Gorton explains that it was a run on the shadow banking system that caused the credit collapse that followed. Investors rushed to pull their money out overnight. LIBOR—the London interbank lending rate for short-term loans—shot up to around 5%. Since the cost of borrowing the money to cover loans was too high for banks to turn a profit, lending abruptly came to a halt.

Fixing the System

The question is how to eliminate this systemic risk. As noted by The Business Insider:

Regulate shadow banking more tightly, and you probably have to also provide government backstops. Shudder. Try to shut the thing down or restrict it and you suck credit out of the system, credit which much of the non-financial “'real” economy uses and needs.

Interestingly, countries with strong public sector banking systems largely escaped the 2008 credit crisis. These include the BRIC countries—Brazil Russia, India, and China—which contain 40% of the global population and are today’s fastest growing economies. They escaped because their public sector banks do not need to rely on repos and securitizations to back their loans. The banks are owned and operated by the ultimate guarantor—the government itself. The public sector banking model deserves further study.

Whatever the solution, a system that requires the slicing and dicing of mortgages behind an electronic smokescreen so they can be bought and sold as collateral for the pawn shop of the repo market is obviously fraught with perils and is unsustainable. Please contact your state attorney general and urge him or her not to go through with the robo-signing settlement, which will be granting immunity for crimes that are not yet fully known. Phone numbers are here. The surface of this great shadowy second banking system has barely been scratched. It needs a very thorough investigation.

Ellen Brown is an attorney and president of the Public Banking Institute, http://PublicBankingInstitute.org. In Web of Debt, her latest of eleven books, she shows how a private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her websites arehttp://WebofDebt.com and http://EllenBrown.com.

FDA staffers sue agency over surveillance of personal e-mail

Πηγή: Washimgton Post
By Ellen Nakashima and Lisa Rein
Jan 30 2012

The Food and Drug Administration secretly monitored the personal e-mail of a group of its own scientists and doctors after they warned Congress that the agency was approving medical devices that they believed posed unacceptable risks to patients, government documents show.

The surveillance — detailed in e-mails and memos unearthed by six of the scientists and doctors, who filed a lawsuit against the FDA in U.S. District Court in Washington last week — took place over two years as the plaintiffs accessed their personal Gmail accounts from government computers.

Information garnered this way eventually contributed to the harassment or dismissal of all six of the FDA employees, the suit alleges. All had worked in an office responsible for reviewing devices for cancer screening and other purposes.

Copies of the e-mails show that, starting in January 2009, the FDA intercepted communications with congressional staffers and draft versions of whistleblower complaints complete with editing notes in the margins. The agency also took electronic snapshots of the computer desktops of the FDA employees and reviewed documents they saved on the hard drives of their government computers.

FDA computers post a warning, visible when users log on, that they should have “no reasonable expectation of privacy” in any data passing through or stored on the system, and that the government may intercept any such data at any time for any lawful government purpose.

But in the suit, the doctors and scientists say the government violated their constitutional privacy rights by gazing into personal e-mail accounts for the purpose of monitoring activity that they say was lawful.

“Who would have thought that they would have the nerve to be monitoring my communications to Congress?” said Robert C. Smith, one of the plaintiffs in the suit, a former radiology professor at Yale and Cornell universities who worked as a device reviewer at the FDA until his contract was not renewed in July 2010. “How dare they?”

An FDA spokeswoman, Erica Jefferson, said the agency does not comment on litigation.

But according to FDA internal documents that the scientists and doctors obtained under the Freedom of Information Act, the agency told the Department of Health and Human Services’ inspector general that they had improperly disclosed confidential business information about the devices. The agency requested that an investigation be opened in May 2010.

The scientists and doctors denied sharing information improperly. The HHS inspector general’s office, which oversees FDA operations, declined to pursue an investigation, finding no evidence of criminal conduct. It also said that the doctors and scientists had a legal right to air their concerns to Congress or journalists.

FDA officials sought a second time that year to initiate action against the scientists and doctors. “We have obtained new information confirming the existence of information disclosures that undermine the integrity and mission of the FDA and, we believe, may be prohibited by law,” wrote Jeffrey Shuren, director of the FDA’s Center for Devices and Radiological Health, on June 28, 2010.

The inspector general, after consulting with federal prosecutors, declined the second request, as well.

Michael Sussmann, a former federal prosecutor who is now a partner at the Perkins Coie law firm, said the FDA’s warning on its computers gave the agency latitude to conduct extensive monitoring. “Anything on this agency’s network is fair game by use of this banner, as long as they’re lawfully targeting their employee.”

