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Monday, June 30, 2008

Obama may ask defence secretary Gates to stay on.

This is just symptomatic of the lack of any real difference in foreign policy between the Democrats and Republicans. Both parties share an aggressive imperialist policy that attempts to assert U.S. global hegemony even though it will ruin the U.S. economy, in the end burdening the populace with ruinous debt and wasting resources that could have been used to improve the condition of Americans at home. Also, there is a waste of American lives for foreign adventures that mostly benefit the capitalist cronies of the two main parties who lavishly support them and are richly rewarded with defence contracts and no bid contracts in Iraq and elsewhere.
If the war on terrror did not exist something else would have been invented to hoodwink the U.S. populace. Don't be surprised if China or Russia become new evil empires within a very short while. A new unifying diversion may be necessary as times get harder.
Robert Gates continuing tenure is also symptomatic of what Obama stands for in the way of real change.

Barack Obama may recruit defence chief Robert Gates
Sarah Baxter in WashingtonTimes of LondonJune 29, 2008

In defiance of traditional party labels, Barack Obama, the Democraticpresidential nominee, may ask the defence secretary of President George WBush to stay on if he wins the White House.Obama's top foreign policy and national security advisers are pressing thecase for keeping Robert Gates at the Pentagon after he won widespread praisefor his performance. The move would be in keeping with Obama's desire toappoint a cabinet of all the talents.After appealing for unity with former rival Hillary Clinton and hersupporters and big donors last week, Obama, 46, is turning his attention towooing Republicans and independent voters who may be concerned that he lacksthe experience to be trusted with America's defence.Richard Danzig, an adviser to Obama on national security and a former navysecretary, said: "My personal position is Gates is a very good secretary ofdefence and would be an even better one in an Obama administration."The appointment would cause a furore among Democratic party activists butwould have the advantage of providing continuity at a time when Iraq appearsto be stabilising and demanding more independence from America.Ivo Daalder of the Brookings Institution in Washington, a foreign policyadviser to Obama, said: "Robert Gates is one of the best defence secretarieswe have had in a long time and it makes a lot of sense to keep him."Gates, a former member of the bipartisan Iraq Study Group, was initiallysceptical about the troop surge in Iraq and has been quietly seeking anorderly transition to a new US administration in January so that hard-wonmilitary gains in Iraq are not thrown away in a hasty withdrawal.At one stage last year, he had hoped that 60,000-70,000 US troops could bewithdrawn by Christmas this year, but he was persuaded to back more modestreductions by General David Petraeus, the US commander. There are still150,000 US troops in Iraq.Obama has declared he will be as "careful" about leaving Iraq as Bush was"careless" going in. His current position is to remove all combat troopsfrom Iraq within 16 months at the rate of "one or two" brigades a month. Heis preparing to visit Iraq and Afghanistan, and will stop over in Britain.Gates recently said Obama and John McCain, his Republican rival, were likelyto take a "sensible approach" to Iraq because "the next president wouldsuffer the greatest consequences if we do get the endgame wrong". RetainingGates would give Obama "cover" for adjusting his policy if necessary, whilereassuring Republicans that withdrawing from Iraq would not imperil nationalsecurity.Gates showed he was comfortable working with Democrats when he appointedJohn Hamre, a former senior official under Bill Clinton, to serve aschairman of the influential Defence Policy Board last year. He alsoappointed William Perry, a former defence secretary who is advising Obama,to the board.Gates has said he finds it "inconceivable" that he would stay on but Obama'sadvisers believe he would respond to the call. "This is a man who believesin service," Daalder said.James Carafano, a defence expert at the conservative Heritage Foundation inWashington, said Obama would be making a "smart move" if he asked Gates tocarry on. "He has clearly adopted a mainstream course on national securitythat would be acceptable to either McCain or Obama."Last month Gates said he backed negotiations with Iran, a policy favoured byObama. "We need to figure out a way to develop some leverage . . . and thensit down and talk with them," the defence secretary told an association ofretired diplomats.Obama has been attacked by McCain, 71, for being all talk and no substancewhen it comes to forging cross-party alliances. The independent-mindedMcCain has had the courage to buck party lines, Republicans argue, whileObama is a conventional liberal beneath the bipartisan rhetoric.Obama has previously told The Sunday Times he is interested in appointingindependent Republican figures such as Senator Chuck Hagel to his cabinet.Hagel, who opposed the Iraq war, is still considered a leading contender fordefence secretary or another prominent post.Obama has also praised Team of Rivals, Doris Kearns Goodwin's biography ofPresident Abraham Lincoln, because it showed how Lincoln was able to marshala civil war-era cabinet of former opponents.Last week Obama told Joe Klein, a commentator for Time magazine: "The lessonis not to let your ego or grudges get in the way of hiring absolutely thebest people . . . I have an interest in casting a wide net, seeking outpeople with a wide range of expertise, including Republicans."Speculation intensified this weekend that Obama may offer Hillary Clintonthe position of health secretary after he appointed Neera Tanden, her seniorpolicy director and a key architect of her healthcare plan, to his campaignteam.http://www.timesonline.co.uk/tol/news/world/us_and_americas/us_elections/article4232070.ece

The era of oil wars is growing.

This is from the Guardian (UK).
As the article points out the U.S. is determined to make sure that the West has access to and preferably control over the development of Iraq oil. This is already happening. Although the new oil law has not passed agreements are being inked with Kurdish authorities and also development agreements with the Iraqi oil ministry. Since there is so much opposition to the oil bill foreign companies are doing an end run around it!
There is also feirce competition in Africa for oil resources and the U.S. is increasing and unifying its military involvement there.

The era of oil wars
Growing competition for oil may escalate to something as hot and dangerous as nuclear proliferation

Michael Meacher
guardian.co.uk,
Sunday June 29, 2008
Article history
Gordon Brown meeting Britain's oil chiefs to discuss higher North Sea output to bring down prices is prompted by oil prices hitting a record high of $135 a barrel, twice as high as a year ago and a staggering 12 times higher than a decade ago. The well-sourced website petrolprices.com is now predicting that petrol will reach £1.50 a litre by September, just 4 months away. Jeff Rubin of CIBC World Markets is forecasting "oil prices almost doubling over the next five years". That would mean $270 a barrel by 2013. It perhaps explains why the government is now strongly backing BP to get a big new slice of the oil drilling licences soon to be issued in Iraq, and – astonishingly – has now also made clear it intends to annex a third of a million square miles of the seabed off Antarctica to pre-empt any rights to the oil it may contain. The fight for oil has begun in earnest.But is there the oil to go round? The authoritative International Energy Agency foresees an oil supply crunch within 5 years forcing up prices to unprecedented levels and greatly increasing western dependence on Opec. And the oil industry itself in its own report Facing the Hard Truths about Energy, produced by 175 authorities including all the heads of the world's big oil companies, for the first time predicted that oil and gas may run short by 2015.
The geopolitical implications of this gathering crisis for world oil supply 2010-15 are immense. The risk of further military interventions and conflicts in the Middle East is clearly high. Total world oil reserves are estimated at 2.5-2.9 trillion barrels, of which half has now been already consumed, while half of the 51 oil-producing countries reported output declines in 2006. Non-Opec production is expected to peak and decline within the next five years, driven mainly by burgeoning demand from China and the US, together with restricted output from Iraq. Then in the following five years Opec's diminishing spare capacity will probably become increasingly unable to accommodate short-term fluctuations, depending on how fast world demand grows and how extensively Opec invests in new capacity. The latter may well not raise production capacity high enough or quickly enough, whether for political reasons or because internal decision-making is too slow or the security environment too hostile.
There are of course exits from this doom-stricken scenario, though none is at all credible. First, discovery of major new oilfields could alter the picture. However, though billions have been spent on the search for new fields, discovery peaked in the mid-1960s and the last big ones were found in the 1970s. Only Iraq has undeveloped super-giant oilfields – at West Qurna, Athabascan tar sands (from Alberta, Canada), extra-heavy oil (from the Orinoco belt in Venezuela), oil shale, and mature source rocks. But the almost insurmountable problem is recoverability, whether poor quality oil (extra-heavy oil), poor quality reservoirs (oil from source rocks), or both (oil shale). Worse, production may be uneconomic because of a very low net energy gain, ie it requires almost as much energy to extract the oil as is made available for subsequent use. And the enormous hike in greenhouse gases generated could produce a turbo climate change effect that would wipe out any benefit from a global post-Kyoto agreement.
But even if supply constraints are ineluctable as the explosion of Chinese growth coincides with falling non-Opec oil production and the beginnings of a slow but remorseless slippage in Opec capacity, the coming crisis could still be eased by significant demand restrictions. Clearly there is substantial room for energy-saving when half the energy generated every day is wasted and when propulsion of an average car is only about 20% efficient, heating of a standard oven only 25%, and electricity generated in some power stations only some 35%. The question, however, is whether improvement can be secured globally on the level and timescale required to push back the crisis more than a few years. Equally, taking the CO2 out of fossil fuels, especially coal, may be crucial, but a decade at least is needed even to test the carbon capture technology in pilot projects, let alone begin to mainstream it. But the most direct means of constraining world demand would be the proposed Rimini protocol, which prescribes that oil-importing countries cut their imports to match the world depletion rate (ie annual production as a percentage of remaining global reserves) now running at about 2% a year. Of course, the fundamental political problem remains that the most powerful oil-hungry countries will not agree. If not Kyoto, why Rimini?
What is most disturbing of all is that the big powers, so far from seeking major adjustments of their energy policies on either the supply or demand fronts or making a major switch into renewables, are actually massively intensifying their competitive struggle short-term for the limited oil reserves left. Despite an unwinnable war in Iraq, the US is still constructing at least five large permanent military bases there in order, according to evidence given to a US Congressional Committee, to control access to Gulf oil, including in Saudi and Iran. As one neocon recently put it, "one of the reasons we had no exit plan from Iraq is that we didn't intend to leave". The US is also trying to force through a new Iraqi oil law that would give western, primarily American, oil multinationals control of Iraqi oilfields for the next 30 years.
The US maintains 737 military bases in 130 countries under cover of the "war on terror" to defend American economic interests, particularly access to oil. The principal objective for the continued existence and expansion of Nato post-cold war is the encirclement of Russia and the pre-emption of China dominating access to oil and gas in the Caspian Sea and Middle East regions. It is only the beginning of the unannounced titanic global resource struggle between the US and China, the world's largest importers of oil (China overtook Japan in 2003). Islam has been dragged into this tussle because it is in the Islamic world where most of these resources lie, but Islam is only a secondary player. In the case of Russia, the recent pronounced stepping up of western attacks on Putin and claims he is undermining democracy are ultimately aimed at securing a pro-western government there, and access to Russian oil and gas when Russia has more of these two hydrocarbons together than any other country in the world.
The struggle has also spilled over into West Africa, reckoned to hold some 66 billion barrels of oil typically low in sulphur and thus ideal for refining. In 2005 the US imported more oil from the Gulf of Guinea than from Saudi and Kuwait combined, and is expected over the next 10 years to import more oil from Africa than from the Middle East. In step with this, the Pentagon is setting up a new unified military command for the continent named Africom. Conversely, Angola is now China's main supplier of crude oil, overtaking Saudi Arabia last year. There is no doubt that Africom, which will greatly increase the US military presence in Africa, is aimed at the growing conflict with China over oil supplies.
As Joe Lieberman, former US presidential candidate, put it, efforts by the US and China to use imports to meet growing demand "may escalate competition for oil to something as hot and dangerous as the nuclear arms race between the US and the Soviet Union".

