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The EU’s Lisbon Treaty has raised a whole series of questions about external representation (Photo: ec.europa.eu)

EUOBSERVER / BRUSSELS – European Commission President Jose Manuel Barroso has sided with smaller member states in trying to restrict the role of the proposed president of the European Council, a new post created by the Lisbon Treaty.

Addressing the European Parliament on Wednesday (7 October), Mr Barroso chastised MEPs for referring to the post as “president of Europe.”

“I am sorry, there will not be a president of Europe. There will be, if we have Lisbon, the president of the European Council. It is important to understand that point because sometimes I think there are some ideas about certain derives institutionelles [institutional drifts],” he said.

Loosely defined in the treaty itself, talk about the nature of the president’s role has become one of the main topics in Brussels in recent days, as national governments deliberate whether the post should go to a well-known personality from a big country or a more discreet politician.

The exact job description will be written by the first person holding the job, with ex British prime minister Tony Blair among the most-mentioned candidates for the post. It is widely agreed that a politician of Mr Blair’s standing would take the post far beyond the largely administrative role foreseen in the treaty.

According to the treaty, which is still awaiting full ratification by all 27 member states, the president is supposed to chair the regular meetings of EU leaders – known as the European Council – and to drive forward their work.

Mr Barroso, who himself enjoys attending international summits on behalf of the EU, has a personal stake in the issue.

A powerful council president would upset the power balance in the EU and would likely see Mr Barroso relegated to a more much Brussels-based role.

The commission president has no formal powers in appointing the European Council president but he warned: “The European Commission will not accept the idea that the president of European Council is the president of Europe.”

Mr Barroso’s remarks came shortly after a leaked paper on the new Lisbon Treaty posts by Belgium, the Netherlands and Luxembourg underlined the importance of maintaining the “institutional balance” of the union. The paper has been interpreted in some quarters as an anti-Blair move.

Poland has also prepared a document on the role of the president of the European Council. Earlier this week, Polish Europe minister Mikolaj Dowgielewicz indicated to EUobserver the limited role that Warsaw foresees for the new president.

“We have to recognise that the Polish minister of finance or agriculture will only take instructions from his prime minister. He will not take instructions from the president of the council,” he said.

Some member states, such as France, have indicated they want to create a major player with the presidential job by appointing someone who can open doors in the US and China and who can give the EU some gravitas on the world stage.

Mr Blair’s is not the only name that has been put forward in connection to the job. Other possible contenders mooted include Dutch leader Jan-Peter Balkenende; Luxembourg leader Jean-Claude Juncker and Felipe Gonzalez, a former Spanish prime minister.

The demise of the dollar

In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.

The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.

The Americans, who are aware the meetings have taken place – although they have not discovered the details – are sure to fight this international cabal which will include hitherto loyal allies Japan and the Gulf Arabs. Against the background to these currency meetings, Sun Bigan, China’s former special envoy to the Middle East, has warned there is a risk of deepening divisions between China and the US over influence and oil in the Middle East. “Bilateral quarrels and clashes are unavoidable,” he told the Asia and Africa Review. “We cannot lower vigilance against hostility in the Middle East over energy interests and security.”

This sounds like a dangerous prediction of a future economic war between the US and China over Middle East oil – yet again turning the region’s conflicts into a battle for great power supremacy. China uses more oil incrementally than the US because its growth is less energy efficient. The transitional currency in the move away from dollars, according to Chinese banking sources, may well be gold. An indication of the huge amounts involved can be gained from the wealth of Abu Dhabi, Saudi Arabia, Kuwait and Qatar who together hold an estimated $2.1 trillion in dollar reserves.

The decline of American economic power linked to the current global recession was implicitly acknowledged by the World Bank president Robert Zoellick. “One of the legacies of this crisis may be a recognition of changed economic power relations,” he said in Istanbul ahead of meetings this week of the IMF and World Bank. But it is China’s extraordinary new financial power – along with past anger among oil-producing and oil-consuming nations at America’s power to interfere in the international financial system – which has prompted the latest discussions involving the Gulf states.

Brazil has shown interest in collaborating in non-dollar oil payments, along with India. Indeed, China appears to be the most enthusiastic of all the financial powers involved, not least because of its enormous trade with the Middle East.

