by Jules Evans | Feb 15, 2009 | Economics and development, Europe and Central Asia
One of the biggest risks for the global economy right now is Ukraine. The country’s currency is rapidly depreciating, which is causing serious trouble for the foreign banks who own a majority of the financial sector.
The foreign banks, led by names like Raiffeisen, Unicredit and BNP Paribas, have piled into Ukraine ever since the Orange Revolution in 2006, on the bet that Ukraine would move ever closer to the EU, and eventually accede.
Instead, the government has been riven with in-fighting ever since that revolution, and really the country has barely had a government for the last three years.
Banks are starting to collapse – this week, the ninth biggest bank, Nadra Bank, was nationalised. If the currency depreciates further and corporates and consumers default on their debt, big European banks could take a major hit.
Raiffeisen, for example, has several billion euros invested in Ukraine, where it owns the second biggest bank. Unicredit owns the fourth biggest bank, and BNP Paribas owns the fifth. OTP, Hungary’s biggest bank, also owns a top ten bank there. Russian banks also have alot invested there.
If Ukraine goes under, it could lead to one of the big Austrian banks, such as Raiffeisen or Bank Austria (owned by Unicredit) going under as well, which would be disastrous for eastern Europe, where Raiffeisen and Unicredit own large chunks of countries’ banking sectors.
That’s why the Austrian finance minister, Josef Proll, has been urging the EU to support Ukraine with more emergency funds, to supplement the $16bn the country received from the IMF.
The IMF has frozen that money at the moment, because Ukraine’s PM, Yulia Timoshenko, has refused to cut government spending. Her finance minister resigned because of this last week.
Timoshenko now appears to be trying to get a bail-out from Russia as well, and is probably trying to play EU and the West off against each other to get money.
by Daniel Korski | Feb 13, 2009 | Cooperation and coherence, East Asia and Pacific
So Sri Lanka has now rejected Gordon Brown’s appointment of Des Browne as a special envoy to the island. President Mahinda Rajapaksa said the appointment was “unhelpful” and was made without consulting his government. A foreign ministry statement said the appointment was tantamount to an “intrusion of Sri Lanka’s internal affairs”.
No 10 have played this down, saying that they were still speaking to the Sri Lankan government about Browne’s exact role. But from Colombo Foreign Minister Rohitha Bogollagama warned of “major repercussions” for relations with Britain over the nomination and said “there is no further discussion with London on the matter.”
Before this incident, the appointment of a Sri Lanka envoy only seemed poorly through-out. Now it looks downright humiliating for the Prime Minister who clearly wanted to make up for sacking his Scottish colleague.
What could have happened? There are a number of options. Perhaps No 10 did not check the appointment with the Sri Lankan government. But if true, this seems negligible beyond belief. Perhaps the Foreign Office did check, but the Sri Lankans changed their minds, or did not communicate as forcefully as they should have that they did not want the appointment. That is what happened over Paddy Ashdown’s UN appointment in Kabul. The final option is that Des Browne, who was quite poorly treated by the PM, was about to blow, spilling the beans on Brown’s weaknesses. To stop this, the PM may have panicked, and offered Browne something that was not really his to offer.
Either way, the non-appointment does not put Brown in the best of lights.
by Jules Evans | Feb 13, 2009 | Influence and networks
Last month saw the launch of several new online initiatives by Labour, as it desperately tries to find a strategy to beat the Tories in the coming election.
John Prescott, who is apparently a star on Twitter (I find this hard to believe but that’s what they say), is writing a new blog, called www.gofourth.co.uk , so called because that’s where Labour will end up being placed in the next election, ha ha. Apparently Alaister Campbell is also involved in the website, somehow…
In the same month, Derek Draper, who briefly showed an interest in psychotherapy but now appears to be a full-time party apparatchik, launched a site called LabourList, which will try to be the same sort of ‘indepenent grass roots website’ as the influential www.conservativehome.com
The Tories have widely mocked these initiatives, saying the government just doesn’t get the net – it is de-centralised, off-message and spontaneous, and therefore completely different to the Alaister Campbell model of spinning and bullying the press corps. The fact that LabourList is run by Peter Mandelson’s former assistant is testament to how much Labour doesn’t get it, and how worn out the grass roots Left is in the UK (just read New Statesman if you’re in any doubt).
That much is said, with the accompaniment of a great gangsta beat, by Raplog, a blogger who’s declared aim is to ‘bring some hip hop panache to political blogging’:
[youtube]http://www.youtube.com/watch?v=cqBFF6TDI8I’>watch?v=cqBFF6TDI8I[/youtube]
by Richard Gowan | Feb 13, 2009 | Africa, Conflict and security
From Bangadi, eastern Congo:
Rebels from the Lord’s Resistance Army sent torture victims — including a man whose back was sliced with a machete — to warn the people of this Congolese town they would be next. The town’s three policemen fled and there was no response from the military and U.N. peacekeepers to the increasingly panicked pleas for help. That’s when residents realized they were on their own.
“We were sending warnings and begging for help practically every day for two weeks. And nothing happened,” said community leader Nicolas Akoyo Efudha. “We finally understood that we were abandoned — in danger and without protection.”
So Akoyo called a town meeting and told everyone to bring whatever weapons they had: pre-World War II rifles, homemade shotguns, lances, swords, machetes, hunting knives, bows with sheaths of poisoned arrows. The women came armed with kitchen knives and log-sized wooden pestles used to pound yams into flour.
Since then, the residents of Bangadi have successfully driven off two attacks by the Ugandan rebels, who have killed at least 900 people in this remote northeastern corner of Congo over the past seven weeks. News of Bangadi’s success — and the lack of military protection — have spurred hundreds of villages to form self-defense groups, according to Avril Benoit, a spokeswoman for MSF.
