Posts Tagged ‘EU’


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Vivendi to Buy Vodafone SFR Stake for $11.3 Billion

Vivendi, the French media conglomerate, announced on Sunday
that it had taken full control of SFR, a large cellphone
service provider, buying Vodafone’s 44 percent stake in
the company for $11.3 billion in cash.

The deal gives Vivendi full control of one of its biggest
business units, a longtime goal for the company. SFR is one
of the biggest cellphone carriers in France. It earned
nearly 4 billion euros in profit last year and had about 20
million mobile service customers as of Sept. 1.

DEALBOOK:
http://dealbook.nytimes.com/2011/04/03/vivendi-to-buy-vodafones-stake-in-sfr-for-11-billion/?nl=business&emc=dlbka9


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Photo by: AP
Israel’s clean-tech megaproject
By AMIRAM BARKAT
12/02/2011
Bid to become a leader in renewable-energy technologies aims to help wean world off oil.
‘The global interest in Israel’s energy R&D and technology is out of all proportion to the size of the country,” says Dr. Eli Opper, a former chief scientist who is now the chairman of the Eureka High Level Group.

Israel holds the chairmanship of Eureka, the European R&D program, of which more than 40 countries are members. According to Opper, Israel’s technological achievements were an important consideration in the award of the chairmanship.

“The world looks for two things in Israel: R&D and technology,” he says. “Our manufacturing and marketing capabilities are of far less interest to it.”

Opper says Israel has an impressive record in developing breakthrough energy technologies.

“Israel was a world pioneer in developing water-desalination and solar-energy technologies,” he says. “Unfortunately, in Spain and California there are solar installations that operate using Israeli technologies, but in Israel itself we have missed the opportunity to implement them, among other things, for political reasons.

“Another reason is the small size of the Israeli market. On this point, Israel has a great deal to gain from cooperation with the large European market. Moreover, Israelis have a lot to learn from the Europeans when it comes to environmental protection. This is an area in which Israel considerably lags behind European countries.

Up to now, Israelis have preferred to deal with more urgent issues on the agenda.”

This highlights the importance of the conference organized by the European Friends of Israel in Jerusalem last week, in collaboration with Globes. The conference was attended by about 500 of the European Parliament’s 736 members.

Over the course of the conference, the European parliamentarians visited Israel’s leading industrial plants. This is no small thing, given that they represent a market of 375 million consumers who could help promote Israeli technology.

OPPER defines clean-tech as comprising three sub-fields: water, environment and renewable energy.

One of the most interesting Israel developments, he says, is in water.

“The hot topic in water technologies these days is prevention of leaks from water pipes,” he says. “There are some very interesting Israeli developments in this area that could be especially relevant to large European cities with antiquated water infrastructure.

In cities like London and Paris, the rate of water loss can be counted in tens of percents.

“The Israeli technology is twostage: The first stage is locating the leak, using sophisticated control systems; the second is blocking the leak, by introducing special, nontoxic materials.”

A few years ago, one of the technology incubators operating in Israel, Kinrot, decided to become a dedicated water-technologies incubator. Another incubator, L.N. Innovative Technologies, based near Haifa, has declared itself an “environmental incubator.”

More clean-tech technologies are at various stages of development in more than 26 incubators that operate in Israel under the aegis of the Chief Scientist’s Office in the Industry, Trade and Labor Ministry.

Opper, who was chief scientist from 2002 to 2010, says there are eight to 10 companies that have been in the incubators for an average of two years, and altogether, the state supports about 200 startup companies.

Opper says the past three years have seen substantial change in the scope of activity and investment in clean-tech R&D in Israel.

“Energy has expanded in recent years because the market understood that money could be made from it,” he says. “The figures are dramatic and indicate a very clear trend: Investment in clean-tech is growing steadily from year to year.”

In 2007, applications received in the Chief Scientist’s Office for research projects in clean-tech were worth a total of NIS 150 million.

By 2010, the amount had jumped to NIS 380m., representing a rise of more than 250 percent in three years. The amount of grants and the number of applications approved have grown by similar rates. At the same time, it must be remembered that cleantech still accounts for only a small proportion of the total of R&D projects approved by the Chief Scientist’s Office, which are worth about NIS 5 billion annually.

Investment in a technology center

The technology incubators and research budgets are only two elements of the R&D activity in Israel in renewable energy.

Another important factor that will soon come into play is the Renewable Energy Technology Center. The center will be set up by a private consortium selected by the Industry, Trade and Labor Ministry. Opper says a second technology center is planned in the next few years for developing water technologies.

Under the terms for setting up and operating the Renewable Energy Technology Center, the state committed to injecting NIS 57m. over five years, while the franchisee committed to match that amount of funding. In September, the tender for the center was won by the Eilat-Eilot Renewable Energy Initiative, a consortium that comprises some of Israel’s most important companies in R&D (Ormat, Elbit Systems, and Rafael Advanced Defense Systems), together with leading research bodies in renewable energy (Ben-Gurion University of the Negev and the Arava Institute for Environmental Studies) and venture- capital firm ProSeed.

The center will be constructed in the Arava, north of Eilat, in the Eilot Regional Council. The Eilat- Eilat Renewable Energy Administration is an important partner in the winning consortium. The win in the tender consolidates the Eilot region as the Israeli center for renewable energy.