China imports 60 per cent of its oil, much of it from the Middle East and Russia. The Chinese have oil production concessions in Iraq – blocked by the US until this year – and since 2008 have held an $8bn agreement with Iran to develop refining capacity and gas resources. China has oil deals in Sudan (where it has substituted for US interests) and has been negotiating for oil concessions with Libya, where all such contracts are joint ventures.

Furthermore, Chinese exports to the region now account for no fewer than 10 per cent of the imports of every country in the Middle East, including a huge range of products from cars to weapon systems, food, clothes, even dolls. In a clear sign of China’s growing financial muscle, the president of the European Central Bank, Jean-Claude Trichet, yesterday pleaded with Beijing to let the yuan appreciate against a sliding dollar and, by extension, loosen China’s reliance on US monetary policy, to help rebalance the world economy and ease upward pressure on the euro.

Ever since the Bretton Woods agreements – the accords after the Second World War which bequeathed the architecture for the modern international financial system – America’s trading partners have been left to cope with the impact of Washington’s control and, in more recent years, the hegemony of the dollar as the dominant global reserve currency.

The Chinese believe, for example, that the Americans persuaded Britain to stay out of the euro in order to prevent an earlier move away from the dollar. But Chinese banking sources say their discussions have gone too far to be blocked now. “The Russians will eventually bring in the rouble to the basket of currencies,” a prominent Hong Kong broker told The Independent. “The Brits are stuck in the middle and will come into the euro. They have no choice because they won’t be able to use the US dollar.”

Chinese financial sources believe President Barack Obama is too busy fixing the US economy to concentrate on the extraordinary implications of the transition from the dollar in nine years’ time. The current deadline for the currency transition is 2018.

The US discussed the trend briefly at the G20 summit in Pittsburgh; the Chinese Central Bank governor and other officials have been worrying aloud about the dollar for years. Their problem is that much of their national wealth is tied up in dollar assets.

“These plans will change the face of international financial transactions,” one Chinese banker said. “America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate.”

Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars. Bankers remember, of course, what happened to the last Middle East oil producer to sell its oil in euros rather than dollars. A few months after Saddam Hussein trumpeted his decision, the Americans and British invaded Iraq.

Iran plans to install a more advanced type of centrifuge at its newly revealed uranium enrichment site, an Iranian newspaper reported Tuesday, a development certain to add to international concerns about the country’s nuclear work.

Head of the Atomic Energy Organization of Iran Ali Akbar Salehi delivers a speech at the beginning of a general conference of the IAEA in Vienna.

Iranian scientists have carried out research and development in recent months for the new generation of more efficient centrifuges, and most of the machines’ components are made domestically, said the head of Iran’s nuclear agency, Ali Akbar Salehi, according to the Kayhan daily newspaper.

Iran’s enrichment of uranium is the central concern of the United States and other nations negotiating with the country over its nuclear program. The technology can be used to make fuel for power plants and nuclear weapons.

Iran insists its enrichment work is only meant for use in generating power, but Washington and its allies are suspicions of Teheran’s intentions and fear its mastery of the technology will give them a pathway to weapons development.

“Over the past months, we have focused on research and development to drive the new machines,” the newspaper quoted Salehi as saying.

The new enrichment site near the holy city of Qom – Iran’s second such facility – was made public last month by US President Barack Obama and the leaders of France and Britain several days after Iran notified the UN’s nuclear monitoring agency about the site. It is still under construction, and Iran says it will be operational in 18 months.

Obama said Iran’s failure to notify the International Atomic Energy Agency at the start of construction “raised grave doubts” about its promise to use nuclear technology for peaceful purposes only.

The new centrifuges would be more advanced than the decades old P-1 type centrifuges once acquired on the black market and in use at Iran’s other enrichment facility in Natanz.

“We are hopeful of being able to use our new version of the centrifuges” at the new site, Salehi was quoted as saying. He gave no timeframe for the installation.

Most of the parts for the new centrifuges were made domestically and others were imported, he said, without specifying from which country.

If true, that would be a sign that Iran is able to get around the three sets of UN sanctions imposed on the country for its refusal to suspend uranium enrichment.

Since April, Iranian officials have said the country is building more advanced centrifuges capable of enriching uranium with high efficiency and precision.