Sunday, June 29, 2008

Secret U.S. operation kills Iraqi, strains relations

This is from McClatchy.
These operations are often counter-productive in terms of relations with occupied countries. The same type of operations have created havoc in Afghanistan. Not only the U.S. there but also British and perhaps even Canadian special forces are involved in Afghanistan. Many if not most of the operations clearly violate international law and often involve war crimes. No one seems to care except the local people who no doubt develop an undying hatred for the occupying forces.
This particular operation has gained publicity only because a person who was a relative of an important person was killed. I wonder if this operation will garner any headlines in the U.S. mainstream media.



Secret U.S. operation kills Iraqi, strains relations
By Hannah A

llam, McClatchy NewspapersSat Jun 28, 6:11 PM ET

BAGHDAD, Iraq — Senior Iraqi government officials said Saturday that a U.S. Special Forces counterterrorism unit conducted the raid that reportedly killed a relative of Iraqi Prime Minister Nouri al Maliki , touching off a high-stakes diplomatic crisis between the United States and Iraq .
U.S. military officials in Baghdad had no comment for the second day in a row, an unusual position for a command that typically releases information on combat operations within 24 hours.
The raid occurred at dawn Friday in the town of Janaja near Maliki's birthplace in the southern, mostly Shiite Muslim province of Karbala . Ali Abdulhussein Razak al Maliki , who was killed in the raid, was related to the prime minister and had close ties to his personal security detail, according to authorities in Karbala .
The incident puts an added strain on U.S.-Iraqi negotiations to draft a Status of Forces Agreement, a long-term security pact that will govern the conduct of U.S. forces in Iraq . Members of the Iraqi government and security forces said the raid only deepened their reluctance to sign any agreement that did not leave Iraqis with the biggest say on when and how combat operations are conducted.
The U.S. military handed Iraqi forces control of Karbala security in October 2007 . By the end of 2007 the U.S. military had transferred nine of the country's 18 provinces to Iraqi control.
"We are afraid now of signing the long-term pact between Iraq and America because of such unjustified violations by the troops. Handing over security in provinces doesn't mean anything to the American troops," said Mohamed Hussein al Musawi , a senior Najaf-based member of the prime minister's Dawa Party . "We condemn these barbaric actions not only when they target a relative of Maliki's, but when any Iraqi is targeted in the same way."
Outrage over the mysterious operation has spread to the highest levels of the Iraqi government, which is demanding an explanation for how such a raid occurred in a province ostensibly under full Iraqi command.
"This is a Special Forces operation, an antiterrorism unit that operates almost independently so there's been no coordination with the local forces on the ground," said a high-ranking member of the Iraqi government who spoke on condition of anonymity because of the extreme sensitivity of the issue. "That's why it's so important to have a Status of Forces Agreement to regulate this relationship. As long as it's vague and open, these incidents will continue to happen."
U.S. and Iraqi officials have been in difficult negotiations to draft a Status of Forces Agreement. Among the main sticking points are whether the U.S. military can stage combat operations without the consent of the Iraqi government and whether to grant immunity to American troops and security contractors.
Kurdish legislator Mahmoud Othman called Friday's operation "unacceptable" and had strained relations between the countries.
"This is a big embarrassment for Prime Minister Maliki because he was in that area two days before the incident, telling his people that we are the masters in our country and the decisions were ours to make," Othman said. "This is why we are afraid of agreements and immunity. ... If there are wanted people in any area, why not send an Iraqi force to do the job?"
Iraqi officials in Karbala said the operation began at dawn Friday with U.S. aircraft delivering dozens of American troops to the rural Shiite Muslim town of Janaja, which is populated mostly by members of the Maliki tribe. Authorities said the raid apparently was aimed at capturing what the military calls a "high-value target," often a reference to the leader of a militant cell.
Raed Shakir Jowdet, the Iraqi military commander of Karbala operations, told journalists Friday that the Americans had acted on faulty intelligence. He said four U.S. military helicopters and a jet fighter soared over the area that morning. About 60 U.S. ground forces then stormed the town, "terrifying the families," Jowdet said. At least one man was detained, though some Iraqi authorities said more were taken into custody.

(Special correspondent Qassim Zein contributed from Najaf.)

Krauthammer on Obama

This is from townhall.com
This is by Krauthammer the right wing U.S. commentator. It is worth reading the other side sometimes! Krauthammer shows not that Obama is moving to the middle but to the right .He was already in the middle or at most a ten minute march away I would say! Anyway the opposition often pens truths that our good guys hide!


"To be clear: Barack will support a filibuster of any bill that includes retroactive immunity for telecommunications companies." -- Obama spokesman Bill Burton, Oct. 24, 2007
WASHINGTON -- That was then: Democratic primaries to be won, netroot lefties to be seduced. With all that (and Hillary Clinton) out of the way, Obama now says he'll vote in favor of the new FISA bill that gives the telecom companies blanket immunity for post-9/11 eavesdropping.
Back then, in the yesteryear of primary season, he thoroughly trashed the North American Free Trade Agreement, pledging to force a renegotiation, take "the hammer" to Canada and Mexico, and threaten unilateral abrogation.
Today, the hammer is holstered. Obama calls his previous NAFTA rhetoric "overheated" and essentially endorses what one of his senior economic advisers privately told the Canadians: The anti-trade stuff was nothing more than populist posturing.
Nor is there much left of his primary season pledge to meet "without preconditions" with Iran's Mahmoud Ahmadinejad. There will be "preparations," you see, which are being spun by his aides into the functional equivalent of preconditions.
Obama's long march to the center has begun

Southern Philippines calls for Muslim rebel talks

This is from the Bangkok Post.
I wonder if part of the reluctance to negotiate is not influenced by the U.S. view that there should be no negotiation with terrorists. Not only are these peace talks in limbo but also earlier talks with the NPA Maoist guerrillas have broken down. The NPA is listed as a terrorist group by the U.S. Arroyo claims she is going to rid the Philippines of the insurgency but with economic conditions turning sour especially in rural areas that is quite unlikely.


Southern Philippines calls for Muslim rebel talks

Manila (dpa) - More than 100,000 people gathered on Saturday in key cities in the southern Philippines, calling for the resumption of the stalled peace negotiations between the government and Muslim rebels.
Amirah Ali Lidasan, one of the organizers of the rallies, said people gathered in the cities of Marawi, Iligan, Cotabato, General Santos and Basilan to urge President Gloria Macapagal Arroyo to resume talks with the Moro Islamic Liberation Front (MILF).
"We challenge President Gloria Macapagal Arroyo to be sincere in the peace negotiations," she said.
The call for the resumption of peace talks came amid escalating clashes between government troops and the MILF rebels.
Earlier in the week, two people were killed, three were wounded and more than a thousand fled their homes in at least three clashes between soldiers and MILF.
Eid Kabalu, MILF civil military affairs chief, said rebel commanders were getting impatient over the continued delay in the negotiations and have expressed doubt on the sincerity of the government to achieve peace in Mindanao.
Peace talks between the MILF and the government have been stalled since December 2007 over disagreements on the scope of territory to be included in a proposed Muslim homeland.

Saturday, June 28, 2008

Dick Cheney 'tried to block North Korea nuclear deal''

This is from the Telegraph.
Cheney is losing influence within the Bush administration it seems. Of course the thaw with North Korea could freeze up again quite quickly. Rice sometimes seems to be a bit more pragmatic than Cheney and other neocons.