THE MAIN focus of the region’s activity in renewable energy is the Eilat-Eilot International Renewable Energy Conference.

This year, the fourth year it is being held, the conference will take place in Eilat next Tuesday through Thursday. In 2010, the conference received official recognition as one of the most important renewable-energy events in the world, when the European Commission, the executive arm of the European Union, chose to include the event in the ECO4B (environment cooperation for business) project, promoted by the Enterprise Europe Network, which links business support organizations from 47 countries.

The conference will bring together more than 2,000 business people, academics, government representatives and large investment entities from Israel and around the world. Among other things, a large Italian delegation is expected, to be led by Economic Development Minister Paolo Romani, alongside delegations from the UK, France and Spain. Two sessions at this year’s conference are being sponsored by Eureka, which at the same time will hold its annual gathering under Luuk Borg, head of the Eureka secretariat in Brussels.

Among prominent Europeans in the renewable-energy field expected in Eilat this year are European Climate Action Commissioner Connie Hedegaard; Dr.

Karl-Josef Kuhn, principle engineer of Siemens AG and head of Siemens Corporate Technology E-Car; and Dr. Gabriel Marquette, director of European Affairs at Schlumberger Research and president of Eurogia. Besides focusing on ways of removing bureaucratic obstacles to implementation of renewable-energy projects, a large part of the discussion will be devoted to innovation and the latest technological developments in the field.

NIS 14 billion to replace oil

In the coming years, Israel’s R&D efforts will not be devoted to clean-tech so much as to a subject close to it: substitutes for oil. Last February, the government decided on “a national effort to develop technologies that reduce the world’s use of oil in transport.”

The goal could hardly be more ambitious: The developed world’s dependence on oil for transport is a political problem, but it’s also an economic and environmental problem.

Dr. Gal Luft, executive director of the Institute for the Analysis of Global Security in Washington, DC, believes this is the world’s number-one problem.

The root of the problem, he says, is that oil is a monopoly in fuel for transport that is produced by a cartel, OPEC, which controls nearly 80% of the world’s oil reserves and is committed to raising its price.

At the Globes Israel Business Conference in Tel Aviv in December, Luft predicted that oil prices would continue to rise under any possible scenario.

“Our ‘luck,’ in inverted commas, is that we have been in a global recession,” he said. “Just imagine what will happen if we emerge from the recession. On the other hand, oil prices will also rise under less optimistic scenarios, such as an outbreak of inflation or substantial weakening of the dollar.

If those things happen, investors will rush to oil as a defensive commodity, like gold.”

Over the past year, since the government decision, comprehensive staff work has been undertaken by the National Economic Council under Prof.

Eugene Kandel. Last month, the government approved a national plan for developing alternatives to oil.

The plan, which will operate between 2011 and 2020, will have a budget of NIS 4b. for its first five years and at least NIS 10b. for the next five years. The government’s participation in the budget will be NIS 1.5b.

The main goal of the plan is for Israel to become a world center of know-how in alternatives to oil.

This goal will be achieved if, by 2016, more than 100 start-up companies and research projects are set up, with the involvement of 20 Israeli global companies.

Also, by 2016, about a 100 research and academic groups in the field are due to be formed.

THE PLAN encourages investment in venture-backed companies active in alternatives to oil.

The program, which has been allocated government funding of NIS 400m., will enable the financing of pilot installations to test new technologies, and it will promote implementation of the new technologies in industry. In addition, a NIS 1.5m. annual prize will be awarded by the prime minister for world innovation in alternatives to oil.

The future scientific activity in Israel will be reinforced by collaboration programs and agreements with foreign countries. Preference will be given to countries with high research and technological capabilities and to countries with the strongest interest in finding alternatives to oil. The government’s decision specifically mentions countries such as India and China, where the number of motorized vehicles is expected to grow substantially in the coming years.

Uri Ben-Porat, economic adviser to President Shimon Peres, recommends teaming with developing countries – such as Kazakhstan, for example – that are dependent on oil exports and seek to diversify their risk. At the recommendation of Opper, the plan states that Israel will seek to strengthen collaboration between Israeli companies and multinational companies active in areas connected to alternatives to oil and with leading research bodies in that area.

“Players like automobile makers and fuel companies are conducting research on a huge scale to find alternatives to oil, and there is a great deal of strategic sense in linking up with them,” Opper said at the Israel Business Conference.

Opper, who was a member of the steering committee that formulated the national plan, believes its ambitious goal is attainable.

“If Israel helps to solve the world’s dependence on oil, it will turn out to have been a very important decision,” he says.