A Western intelligence assessment that has been cited by diplomats says the new site is meant to house no more than 3,000 enriching centrifuges – much less than the more than 8,000 machines at Natanz.

That assessment also notes that the site could be set up for more advanced domestically developed centrifuges that would process uranium at much higher speed and efficiency, adding to concern that such a site could be used to enrich uranium to the higher levels needed to make weapons.

Over the weekend, Iran agreed to set October 25 as the date for UN inspectors to visit the site.

The facility has heightened concerns because its location next to a military base and partly inside a mountain adds to suspicions that Iran’s nuclear program could have a military dimension.

The inspection of the site and the outcome of more nuclear talks later this month with the United States and its allies will be crucial in determining the direction of the six-year standoff over Iran’s nuclear activities.

 

 

The creation of a European superstate has moved a step closer, after the Irish people voted to accept the Lisbon Treaty, paving the way for a powerful new President of Europe.

In a result greeted with relief in Downing Street and dismay in the Tory Party, more than two-thirds of the Irish electorate voted Yes in the country’s second referendum on the treaty.

The ballot, hailed by European Commission President Jose Manuel Barroso as ‘a great day for Ireland and for Europe’, followed a frantic campaign by pro-Europeans to reverse Ireland’s overwhelming No vote last year. Now, only Poland and the Czech Republic of the EU’s 27 countries have yet to approve it.

Critics say the treaty, which aims to ‘streamline’ EU institutions to mimic the functions of a nation state, represents the biggest threat to British sovereignty since the invasion of William the Conqueror in 1066.

Tony Blair is strongly tipped to be anointed as the new European President, possibly within weeks, creating a headache for David Cameron as he heads to Manchester for his party conference.

The Conservative leader says a Tory Government would hold a British referendum on the treaty if it had not been fully ratified when the party came to power, but refuses to be drawn on what its position would be if the treaty was already in force.

Here Peter Hitchens looks at why the Irish changed their minds and considers the threat the new European superstate presents to Britain…

Frightened for their jobs, no longer confident in their ability to govern themselves, the Irish finally surrender to Europe. But at least they were allowed a vote

By Peter Hitchens In Dublin

So, out of the smog of dishonesty that has long concealed it, we at last see the true shape of the thing that threatens us.

A great grey Tower of Babel reaches up into the sky over Europe, lopsided, full of cracks and likely to collapse in the fullness of time. But unlike the mythical original, it is complete – even though its builders neither understand nor particularly like each other. 

'Yes' vote supporters celebrate at Dublin castle‘Yes’ vote supporters celebrate at Dublin castle

The new European State finally exists and has given itself life – life of a rather Frankenstein sort, but life all the same. 

It no longer needs to ask the permission of its member states to act. Ireland, for instance, will no longer be able even to hold a referendum on increased EU central powers.

It has what is called a ‘legal personality’, so will not need to make future changes by treaty but by acting as the superstate it now is.

Increasingly, the provinces of Europe, which until today were countries, will need its
permission to exist at all.

That passport you hold is not British, but European. You are a European citizen. British Embassies abroad are European Embassies – as they already show by flying the EU’s meaningless and tasteless blue and yellow dishcloth.

Shouldn’t somebody have pointed out that in the recent history of the Continent, yellow stars call up only one dismal image, the mass murder of Europe’s Jews? 

yes supporterStep forward: Ireland has now paved the way for EU reform

 

Brian CowenRelieved: Irish PM Brian Cowen welcoming the approval yesterday

Anthony Blair, who wrecked his own political party and irreparably damaged Britain in the pursuit of global ideals, is considered a fit person to be the appointed President of this strange new superpower, precisely because he is unfit to lead his own country.

David Cameron claims that he is somehow able to exempt Britain from all these forces by holding a referendum on a treaty this country has already ratified.

But what will he do if we vote ‘No’? Does he think we are not subject to the forces that have compelled Ireland to hold the poll again?

Amid all the fuss about London’s grandiose new Supreme Court, nobody has seen fit to mention that Britain’s real Supreme Court, the European Court of Justice – now sits in Luxembourg. 

For most of its members, accustomed to dictatorship, partition, subjugation, occupation, invasion and domination by bigger neighbours, this sort of thing will be familiar. In many ways it will be preferable.