Dick Cheney 'tried to block North Korea nuclear deal'
By Philip Sherwell in New York
Last Updated: 6:51PM BST 28/06/2008
Vice President Dick Cheney fought furiously to block efforts by Secretary of State Condoleezza Rice to strike a controversial US compromise deal with North Korea over the communist state's nuclear programme, the Telegraph has learned.
"The exchanges between Cheney's office and Rice's people at State got very testy. But ultimately Condi had the President's ear and persuaded him that his legacy would be stronger if they reached a deal with Pyongyang," said a Pentagon adviser who was briefed on the battle.
Mr Cheney's office is believed to have played a key role in the release two months ago of documents and photographs linking North Korea to a suspected nuclear site in Syria that was bombed by Israeli jets last year.
Six months later than promised, Pyongyang last week handed over details to China of its plutonium stocks and invited US officials to witness the symbolic destruction of an already disabled cooling tower at its Yongbyon plutonium plant.

Update on Fengshen casualties in Philippines

Given that there are so many on the ferry unaccounted for it seems that the toll will rise still higher in the coming days. The damage to crops will make things even worse for many filipinos already facing high rice prices.


Typhoon death toll rises to 664 in Philippines
www.chinaview.cn 2008-06-28 00:40:02

MANILA, June 27 (Xinhua) -- The death toll from typhoon Fengshen has risen to 664 in the Philippines, according to the latest government data released on Friday night.
Besides those confirmed dead due to the capsizal of an ill-fated ferry, the Philippine National Disaster Coordinating Council said as of Friday evening, 540 more fatalities have been reported from all parts of the typhoon affected areas. Floods and mudflows were the major reasons for the deaths.
The M/V Princes of the Stars capsized off the Philippines' central province of Romblon last Saturday at the height of the typhoon, with 862 passengers and crew on board. The last official casualty count from the ship was placed at 124, with only 56 survivors confirmed while most of the others are still missing, mostly feared dead.
Rescue and retrieval operations inside the overturn ferry were halted on Friday following reports that the vessel was carrying a pesticide cargo.
Deputy Presidential Spokesman Anthony Golez Jr said the vessel was found to be carrying 10,000 metric tons of the highly-toxic pesticide, and that authorities have shifted efforts to containing the chemical and retrieving the shipment.
The shipment retrieval is expected to start on Saturday afternoon, according to Transportation Undersecretary Elena Bautista.
Of the 540 fatalities confirmed by the disaster-relief agency, 328 have been identified while the rest 212 not yet.
At least 291 were reported injured while 277 remained missing, National Disaster Coordinating Council said in its latest report.
The agency said the typhoon affected 571,641 families or 2,875,725 persons in 46 provinces.
Of these, some 422,618 families or 2,215,529 persons have been served inside and outside evacuation centers, it added.
At least 65,413 houses were destroyed and 167,181 damaged, according to the report.
Estimated cost of damage to infrastructure and, mostly to agriculture, amounted to 6.979 billion pesos (157 million U.S. dollars), the report said.
However, the Philippine National Food Authority on Friday assured the public that there will be sufficient rice supply despite the massive devastation.
The agency's stockpile of 920,000 metric tons of rice is good for 28 days to meet the nationwide staple need, said NFA spokesman Rex Estoperez.
Fengshen entered the Philippines from the eastern Samar island on the night of June 20 and exit through the western coast of Central Luzon after two days' onslaught on the archipelago.
Editor: Mu Xuequan

Deadly Iraq blast in Anbar days before security handoff.

This is from the LAtimes.
Al Qaeda in Iraq may be down but certainly it is not out as these actions show. The recent pronouncements of the Americans about the defeat of Al Qaeda in Iraq is a bit like Bush's pronouncement years ago about mission accomplished in Iraq. I suppose the mission is accomplished in the sense that Americans are probably not focused very much on the war anymore but on the upcoming election and the U.S. economy. I am quite surprised that there is not more reaction by the U.S. public about the billions if not trillions of dollars being spent by th U.S. on its foreign wars. Americans can no longer afford their houses in many cases but they can afford to support multi-billion dollar wars that are sinking them into even more debt.

Deadly Iraq blast in Anbar comes days before security handoff
A suicide bomber kills 21 at a meeting of sheiks and city leaders in the province that has been seen as a security success story. In Mosul, explosions kill at least 18.By Doug SmithLos Angeles Times Staff Writer9:45 AM PDT, June 26, 2008BAGHDAD — Nearly 40 Iraqis were killed and more than 100 injured today in a suicide attack at a town meeting in Anbar province and two blasts in the northern city of Mosul.The mayor and tribal chief of Garma were killed along with 19 others when a bomber blew himself up during a meeting of sheiks and city leaders of the town about 15 miles northeast of Fallouja. Another 20 were injured.The attack came only days before the U.S. military planned to hand over responsibility for security in the western province to the Iraqis.Once considered lost to insurgents, Anbar became a success story after tribal leaders banded together to combat Al Qaeda in Iraq.The U.S. military said the bombing was consistent with Al Qaeda in Iraq. A statement said U.S.-led forces were among the injured.The attack followed by days two others targeting government buildings where U.S. forces were meeting with Iraqi local officials in an effort to restore public services and establish democratic processes.Anbar officials said it was too soon to tell whether there would be a setback for the transfer, which was believed to be planned for next week."We will see whether the attack of Fallouja today might have an affect," said Abdul Salam Ani, chairman of the Anbar Provincial Council.In Mosul, Ninevah province Gov. Duraid Kashmola was inspecting the site of a rocket attack near the governor's building when a car bomb exploded. At least 18 people were killed and more than 70 injured in the two attacks.Kashmola was unharmed, police said.