Israel’s clean-tech megaproject

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In a Computer Worm, a Possible Biblical Clue

September 29, 2010
Deep inside the computer worm that some specialists suspect is aimed at slowing Iran’s race for a nuclear weapon lies what could be a fleeting reference to the Book of Esther, the Old Testament tale in which the Jews pre-empt a Persian plot to destroy them.
That use of the word “Myrtus” — which can be read as an allusion to Esther — to name a file inside the code is one of several murky clues that have emerged as computer experts try to trace the origin and purpose of the rogue Stuxnet program, which seeks out a specific kind of command module for industrial equipment.
Not surprisingly, the Israelis are not saying whether Stuxnet has any connection to the secretive cyberwar unit it has built inside Israel’s intelligence service. Nor is the Obama administration, which while talking about cyberdefenses has also rapidly ramped up a broad covert program, inherited from the Bush administration, to undermine Iran’s nuclear program. In interviews in several countries, experts in both cyberwar and nuclear enrichment technology say the Stuxnet mystery may never be solved.
There are many competing explanations for myrtus, which could simply signify myrtle, a plant important to many cultures in the region. But some security experts see the reference as a signature allusion to Esther, a clear warning in a mounting technological and psychological battle as Israel and its allies try to breach Tehran’s most heavily guarded project. Others doubt the Israelis were involved and say the word could have been inserted as deliberate misinformation, to implicate Israel.
“The Iranians are already paranoid about the fact that some of their scientists have defected and several of their secret nuclear sites have been revealed,” one former intelligence official who still works on Iran issues said recently. “Whatever the origin and purpose of Stuxnet, it ramps up the psychological pressure.”
So a calling card in the code could be part of a mind game, or sloppiness or whimsy from the coders.
The malicious code has appeared in many countries, notably China, India, Indonesia and Iran. But there are tantalizing hints that Iran’s nuclear program was the primary target. Officials in both the United States and Israel have made no secret of the fact that undermining the computer systems that control Iran’s huge enrichment plant at Natanz is a high priority. (The Iranians know it, too: They have never let international inspectors into the control room of the plant, the inspectors report, presumably to keep secret what kind of equipment they are using.)
The fact that Stuxnet appears designed to attack a certain type of Siemens industrial control computer, used widely to manage oil pipelines, electrical power grids and many kinds of nuclear plants, may be telling. Just last year officials in Dubai seized a large shipment of those controllers — known as the Simatic S-7 — after Western intelligence agencies warned that the shipment was bound for Iran and would likely be used in its nuclear program.
“What we were told by many sources,” said Olli Heinonen, who retired last month as the head of inspections at the International Atomic Energy Agency in Vienna, “was that the Iranian nuclear program was acquiring this kind of equipment.”
Also, starting in the summer of 2009, the Iranians began having tremendous difficulty running their centrifuges, the tall, silvery machines that spin at supersonic speed to enrich uranium — and which can explode spectacularly if they become unstable. In New York last week, Iran’s president, Mahmoud Ahmadinejad, shrugged off suggestions that the country was having trouble keeping its enrichment plants going.
Yet something — perhaps the worm or some other form of sabotage, bad parts or a dearth of skilled technicians — is indeed slowing Iran’s advance.
The reports on Iran show a fairly steady drop in the number of centrifuges used to enrich uranium at the main Natanz plant. After reaching a peak of 4,920 machines in May 2009, the numbers declined to 3,772 centrifuges this past August, the most recent reporting period. That is a decline of 23 percent. (At the same time, production of low-enriched uranium has remained fairly constant, indicating the Iranians have learned how to make better use of fewer working machines.)
Computer experts say the first versions of the worm appeared as early as 2009 and that the sophisticated version contained an internal time stamp from January of this year.
These events add up to a mass of suspicions, not proof. Moreover, the difficulty experts have had in figuring out the origin of Stuxnet points to both the appeal and the danger of computer attacks in a new age of cyberwar.
For intelligence agencies they are an almost irresistible weapon, free of fingerprints. Israel has poured huge resources into Unit 8200, its secretive cyberwar operation, and the United States has built its capacity inside the National Security Agency and inside the military, which just opened a Cyber Command.
But the near impossibility of figuring out where they came from makes deterrence a huge problem — and explains why many have warned against the use of cyberweapons. No country, President Obama was warned even before he took office, is more vulnerable to cyberattack than the United States.
For now, it is hard to determine if the worm has infected centrifuge controllers at Natanz. While the S-7 industrial controller is used widely in Iran, and many other countries, even Siemens says it does not know where it is being used. Alexander Machowetz, a spokesman in Germany for Siemens, said the company did no business with Iran’s nuclear program. “It could be that there is equipment,” he said in a telephone interview. “But we never delivered it to Natanz.”
But Siemens industrial controllers are unregulated commodities that are sold and resold all over the world — the controllers intercepted in Dubai traveled through China, according to officials familiar with the seizure.
Ralph Langner, a German computer security consultant who was the first independent expert to assert that the malware had been “weaponized” and designed to attack the Iranian centrifuge array, argues that the Stuxnet worm could have been brought into the Iranian nuclear complex by Russian contractors.
“It would be an absolute no-brainer to leave an infected USB stick near one of these guys,” he said, “and there would be more than a 50 percent chance of having him pick it up and infect his computer.”
There are many reasons to suspect Israel’s involvement in Stuxnet. Intelligence is the single largest section of its military and the unit devoted to signal, electronic and computer network intelligence, known as Unit 8200, is the largest group within intelligence.
Yossi Melman, who covers intelligence for the newspaper Haaretz and is at work on a book about Israeli intelligence over the past decade, said in a telephone interview that he suspected that Israel was involved.
He noted that Meir Dagan, head of Mossad, had his term extended last year partly because he was said to be involved in important projects. He added that in the past year Israeli estimates of when Iran will have a nuclear weapon had been extended to 2014.
“They seem to know something, that they have more time than originally thought,” he said.
Then there is the allusion to myrtus — which may be telling, or may be a red herring.
Several of the teams of computer security researchers who have been dissecting the software found a text string that suggests that the attackers named their project Myrtus. The guava fruit is part of the Myrtus family, and one of the code modules is identified as Guava.
It was Mr. Langner who first noted that Myrtus is an allusion to the Hebrew word for Esther. The Book of Esther tells the story of a Persian plot against the Jews, who attacked their enemies pre-emptively.
“If you read the Bible you can make a guess,” said Mr. Langner, in a telephone interview from Germany on Wednesday.
Carol Newsom, an Old Testament scholar at Emory University, confirmed the linguistic connection between the plant family and the Old Testament figure, noting that Queen Esther’s original name in Hebrew was Hadassah, which is similar to the Hebrew word for myrtle. Perhaps, she said, “someone was making a learned cross-linguistic wordplay.”
But other Israeli experts said they doubted Israel’s involvement. Shai Blitzblau, the technical director and head of the computer warfare laboratory at Maglan, an Israeli company specializing in information security, said he was “convinced that Israel had nothing to do with Stuxnet.”
“We did a complete simulation of it and we sliced the code to its deepest level,” he said. “We have studied its protocols and functionality. Our two main suspects for this are high-level industrial espionage against Siemens and a kind of academic experiment.”
Mr. Blitzblau noted that the worm hit India, Indonesia and Russia before it hit Iran, though the worm has been found disproportionately in Iranian computers. He also noted that the Stuxnet worm has no code that reports back the results of the infection it creates. Presumably, a good intelligence agency would like to trace its work.

