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courage is contagious
Viewing cable 09BERLIN344, MEDIA REACTION: ECONOMY, AFGHANISTAN, ISRAEL, IRAQ-TURKEY,
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| Reference ID | Created | Released | Classification | Origin |
|---|---|---|---|---|
| 09BERLIN344 | 2009-03-24 12:27 | 2011-08-24 16:30 | UNCLASSIFIED | Embassy Berlin |
R 241227Z MAR 09
FM AMEMBASSY BERLIN
TO SECSTATE WASHDC 3651
INFO WHITE HOUSE WASHINGTON DC
SECDEF WASHINGTON DC
DIA WASHINGTON DC
CIA WASHINGTON DC
DEPT OF TREASURY WASHINGTON DC
FRG COLLECTIVE
AMEMBASSY BRUSSELS
AMEMBASSY LONDON
AMEMBASSY PARIS
AMEMBASSY ROME
USMISSION USNATO
USMISSION USOSCE
HQ USAFE RAMSTEIN AB GE
HQ USEUCOM VAIHINGEN GE//J5 DIRECTORATE (MC)//
CDRUSAREUR HEIDELBERG GE
UDITDUSAREUR HEIDELBERG GE
UNCLAS BERLIN 000344
STATE FOR INR/R/MR, EUR/PAPD, EUR/PPA, EUR/AGS, INR/EUC, INR/P,
SECDEF FOR USDP/ISA/DSAA, DIA FOR DC-4A
VIENNA FOR CSBM, CSCE, PAA
"PERISHABLE INFORMATION -- DO NOT SERVICE"
E.0. 12958: N/A
TAGS: OPRC KMDR KPAO GM US AF IS IZ TU RS SF DA CH
SUBJECT: MEDIA REACTION: ECONOMY, AFGHANISTAN, ISRAEL, IRAQ-TURKEY,
NATO, RUSSIA, AFRICA-CHINA
¶1. Lead Stories Summary
¶2. U.S. Bailout Plan
¶3. U.S. Strategy on Afghanistan
¶4. U.S. Budget Draft
¶5. Obama on AIG Bonuses
¶6. New Israeli Government
¶7. Turkish President Gul Visits Iraq
¶8. 10th Anniversary of NATO Intervention
¶9. Future NATO Secretary General
¶10. Russian Democracy
¶11. South Africa Bans Dalai Lama Visit
¶1. Lead Stories Summary
ZDF-TV's early evening newscast Heute and ARD-TV's early evening
newscast Tagesschau opened with stories on the U.S. government's
plan to stabilize banks with a combination of public and private
funds that could total one trillion dollars. This morning's Heute
newscast opened with the commitment of some AIG managers to repay
their bonuses. Newspapers led with stories on the agreement of Abu
Dhabi's Aabar Investments to become carmaker Daimler's largest
shareholder, and the U.S. plan to rescue the banking system.
Editorials focused on a range of economic stories, such as Daimler,
the U.S. bank rescue plan, and AIG bonus payments.
¶2. U.S. Bailout Plan
ARD-TV's late evening newscast Tagesthemen broadcast the following
commentary: "The American people are currently paying for the
mistakes of the government and banks. Treasury Secretary Geithner
used clear words aimed at the incredible mistakes of the Bush
predecessor government. But these words also sound like slogans of
a politician who stands with his back to the wall, too. Now a new
bailout package is to bring a turnabout for Geithner and the Obama
administration. It entered office with the promise to end the
excesses at the financial markets once and for all. It has now
arrived in the real world."
Under the headline: "Dance with a Zombie," Sueddeutsche Zeitung
argued: "After listening to Geithner's plan, the listeners
immediately come up with one question: If everything is so simple,
why has thus far no one come up with this idea? The answer: because
at least one of the actors will lose, namely the American people.
In his new version, the Geithner plan is so complicated that its
effects cannot be forecast now. But there are two indications why
the taxpayers will lose: First, they are supposed to finance the
purchase of the [toxic] bonds...and second, the investors are safe
because of state guarantees shouldered by the American people.