Yet the case sheds light on the lengths to which a federal agency will go to monitor employees. At issue, experts say, is whether the purpose of the monitoring was legal and what level of monitoring on government computers is reasonable at a time when technology increasingly blurs the lines between work and home.

“The FDA has a huge responsibility to protect public health and safety,” Sen.Charles E. Grassley (R-Iowa) said in a statement last week. “It’s hard to see how managers apparently thought it was a good use of time to shadow agency scientists and monitor their e-mail accounts for legally protected communications with Congress.”

Concerns about devices

The FDA scientists and doctors, all of whom worked for the agency’s Office of Device Evaluation, said they first made internal complaints beginning in 2007 that the agency had approved or was on the verge of approving at least a dozen radiological devices whose effectiveness was not proven and that posed risks to millions of patients. Frustrated, they also brought their concerns to Congress, the White House and the HHS inspector general.

Three of the devices risked missing signs of breast cancer, the scientists and doctors warned, according to documents and interviews. Another risked falsely diagnosing osteoporosis, leading to unnecessary treatments; one ultrasound device could malfunction while monitoring pregnant women in labor, risking harm to the fetus; and several devices for colon cancer screening used such heavy doses of radiation that they risked causing cancer in otherwise healthy people, the FDA scientists and doctors said.

They also had expressed concern about a computer-aided imaging device that searched for signs of breast cancer. Three times, a team of experts, including Smith, recommended against approval, and middle managers agreed in each case, he said. After the third rejection, a senior manager approved the device in 2008, he said.

Most of the devices the scientists and doctors questioned have received approvals only in the past two years, making it difficult to evaluate whether the fears that the FDA scientists and doctors expressed were valid.

But the concerns were not isolated. In 2009 and 2011, the Government Accountability Office, Congress’s auditing arm, warned that some risky medical devices win approval through a process that is insufficiently stringent. The Institute of Medicine concluded in a major study last year that the FDA process for approving medical devices needed to be revised and based on “sound science.”

Though the FDA declined to comment for this story, agency officials last year dismissed an analysis by the Archives of Internal Medicine claiming that unsafe medical devices were rushed to market, saying a relatively small number were recalled between 2005 and 2009. An FDA spokeswoman also said last year the agency had made changes to make the review process safer.

Snapshots of desktops

After President Obama’s election, the FDA scientists and doctors wrote to his transition team in 2009, alleging corruption at the agency and warning about risks posed by the breast-cancer screening device.

After they sent the letter, which they shared with members of Congress, several news organizations reported on the concerns. In some of those reports, FDA officials said they were addressing the issues.

Within days after the news reports appeared, the president of the company that made the device, Ken Ferry of iCAD Inc., based in Nashua, N.H., wrote a letter to the FDA alleging that confidential business information had been leaked. Ferry declined to comment for this story.

Using automated software, the agency began taking snapshots of the scientists’ computer screens showing documents as they were being backed up and e-mails being moved from one file to another, the FDA documents show. The agency created a file, “FDA 9,” to store e-mails and documents gathered from nine scientists and doctors who originally had complained. (Three of them are not involved in the lawsuit filed last week.)

The first documented FDA interception was of an e-mail dated Jan. 29, 2009, shortly after the letter from Ferry. In it, device reviewer Paul T. Hardy asked a congressional aide, Joanne Royce, for assurances that “it is not a crime to provide information to the Congress about potential misconduct by another Agency employee.”

Royce replied: “[Y]ou and your colleagues have committed no crime. . . . you guys didn’t even provide confidential business information to Congress.”

Hardy, who is among the six employees who filed the suit, was fired in November after a negative performance review; an internal FDA letter obtained in separate litigation quoted managers saying they did not “trust” him. Of the other five scientists and doctors, the suit says two did not have their contracts renewed, two suffered harassment and werepassed over for promotions, and one was fired.

NATO allies grapple with shrinking defense budgets

Πηγή: Washington Post
By Craig Whitlock
Jan 30 2012

NATO allies are confronting a sustained weakening of the military alliance as ailing economies are forcing nearly all members, including the United States, to accelerate cuts to their defense budgets at the same time.

The Pentagon’s recent decision to eliminate two of the Army’s four brigades in Europe is the latest blow to NATO’s military capabilities. It extends a year of grim announcements from members of the alliance that they can no longer afford their security commitments and that a long period of austerity is in the offing.