Ethan Bronner contributed reporting from Israel, and William J. Broad from New York.

 In a Computer Worm, a Possible Biblical Clue – NYTimes.com

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>A computer worm proliferating in Iran targets automated activity in large industrial facilities. Speculation that the worm represents an effort by a national intelligence agency to attack Iranian nuclear facilities is widespread in the media. The characteristics of the complex worm do in fact suggest a national intelligence agency was involved. If so, the full story is likely to remain shrouded in mystery.

Analysis

A computer virus known as a worm that has been spreading on computers primarily in Iran, India and Indonesia could be a cyberattack on Iranian nuclear facilities, according to widespread media speculation.

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The Stuxnet Computer Worm and the Iranian Nuclear Program

Summary

A computer worm proliferating in Iran targets automated activity in large industrial facilities. Speculation that the worm represents an effort by a national intelligence agency to attack Iranian nuclear facilities is widespread in the media. The characteristics of the complex worm do in fact suggest a national intelligence agency was involved. If so, the full story is likely to remain shrouded in mystery.

Analysis

A computer virus known as a worm that has been spreading on computers primarily in Iran, India and Indonesia could be a cyberattack on Iranian nuclear facilities, according to widespread media speculation.
Creating such a program, which targets a specific Siemens software system controlling automated activity in large industrial facilities, would have required a large team with experience and actionable intelligence. If a national intelligence agency in fact targeted Iranian nuclear facilities, this would be the first deployment of a cyberweapon reported on in the media. It would also mean that the full details of the operation are not likely ever to be known.
The so-called Stuxnet worm first attracted significant attention when Microsoft announced concerns over the situation in a Sept. 13 security bulletin, though various experts in the information technology community had been analyzing it for at least a few months. The worm is very advanced, required specific intelligence on its target, exploits multiple system vulnerabilities and uses two stolen security certificates, suggesting a typical hacker did not create it.
On a technical level, Stuxnet uses four different vulnerabilities to gain access to Windows systems and USB flash drives, identified independently by antivirus software makers Symantec and Kaspersky Lab. Discovering and exploiting all four vulnerabilities, which in this case are errors in code that allow access to the system or program for unintended purposes, would have required a major effort. Three of them were “zero-day” vulnerabilities, meaning they were unknown before now. A Polish security publication, Hakin9, had discovered the fourth, but Microsoft had failed to fix it. Typically, hackers who discover zero-day vulnerabilities exploit them immediately to avoid pre-emption by software companies, which fix them as soon as they learn of them. In another advanced technique, the worm uses two stolen security certificates from Realtek Semiconductor Corp. to access parts of the Windows operating system.
Stuxnet seems to target a specific Siemens software system, the Simatic WinCC SCADA, operating a unique hardware configuration, according to industrial systems security expert Ralph Langner and Symantec, which both dissected the worm. SCADA stands for “supervisory control and data acquisition systems,” which oversee a number of programmable logic controllers (PLCs), which are used to control individual industrial processes. Stuxnet thus targets individual computers that carry out automated activity in large industrial facilities, but only will activate when it finds the right one. Siemens reported that 14 facilities using its software had already been infected, but nothing had happened. When Stuxnet finds the right configuration of industrial processes run by this software, it supposedly will execute certain files that would disrupt or destroy the system and its equipment. Unlike most sophisticated worms or viruses created by criminal or hacker groups, this worm thus does not involve winning wealth or fame for the creator, but rather aims to disrupt one particular facility, shutting down vital systems that run continuously for a few seconds at a time.
VirusBlokAda, a Minsk-based company, announced the discovery of Stuxnet June 17, 2010, on customers’ computers in Iran. Data from Symantec indicates that most of the targeted and infected computers are in Iran, Indonesia and India. Nearly 60 percent of the infected computers were in Iran. Later research found that at least one version of Stuxnet had been around since June 2009. The proliferation of the worm in Iran indicates that country was the target, but where it started and how it has spread to different countries remains unclear.
Few countries have the kind of technology and industrial base and security agencies geared toward computer security and operations required to devise such a worm, which displays a creativity that few intelligence agencies have demonstrated. This list includes, in no particular order, the United States, India, the United Kingdom, Israel, Russia, Germany, France, China and South Korea.
Media speculation has focused on the United States and Israel, both of which are seeking to disrupt the Iranian nuclear program. Though a conventional war against Iran would be difficult, clandestine attempts at disruption can function as temporarily solutions. Evidence exists of other sabotage attempts in the covert war between the United States and Israel on one side and Iran on the other over Iranian efforts to build a deliverable nuclear weapon.
U.S. President Barack Obama has launched a major diplomatic initiative to involve other countries in stopping Iran’s nuclear activities, so another country might have decided to contribute this creative solution. Whoever developed the worm had very specific intelligence on their target. Targeting a classified Iranian industrial facility would require reliable intelligence assets, likely of a human nature, able to provide the specific parameters for the target. A number of defectors could have provided this information, as could have the plants’ designers or operators. Assuming Siemens systems were actually used, the plans or data needed could have been in Germany, or elsewhere.
Evidence pinpointing who created the worm is not likely to emerge. All that is known for certain is that it targets a particular industrial system using Siemens’ programming. Whether the worm has found its target also remains unclear. It may have done so months ago, meaning now we are just seeing the remnants spread. Assuming the target was a secret facility — which would make this the first cyberweapon reported in the media — the attack might well never be publicized. The Iranians have yet to comment on the worm. They may still be investigating to see where it has spread, working to prevent further damage and trying to identify the culprit. If a government did launch the worm, like any good intelligence operation, no one is likely to take credit for the attack. But no matter who was responsible for the worm, Stuxnet is a display of serious innovation by its designer.