In living memory, their frontier posts were demolished by sneering soldiers and their capitals forced to watch parades of other people’s tanks.

Now, the same frontier barriers are dismantled by unequal treaties, and their currencies replaced by the euro. Nobody dies, though much is lost. 

yes supportersSecond time lucky: Yes supporters enjoy the victory at Dublin Castle

 

A supporter of 'Ireland For Europe' celebratesOverwhelming: A supporter of ‘Ireland For Europe’ celebrates

For Britain, Europe’s oldest continuously independent sovereign state, it
is entirely different. It is the end of 1,000 years of history, as predicted by the Labour leader Hugh Gaitskell as long ago as 1962.

What about Ireland, which still lovingly and proudly preserves the bullet marks on Dublin buildings from the Easter Rising against British rule in 1916? How strange that the last gasp of national sovereignty should happen in this odd, quiet way on a wet and windy morning, here of all places.

With a national sigh of resignation, the Irish people have said not so much ‘Yes!’ as ‘Oh, very well then, if you absolutely insist’ to their absorption in the strangest empire the world has ever seen.

It is a realm without a throne, ruled by stifling regulation and dull secret committees rather than by a crowned despot. It is supposedly a club of happy equals but actually dominated by a single great power – Germany – whose importance nobody dares to mention, precisely because it is so important.

It is fitting, in a way, that it should be Ireland, which long defined itself as a nation of rebels against its mighty neighbour, that should have held out to the end.

This was never because Ireland’s current generation of leaders wanted
a fight. On the contrary, the Irish political class sprawls luxuriously on great cushions of Euro-money and have long enjoyed their status as the favoured pet of Brussels.

It is only because of the Republic’s cunningly drafted and thrillingly fair constitution that the people of Ireland have been allowed to vote on the matter at all.

And I think it true to say that the first vote, when they said ‘No’ 15 months ago, expressed the real opinion of the Irish people, who have never liked being pushed around by outsiders.

balloonsBacking: The Irish passed the Lisbon Treaty Referendum by over 60 per cent

Remember that they did so in spite of the fact that the entire political establishment and the huge bulk of the Irish media were hot for a ‘Yes’ vote.

Rather enjoyably, but quite consistently, the anti-British militants of Sinn Fein were among the few organisations who argued for ‘No’.

After all, why go to such lengths to expel the British Crown, only to end up as a remote and bought-off province under the Crown of Charlemagne?

At least the British, for all their faults, were actually interested in Ireland, share a language and a culture and much of their history. 

In the EU, Ireland – no longer a Tiger – takes its place alongside Slovenia and Lithuania as a quirky, minor possession on the damp and unvisited fringes of the Continent, with almost no voting power.

Shorn – as it is now – of its ability to get in the way, it may find that the flow of subsidies will become much thinner in years to come.

The ‘Yes’ campaign has been based, blatantly, on a call to cling to nurse, for fear of finding something even worse. And with reason. Ireland’s economic crisis is so bad that they envy Britain’s relatively solvent state.

Without EU help, they would be worse off than Iceland. And they know it.

Even with EU help, the public sector is unsustainable, overspending by £20billion a year, and the private sector shrivelling in the blast of bankruptcy and negative equity. 

Anti-Lisbon Treaty protesters in PragueUnhappy: Anti-Lisbon Treaty protesters in Prague yesterday

Last week, when Marks & Spencer advertised in Dublin for short-term Christmas staff, an enormous queue of respectable, well-dressed and quietly desperate people formed outside the hiring office.

Slogans such as ‘Vote Yes for jobs’, plastered all over the city, conceal
a deeper message that Ireland no longer believes two things.

One, it no longer believes that it can govern its own economy and take responsibility for ensuring its own people have jobs; and two, it no longer values its independence so highly that it is prepared to suffer for it – as it certainly was in the thin, cold pinched days of the Twenties and Thirties.

The ideal of a very Irish, very Catholic state, proudly separate and honestly poor, no longer appeals in the era of Sex And The City.

I suspect a lot of people share the view of Fionnuala Maher, who told the Irish Times that she remembered Ireland before it joined the EU in 1973. ‘It was a terrible place,’ she said. ‘If we don’t have Europe, we don’t have a bloody hope.’ 