Following each bailout package for the banks, the financial crisis
seemed to have been resolved, but each time, it came back like a
zombie. Now Geithner is asking this zombie for a dance. It is
really an absurd idea to allow the financial sector, which caused
the crisis, to profit from a solution to the crisis. There is a
radical alternative: the state must take over control of those
banks which would otherwise go down - and for this risk, it must
make profits from the sale of toxic assets on its own. This variant
smells of socialism, it would require the shareholders to make
greater sacrifices, and would not create a big business for hedge
funds, but it is much fairer than the Treasury Secretary's plan."
According to Handelsblatt, "the U.S. government is finally tackling
the core of the problem by buying illiquid assets with the support
of private investors. Without cleaning the balance sheets of banks,
the credit markets cannot be revived and the economy will not get
going again. But two questions will be decisive for a successful
bailout plan: Is the volume high enough? And will prices build that
will clean the market of illiquid assets? Nevertheless, it is it is
worthwhile for the taxpayer to accept these risks, not only because
there is no alternative to the Geithner plan but also because these
assets are not only made up of useless junk. If this plan succeeds
and if the panic is replaced by economic calculations, it would not
only be the first step out of this quagmire, but the costs would
also be much smaller than feared."
Financial Times Deutschland editorialized on its front page: "The
great irony of Geithner's plan is that he basically comes back to
the plan which his predecessor Hank Paulson wanted to implement half
a year ago to restructure the banks. Geithner now wants to
implement the failed concept by using those instruments that were
responsible for so many financial problems: private investors will
now de facto get the possibility to speculate with taxpayers' money.
Geithner proudly said: 'We are the United States, not Sweden.' But
the great risk he is now taking is that the enormous amount of money
is not clearly targeted enough. This maneuver cannot be repeated as
often as he likes."
Die Welt editorialized: "Barack Obama and Timothy Geithner are on
the offensive again. First, Congress adopted populist bills on the
taxation of bonus payments and yesterday, Geithner presented the
Public Private Investment Program, which is a political, but
probably also, an economic, act of liberation. Treasury Secretary
Geithner's plan could turn out to be the golden way out of the
financial crisis. The governments in Europe are well-advised to
closely follow this experiment."
Regional daily Kieler Nachrichten noted: "It is pure despair which
has driven the U.S. Treasury Secretary to develop the new banking
bailout plan. Even though the U.S. government has been pumping
billions of dollars into the financial markets, the core problem,
which has really caused the recession, remains unchanged. There is
no market for toxic assets. And as long as this does not change, all
attempts to get the economy going again must fail."
According to die tageszeitung, "the U.S. administration is obviously
willing to pay almost every price to avoid taking over the banks,
even though this would be cheaper; it can be ruled out that private
investor make profits with state banks. But U.S. politicians seem
to fear that they could be accused of pursuing a 'socialist' policy.
As far as the ideology is concerned, the investment bankers have
now won. This message of the Geithner plan will have global
consequences. The taxpayer will have to pay the damage."
¶3. U.S. Strategy on Afghanistan
Several papers carried reports on the review of U.S. strategy on
Afghanistan, focusing particularly on President Obama's CBS
interview and Special Representative for Afghanistan and Pakistan
Richard Holbrooke's talks with NATO and EU representatives in
Brussels. Berliner Zeitung's intro said: "President Obama's new
strategy on Afghanistan does not rule out the possibility of
withdrawal." FT Deutschland headlined: "Obama is searching for the
exit from Afghanistan."
Frankfurter Allgemeine headlined "Dissent over expanding Afghan
police forces" and reported that "the international discussion on
the new strategy to stabilize Afghanistan is still at odds over the
division of labor in the buildup of Afghan police forces. While the
EU began to talk about deploying European police officers in the
country, Americans want NATO to take the lead in this mission."