Global Finance, the Current Crisis and Challenges to the Dollar

This is an interesting analysis of the U.S. financial crisis by David McNally. McNally is a prof. at York University in Toronto Canada. McNally claims that the crisis is not a liquidity crisis but a bank solvency crisis. McNally certainly has a point but the fact that banks are facing financial problems does cause a liquidity crisis of sorts in that money stops flowing as loans to a considerable extent. The crisis is exacerbated by the increasing costs of energy and foodstuffs as speculative funds seek as safe haven. This drives up prices even further. At the same time these problems cause a slowing economy and distress for ordinary citizens. It is rather ironic that Bush a worshipper of the free market applies a band-aid of giving Americans a government check (aka handout) as means to stimulate the economy. If a leftist had suggested this it would have been panned as a unconscionable interference in the operations of the market as concocted by some idealistic free spending liberal who knew nothing about economics.


~~~~~~~~~~~~~~(((( T h e B u l l e t ))))~~~~~~~~~~~~~A Socialist Project e-bulletin .... No. 118 .... June 25, 2008________________________________________________
Global Finance, the Current Crisisand Challenges to the Dollar
David McNally
It is not often that we find ourselves living through financial turmoil so serious that the International Monetary Fund calls it "the largest financial crisis in the United States since the Great Depression." Yet that is where we are today. Already, commercial banks have collapsed in both Britain and Germany, as has the fifth-largest investment bank on Wall Street. A series of hedge funds have gone under or are teetering on the brink of ruin. And it is a near certainty that more financial institutions will fail before the crisis burns out.
It is clear that the Left needs serious analysis of just what is happening to world capitalism at the moment. Too often, however, our assessments are stuck in the past, revolving around debates as to whether or not this crisis represents a repeat of 1929 and the Great Depression.
Such debates detract from the hard work of analysis that is needed. On the one side are those who assume that history tends to repeat itself. On the other side are those critics who so exaggerate what has changed (particularly the ability of central banks to dampen tendencies to financial collapse) that they present a picture of a capitalism whose contradictions have been so muted that the system is no longer susceptible to severe economic slumps.
The real challenge for radical analysis, however, is to grasp both the changes and the enduring economic contradictions within capitalism in order to understand how capitalist transformation displaces and reorganizes crisis tendencies without eliminating them.
In the absence of such analysis, much of the radical commentary on offer tends to focus on the blatant deceit and corruption of financial players who have contributed to the market upheaval. This has its purposes. But it runs the risk of downplaying the structural features of late capitalism that breed financial meltdowns – and in so doing of suggesting that the Left focus on issues like financial regulation rather than class struggle against capital.
Trying to make sense of this crisis is one important step toward developing both an analysis of late capitalism and some of the tasks that confront the Left. To be sure, any assessment of unfolding events will necessarily be partial and incomplete. Nonetheless, it is possible to offer some crucial guidelines for making sense of this crisis.
A Banking Crisis, Not a Liquidity Crisis
It is critical to recognize at the outset that, contrary to the claims of central banks, this is not a liquidity crisis, i.e. financial turmoil caused by insufficient supplies of money flowing through the financial system. Instead, we are dealing with an insolvency crisis caused by the fact that many financial institutions are effectively broke. The result is a trauma in the banking sector.
This trauma persists because a myriad of lending institutions hold billions of dollars in massively depreciated paper that nobody is interested in buying from them. There is a host of exotic names for this paper, but essentially it is an array of debt obligations – titles to payment of interest and principal on a vast array of loans. Until the crisis broke, investors had been treating this paper as a pile of assets that they could always sell, i.e. as real wealth. Yet, the value of a debt rests in the first instance on the capacity of the borrower to pay. If the borrower can't pay, the alternative is for the creditor to seize the asset. But if the asset itself is losing value, then it may not cover the loan – and there might not be anyone out there who wants to buy it. In short, it may not be convertible to cash.
And that is precisely what is happening on a larger and more complex scale today. Economic reality is demonstrating that much of this paper – tied in the first instance to tens of millions of U.S. mortgages – is worth billions of dollars less than what was paid for it. So much of it is being written off or written down (revalued at amounts that involve enormous losses). It is as if you once had $1,000 in the bank, against which you'd borrowed many times that amount (say, ten times that amount or $10,000) and you have now learned that you only have $500. Once your creditors discover that, they'll scramble to collect in the knowledge that there's no way you will ever pay off all that you owe. But your $500 will be gone pretty fast. And since you owe $10,000, a lot of your creditors (including people who bought fancy paper called "Collateralized Debt Obligations" which includes some of your loans) won't be able to collect. And they won't be able to sell off your debts to anyone else either.
Precisely such dynamics are at work when an institutional "run on a bank" occurs, of the sort that rocked Bear Stearns in mid-March. In the course of 48 hours, Bear's holdings of cash and liquid assets plummeted from $17 billion to $2 billion as investors pulled their funds from the bank.
So the root problem is not a lack of liquidity in the system. It's that there are all kinds of institutions out there that nobody wants to lend to and whose ostensible "assets" nobody wants to buy. Worse, none of the players in the system are entirely certain as to who is holding increasingly worthless paper, or how much of it they have. As a result, the flow of funds between banks, and between banks and other lenders (like mortgage companies), keeps seizing up.
This is the reason that injecting cash into the system doesn't restore confidence. In fact, despite deep cuts to interest rates by central banks, particularly the U.S. Federal Reserve (designed to encourage borrowing) and massive injections of money into the banking system, American banks have continued to tighten lending to consumers, corporations and other banks (Financial Times, May 6, 2008).
When investors lost confidence in Bear Stearns, they did so for a fundamental economic reason, not a simply psychological one: Bear's actual assets, particularly those tied to real estate loans, had been losing massive amounts of value for months. In fact, in June of last year, two of the bank's hedge funds, which were deeply invested in sub-prime mortgages, effectively collapsed.
Continue reading: www.socialistproject.ca/bullet/bullet118.html#continue

Friday, June 27, 2008

Bush administration lifts North Korea sanctions.

This is somewhat surprising but welcome news of progress in relations between the U.S. and North Korea. Maybe the visit by a US symphony orchestra created sweet music! There still is a long way to go and a lot of mutual distrust but this is further than the two countries have ever managed to go before.

This is from wiredispatch.


Bush administration lifts North Korea sanctions
Bush administration lifts sanctions, moves to take North Korea off terrorist list
DEB RIECHMANNAP News
Jun 26, 2008 08:26 EST
President Bush said Thursday he will lift key trade sanctions against North Korea and remove it from the U.S. terrorism blacklist, a remarkable turnaround in policy toward the communist regime he once branded as part of an "axis of evil."




The announcement came after North Korea handed over a long-awaited accounting of its nuclear work to Chinese officials on Thursday, fulfilling a key step in the denuclearization process.
Bush called the declaration a positive step along a long road to get the nation to give up its nuclear weapons. Yet, he remained wary of the regime, which has lied about its nuclear work before. And North Korea's declaration, received six months late, falls short of what the administration once sought, leaving it open to criticism from those who want the U.S. to take an even tougher stance against the regime.
"We will trust you only to the extent you fulfill your promises," Bush said in the Rose Garden. "I'm pleased with the progress. I'm under no illusions. This is the first step. This isn't the end of the process. It is the beginning of the process."
To demonstrate that it is serious about foregoing its nuclear weapons, North Korea is planning the televised destruction of a 65-foot-tall cooling tower at its main nuclear reactor at Yongbyon. The cooling tower is a key element of the reactor, but blowing it up — with the world watching — has little practical meaning because the reactor has already been nearly disabled.
Specifically, Bush said the U.S. would erase trade sanctions under the Trading With the Enemy Act, and notify Congress that, in 45 days, it intends to take North Korea off the State Department list of nations that sponsor terrorism.
"If North Korea continues to make the right choices it can repair its relationship with the international community ... If North Korea makes the wrong choices, the United States and its partners in the six-party talks will act accordingly," Bush said.
The declaration, about 60 pages of documentation, is the result of long-running negotiations the United States, Japan, South Korea, China and Russia have been having with Pyongyang.
A senior U.S. official said the declaration contains detailed data on the amount of plutonium North Korea produced during each of several rounds of production at a now-shuttered plutonium reactor. It is expected to total about 37 kilograms of plutonium — enough to make about a half-dozen bombs.
However, the declaration, which covers nuclear production dating back to 1986, does not contain detailed information about North Korea's suspected program of developing weapons fueled by enriched uranium.
It also does not provide a complete accounting of how it allegedly helped Syria build what senior U.S. intelligence officials say was a secret nuclear reactor meant to make plutonium, which can be used to make high-yield nuclear weapons. Israeli jets bombed the structure in the remote eastern desert of Syria in September 2007.
North Korea had promised to complete the declaration by the end of last year in exchange for removal from U.S. terrorism and economic sanctions blacklists, which restrict its foreign trade and ability to get loans from international development banks.
North Korea was put on the list of nations that sponsor terrorism for its alleged involvement in the 1987 bombing of a South Korean airliner that killed 115 people. The designation has effectively blocked North Korea from receiving low-interest loans from the World Bank and other international lending agencies.
The president, insisting that the U.S. was not giving North Korea a free ride, said the U.S. action would have little impact on North Korea's financial and diplomatic isolation. "It will remain one of the most heavily sanctioned nations in the world," Bush said. All U.N. sanctions, for example, will remain in place.
Bush said the United States would monitor North Korea closely and "if they don't fulfill their promises, more restrictions will be placed on them."
Bush said that to end its isolation, North Korea must, for instance, dismantle all of its nuclear facilities and resolve outstanding questions on its highly enriched uranium and proliferation activities "and end these activities in a way that we can fully verify."
Bush thanked all members of the six-party talks, but singled out Japan. Tokyo has argued that the U.S. decision to remove North Korea from the list of terrorist nations should be linked to progress in solving North Korea's abduction of Japanese nationals in the 1970s and 1980s.