European Commission President Jose Manuel Barroso yesterdayEuropean Commission President Jose Manuel Barroso yesterday

For such people, the EU is completely identified with the personal liberation and individualism that in Britain is linked with the Sixties cultural revolution.

That may be a mistake. The ascent of the EU happened to coincide with several decades of unheard-of prosperity and growth. But the EU did not cause that prosperity, though it claims to have done so.

It was based on American Marshall Aid and helped along by American and British willingness to spend heavily on defending Europe against the USSR, while most of the EU nations kept their military budgets small.

Stage set for Blair to be President of Europe

The Lisbon Treaty will create the powerful new post of EU president – with Tony Blair widely expected to be the first to hold the job. The document has been condemned as a blueprint for a European superstate and a thinly disguised version of the European Constitution abandoned just four years ago.

It creates the unprecedented situation where a single politician will represent Europe around the world. So far, each member state has taken it in turns to hold the EU presidency on a rotating basis. But the new position, with an expected salary of £270,000, raises the spectre that an incoming Tory Government under David Cameron would be eclipsed on the world stage by a ‘President Blair’ with avowedly pro-European views.

The Lisbon agreement will also establish a powerful new role of EU foreign ‘High Representative’ to act for Brussels on foreign policy and security issues. This will trigger fears that Brussels is building its own diplomatic network.

Amid further worries that the treaty represents another step to a European superstate, it will make further restrictions on countries’ abilities to veto EU proposals. The agreement scraps the national vetoes in new areas including criminal justice laws – although the Foreign Office claims that Britain can still block any EU criminal justice reforms it does not like.
In another move, the treaty also strengthens the rights of trade unions by incorporating the Charter of Fundamental Rights into EU law. The UK has negotiated an exemption but critics fear the opt-out will be given up in future concessions. Crucially, the treaty also raises fears that UK laws will be entirely subservient to European courts  through the provision that gives the EU a full legal status or ‘legal personality’ for the first time.

The EU also cannot guarantee that Europe’s prosperity will go on forever. With so many member nations, many of them devastated by decades of Marxist misrule, its capacity to hand out subsidies is running out.

The credit crisis has not finished yet, Western Europe is fast running out of its own energy supplies and the shift of economic power to the Far East is speeding up, not stopping.

The European nations have not worked out how to deal with the enormous Muslim minorities which they have encouraged to settle on their territory and which increasingly demand the right to live according to their traditions.

Nor can they stop the slide of the manufacturing industry towards the regions where labour is cheapest.

Germany, still in a sort of post-traumatic shock over the cost of absorbing the Communist East, may not forever be willing to share a currency – and so a joint bank account – with the poorer and less well-run nations of the Eurozone.

The remnants of Yugoslavia are turning out to be much harder to absorb than anyone thought. Russia, sick of being pushed around, has made it aggressively clear that it wants no more Western interference along its borders, and will bite hard if crossed. Turkey, fobbed off for decades with promises of membership, may turn very nasty indeed if – as is likely – the pledge is broken.

The moment of political unity, schemed for since the Rome Treaty in 1957, comes just as all the old problems of the European Continent, economic, political, religious and social, begin to re-emerge in new and tricky shapes.

We in Britain, like Ireland, have constantly been warned that by staying out we would miss the European train – always depicted as a luxury express bound for a pleasant destination and more or less under our control.

Now, as the whistle blows, the doors are locked and the Eurotrain at last jolts out of the station, we look around us and see threadbare seats and through grimy windows glimpse an unfamiliar and unpleasant landscape, and when we ask where we are going, the crew tell us that from now on, that is their business, not ours.

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Israel’s prime minister, Binyamin Netanyahu, has handed the Kremlin a list of Russian scientists believed by the Israelis to be helping Iran to develop a nuclear warhead. He is said to have delivered the list during a mysterious visit to Moscow.

Netanyahu flew to the Russian capital with Uzi Arad, his national security adviser, last month in a private jet.

His office claimed he was in Israel, visiting a secret military establishment at the time. It later emerged that he was holding talks with Vladimir Putin, the Russian prime minister, and President Dmitry Medvedev.

“We have heard that Netanyahu came with a list and concrete evidence showing that Russians are helping the Iranians to develop a bomb,” said a source close to the Russian defence minister last week.