Sueddeutsche wrote on the President's CBS interview that "Obama
reveals how he wants to resolve the problem of Afghanistan,"
highlighting that he "wants a clear plan to end the mission in
Afghanistan." The paper raised expectations for next week's POTUS
visit to Europe: "Obama's statements are further details of the new
American strategy on Afghanistan, which the President wants to
present to Europe next week.... Obama's recent statement, however,
do not suggest a quick end to the mission."
die tageszeitung editorialized on the new U.S. strategy: "Day by
day, the discussion focuses on a new issue in Afghanistan.... Many
of the proposals are worth consideration but the uncoordinated and
arbitrary way they are presented does not make the impression of a
thorough and fully developed change of strategy. It looks like
conceptual chaos, if not even like panic in the face of defeat.
Given this chaos, it is not convincing to talk about an exit
strategy.... 'Change we can believe in' must be communicated
differently in Afghanistan."
¶4. U.S. Budget Draft
Frankfurter Allgemeine had this to say: "President Obama
understands this serious economic crisis as a chance to readjust the
relationship between market and state. Evidence of this is the
budget draft for next year and the time thereafter. The president
pins his hopes on higher taxes for wealthy American, state
intervention to protect the climate, and improved control of the
healthcare sector. In addition, the actors in the financial markets
are to be controlled much better than in the past with more
regulatory measures. This corresponds to the spirit of the time and
meets with support among the America people. But the president
should not succumb to the fallacy that only greedy Wall Street
bankers are to be blamed for the crisis. The state, too, has failed
because it set false incentives and contributed to the development
of the bubble on the housing market. Obama must see to it that he
does not overshoot the mark and paralyze the very forces he wants
to strengthen: corporate spirit and the willingness of the people to
take risks."
¶5. Obama on AIG Bonuses
In the view of Sueddeutsche Zeitung, "all of a sudden, President
Obama has constitutional concerns about the AIG bill. This is
reasonable, but the question is why he did not present his concerns
a week ago. This vacillation does not cast a favorable light on the
president. He acted in an opportunistic way. Obama promised a new
straightforwardness in his policies. But the staggering course of
the past few days has now damaged him."
Financial Times Deutschland observed: "It is extraordinary that
President Obama is losing popularity. In order to explain this
decline, it is not enough to refer to historic challenges. But
liberal and conservatives in the U.S. expect the president to
demonstrate a similar degree of leadership, inspiration, and clear
communication as he demonstrated as election campaigner. Instead,
Obama is sending contradictory signals by showing his outrage at
bonus payments for AIG managers without having done anything to
prevent them. Obama's problem is not so much that he had to make
painful decisions but that he changed course too often. Four years
before the next elections, Obama could well afford to make decisions
that could damage him in opinion polls. But the president of the
biggest economic power in the world cannot do without a clear course
- even though he will not always get the necessary applause for
these decisions."
¶6. New Israeli Government
Sueddeutsche Zeitung editorialized: "In the elections, Ehud Barak's
Labor Party achieved the worst result in its history, but Barak
wants to use all his might to keep the portfolio of the defense
minister. That is why he is now betraying the ideals of his party.
He is negotiating a coalition with designated prime minister
Netanyahu, thus approving the sellout of his principles. Netanyahu
wants to lull the world into believing that he will form a grand
coalition with Barak's Social Democrats. But he needs the Likud
Party not to govern but as a fig leaf for his hopelessly right-wing
coalition."
Regional daily Braunschweiger Zeitung opined: "Benjamin Netanyahu
has decided to play a risky game: to form a coalition of faltering
candidates. He succeeded in winning the support of the nationalist
'Our House' and of the ultra-orthodox Shas parties. But this is
still not enough to form a coalition majority. It would be perfect
only if the Labor party joined the coalition. And its chairman Ehud
Barak is only waiting. If this coup succeeded, it would be like
putting a bomb in charge so to speak. Our House chairman Avigdor
Lieberman can imagine the Israeli army acting in a similar way as
the Russians did in Chechnya. Barak, in turn, does not seem to have
problems with his kow-tow to Likud. In the long run, there is no
way this coalition will work."