Obama administration officials warned last year that European members of NATO could no longer expect the United States to shoulder a disproportionate burden of maintaining the 28-member alliance, the bedrock of trans-Atlantic security and diplomacy since the end of World War II. The United States accounts for 75 percent of all NATO defense spending, up from 50 percent during the Cold War.

Instead of coming forward, however, European members of NATO are in retreat. Britain announced troop cuts this month that will eventually shrink the size of its army by nearly one-fifth; it already has mothballed its only aircraft carrier.

Germany is trimming the size of its armed forces by a similar amount and canceling orders for fighter jets, helicopters and other weapons systems. Italy, which imposed deep defense cuts two years ago, is confronting another round that could include steep reductions in the number of F-35 Joint Strike Fighters — a U.S.-made plane — that it had planned to buy.

“Of course it is a painful time,” Hans Hillen, the defense minister of the Netherlands, said in an interview. “The problem of cutting defense is not a European hobby, or an American one, these days. It’s because of the economic crisis.”

The Dutch government decided last year to ax 12,000 Defense Ministry jobs, including 30 percent of the military’s general staff. “All the countries have problems with budgets, and they have to make choices,” Hillen said.

U.S. and NATO officials fret that the cutbacks will further erode military weaknesses that were exposed during last year’s air war in Libya. Several European countries quickly ran out of munitions and had to order them on an emergency basis from Washington. European militaries also lacked capability to refuel their own planes or conduct adequate surveillance from the air.

“If there ever was a time in which the United States could always be counted on to fill the gaps that may emerge in European defense, that time is rapidly coming to an end,” Ivo Daalder, the U.S. ambassador to NATO, told reporters in Washington last month.

At the same time, Europe’s austere economic outlook is leading to a “further weakening of the core ability to defend ourselves,” said Norwegian Defense Minister Espen Barth Eide.

Oil-rich Norway is an exception to the trend; it is increasing its defense budget. But Europe’s overall economic woes are exacerbating existing tensions within NATO, Eide said in a recent speech at the Center for Security and International Studies, a Washington-based think tank.

In Washington, the long-held “vision of Europe is that there’s a bunch of reasonably rich countries, relatively lazy, and not standing up for American-initiated missions abroad as much as they should,” he said.

In contrast, Eide said, resentment and opposition to the U.S.-led occupations of Iraq and Afghanistan has reduced popular backing for NATO among many Western European countries. “NATO was identified simply as the organization that takes away our sons and daughters and sends them to faraway places to do nation-building in the desert.”

Pentagon officials said the two Army brigades they are eliminating in Europe — each has about 5,000 soldiers — would be replaced in part by U.S.-based units that would rotate periodically to the continent to conduct joint training exercises. The reductions are part of a larger effort to cut $487 billion in projected spending over the next decade.

“I still think we’re going to have plenty of capacity to lead, if asked to lead, with boots on the ground, depending on the operation,” Gen. Ray Odierno, the Army chief of staff, told reporters Friday.

Odierno added that the U.S. military wasn’t counting on its cash-strapped NATO allies to fill the void. “We certainly are going to need our partners to move along with us as we do this, but I don’t think there’s any great expectation that they would provide more.”

There are about 80,000 U.S. service members stationed in Europe, along with more than 200,000 family members and civilian employees.

Plans have been afoot to reduce those numbers for many years. In 2004, then-Defense Secretary Donald Rumsfeld announced a similar plan to remove two of four U.S. Army brigades on the continent, but Army leaders successfully resisted.

As recently as April, the Pentagon said it would leave three brigades in Europe and wait until 2015 to bring the fourth one home. Army officials said the troops are critical to carrying out training missions with NATO allies, especially those from eastern Europe that joined the alliance only in the past decade.

The Pentagon has not publicly identified which of the four brigades will leave Europe. But officials Friday pointed toward the 170thInfantry Brigade, based in Baumholder, Germany; and the 172nd Infantry Brigade, based in Schweinfurt, Germany.

Remaining would be the 2nd Cavalry Regiment in Vilseck, Germany, and the 173rd Airborne Brigade Combat Team in Vicenza, Italy.

The locations of those bases are legacies from the Cold War, when U.S. and NATO forces were focused on the threat of a Soviet land invasion.

Hillen, the Dutch defense minister, said the withdrawal of the U.S. Army brigades was unlikely to trigger anxiety in western Europe but would be felt more keenly among NATO countries that border Russia and still see Moscow as a security concern.