“That is why it was kept secret. The point is not to embarrass Moscow, rather to spur it into action.”

Israeli sources said it was a short, tense meeting at which Netanyahu named the Russian experts said to be assisting Iran in its nuclear programme.

In western capitals the latest claims were treated with caution. American and British officials argued that the involvement of freelance Russian scientists belonged to the past.

American officials said concern about Russian experts acting without official approval, had been raised by the International Atomic Energy Agency (IAEA) in a report more than a year ago.

“There has been Russian help. It is not the government, it is individuals, at least one helping Iran on weaponisation activities and it is worrisome,” said David Albright, a former weapons inspector who is president of the Institute for Science and International Security.

However, Israeli officials insist that any Russian scientists working in Iran could do so only with official approval.

Robert Einhorn, the special adviser for non-proliferation and arms control to Hillary Clinton, the US secretary of state, is understood to believe that Russian companies have also supplied material that has been used by Iran in the production of ballistic missiles.

The disclosures came as Iran agreed at talks in Geneva to submit to IAEA inspections of its newly disclosed enrichment plant, which is being built under a mountain on a military base at Qom. Iran revealed the plant to the IAEA to pre-empt being caught out by an imminent announcement from western governments, which had discovered its existence.

The West says the plant is tailor-made for a secret weapons programme and proves Iran’s claim that its nuclear programme is intended only for peaceful purposes is a lie. The plant is designed to hold 3,000 centrifuges — enough to produce the material needed for one bomb a year.

Iran’s conduct over the next few weeks will determine whether the West continues its new dialogue or is compelled to increase pressure with tougher United Nations and other sanctions.

Ephraim Sneh, a former Israeli deputy defence minister, warned that time was running out for action to stop the programme. “If no crippling sanctions are introduced by Christmas, Israel will strike,” he said. “If we are left alone, we will act alone.”

A key test for the West will be whether Iran allows IAEA inspectors unfettered access to the Qom plant. Mohamed ElBaradei, the head of the IAEA, was in Tehran this weekend to discuss this and Iran’s agreement, in principle, to ship most of its current stocks of low-enriched uranium to Russia so it can be used in medical research. President Barack Obama has told Iran he wants to see concrete results within two weeks.

While there is consensus in the West that Iran is trying to acquire the capability to build a weapon, the progress of its weaponisation programme is a matter of fierce debate among intelligence agencies.

The Americans believe secret work to develop a nuclear warhead stopped in 2003. British, French and German intelligence believe it was either continuing or has restarted. The Israelis believe the Iranians have “cold-tested” a nuclear warhead, without fissile material, for its Shahab-3B and Sejjil-2 rockets at Parchin, a top-secret military complex southeast of Tehran.

The vast site is officially dedicated to the research, development and production of ammunition, rockets and explosives. Satellite imagery as early as 2003 has shown Parchin to be suitable for research into the development of a nuclear weapon, say western experts.

The Shahab-3B, which the Iranians test-fired last Monday, is capable of carrying a 2,200lb warhead. Its 1,250-mile range puts parts of Europe, Israel and US bases in the Middle East within its reach.

According to the Israelis, Russian scientists may have been responsible for the nuclear warhead design. But western experts have also pointed the finger at North Korea.

WASHINGTON (Reuters) – The United States will urge world leaders this week to launch a new push in November to rebalance the world economy, but there are doubts national governments will bow to external advice.

A document outlining the U.S. position ahead of the September 24-25 Group of 20 summit in Pittsburgh said exporters, which include China, Germany and Japan, should consume more, while debtors like the United States ought to boost savings.

“The world will face anemic growth if adjustments in one part of the global economy are not matched by offsetting adjustments in other parts,” said the document, which was obtained by Reuters on Monday.

The framework drafted by U.S. policy makers foresaw analysis of G20 members’ economic policies by the International Monetary Fund to figure out if they were consistent with better balanced growth.

“We call on our finance ministers to launch the new framework by November,” the document said, signaling a determined effort to maintain momentum for change created by last year’s global financial crisis.

The United States envisages the IMF playing a central role in a process of “mutual assessment” by making policy recommendations to the G20 every six months.

Finance ministers and central bankers from the G20 countries are due to meet November 7-8 in Scotland.