"The United States will never forget the abduction of Japanese citizens by the North Koreans," said Bush who called Japanese Prime Minister Yasuo Fukuda on Wednesday to express U.S. concern about the issue. "We will continue to closely cooperate and coordinate with Japan and press North Korea to swiftly resolve the abduction issue."
___
AP White House Correspondent Terence Hunt contributed to this story.
Source: AP News

Thursday, June 26, 2008

Israel prodding U.S. to attack Iran

This is from CBSnews.
Reports such as this help boost the price of oil. It remains to be seen whether the Bush administration is willing to risk disaster during the last months of its life. Iran's nuclear facilities are widely dispersed and Israel is probably not capable of taking them out at one fell swoop. The reaction to any such attack is hard to predict. It certainly could be very forceful and simply widen conflict.

Israel Prodding U.S. To Attack Iran
June 24, 2008
(CBS) Joint Chiefs Chairman Admiral Mike Mullen leaves Tuesday night on an overseas trip that will take him to Israel, reports CBS News national security correspondent David Martin. The trip has been scheduled for some time but U.S. officials say it comes just as the Israelis are mounting a full court press to get the Bush administration to strike Iran's nuclear complex. CBS consultant Michael Oren says Israel doesn't want to wait for a new administration. "The Israelis have been assured by the Bush administration that the Bush administration will not allow Iran to nuclearize," Oren said. "Israelis are uncertain about what would be the policies of the next administration vis-à-vis Iran." Israel's message is simple: If you don't, we will. Israel held a dress rehearsal for a strike earlier this month, but military analysts say Israel can not do it alone. "Keep in mind that Israel does not have strategic bombers," Oren said. "The Israeli Air Force is not the American Air Force. Israel can not eliminate Iran's nuclear program." The U.S. with its stealth bombers and cruise missiles has a much greater capability. Vice President Cheney is said to favor a strike, but both Mullen and Defense Secretary Gates are opposed to an attack which could touch off a third war in the region. U.S. intelligence estimates Iran won't be able to build a weapon until sometime early in the next decade. But Israel is operating on a much shorter timetable. "The Iranians, according to Israeli security sources, will have an operable nuclear weapon by 2009. That's not a very long time," Oren said. For now, the Bush administration is counting on new economic sanctions which took effect Tuesday to persuade Iran to give up its nuclear program. But nobody's counting on it. © MMVIII, CBS Interactive Inc. All Rights Reserved.

Raimondo: Is War Good for the Economy?

This is from antiwar.com.
Justin Raimondo is one of my favorite right wing libertarian types. Here he is replete with references to Ayn Rand and Murray Rothbard. In spite of the fact that I am on the opposite side of the political spectrum, I find much of what Raimondo has to say is bang on. Raimondo is almost always worth reading for his provocative and insightful analyses. As the article points out there are beneficiaries of pursuing an aggressive warlike policy. The crony capitalists of the Bush administration do well as do the suppliers to the giant U.S. military machine. War also works as a sort of military Keynesianism to keep the economy expanding.


Is War Good For the Economy? In short: No.
by Justin Raimondo
The idea that warfare helps the economy is a prime example of Bizarro logic, which has pervaded our collective consciousness since the 9/11 terrorist attacks, ideological fallout from the explosion of national hysteria that followed. In Bizarro World, as we all know, the laws of nature and logic are inverted, so that up is down, freedom is slavery, and ignorance is strength. In the post-9/11 era, as I have often pointed out, we have finally arrived in a world where two plus two can and indeed often does equal five – if it suits the purposes of the War Party to deem it so.
Somewhere, George Orwell isn't smiling. He'd no doubt be appalled, and a little nonplused, by the accuracy of his speculations in Nineteen Eighty-Four. In the novel, you'll recall, the deliberate impoverishment of the ordinary "proles" and the Outer Party types was a matter of INGSOC policy, a theme underscored by the general shabbiness of Orwell's dystopia, what with the constant shortages and the way thing always seemed to be literally and physically falling apart. Particularly striking is the Orwellian presentiment that the world of the future is bound to be poorer and, simultaneously, engaged in constant warfare.
This prediction seemed, for quite a while, to be one of the few he got wrong. Yet Orwell, it turns out, was right; it's just that the productive power of capitalism in the U.S. was so great that it coasted along for a long time on sheer momentum. Our accumulated wealth reflected the dynamism of an earlier era. This upward spiral of productivity and wealth-generation really crested during the 1950s, a period of unprecedented prosperity and cultural optimism, and the early 1960s – before the Vietnam war and the inflationary policies that financed it ate away at the heart of American prosperity, the necessary prelude to the "stagflation" of the Carter years.
Wars are expensive propositions, especially the sort of all-embracing, the-sky's-the-limit, multi-generational conflict envisioned by the War Party's editorial board commandos. Our $3 trillion war, as Nobel-prize-winning economist Joseph Stiglitz and Linda Bilmes have dubbed it, is an albatross hung round the neck of the American giant, whose great neck is bowing under its weight. The unipolar moment the neocons once exulted in will go down in the official record as the briefest incident in human history, albeit not the noblest.
This hasn't always been immediately obvious. The false prosperity induced by the speeding up of the printing presses over at the Federal Reserve led to what Alan Greenspan once called "irrational exuberance," a delusion created by the very easy money policies he carried out as head of the Fed. No sooner had certain Beltway sages declared that the age of permanent abundance was upon us – and that this rendered the struggle against the Welfare-Warfare State irrelevant – than their economic cornucopia of limitless wealth went empty. As banks are bailed out while ordinary Americans are turned out into the streets, the manic hubris of Fukuyama's historical "endism" and prophecies of universal prosperity via "globalization" stand revealed in all their silliness.
Mania is invariably followed by a massive downward plunge into despair, in economic terms, a deep recession, if not something far worse. So what has stopped the forward motion of America's dash over history's finish line?
As Ron Paul has tirelessly explained, it is the cost of our expanding overseas empire that is driving us into bankruptcy. We have, as the Old Right seer Garet Garrett put it, an empire of a unique type, one in which "everything goes out and nothing comes in." The costs of this are ordinarily hidden from sight, as Ron Paul explains, by governmental sleight-of-hand:
"As the war in Iraq surges forward, and the administration ponders military action against Iran, it's important to ask ourselves an overlooked question: Can we really afford it? If every American taxpayer had to submit an extra five or ten thousand dollars to the IRS this April to pay for the war, I'm quite certain it would end very quickly. The problem is that government finances war by borrowing and printing money, rather than presenting a bill directly in the form of higher taxes. When the costs are obscured, the question of whether any war is worth it becomes distorted."
Yet there comes a time when the obscuring mists are cleared and the costs of our foreign policy of perpetual war become readily apparent, and surely that time is approaching. Indeed, it may have already passed. Garrett dubbed ours' "the empire of the Bottomless Purse," yet we are just about scratching bottom about now. It remains for Paul and the movement he generated to point out how all of this is paid for. As Paul puts it:
"Congress and the Federal Reserve Bank have a cozy, unspoken arrangement that makes war easier to finance. Congress has an insatiable appetite for new spending, but raising taxes is politically unpopular. The Federal Reserve, however, is happy to accommodate deficit spending by creating new money through the Treasury Department. In exchange, Congress leaves the Fed alone to operate free of pesky oversight and free of political scrutiny. Monetary policy is utterly ignored in Washington, even though the Federal Reserve system is a creation of Congress.
"The result of this arrangement is inflation. And inflation finances war."
When our rulers decide to go to war, they simply step on the gas and flood the engines of inflated expectations, fueled by bank credit expansion. The results are the decline of the dollar and the current economic crisis, which might be compared to a hangover that follows an extended binge. Americans are suffering a double-hangover in the sense that they're still recovering from the post-Cold War triumphalism that envisioned a unipolar, Washington-centered world.
The idea that the defense of the country requires an overseas empire that surpasses the British imperium at its zenith is a typical neocon fantasy, one that is proving far more costly than advertised. Yet some are raking it in while others are foreclosed. Remember how the sale of oil was supposed to pay for the Iraq war? A consortium of U.S. and European oil companies have since homesteaded the oil revenues Paul Wolfowitz assured us would be reimbursed to the American taxpayers. It's funny how that works.
War, as the liberal intellectual Randolph Bourne famously explained, is the health of the state. That is, it benefits state officials and their dependents, clients, and assorted sycophants at the expense of the rest of us. Many are impoverished by our policies, but a few are enriched. The beneficiaries are the growing administrative, corporate, and military bureaucracies that oversee our ever expanding global presence, in effect a colonial class. This class pursues and secures its economic and social interests by means of directly influencing government policy, operating as an organized force on behalf of the policy of imperialism, so far with remarkable success.
When John McCain sneered at Mitt Romney's business experience as lacking in honor and the spirit of self-sacrifice, he was expressing the "noble" and highly stagy sentiments of this rising class. Forget the free market fervor of the Reagan era, when entrepreneurs were valorized. The new Republican hero is the swaggering caesar.
Is the Iraq war good for the economy?
Well, whose economy? Who benefits from this war, and who loses? Once the American people realize that they're among this war's biggest losers – aside from the Iraqi people, and perhaps the Iranians, too – they'll turn on the beneficiaries with a vengeance. As their savings are eaten up by inflation, and the equity they labored to preserve and increase evaporates into thin air, ordinary Americans are likely to be quite interested in the question: who's responsible?
As the Federal Reserve pumps more funny money into circulation, in a desperate and vain attempt to postpone the crisis of the Warfare State, the single biggest winners are the banks, the most government-protected industry of all, who are the first to be bailed out of any crisis. Oh, perhaps a few will be allowed to go under, but the big ones will be too big to fall, like Bear Stearns. The economic elite will golden parachute its way out of the crisis.
The main beneficiaries of the present system – what Murray Rothbard, the late libertarian theorist and polemicist, called the Welfare-Warfare State – are the new plutocrats. Think of what Ayn Rand referred to as "the aristocracy of pull," the principal villains of her famous novel Atlas Shrugged, i.e., corrupt businessmen who succeeded on account of their political connections rather than their entrepreneurial skill.
Today's aristocracy of pull is the militarized sector of the economy, which is completely dependent on government contracts. Their political Praetorian Guard is represented in Washington by both parties, and, what's more, their partisans dominate think-tanks of the ostensible Left as well as the Right.