As part of a new military strategy released this month, the Obama administration said it would devote greater attention and resources to Asia while maintaining a robust presence in the Middle East. That has fed concern among European allies that they will get short shrift over the long term and lose their influence in Washington.

More worrisome, however, is the possibility that the Pentagon’s attempts to get Europe to bear more of NATO’s costs could backfire, said Heather A. Conley, director of the Europe program at the Center for Strategic and International Studies. By bringing home U.S. troops, Washington may inadvertently give European allies an excuse to cut their defense budgets even more.

“I don’t see a plausible scenario for Europe to step forward,” said Conley, a former State Department official in the George W. Bush administration. “If we don’t start having these tough but important discussions, we run the risk of all of us just cutting away and leading to strategic drift.”

U.S. Drones Patrolling Its Skies Provoke Outrage in Iraq

Πηγή: New York Times
By ERIC SCHMITT and MICHAEL S. SCHMIDT
Jan 29 2012


BAGHDAD — A month after the last American troops left Iraq, the State Department is operating a small fleet of surveillance drones here to help protect the United States Embassy and consulates, as well as American personnel. Some senior Iraqi officials expressed outrage at the program, saying the unarmed aircraft are an affront to Iraqi sovereignty.

The program was described by the department’s diplomatic security branch in a little-noticed section of its most recent annual report and outlined in broad terms in a two-page online prospectus for companies that might bid on a contract to manage the program. It foreshadows a possible expansion of unmanned drone operations into the diplomatic arm of the American government; until now they have been mainly the province of the Pentagon and the Central Intelligence Agency.

American contractors say they have been told that the State Department is considering to field unarmed surveillance drones in the future in a handful of other potentially “high-threat” countries, including Indonesia and Pakistan, and in Afghanistan after the bulk of American troops leave in the next two years. State Department officials say that no decisions have been made beyond the drone operations in Iraq.

The drones are the latest example of the State Department’s efforts to take over functions in Iraq that the military used to perform. Some 5,000 private security contractors now protect the embassy’s 11,000-person staff, for example, and typically drive around in heavily armored military vehicles.

When embassy personnel move throughout the country, small helicopters buzz over the convoys to provide support in case of an attack. Often, two contractors armed with machine guns are tethered to the outside of the helicopters. The State Department began operating some drones in Iraq last year on a trial basis, and stepped up their use after the last American troops left Iraq in December, taking the military drones with them.

The United States, which will soon begin taking bids to manage drone operations in Iraq over the next five years, needs formal approval from the Iraqi government to use such aircraft here, Iraqi officials said. Such approval may be untenable given the political tensions between the two countries. Now that the troops are gone, Iraqi politicians often denounce the United States in an effort to rally support from their followers.

A senior American official said that negotiations were under way to obtain authorization for the current drone operations, but Ali al-Mosawi, a top adviser to Prime Minister Nuri Kamal al-Maliki; Iraq’s national security adviser, Falih al-Fayadh; and the acting minister of interior, Adnan al-Asadi, all said in interviews that they had not been consulted by the Americans.

Mr. Asadi said that he opposed the drone program: “Our sky is our sky, not the U.S.A.’s sky.”

The Pentagon and C.I.A. have been stepping up their use of armed Predator and Reaper drones to conduct strikes against militants in places like Pakistan, Yemen and Somalia. More recently, the United States has expanded drone bases in Ethiopia, the Seychelles and a secret location in the Arabian Peninsula.

The State Department drones, by contrast, carry no weapons and are meant to provide data and images of possible hazards, like public protests or roadblocks, to security personnel on the ground, American officials said. They are much smaller than armed drones, with wingspans as short as 18 inches, compared with 55 feet for the Predators.

The State Department has about two dozen drones in Iraq, but many are used only for spare parts, the officials said.

The United States Embassy in Baghdad referred all questions about the drones to the State Department in Washington.

The State Department confirmed the existence of the program, calling the devices unmanned aerial vehicles, but it declined to provide details. “The department does have a U.A.V. program,” it said in a statement without referring specifically to Iraq. “The U.A.V.’s being utilized by the State Department are not armed, nor are they capable of being armed.”

When the American military was still in Iraq, white blimps equipped with sensors hovered over many cities, providing the Americans with surveillance abilities beyond the dozens of armed and unarmed drones used by the military. But the blimps came down at the end of last year as the military completed its withdrawal. Anticipating this, the State Department began developing its own drone operations.

According to the most recent annual report of the department’s diplomatic security branch, issued last June, the branch worked with the Pentagon and other agencies in 2010 to research the use of low-altitude, long-endurance unmanned drones “in high-threat locations such as Iraq and Afghanistan.”