European Central Bank President Jean-Claude Trichet said persuading Europe, the United States and China to accept IMF advice on economic policy may be difficult. In the past, many countries have ignored suggestions the IMF dished out in regular reviews.

Trichet told French newspaper Le Monde the G20 had made progress on reforms to make the financial system more stable after the crisis.

“The most difficult question is still open: Europe, America, China, are they ready to modify their macroeconomic policies in the future — by following the advice of the IMF and under pressure from their peers, for the common good, and world economic stability?” he said in the piece on Monday.

G7 sources told Reuters there was a renewed determination to cooperate because the crisis had driven home the interconnected nature of the global system. That said, governments would not allow themselves to be told what to do.

“We can’t get to a situation where any country is giving up its own decision-making,” said one source, who spoke on the condition of anonymity.

Germany, a major exporter to the United States, was singled out on Sunday by U.S. President Barack Obama as a country that, like China, exports a lot but does not buy much back.

But a top European Union official said that the euro zone, where 16 countries share a common currency, had to act as a collective.

“It is difficult to think about one country without taking into consideration what is the impact in the euro area,” European Commission President Jose Manuel Barroso told reporters in New York.

Taxpayer money to the tune of $5 trillion has been pumped into the world economy to keep it from seizing up since the beginning of the crisis last September.

G20 leaders will maintain that pace of stimulus while acknowledging that at some point it will have to be wound down, the document said.

But, mindful of how a disorderly rush to raise interest rates could roil world markets again, they will also ask finance ministers to thrash out a “transparent and credible” exit strategy.

There were no details of how to achieve this in practice, but the document echoed the caution of G20 finance ministers at their meeting in London earlier this month acknowledging the pace of change would vary by country.

Simon Johnson, a former chief economist at the IMF, warned there was a risk the Pittsburgh summit would be an empty public relations exercise.

“The point of the meetings is to try to reassure themselves and everyone else that they’re broadly on track and have a round of applause and some back patting,” he said.

But John Bruton, the EU ambassador to Washington, said it was important not to ignore the summit’s symbolic power.

“I think we’re seeing the beginning of a conversation between world leaders,” he told Reuters in an interview

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(IsraelNN.com) The Israel HaYom newspaper reveals a leftist turn for Prime Minister Binyamin Netanyahu. Speaking in an interview to be published Thursday, the Prime Minister admitted he had come to terms with dividing the Land of Israel.  “The land is already divided. How it will [yet] be divided, that is the question,” the newspaper reports.

In the interview, Netanyahu insisted that the new reality required “practical solutions”. “How will the land be divided? Territory-wise, there have been those who predicted the land would be divided according to the 1967 armistice lines, which is not acceptable to me. Israel requires defensible borders.”

“I know every place in this land, but there is a reality that exists regarding the million and a half Palestinians that live in the heart of the Jewish State. We need to find a true solution for co-existence with them.”

The dollar should be replaced with a global currency, the United Nations has said, proposing the biggest overhaul of the world’s monetary system since the Second World War.

Crumpled dollar bill - UN wants new global currency to replace dollar

A number of countries, including China and Russia, have suggested replacing the dollar as the world’s reserve currency

In a radical report, the UN Conference on Trade and Development (UNCTAD) has said the system of currencies and capital rules which binds the world economy is not working properly, and was largely responsible for the financial and economic crises.

It added that the present system, under which the dollar acts as the world’s reserve currency , should be subject to a wholesale reconsideration.

Although a number of countries, including China and Russia, have suggested replacing the dollar as the world’s reserve currency, the UNCTAD report is the first time a major multinational institution has posited such a suggestion.

In essence, the report calls for a new Bretton Woods-style system of managed international exchange rates, meaning central banks would be forced to intervene and either support or push down their currencies depending on how the rest of the world economy is behaving.

The proposals would also imply that surplus nations such as China and Germany should stimulate their economies further in order to cut their own imbalances, rather than, as in the present system, deficit nations such as the UK and US having to take the main burden of readjustment.

“Replacing the dollar with an artificial currency would solve some of the problems related to the potential of countries running large deficits and would help stability,” said Detlef Kotte, one of the report’s authors. “But you will also need a system of managed exchange rates. Countries should keep real exchange rates [adjusted for inflation] stable. Central banks would have to intervene and if not they would have to be told to do so by a multilateral institution such as the International Monetary Fund.”