The task of those who oppose the new colonialism, which masquerades as global altruism of one sort or another, is to unmask the real motives and connections of a self-interested colonial class, which, in spite of its claim to the mantle of honor and duty to country, is supremely successful at promoting its own interests over and above those of the nation.~ Justin Raimondo

Bush administration to leave Iraq oil deals alone

Did anyone think that the Bush administration would interfere in these negotiations? This is from this site. The Bush administration is no doubt quite pleased that Big Oil is getting in on the ground floor. It is quite possible that the administration even encouraged the deal in the first place. Anyway the Iraqi government probably learned about no bid contracts from the U.S. It encourages the development of corruption that can benefit the players while fleecing taxpayers. Isn't that what politics is all about?

Bush administration to leave Iraq oil deals alone
By ANNE FLAHERTY, Associated Press Writer
Tuesday, June 24, 2008
(06-24) 10:21 PDT WASHINGTON, (AP) --
The Bush administration indicated Tuesday that it had no plans to interfere with negotiations between Iraq and several Western oil giants to boost crude production in that country, despite concerns by some Democrats that the deal could inflame anti-U.S. sentiments.
"Iraq is a sovereign country, and it can make decisions based on how it feels that it wants to move forward in its development of its oil resources," said White House spokeswoman Dana Perino.
"And if that means that our companies here in the United States can compete and win business, then that's for them and the Iraqis to decide," Perino added. "But I don't think the federal government of the United States needs to get involved."
The administration's position puts it at odds with Democratic Sens. Chuck Schumer of New York, John Kerry of Massachusetts and Claire McCaskill of Missouri, who warn that the deals could fan the perception that U.S. involvement in Iraq was motivated by oil.
In a letter Monday, the senators asked Secretary of State Condoleezza Rice to try to block the oil deals.
Until Baghdad agrees on how to divide the nation's oil revenues, the presence of Western companies — including U.S.-based Exxon Mobil — will heighten tensions among Iraq's feuding sectarian groups "at the same time that American service members are fighting night and day to reduce the levels of violence," they wrote.
"This is clearly a matter of national security, which we believe should trump any and all commercial interests," the senators added.
State Department spokesman Tom Casey said it was unlikely Rice would try to interfere.
"Since the United States has had no involvement in this, I'm not sure on what basis the United States could...block the Iraqi government from contracting in the way it sees fit," he said.
Likewise, Perino dismissed the senators' concerns as illogical.
"I'm curious as to why the Democrats seem to, on the one hand, want Iraq to take over more control of their own country, but on the other hand, want to continue to meddle in their business," she told reporters.
The Democrats responded that while Iraq may be sovereign, the U.S. is entitled to speak up because of the number of troops and dollars it has invested in the country's future.
"When it has been in our interest to try to get the Iraqi government to do something that this administration really wanted them to do, they do it," said Kerry.
The Iraq oil deals will likely be announced by the end of the month. The agreements, worth around $500 million each, are seen as a stopgap measure to begin ramping up oil production while Iraq's sectarian groups debate legislation that would divide the nation's oil revenues.
While modest in size, the contracts are expected to give the companies a significant bidding advantage over others in the future.
Last week, Iraq's oil ministry declined to name the companies set to receive the deals. The New York Times reported Thursday that Shell, BP, Exxon Mobil and Total were in the final stages of negotiations on the no-bid contracts.

Wednesday, June 25, 2008

The timing of the Status of Forces Agreement

This is from an Baghdad journalist's blog.
I was not aware of the signing of the oil contracts as described in this article. However, it is certainly true that the negotiation of the status of forces agreement is going on in secret. However, some Iraqi journalists and politicians are certainly discussing the issue. The U.S. however is more self-absorbed as mentioned. The U.S. economy however is probably more of an issue than the elections. There has been some discussion of whether the status forces agreement is a treaty and should go before the legislature but even this issue seems to have died.


June 21, 2008
Status of Forces Agreement at American Elections' Time
What ingenuity! The timing is brilliant!
The American people are almost completely taken up with the presidential elections and the race to the White House.
The Iraqi people are so overwrought a lot of them don't even know what's going on – some just don't care any more, they are too taken up with the basic affair of staying alive, providing minimal sustenance for their families and too much grief.
And yet, at this "delicate" time everything is boiling down to the core of the objectives for which this war was waged – American long term interests in Iraq.
At this "delicate" time no-bid contracts are to be signed between the Iraqi Ministry of Oil and the self same companies that constituted the old Iraqi petroleum company that had a monopoly over Iraqi oil before nationalization in the early seventies, 1971 - 1972 -What a come back!
Now all is crystal clear – the two objectives that brought hundreds of thousands of troops half across the globe have become crystal clear. Oil - and the power to control it.
And while our "sovereign democracy" shamelessly seeks to hide these facts from the people to present them with a fait accompli, it seems that the American "democracy" is also shamelessly seeking to sneak the agreement through the least visible route so as to willfully disregard the will of the American people and cement its interests here – no matter the cost to human lives – no matter the cost in funds – no matter the loss of face because non of these matter to them as much. The contracts are to be signed soon, before the Iraqi parliament even passes an Oil Law - and that will be that.
What remains to be seen is whether America is willing to sacrifice its men, women and money for these companies' interests to be "properly" looked after.
The Status of Forces Agreement.
And it remains to be seen whether Iraq has any say in this at all.

Security agreement with the US and Iraq

This is from VOI.
Perhaps the parts dealing with the right of the U.S. to attack other countries from Iraq were part of an original draft and have been removed. Apparently, the document has been revised to remove some parts that would make it impossible for the Iraqi parliament to approve. As with the oil bill the contents of the agreement are shrouded in secrecy. If the U.S. intended Iraq to be a true democracy it would encourage public discussion of the oil bill and of this agreement but of course that is the very last thing that the U.S. wants in these cases. There is still no oil law and this agreement may be stalled until the last minute when some other short term substitute for the UN motion will be adopted.


Politics and Security

Deal allows U.S. to attack any country from Iraq – IAF

Baghdad - Voices of Iraq
Tuesday , 24 /06 /2008 Time 3:46:34


Baghdad, Jun 23, (VOI) – A Sunni legislator said on Monday that the security agreement to be signed between Baghdad and Washington would allow the latter to attack any country from Iraqi territories.

"The Iraqi-U.S. agreement contains several items that impinge upon the sovereignty of Iraq, including the right of the U.S. forces in Iraq to attack any nation and raid any Iraqi house and arrest people without prior permission from the Iraqi government," Khalaf al-Alyan, a member of parliament from the Iraqi Accordance Front (IAF), told Aswat al-Iraq – Voices of Iraq – (VOI).U.S. President George W. Bush had signed a declaration of principles with Iraqi Prime Minister Nouri al-Maliki on December 1, 2007. It was planned to be ratified on July 31, 2008 to be effective as of January 1, 2009."The agreement grants the United States the right to set up a large number of bases in Iraq, ranging between 50 and 58 bases," said Alyan.The IAF is composed of three key political components: Vice President Tareq al-Hashimi's Iraqi Islamic Party (IIP), IAF leader Adnan al-Dulaimi's Iraq People's Congress (IPC) and Alyan's National Dialogue Council (NDC).The IAF, which has 40 out of a total 275 seats, is the main bloc representing Arab Sunnis in the country's political process.Meanwhile, Labid Abbawi, the undersecretary for foreign affairs, denied that the agreement contained an item allowing U.S. forces to use Iraqi territories as a springboard to threaten other countries."This item does not exist in the agreement because it simply runs counter to the policies of both Baghdad and Washington governments," Abbawi told VOI.The deal governs the presence of U.S. forces in Iraq after the year 2008. The U.S. presence in Iraq is currently relying on a mandate by the United Nations, renewed annually upon the request of the Iraqi government.The agreement would not enter into effect if the Iraqi parliament did not approve it.AE

Tuesday, June 24, 2008

48 from Philippine ferry survive, at least 67 confirmed dead.

This is from Xinhua.
No doubt there are many more bodies in the ferry to be recovered. Perhaps a few survivors will be rescued elsewhere but it looks as if the vast majority must have perished. This tragedy could have been avoided had the ship not been allowed to set sail when authorities knew that Fengshen was on its way.


48 survive, 67 fatalities confirmed in Philippines sea mishap
MANILA, June 24 (Xinhua) -- The Philippine Coast Guard said Tuesday the situation of 115 people of the 862 on board of a capsized ferry have been known. Forty-eight survived and 67 have been killed.
Beside them, the conditions of the remaining passengers and crew are still unknown and are considered missing, said Coast Guard spokesman Armand Balilo in a press briefing.
On its way from Manila to Cebu, the 23,800-ton M/V Princess of the Stars sank off the Philippines' central province of Romblon at the height of Typhoon Fengshen, which lashed the archipelago from east to west over the weekend.
There were 862 people on board, including "751 manifested passengers and 111 crew members", according to the Sulpicio Lines company, owner of the ill-fated vessel.
Reports said divers have brought three bodies to the surface and spotted at least another 15 floating inside the capsized ferry as they managed to enter the vessel after several failed attempts.
The spokesman said authorities are still verifying the reports.
Earlier, Philippine Navy spokesman Edgard Arevalo said bodies were seen when Navy and Coast Guard divers entered the ship at 9 a.m. local time (0100 GMT) on Tuesday.
"Most of the bodies were floating inside. They were trapped when the ship suddenly tilted and capsized," Arevalo said.

Truce in Gaza holding-for the most part!

This is from Al Jazeera.
As the headline would indicate Al Jazeera is not exactly pro-Israel, although they do point out that there was also a rocket from Gaza since the ceasefire. At least the truce seems to be holding and the incident cited by Al Jazeera is not in Gaza at all. However, the incident in the West Bank will put pressure on Abbas. There seems a definite move towards more accomodation between Abbas and Hamas and also a somewhat more pragmatic stance by Israel in dealing with Hamas. This is surely all to the good in terms of creating conditions for peace.

Israel kills West Bank Palestinians
Olmert, left, is meeting Mubarak to discuss the progress of the Gaza truce [Reuters]
Israeli troops have shot dead two Palestinians in the West Bank town of Nablus, five days after a ceasefire between Israel and Palestinian armed groups took effect.
Israeli troops killed the men on Tuesday in an exchange of fire, an Israeli military spokesman said, adding that one of them was a fighter from Islamic Jihad and the other was a "militant".
Nablus residents said that one of the men was a bystander killed by Israeli troops when he opened the door to his apartment, which lies next to the location of the raid.
The truce between Israel and Palestinian armed groups, including Hamas, does not cover the West Bank.
Lamis Andoni, Al Jazeera's Middle East analyst, said: "The killings are a reminder that the truce in Gaza will remain shaky when it is not extended to include the West Bank.