Read more: The Stuxnet Computer Worm and the Iranian Nuclear Program | STRATFOR 

Also see:

Iran ‘attacked’ by computer worm
Iran’s nuclear agency trying to combat a virus capable of taking over systems that control power plants, media says.
Last Modified: 25 Sep 2010 15:08 GMT
Foreign media has speculated that the worm is aimed at disrupting the Bushehr nuclear plant [EPA]

Iran’s nuclear agency is trying to combat a complex computer worm that has affected industrial sites throughout the country and is capable of taking over the control systems of power plants, Iranian media reports have said.
Experts from the Atomic Energy Organisation of Iran met this week to discuss how to remove the malicious computer code, or worm, the semi-official Isna news agency reported on Friday.
No damage or disruption of nuclear facilities has yet been reported, however.
The computer worm, dubbed Stuxnet, can take over systems that control the inner workings of industrial plants.
Experts in Germany discovered the worm in July, and it has since shown up in a number of attacks – primarily in Iran, Indonesia, India and the US.
‘Disrupting Bushehr’
Isna said the malware had spread throughout Iran, but did not name specific sites affected.
Foreign media reports have speculated the worm was aimed at disrupting Iran’s first nuclear power plant, which is to go online in October in the southern port city of Bushehr.

The Russian-built plant will be internationally supervised, but world powers remain concerned that Iran wants to use its civil nuclear power programme as a cover for making weapons.
Iran denies such an aim and says its nuclear work is solely for peaceful purposes.
The destructive Stuxnet worm has surprised experts because it is the first one specifically created to take over industrial control systems, rather than just steal or manipulate data.
Speaking to Al Jazeera, Rik Ferguson, a senior security adviser at the computer security company Trend Micro, described the worm as “very sophisticated”.
“It is designed both for information theft, looking for design documents and sending that information back to the controllers, and for disruptive purposes,” he said.
“It can issue new commands or change commands used in manufacturing.
“It’s difficult to say with any certainty who is behind it. There are multiple theories, and in all honesty, any of of them could be correct.”
Western experts have said the worm’s sophistication – and the fact that about 60 per cent of computers infected looked to be in Iran – pointed to a government-backed attack.
Washington is also tracking the worm, and the Department of Homeland Security is building specialised teams that can respond quickly to cyber emergencies at industrial facilities across the US.

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Lunch with the FT: Tony Blair

By Philip Stephens

Published: September 10 2010 18:54 | Last updated: September 10 2010 18:54

An illustration of Tony BlairI had hoped I might meet Tony Blair at one of London’s more bustling venues – mainly, I confess, because I wanted to measure the reaction of the throng. But the rules of Lunch with the FT leave the choice with the guest. So, after a certain amount of cloak and daggery, insisted upon by the police protection officers who still accompany him everywhere, I arrive at Blair’s local Italian, Locanda Locatelli.

It is one of those restaurants comfortable with celebrity. On a weekday lunchtime most tables seem to be occupied by business types but Madonna is said to be among the evening regulars. Our corner booth offers a panoramic view of polished wood, fabric wall coverings and soft leather banquettes. A head or two turns discreetly as Blair enters. No one is impolite enough to stare.

Britain’s former prime minister presents a conundrum. His memoir has invited torrents of invective from enemies (critics is much too soft a word) among metropolitan elites. Yet copies of A Journey are flying off the shelves as “real people” open their wallets to read Blair’s version of events. He did, after all, win three elections and put Britain back on the international stage. Then again, he also stood shoulder to shoulder with George W Bush in Iraq.