The proposals, included in UNCTAD’s annual Trade and Development Report , amount to the most radical suggestions for redesigning the global monetary system.

Although many economists have pointed out that the economic crisis owed more to the malfunctioning of the post-Bretton Woods system, until now no major institution, including the G20 , has come up with an alternative.

The Middle East peace plan that United States President Barack Obama will unveil soon involves the creation of a Palestinian Authority state by 2011 and the transfer of Islamic holy sites in Jerusalem [presumably including the Temple Mount – ed.] to Arab-Muslim sovereignty, Saudi newspaper Al-Ukaz has learned.

According to the report published Sunday in Al-Ukaz, the Obama plan also includes the following elements:

Some parts of eastern Jerusalem [presumably Neveh Yaakov, Pisgat Ze'ev and the like - ed.] would be transferred to Israeli control.

There would be an international presence in the Jordan Valley and other parts of Judea and Samaria.

The Palestinian Authority terror organizations would be disbanded and turn into political parties.

The large settlement blocs in Judea and Samaria would not be dismantled.

The fate of smaller Jewish settlement areas would be decided in a three-month-long negotiation period.

A reporter for the Saudi newspaper received the information from Hassan Harisha, the Second Deputy Speaker of the Palestinian Authority Parliament. Harisha told him that the U.S. has handed over a draft of the peace proposal to the PA and other Arabs for their perusal.

The plan also calls for Judea and Samaria to be demilitarized and for its airspace to remain under Israel control. Israeli-Palestinian Authority security coordination would be strengthened, and the Palestinian Authority state would not be allowed to strike military treaties with other countries in the region.

An “agreed number” of Arab refugees would be absorbed in the Jordan Valley area and in other parts of Judea and Samaria – especially in the area between Ramallah and Shechem.

An international fund would support the refugees and Israel would release Palestinian Authority prisoners three years after a diplomatic accord is signed.

Will he lay out a blueprint?

The Saudi report notwithstanding, the Washington Post’s Jackson Diehl estimated Sunday that Obama will not go so far as to present a blueprint for a peace settlement, despite being urged to do so by several Arab governments.

“As the U.N. General Assembly meets in late September, Obama aims to announce the opening of a new negotiating process between Israelis and Palestinians, along with ‘confidence-building’ steps by Israel, the Palestinian Authority and a number of Arab governments,” the columnist wrote. Obama “will probably lay out at least a partial vision of the two-state settlement that all sides now say they support, and the course that negotiations should take. More significantly, he intends to set an ambitious timetable for completing the peace deal – something that will please Arabs but may irritate Israel.”

The Arab League reacted with fury on this week to reports that a small group of Jews had prayed on the Temple Mount on Sunday. Secretary-General Amr Moussa termed the spontaneous prayer gathering “a violation of international law.”

Rabbi Yisrael Ariel, head of the Temple Institute in Jerusalem, led the guided tour on the Temple Mount. While guards on the mount have a policy of preventing Jewish prayer or religious gestures such as kneeling or bowing, Rabbi Ariel’s group managed to briefly pray at the site.

“This is the first time since 1967 that Jews have conducted prayers on Al-Aksa during the month of Ramadan,” Moussa declared. “We condemn this act,” he added, in the name of the 22 countries belonging to the League.

The prayer session was “a serious blow to the holiness of the site,” Moussa claimed, adding that Jews should not be allowed to pray at the site “whether it is Ramadan or any other time of year.”

The Temple Mount in Jerusalem’s Old City is the site on which the Temple and Second Temple once stood, and according to Judaism, is the holiest place on earth. For approximately 1,000 years, the mount has housed the Al Aksa mosque.

Rabbi Chaim Richman, another Temple Institute leader, said Moussa was misinformed. Rabbi Ariel’s prayer was not the first of its kind – in fact, Jews pray on the Temple Mount whenever they can, he said, and always have.

“There’s a positive commandment for Jewish people to pray on the Temple Mount,” Rabbi Richman explained. “I was on the Temple Mount on Wednesday, and I prayed.”

Far from being a violation of international law, Jewish prayer at the site is a fundamental human right, he said. “We go there out of a deep desire to express the most basic human right that we have, which is to pray to G-d.”

   
   

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