"Israeli insistence on retaining freedom to conduct arrests and raids in the West Bank further undermines Palestinian president Mahmoud Abbas' standing, and makes it difficult for Hamas to demand Palestinian fighters adhere to the truce in Gaza."
Mortar attack
A mortar shell was also fired into Israeli territory from the Gaza Strip the previous evening, the Israeli army said, in the first such incident since the truce came into effect.
No one was hurt by the missile, which landed in the Nahal Oz area after being launched from the central Gaza Strip, officials said on Tuesday.
"We are familiar with a mortar shell that landed near the security fence in northern Gaza on the Israeli side," an army spokeswoman said.
There has been no claim of responsibility for the reported incident on Monday evening, nor any confimation from Palestinian sources that such an incident took place.
Observers have said that both sides do not regard the incident as a violation of the ceasefire.
Gaza talks
Meanwhile, Ehud Olmert, Israel's prime minister, is set to discuss the Gaza truce with Hosni Mubarak, Egypt's president, later on Tuesday.
The talks in the Red Sea resort of Sharm el Sheikh are expected to focus on the fate of an Israeli soldier held by Hamas, as well as a possible prisoner exchange with the group.
Amr el-Kahky, Al Jazeera's correspondent in Sharm el Sheikh, said that the main issue would be the release of certain Palestinian prisoners whom Israel deem to have blood on their hands, but whom the Palestinians see as resistance fighters.
The ceasefire in Gaza between Israel and Palestinian groups including Hamas, the largest Palestinian armed group, came into effect on Thursday.
Israeli forces have not entered the Hamas-ruled Gaza Strip since the truce took effect and has started to lift some restrictions there, easing the effects of a crippling economic blockade of the territory.
Egypt brokered the ceasefire deal between Israel and Hamas as Tel Aviv rejects direct contact with the Palestinian organisation.
Olmert criticised
Olmert has been criticised at home for not making the truce conditional upon Hamas releasing Gilad Shalit, a soldier captured by them in 2006.
The Israeli prime minister has said that the deal includes a commitment by Hamas to make progress towards Shalit's release.
Regev said: "The issue of Gilad Shalit will be raised.
"Both states have a joint interest in putting this issue behind us. Ultimately, we want to see the situation in Gaza stabilised."
Israel has also called for Egypt to help stop the smuggling of weapons from Egypt's Sinai peninsula into Gaza.
Ismail Haniya, a senior Hamas leader and former Palestinian prime minister, said on Monday that it was premature to judge whether the truce had been a success.
"It is too early to judge whether the occupation is adhering or not adhering to the understandings reached 10 days ago," Haniya said.
Haniya said his Hamas-run administration was "monitoring what is coming into the Gaza Strip and is in daily contact with our brothers in Egypt" to see that Israel eases its Gaza blockade.
El-Khaky said: "The re-opening of the Rafah border crossing [from Gaza to Egypt] is a pressure card that Israel is playing to try to secure and speed up the release of Gilad Shalit."

Monday, June 23, 2008

Tsvangirai always had few options

This is from Al Jazeera.
This is an absolute disaster. In order not to appear to be interfering in another African nation's internal affairs other African countries and in particular South Africa have not put sufficient pressure on Mugabe to cause any difference. You would think that with all the problems it is having with refugees South Africa would take a more forceful stance. The U.S. was able to fund and support rebellion against the Sandinista government but with Mugabe it is all rhetoric. In any event it would be much more appropriate if African countries put more pressure on Mugabe. Mugabe uses anti-colonial rhetoric to justify his incompetence and his gifts to his incompetent cronies as well. The country has become a basket case. Talk about failed states!



UPDATED ON:Monday, June 23, 2008 13:57 Mecca time, 10:57 GMT

FOCUS: ANALYSIS
Tsvangirai always had few options
By Musaazi Namiti
Opposition leader Morgan Tsvangirai says he pulled out of the June 27 poll after his supporters were beaten and intimidated in Harare GALLO/GETTY]
After winning Zimbabwe's first round of presidential elections - but failing to secure an outright majority - Morgan Tsvangirai, the leader of the opposition Movement for Democratic Change (MDC), has pulled out of a run-off vote against the incumbent.
Tsvangirai, who had been given more than 50 per cent of the first-round vote by the MDC's tally but only officially won 47 per cent, cited violence against his supporters as a major reason for the withdrawal.
The opposition announcement came after thousands of police in riot gear and soldiers blockaded the site of the MDC's main campaign rally.
Had Tsvangirai originally chosen to boycott the June 27 run-off, he would have set the stage for Robert Gabriel Mugabe, the president, to win re-election by default.
Tsvangirai's supporters would also have viewed him as a coward and a let-down, Zimbabwean political analysts say.
But contesting the run-off, perhaps the second-best option, represented major hurdles - the MDC were always aware of the likelihood of intimidation and violence against people who voted for them in the first round.
Tsvangirai has been detained by police several times, and released without charge, during his election campaigning. Tendai Biti, the MDC's secretary-general, has also been arrested and is facing charges of treason, which carry a death sentence upon conviction.
Intimidation, beatings
Mugabe has sworn that his supporters will fight to keep him in power [AFP]Tsvangirai's supporters have not only been attacked and beaten but they have also been murdered for opposing Mugabe, according to the MDC, who have put the death toll at at least 80.
Local election monitors say some MDC supporters have been forcibly removed from their homes, further hindering their abilities to vote; scores more have been hospitalised with severe injuries.
Tsvangirai himself has been to see supporters in hospital who allegedly have been assaulted by security forces and supporters of Zanu-PF, the governing party headed by Mugabe.
For several weeks, the Zimbabwe Election Support Network (ZESN), which deployed hundreds of observers across the country in the March 29 election, has released statements highlighting incidents of violence against MDC supporters and some of its observers.
But there were hopes that Tsvangirai would win the run-off in spite of a vow by Mugabe that the opposition would never come to power as long as he is alive.
Mugabe has also said that the country's war veterans are ready to fight to try to prevent the MDC from coming to power.
Economic factor
Economic travails could play into the hands of the MDC opposition [AFP]Political observers and analysts say Zimbabwe's deteriorating economic situation made the MDC a popular alternative to Mugabe.
"Mugabe could go on and try every trick in the book, but the sheer number of voters [for the MDC] may be hard to beat," Wilf Mbanga, the London-based editor of The Zimbabwean, a weekly printed in South Africa and sold in Zimbabwe, says.
Others say intimidation may work to the disadvantage of Mugabe.
"Intimidation could turn out to be counterproductive," Professor Tony Hawkins, who lectures at the University of Zimbabwe, told Al Jazeera.
"But chasing people from their homes will make it impossible for them to vote. If you’re chased away, you can't vote."
Mugabe's controversial land redistribution program - which began in 2000 and saw white farmers forced off their farms, some of which went to Mugabe cronies who have no knowledge on how to run them - has hampered food production and brought Zimbabwe to its knees.
In an attempt to stave off the crisis, the government has been printing money with planeloads of banknotes arriving in Harare, the capital, almost on a weekly basis, according to the UK's Sunday Times newspaper.
In depth
Q&A: Zimbabwe'selection crisisThis has resulted in runaway inflation, which stood at 165,000 per cent in February; Zimbabwe has possibly the largest number of millionaires in Africa, but they can't even afford basic commodities.
The Zimbabwean dollar is almost worthless. A one million-dollar bill can only buy a few items in supermarkets - if the customer carrying it is lucky to find goods on the shelves.
Unemployment among the country's 13 million people is said to be around 80 per cent, and hundreds of thousands of Zimbabweans have had to seek economic refuge in neighbouring South Africa, Botswana and Mozambique.
They can return home if Tsvangirai one day takes power and sorts out the economic mess, but the former trade union leader has several hurdles yet.
Source:
Al Jazeera

Sunday, June 22, 2008

Typhoon Fengshen sinks ferry and kills at least 155 in the Philippines

This is from AP.
The authorities were surely remiss in letting the ferry set sail given that a typhoon was approaching. I was away for the weekend and just learned of the typhoon today. It seems that the area where our relatives live was relatively unscathed as the typhoon changed course. Deforestation of hillsides causes many of the mudslides that bury people and increase the number of casualties.

Red Cross: 155 dead in Philippines typhoon
17 hours ago
MANILA, Philippines (AP) — The Philippine Red Cross says the death toll from Typhoon Fengshen has risen to at least 155.
The storm has submerged entire communities in torrential downpours and setting off landslides.
In addition to the dead, more than 740 passengers and crew from a passenger ferry that ran aground Saturday were missing. Only four survivors from the ship have been found so far.
Sen. Richard Gordon, head of the national Red Cross, says the figure of 155 dead is based on field reports from his staff.
He said Sunday he has asked U.S. authorities for help in finding possible survivors inside the ferry.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
MANILA, Philippines (AP) — A rescue ship battling huge waves and strong winds on Sunday reached a passenger ferry that capsized in Typhoon Fengshen, but found none of the more than 700 people who were on board. The storm has submerged entire communities in the Philippines and left at least 80 people dead.
The ferry, one end jutting out of the water, went down in the rough waters Saturday and had been out of radio contact for more than 24 hours.
"They haven't seen anyone. They're scouring the area. They're studying the direction of the waves to determine where survivors may have drifted," coast guard spokesman Lt. Senior Grade Arman Balilo said. Three survivors had made it to land earlier.
Many of the passengers were feared dead after villagers found four bodies, children's slippers and life jackets that washed ashore near where the MV Princess of Stars had stalled. Port captain Nestor Ponteres said the ferry's owner, Sulpicio Lines, had lost radio contact with the ship.
The dead, including a man and a woman who had bound themselves together, were believed to have been on the vessel, which initially ran aground a few miles off central Sibuyan island Saturday, then capsized, said Mayor Nanette Tansingco of San Fernando on Sibuyan island.
At least three survivors from the ferry were found in Sibuyan's Mabini village and police were ordered to go there. But all the roads to the village, where many houses were washed away by huge waves, were blocked by toppled trees, Tansingco told DZBB radio.
She appealed for food, medicine and formalin — an embalming fluid — apparently expecting many deaths in her town. The ferry's bow could be seen from her town, she said.
The typhoon lashed the central Philippines for about four hours Saturday, setting off landslides and floods, knocking out power and blowing off roofs.
Packing sustained winds of 74 miles per hour and gusts of up to 93 mph, the typhoon shifted course Sunday to the northwest and battered Manila at dawn, dumping heavy rain on the capital.
TV footage showed rescuers holding on to a long rope to pluck three people from raging floodwaters. The three were trapped on top of a partially engulfed van in a village in Iloilo province, where the governor said 59 people had drowned. In nearby village, residents pulled out a body from a muddy field then lays it beside another they found earlier. Gov. Neil Tupaz said another 40 people were missing in the province.