I am getting ahead of myself. The Michelin-starred Locanda Locatelli is around the corner from Blair’s central London home. Its proprietor-chef Giorgio Locatelli, I will discover, is an exquisite cook. But first I concentrate on my guest. Blue suit, white shirt and no tie (I had worn one for the occasion), he is visibly at ease. The slings and arrows of media outrage don’t seem to have left any scars. He has just cancelled a signing at a bookstore in London because of promised disruption by protesters. But he’s still getting all those clicks on Amazon.

It cannot feel very nice, though, to have people call you a war criminal? Blair doesn’t blink. “I’ve always had a, I mean truthfully, a better relationship with the country than with the media because the media divides into a left and right of a pretty traditional sort. And the left always regard me as not sufficiently left and the right hate me because I win. Or I won.”

The style of, and reaction to, the book mirrors the division of opinion between liberal intelligentsia and voters. It’s racy. In places, it badly mangles the English language; the colloquialisms sometimes slip into cringe-making confessionals. We really don’t need to know about that night of unbridled passion with his wife Cherie. The book is everything, in other words, that the chatterati don’t like about Blair.

Yet it carries the reader along. There is plenty about politics and policy – more than in many political memoirs. He is way ahead on some things – particularly on what progressive politicians have to do to adapt to change; and, to my mind, profoundly mistaken on others, as in his reading of the struggle against violent Islamism. But A Journey reads as a story, not a chore.

“I wanted to write it in a different way and I wanted to write it in a way that is more open.” It was time for someone to explain that politicians are also human beings. “One of the worst things happening in politics today is this assault on politicians when they get … they do something that’s wrong or people think it wrong, or whatever, and yet no one actually sees it from the other side.”

He warms to the theme. “If you’re not careful what happens is your political leaders have to be all sort of buttoned up; meanwhile they’re subject to a degree of intrusion that in times gone by was completely unknown. I think it’s therefore quite helpful … to understand that they are human beings and to understand things from their point of view.” That’s why he has now owned up to the inner fears that had often lain behind the apparently supreme confidence.

There is more to this than artifice dressed up as candour, or indeed the desire to speak directly to people over the head of a hostile media. He thinks he has something important to say about the tumultuous pace of change in the world, the west’s response to the rise of Asia, the future of centre-left politics.

“I want people to read me unmediated rather than mediated because I think if they read it they will at least understand what I’m trying to say and it’s very much a book that’s prospective in a sense, because a lot of what I’m saying … is about where are we now and where we need to be.”

As we talk I am nibbling on Parmesan-infused grissini and picking small pieces from a basket of freshly baked bread. Blair resists the temptation. He likes to keep in shape. I have long abandoned such fantasies. Meanly, I take private satisfaction that the price he pays for keeping his weight down is to look his age.

The antipasti arrive. Blair has the salad of broad beans, rocket and ewe cheese. I hesitate before opting for the green bean salad with potato and truffle. The truffle always tips it. Mine is scrumptious. His salad likewise, says Blair. The plates go back scraped clean to Locatelli’s kitchen. “Local Italian” no longer seems an apt description of the cuisine on offer here.

We are sticking to sparkling water – a cue to tease my guest. He has admitted that as prime minister he fretted that an habitual whisky or gin followed by a couple of glasses of wine (sometimes even half a bottle!) over dinner left him close to the edge of alcohol dependency.

Guffaws all round. “All my friends have been saying it was quite the most pathetic and sad admission they’d ever come across. John Reid’s [a former cabinet colleague] comment was the best. Did you hear that? He said, ‘Where I come from in Glasgow they give more than that to the budgie.’”

There are moments in the book when Blair sounds almost melancholic. Politics, he explains, is lived backwards. Leaders are at their most powerful when they are least practised. Time brings experience but it also drains political capital.

He would have stayed on as prime minister had Gordon Brown, his chancellor and bitter rival, not forced the timing of his departure. Yet he bridles at the idea that he is now a lost soul. “That’s true … I do say [I would have stayed] because I have the confidence to say it – without actually spending my life desperately troubled I’m not still there.” So he has gotten over not being prime minister? Yes. “I really don’t miss it. The only time I missed it was during the global financial crisis.” Ah yes, that would have been a moment for him to stride the world stage again. As it was, Brown got quite a lot of credit.

But, he says, “I’m happy to go out there doing the things I’m doing … I’m fascinated by the Middle East peace process and I want to work on it. And my faith foundation is now operating in 15 different countries, I’ve got the Africa governance initiative, that’s operating in three African countries.” Then, of course, there are the speeches, the advisory work for a bank and the consultancy contracts for Tony Blair Associates.

Once during the lunch I think I off-balance him. I remind him that Peter Mandelson, a co-conspirator in the modernisation of his party, had once observed that New Labour was “intensely relaxed” about people becoming “filthy rich”. So how does Blair feel about living in private jets? Hasn’t he been seduced by the bling?

This evokes a pained frown. Most of his time, he protests, is spent on unpaid work – the role of Middle East envoy that a few days earlier had taken him to Barack Obama’s White House, his faith foundation, the work on governance in Africa and the rest. The speeches and the consultancy pay the bills for the pro bono.