¶7. Turkish President Gul Visits Iraq
Die Welt reported: "For the first time in 33 years, a Turkish head
of state is visiting Iraq. President Gul arrived in Bagdad for a
two-day visit.... Turkey and Iraq want to take joint action against
the rebels of the Kurdish Worker's Party, who are operating in the
north of Iraq. Talabani and Gul agreed on this common regional
front."
Tagesspiegel commented: "Realpolitik is gaining ground in the
difficult relations between Turkey and Iraq. In recent years,
Ankara has been postponing a new beginning with its southeastern
neighbor, fearing that too close contacts could promote the
establishment of a Kurdish state in northern Iraq. Turkey has
realized that it can permanently weaken the PKK rebels only together
with the Iraqis. In addition: in a few years the Americans will
have withdrawn from Iraq, but the Turks and Iraqis will still be
there and have to find an arrangement.... Ankara and Bagdad are
obviously prepared to tackle the problems together. If both sides
stick to the current policy, not only Turks and Iraqis will benefit
from it."
¶8. 10th Anniversary of NATO Intervention
Sueddeutsche Zeitung is of the opinion that "NATO's war against
Serbia was the prototype of a conflict which has been pestering the
world until today. On this small theater in Kosovo, all those
villains, do-gooders?, religious fanatics, legalists, and military
strategist came together who are still determining the suffering and
the happiness of the world today. That is why the Kosovo conflict
was the first conflict of a new era. And today, the community of
nations still raises the question in many conflicts when it or part
of it is allowed to intervene in other states. International law
has not given an answer for more than ten years. The UN has
discovered 'the duty to protect,' which is a minor club to use
against all governments that fail in their work and violate
elementary moral principles. The United States has abused? this
right to intervene, invented a reason for war in Iraq and
discredited itself with its missionary ideas to democratize others.
But this moral exuberance has disappeared today. What is left is
the insight that international law still does not fight injustice in
the world and that the UN is too weak to offer a legitimate reason
to intervene."
Regional daily Mdrkische Oderzeitung of Frankfurt on the Oder
opined: "NATO's military mission against the former Yugoslavia in
1999 was politically and morally right beyond all the questions of
international law that influenced the decision ten years ago.
Following the bloody consequences of his nationalist policy in
Croatia and Bosnia, dictator Slobodan Milosevic had to be stopped.
Without NATO's actions, there would have been a lasting and massive
expulsion of the Albanian population from the Serbian province of
Kosovo.".
¶9. Future NATO Secretary General
Die Welt commented on the increasing number of reports suggesting
that Danish Prime Minister Rasmussen will be appointed NATO
secretary general. "Is Rasmussen's appointment innovative? Twenty
years after the downfall of the Soviet empire and the fall of the
Iron Curtain, NATO's leadership still reflects the time of the Cold
War as if nothing has happened since autumn 1989. The time would
have been ripe to appoint an eastern European. One could also have
considered a French candidate."
¶10. Russian Democracy
Frankfurter Allgemeine commented on President Medvedev's decision to
fire Murmansk Governor Yury Yevdokimov, saying that Yevdokimov
"contributed to the embarrassing defeat of Unified Russia by
promoting an independent candidate. This was it. The governor
violated the rules of the game: not the people but the Kremlin makes
the decision on who wins the elections."
¶11. South Africa Bans Dalai Lama Visit
Berliner Zeitung analyzed: "The Dalai Lama must stay out of South
Africa.... Because China is a very important partner for South
Africa - politically and economically - the order was given to deny
the Dalai Lama a visa. South Africa is not as important as Germany,
Britain or France, which can stand their ground better against China
because of their power.... South Africa will therefore do nothing
that could impede relations with China. And the door to
Johannesburg will remain closed for the Nobel Peace Prize winner."
KOENIG