"Almost all the towns are covered by water. It's like an ocean," Tupaz said, adding thousands have been displaced in the central province that is home to 1.7 million people.
Rescue vessels aborted an initial attempt Saturday to get to the 23,824-ton ferry, but efforts resumed in stormy weather Sunday, coast guard chief Vice Admiral Wilfredo Tamayo said, although churning seas kept smaller vessels away. Four coast guard ships and three from the navy were being deployed, and the air force was asked to send aircraft as soon as the weather clears.
The ferry — with 626 passengers and 121 crew members on board — was "dead in the water" after its engine failed around noon Saturday, Tamayo said.
About two dozen relatives trooped to the Manila office of Sulpicio Lines, some quietly weeping as they waited for news about the fate of their loved ones. "I'm very worried, I need to know what happened to my family," said Felino Farionin, his voice cracking. His wife, son and four in-laws were on the ferry.
President Gloria Macapagal Arroyo directed the defense and local government departments to stand by for relief and rescue missions before she left for the United States late Saturday.
Arroyo later talked to officials in a teleconference aired live on nationwide radio, scolding coast guard officials for allowing the ferry to leave Manila late Friday despite the bad weather.
Ferries are the main form of inter-island transportation in the sprawling Philippines archipelago, site of the world's worst peacetime maritime disaster when the ferry MV Dona Paz sank after colliding with the fuel tanker MT Vector five days before Christmas in 1987, killing more than 4,341 people.
In southern Maguindanao province, at least 14 people drowned in flash floods Saturday, including 10 swept away from riverside homes, said provincial administrator Norie Unas. Five others were missing.
A 50-year-old man and his 10-year-old grandson were killed when a landslide buried their hillside shanty in Cotabato city Saturday, Mayor Muslimin Sema said.

Friday, June 20, 2008

Yahoo Philippines!

This is from the Inquirer.
Yahoo is becoming more and more popular in Asia. There are plenty of filipinos on Yahoo Chat. This is the second Asian country to have a Yahoo subsidiary. Earlier Yahoo created a branch in Singapore.

Yahoo! establishes Philippine subsidiary
By Erika TapallaINQUIRER.net
Posted date: June 20, 2008
MAKATI City, Philippines -- After 120 days of local preparation, Yahoo! Philippines has finally established an office in Manila, becoming the Internet giant’s second 100-percent owned subsidiary in Southeast Asia after Singapore.
The local Yahoo! office is looking at employing between 10 and 15 people, according to Jojo Añonuevo, General Manager of Philippine Operations for Yahoo! Southeast Asia. Añonuevo added that 20 percent of Yahoo! Singapore employees are Filipinos. The Yahoo! Philippines office is located at Fort Bonifacio Global City.
Based on internal Yahoo! metrics and surveys, 85 percent of Filipinos in the Philippines use Yahoo! platforms. However, the company has not yet partnered with an independent research company to calculate its traffic.
“We know a lot of Filipinos globally use Yahoo! content, but we are not able to break down the exact number of usage per market per country,” said Añonuevo. “We are still working with Nielsen Research to conduct research in the Philippines in conjunction with Internet associations in the Philippines to give us a third-party breakdown of these numbers.”
Añonuevo predicts a double-digit growth in the Philippines in terms of revenue. Yahoo! has three main objectives to generate revenue locally but is primarily banking on online advertising.
The first of the three objectives is to make Yahoo! the starting point for most consumers so that the service would be top-of-mind in their every online experience. For example, Yahoo! has developed mobile services in partnership with Sun Cellular and Smart Communications for the Yahoo! oneSearch mobile application.
Due to the popularity of social networking in the Philippines, Yahoo! Philippines is also looking at partnering with social networking sites.
“We are already in discussions with Friendster and other social networking sites to merge Yahoo! Messenger functions in their pages. There are some functionalities in Yahoo! Messenger that a Friendster user would want," Añonuevo said.
The company’s second objective is to become a "must-buy" for most advertisers by providing various platforms that would be viable choices for advertising and campaigns. In connection with this, Yahoo! Philippines has come up with Yahoo! Sponsored Search for Filipino businesses and advertisers. This advertising product enables small to large Philippine businesses potentially reach 53 million new customers in Southeast Asia.
The third objective is to become a "partner of choice" by providing favorable platforms for publishers and developers. For example, in April, the beta version of Yahoo! Philippine news was launched.
©Copyright 2001-2008 INQUIRER.net, An Inquirer Company

Official: Negotiator kept 60 percent of Philippines TV crew's ransom.

This is from the AFP.
60 percent of the ransom seems a hefty negotiating fee. I guess the salary of the mayor is probably quite low so he needs to supplement it by negotiating release of persons kidnapped by his relatives! I wonder if the mayor is a good Arroyo supporter!

Negotiator kept 60 percent of Philippines TV crew's ransom: official
7 hours ago
MANILA (AFP) — A local Philippines official arrested for the abduction of a television crew kept 60 percent of the ransom while pretending to negotiate their release from Muslim militants, authorities said Friday.
Police have asked prosecutors to file kidnapping charges against Alvarez Isnaji, mayor of Indanan town in the southern island of Jolo, and his son Haider Isnaji, for the abduction of ABS-CBN network presenter Cecilia Drilon and three others.
National police chief Avelino Razon said a police undercover agent saw the Isnajis handling five million pesos (112,500 dollars) delivered to their home by a brother of Drilon to buy her freedom and those of her crew and guide.
During the nine-day hostage ordeal, the mayor publicly warned authorities that the gunmen had threatened to behead the captives if a ransom was not paid.
"We consider him (Alvarez Isnaji) as the leader of the kidnap group," Razon told a news conference.
The TV crew and a university professor acting as a guide were seized on June 8 as they went to interview a senior leader of Abu Sayyaf, an Islamic militant group with ties to Al-Qaeda.
Razon showed two pictures of the Isnajis counting the money, with the undercover agent and provincial vice governor Lady Ann Sahidulla serving as witnesses.
The undercover agent, who presented himself to the Isnajis as a civil servant from the Interior Department, will testify that two million pesos was given to the gunmen while the mayor kept three million, Razon said during a media briefing on Friday.
The money has not been recovered, he added.
The mayor and his son, who the elder Isnaji had described as his personal emissary to the kidnappers, were arrested Wednesday.
Their lawyer, Ernesto Francisco, said his clients were innocent and being prosecuted for "political reasons."
Razon said the 14 gunmen who held the crew hostage were Abu Sayyaf members. They included three blood relatives of the mayor, and they were all still at large, he added.
The gunmen's first captive was released June 12 after the mayor said he paid 100,000 pesos in "board and lodging" fees to the kidnappers -- a euphemism for ransom.
The mayor said a similar amount was later paid to secure the release of the rest of the group.
But Razon said the police were investigating reports that another shipment of ransom money was flown by private plane to Jolo after June 12, resulting in the release of the remaining three hostages late Tuesday.
The mayor said at the time that Senator Loren Legarda, a close friend of Drilon's who is widely expected to run for president in the 2010 election, had helped him secure their freedom.
"We cannot fault the (Drilon) family for doing everything to bring back their loved one," Razon said.

Opposition considers pulling out of Zimbabwe vote.

Given the conditions the opposition is facing and the fact that the army and police have both said that they will not support an opposition victory, pulling out seems a prudent action. Only some type of insurgency will overthrow Mugabe it seems unless Mugabe himself is assassinated and some other leader more amenable to negotiation with the opposition takes over. The problem seems to go beyond Mugabe himself though and relate to his party, the army, and the police.


Opposition considers pulling out of Zimbabwe vote
CRIS CHINAKA
Reuters
June 20, 2008 at 6:43 AM EDT
HARARE — Zimbabwe's opposition leader Morgan Tsvangirai is considering whether to pull out of the June 27 presidential run-off election amid fears it will be a charade, a spokesman said on Friday.
Some African nations, the United States and former colonial power Britain have said they do not believe the poll would be free and fair because of growing violence that the opposition blames on veteran President Robert Mugabe.
Mr. Tsvangirai's Movement for Democratic Change says at least 70 of its supporters have been killed since he defeated Mr. Mugabe in a March 29 vote but fell short of the outright majority needed to avoid a run-off, according to official figures.
“There is a huge avalanche of calls and pressure from supporters across the country, especially in the rural areas, not to accept to be participants in this charade,” MDC spokesman Nelson Chamisa told Reuters.


Mr. Chamisa did not say when the party would decide on participating in the run-off.
Mr. Mugabe, 84, is fighting to cling onto power in the country he has ruled since independence in 1980. Once prosperous, its economy is now ruined and millions of Zimbabweans have fled the political and economic crisis to neighbouring states.
Mr. Mugabe blames the election bloodshed on the opposition and has threatened to arrest MDC leaders.
Mr. Tsvangirai has been detained five times while campaigning this month and his lieutenant, Tendai Biti, is being held in custody on treason and other charges. A conviction could carry a death sentence.
A magistrate on Friday ordered that Mr. Biti, the MDC's secretary-general, remain behind bars until July 7, rejecting the party's bid to have him released.
“I'm of the view that there's reasonable suspicion to believe the accused committed the said offences. Accordingly the application is dismissed,” Magistrate Mishrod Guvamombe said in a Harare court.
European Union leaders were set to issue a new threat of further sanctions on Zimbabwe on Friday, a draft summit statement showed. The EU has an arms embargo on Zimbabwe as well as visa bans and asset freezes on Mr. Mugabe and other officials.
The EU text, obtained by Reuters before the final working session of the two-day summit, said a free and fair election was critical to the resolution of a political and economic crisis in the former British colony.
But it stopped short of backing U.S. Secretary of State Condoleezza Rice's assertion on Thursday that actions by Mr. Mugabe's government meant the run-off will not be free and fair.
EU leaders urged the Southern Africa Development Community (SADC) and the African Union to deploy a significant number of election monitors and called for a swift and transparent vote count this time after lengthy delays in the first round.
“The European Council reiterates its readiness to take additional measures against those responsible for violence,” it said.
SADC, a group of 14 nations that includes Zimbabwe, is sending 380 monitors to Zimbabwe for the vote.
SADC ministers responsible for peace and security said on Thursday they doubted the election would be free after hearing initial reports from monitors, signalling growing impatience on the continent with Mugabe's authoritarian rule.
South African President Thabo Mbeki, mandated by the regional group to mediate in the crisis, visited Zimbabwe on Wednesday to discuss the crisis with Mugabe and the opposition.
Mr. Chamisa denied media reports that Mr. Mbeki had asked for the election to be cancelled in favour of a unity government.
“President Mbeki did not raise that issue. We raised the issue of electoral violence,” Mr. Chamisa said, declining to provide further details on the meeting. A spokesman for Mr. Mbeki also declined to comment on the matter.
The political impasse threatens to worsen the economic crisis in Zimbabwe, which is struggling with inflation over 165,000 per cent, 80 per cent unemployment and chronic food and fuel shortages.