“I would have been happy to carry on with being prime minister; I’ve been in public service for 25 years. I would have been happy taking the European job and going on a European salary … I’d be happy to go back to a public service job one day but if I don’t I’ve got the ability to make money, and I make it, and I provide for my family and I can do the things that I believe in doing.” The proceeds of the book – something upwards of £4m – have been pledged to a military charity helping the casualties of Iraq and Afghanistan.

Stuffy people like me are troubled by the idea of former prime ministers trading off their political careers. But Blair has a point. The flip-side of political leaders getting younger is that they retire in their prime. Can we really insist that fit fifty-somethings disappear into retirement or accept a cap on their earnings?

In any event, I don’t think the money is the motivation. What Blair really wants is to remain at the centre of things; to be a player. Wealth is an adjunct.

By now, we are finishing our main courses. I have opted for the day’s special – a sublime ravioli filled with spinach and ricotta. Blair nods approvingly at his char-grilled squid with chilli and garlic. Trying to trip him up reminds me why he was so good. When he was prime minister I used to see quite a lot of him. Before each encounter I would tell myself that this time I would not be bamboozled. Maddeningly, 20 minutes into the conversation, I would be thinking “Well, maybe he’s right after all.”

Blair told visitors to Downing Street what they wanted to hear – sometimes, as he admits in the book – bending the truth to that aim. I remember a colleague remarking that he “always believed what he said at the moment he said it”. So, you could add, did the visitors.

His gift, though, is about more than charm and the emotional intuition of a natural communicator. The big thing about Blair is that he knows how to frame an argument. Most politicians get lost in the foothills of tactics. He has a strategic brain – a view of the world – and the self-belief to follow it through.

The self-belief bit, of course, turned out to be his weakness as well as his strength. I would like to say that when the conversation turned to Iraq, I succeeded in pushing Blair up against a wall until he repented. I didn’t. Partly because I was ambivalent about the war at the time – I always thought getting rid of Saddam Hussein was rather a good thing. And partly because I deprecate the implicit assumption of many of the anti-war crowd that the world would be such a great place if Iraq and Iran were still fighting themselves to a standstill.

In any event he has heard the charges too many times to change his answers now: “We acted on the information that we had at the time; we also acted with a certain sense of urgency after September 11. I think people forget that.”

Yes, of course, he regrets the loss and damaged lives of the war but he is not going to say he regrets the decision to go to war. “We used to have a policy of supporting Saddam, to be a brake on Iran, and look what happened: it didn’t work, in the same way we actually armed some of the Mujahaddin in order to take on the Russians – it didn’t work, let’s learn the lesson.”

You could say Iraq tested to destruction his doctrine of liberal interventionism. On the other hand, are we to conclude that everything will be hunky-dory if only we leave the tyrants alone?

We opt for coffee rather than dessert, but it comes with a small selection of home-made sorbets and petit fours. This time I consider my waistline and stick, like Blair, with the sorbet.

Time is passing. Blair’s account of his titanic struggle with Gordon Brown grabbed even more headlines than Iraq. Some consider his description of his former colleague to be overly harsh; others wonder why he admits that, as prime minister, he did not feel strong enough to sack him.

The only point he makes now is that the struggle was more about the direction of the New Labour government than about who should be prime minister. “I think you need to make it clear there was a policy disagreement. People used to write this whole relationship up as if it was just a personal spat about a job – it wasn’t for me at all,” he says.

Our chef stands by the front desk as we leave. It’s my first lunch with a politician for a long time where the food has left a real impression. Usually it gets in the way.

Back in the office I pick up The New York Times to read the columnist Maureen Dowd’s take on the memoir. It seems I had been lunching with a delusional maniac. The thought occurs that perhaps I should have carted him off to Guantánamo. That’s the thing, though, about Blair. He awakens in many liberals the unhinged rage that Barack Obama draws from America’s Tea Party crowd. What to do, though, about all those people who are buying – even enjoying – his book?

Philip Stephens is the FT’s chief political commentator

…………………………………………..

Locanda Locatelli

8 Seymour Street, London W1

Contribution to charity £1

Bottle sparkling water £3.50

Broad beans, rocket and ewe cheese salad £9.50

Green bean salad, potato and black truffle £16.50

Char-grilled squid, chilli and garlic £28

Ravioli with ricotta and spinach £12.50

Espresso x 2 £5

An assortment of sorbets and petit fours (on the house)

Total (including optional service) £90

…………………………………………..

How successful has Blair been as Middle East envoy?

Of the many jobs and functions that Tony Blair has taken on since leaving 10 Downing Street, only one has provided the former British leader with any kind of international clout: his role as Middle East envoy, writes Tobias Buck.

Qadoura Mousa, Tony Blair and Silvan Shalom
Blair with Jenin governor Qadoura Mousa, left, and Israeli vice prime minister Silvan Shalom, 2009

Blair was appointed representative of the Middle East Quartet – the US, the United Nations, the European Union and Russia – almost immediately on leaving office in 2007. The post meant returning to a region where he is remembered, above all, for his role in the deeply unpopular invasion of Iraq in 2003. At the time, a number of analysts and diplomats cautioned that this association made him an improbable figure to advance peace between Israel and its Arab neighbours. That concern was gradually dispelled once Blair set up his office in Jerusalem’s famous American Colony Hotel. He made an early impression on his Israeli and Palestinian interlocutors, who noted both his dedication and easy-going charm (a rare commodity in Middle Eastern political circles).