The document said that the program was tested in Iraq in December 2010. “The program will watch over State Department facilities and personnel and assist regional security officers with high-threat mission planning and execution,” the document said.

In the online prospectus, called a “presolicitation notice,” the State Department last September outlined a broad requirement to provide “worldwide Unmanned Aerial Vehicle (U.A.V.) support services.” American officials said this was to formalize the initial program.

The program’s goal is “to provide real-time surveillance of fixed installations, proposed movement routes and movement operations,” referring to American convoy movements. In addition, the program’s mission is “improving security in high-threat or potentially high-threat environments.”

The document does not identify specific countries, but contracting specialists familiar with the program say that it focuses initially on operations in Iraq. That is “where the need is greatest,” said one contracting official who spoke on condition of anonymity, because the contract is still in its early phase.

In the next few weeks, the department is expected to issue a more detailed proposal, requesting bids from private contractors to operate the drones. That document, the department said Friday, will describe the scope of the program, including the overall cost and other specifics.

While the preliminary proposal has drawn interest from more than a dozen companies, some independent specialists who are familiar with drone operations expressed skepticism about the State Department’s ability to manage such a complicated and potentially risky enterprise.

“The State Department needs to get through its head that it is not an agency adept at running military-style operations,” said Peter W. Singer, a scholar at the Brookings Institution and the author of “Wired for War,” a book about military robotics.

The American plans to use drones in the air over Iraq have also created yet another tricky issue for the two countries, as Iraq continues to assert its sovereignty after the nearly nine-year occupation. Many Iraqis remain deeply skeptical of the United States, feelings that were reinforced last week when the Marine who was the so-called ringleader of the 2005 massacre of 24 Iraqis in the village of Haditha avoided prison time and was sentenced to a reduction in rank.

“If they are afraid about their diplomats being attacked in Iraq, then they can take them out of the country,” said Mohammed Ghaleb Nasser, 57, an engineer from the northern city of Mosul.

Hisham Mohammed Salah, 37, an Internet cafe owner in Mosul, said he did not differentiate between surveillance drones and the ones that fire missiles. “We hear from time to time that drone aircraft have killed half a village in Pakistan and Afghanistan under the pretext of pursuing terrorists,” Mr. Salah said. “Our fear is that will happen in Iraq under a different pretext.”

Still, Ghanem Owaid Nizar Qaisi, 45, a teacher from Diyala, said that he doubted that the Iraqi government would stop the United States from using the drones. “I believe that Iraqi politicians will accept it, because they are weak,” he said.

India will not scale down petroleum imports from Iran: Pranab Mukherjee

India's Union Finance Minister Pranab Mukherjee

Πηγή: Business Today
Jan 30 2012

India will not scale down its petroleum imports from Tehran despite US and European sanctions against the Islamic republic, Finance Minister Pranab Mukherjee has said.

India imports 12 per cent of its oil from Iran.

"It is not possible for India to take any decision to reduce the imports from Iran drastically, because among the countries which can provide the requirement of the emerging economies, Iran is an important country amongst them," Mukherjee told reporters in Chicago.

Speaking at the end of a two-day visit aimed at wooing US investment, Mukherjee said on Sunday: "Some other countries, Saudi Arabia, Nigeria, the other Gulf countries they also contribute but Iran contributes substantially."

"We (India) imports 110 million tonnes of crude per year. We will not decrease imports from Iran. Iran is an important country for India despite US and European sanctions on Iran," the finance minister said.

India, the world's fourth-largest oil consumer, is Iran's second-biggest oil client after China.

The US and other Western sanctions have been imposed on Iran's economy over Tehran's controversial nuclear programme.

US President Barack Obama added to those measures on December 31, last year when he signed into law additional sanctions targeting Iran's central bank and financial sector.

Indian Ambassador to the US Nirupama Rao last week said that India's purchase of oil from Iran has dropped slightly in last two years and is expected to drop further given the difficulties New Delhi might have in making payments through banks due to tough sanctions imposed against Iranian banks.

Rao had said India was in touch with the US Government and closely monitoring the developing situation concerning Iran, when asked about the pressure from the US that India needs to reduce its dependency on Iranian oil.

Greece no to Germany’s plan for EU ‘budget tsar’

Greece's Prime Minister Lucas Papademos is seen in Athens

Πηγή: BusinessDay
By Bloomberg, Reuters
Jan 30 2012

Angry row ahead of summit as Athens rejects outside help.