More importantly, it soon became clear that Blair had not arrived with the intention of remaking the Middle East. He was, in fact, never supposed to play the role of peacemaker: his Quartet mandate spells out clearly that his primary task is to help improve the governance of the Palestinian territories and boost the Palestinian economy. According to his advisers, this was the mandate Blair himself wanted, believing that economic growth and good governance were a crucial – and previously overlooked – part of the strategy to end decades of bloody conflict.

What it means in practice is that Blair has been engaged above all in unglamorous aspects of Middle East politics: persuading Israel to lift a checkpoint in the West Bank; getting the Israeli army to approve the shipment of sewage pipes to the Gaza Strip; or calling on Gulf sheikhs to increase their funding for the Palestinian Authority.

There is no doubt that both the Palestinian economy and the quality of Palestinian governance have improved drastically since Blair entered the arena. However, many observers say most of the credit for the recent upswing goes to Salam Fayyad, the US-educated economist who serves as Palestinian prime minister. Blair has certainly contributed, in his role as a facilitator and mediator between the two sides, to the economic and political improvements in the West Bank but it is not easy to quantify how influential his actions have been.

“It is hard to say,” replied one senior adviser to the Palestinian Authority when asked about Blair’s contribution. “Many people work on many issues, but every word helps. Blair has tried his best to be successful but it is not always easy.”

Tobias Buck is the FT’s Jerusalem bureau chief

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How Gangsters Are Saving Euro Zone

By STEPHEN FIDLER 

JULY 30, 2010

BRUSSELS BEAT

[brussels_sub]
(Please see Corrections & Amplifications item below.)
Gangsters, drug dealers and money launderers appear to be playing their part in helping shore up the financial stability of the euro zone.
That’s thanks to their demand, according to European authorities, for high-denomination euro bank notes, in particular the €200 and €500 bills. The European Central Bank issues these notes for a hefty profit that is welcome at a time when its response to the financial crisis has called its financial strength into question.
The high-value bills are increasingly “making the euro the currency of choice for underground and black economies, and for all those who value anonymity in their financial transactions and investments,” wrote Willem Buiter, chief economist at Citigroup, in a recent research report. The business of issuing euro notes, produced at almost zero cost, is “wildly profitable” for the ECB, Mr. Buiter wrote.
When euro notes and coins went into circulation in January 2002, the value of €500 notes outstanding was €30.8 billion ($40 billion), according to the ECB.
Today some €285 billion worth of such euro notes are in existence, an annual growth rate of 32%. By value, 35% of euro notes in circulation are in the highest denomination, the €500 bill that few people ever see.
In 1998, then-U.S. Treasury official Gary Gensler worried publicly about the competition to the $100 bill, the biggest U.S. bank note, posed by the big euro notes and their likely use by criminals. He pointed out that $1 million in $100 bills weighs 22 pounds; in hypothetical $500 bills, it would weigh just 4.4 pounds.
Police forces have found the big euro notes in cereal boxes, tires and in hidden compartments in trucks, says Soren Pedersen, spokesman for Europol, the European police agency based in The Hague. “Needless to say, this cash is often linked to the illegal drugs trade, which explains the similarity in methods of concealment that are used.”
A spokeswoman for the ECB declined to comment on who uses the bills.
The ECB and its member governments are beneficiaries of the demand.
The profit a central bank gains from issuing currency—as well as from other privileges of a central bank, such as being able to demand no-cost or low-cost deposits from banks—is known as seigniorage. It normally accrues to national treasuries once the central banks account for their own costs.
The ECB’s gains from seigniorage are becoming increasingly important this year.
The ECB has taken hundreds of billions of euros of assets of unknown quality on to its balance sheet as it has reacted to the global financial crisis.
It holds more than €600 billion in collateral from banks to which it has made loans, and more than €400 billion in securities it holds outright, including government bonds.
Overall, the ECB’s balance sheet has grown to almost €2 trillion. It has a capital base of €78 billion. That creates leverage that makes it look like a “hedge fund on steroids,” Mr. Buiter wrote. It wouldn’t need to lose much on these assets to wipe out its thin cushion of capital.
That’s where seigniorage comes in.
In recent years, the profits on its issue of new paper currency have been running at €50 billion. In 2008, the year of the Lehman Brothers crisis, it was €80 billion.
Even with conservative assumptions about future growth of currency in circulation—at, say, 4% a year, which is in line with the ECB’s 2% inflation target plus a margin for economic growth—Mr. Buiter estimates future seigniorage profits for the central bank between €2 trillion and €6.9 trillion.
Thanks to seigniorage, he says, the ECB is “super solvent.”
An ECB spokeswoman says there’s no plan to withdraw high-value notes, national equivalents of which were used in six member states before the euro was launched. They will be retained when a redesigned series is issued in coming years.
Replacing them with small denominations would increase production and processing costs, she says.

Corrections & Amplifications
The volume of €500 notes in circulation is €285 billion, accounting for 35% by value of all euro notes outstanding. An earlier version of this article incorrectly said the €285 billion figure represented all euro notes.
There are 570 million €500 bills in circulation. The scale on a chart accompanying an earlier version of this article misrepresented the number as 570,000.
Write to Stephen Fidler at stephen.fidler@wsj.com

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