GREECE yesterday angrily shot down a German proposal that it cede fiscal policy to a "budget commissioner" with veto powers, in a new row that could determine whether Athens receives further bail-out funds or whether it will be forced to quit the euro zone.

German Economy Minister Philipp Roesler yesterday became the first German cabinet member to openly endorse a proposal for Greece to surrender budget control, after European sources said on Friday Berlin wanted Athens to give up budget control.

Greece, which has repeatedly failed to meet the fiscal targets set out by its international lenders, is in discussions to finalise a second €130 bn package.

With many Greeks blaming Germans for the austerity medicine, officials in Athens dismissed the idea of relinquishing budget control.

The standoff between the two countries could prolong the search for a deal to save troubled euro-zone economies that are threatening to drag the global economy down with them.

Greek Finance Minister Evangelos Venizelos angrily rejected the proposal, saying the country was perfectly capable of making good on its promises.

"Anyone who puts a nation before the dilemma of ‘economic assistance or national dignity’ ignores some key historical lessons," he said before heading to Brussels for today’s European Union (EU) summit.

The Financial Times obtained a copy of the proposal showing Germany wants a new euro-zone "budget commissioner" with the power to veto budget decisions if they are not in line with targets set by international lenders.

"Given the disappointing compliance so far, Greece has to accept shifting budgetary sovereignty to the European level for a certain period of time," the document said.

Under the plan, Athens would be allowed to carry out normal state spending only after servicing its debt, the paper said.

Crushed by €350 bn of debt and running out of cash quickly, Greece is scrambling to appease the "troika" of its official lenders — the European Commission, European Central Bank and International Monetary Fund (IMF) — and stitch up a deal with private creditors simultaneously.

Greece needs to strike a deal with creditors in the next few days to unlock its next aid package in order to avoid a chaotic default.

A government source in Berlin said Germany’s proposal was aimed not just at Greece but also at other struggling euro-zone members that receive aid and are unable to make good on their obligations. The European Commission, the executive arm of the 27-country bloc, said it wanted Greece to maintain autonomy.

Greece was pressed by policy makers at the World Economic Forum meetings, which ended in Davos yesterday, to strike a credible agreement with its creditors.

Policy makers from Hong Kong to Canada also used the annual event to push euro-zone counterparts to boost bail-out cash to protect Italy and Spain.

EU leaders will meet in Brussels today to draw up a fiscal compact to strengthen governance of the euro zone.

Failure to deliver homegrown solutions would cost Europe any chance of further outside support, and undermine the IMF’s push for more crisis-fighting resources of its own, officials said.

The concern tempered earlier optimism when delegates expressed hope Europe had succeeded in calming markets.

Delegates interviewed at the forum said the effect of the crisis would be felt beyond Europe.

"I’ve never been as scared as I am about the world," Hong Kong’ s CE Donald Tsang said yesterday. "Nobody’s immune. You need decisive action. You need to inspire confidence."

Bank of Canada governor Mark Carney estimated the European crisis would subtract one percentage point from global growth by the end of this year "and that’s in a world where this crisis is contained". Europe’s pain could be transmitted via trade or financial channels with banks already hoarding cash or investing only in domestic markets, he said.

Nouriel Roubini, co-founder of Roubini Global Economics, said Greece might be forced to quit the single currency in 12 months.

"The euro zone is a slow-motion train wreck," Prof Roubini said.

Meanwhile, the World Bank’s vice-president for Africa, Obiageli Ezekwesili, warned African countries should prepare for the effect of the euro-zone crisis that threatens to derail economic growth on the continent.

This should be done by improving trade between countries and fighting inflation, she said.

Speaking on the sidelines of an African Union summit in Addis Ababa, Ms Ezekwesili said the traditional partners of Africa in Europe were likely to be affected by the fallout of the debt crisis, which would squeeze remittances, and curb trade and tourism.

She said Africa’s economic growth forecast for this year stood at 5,3% and 5,6% for 2013, but a recession was likely to prompt a 1,7% contraction this year.

"When you talk about Greece, Portugal, Ireland and the other countries, you then look at African countries particularly linked to them. We keep our eyes on countries like Cape Verde, Guinea, Nigeria, Sierra Leone," she said.

Ms Ezekwesili forecast a downturn in trade of at least 30% for some African countries.

She said some countries in Africa sent 60% of their exports to a particular country in Europe, and these were likely to face a downturn in earnings due to the crisis.