The South Stream Project and the European Union's Energy Supply Security

After the project of Trans-Anatolia Natural Gas Pipeline (TANAP) was signed between Turkey and Azerbaijan, the South Stream project was signed between Turkey and Russia, yesterday. Russia reaches Southstream agreement with Turkey. Russia has said it has reached an agreement with Ankara permitting Moscow to bed down the Southstream natural gas pipeline to Europe via Turkish territorial waters. The agreement of the construction of South Stream was signed with the participation of Energy and Natural Resources Minister of Turkey, Taner Yildiz, Russian Deputy Prime Minister Igor Sechin and Russian Prime Minister Vladimir Putin. This seems like the second giant step for Turkey in energy, but it can create some problems in the future for Turkey and Europe.

In South Stream project, Russia's overall objective seems like a strategy to bypass Ukraine’s gas transit system. However, Russia's other aim may be bypassing the Nabucco project through South Stream Pipeline?

Nabucco is planned to carry gas from the Caucasus and Central Asia to the European Union aimed at reducing dependence on Russian gas. Some countries in Europe were not pleasant after the South Stream agreement between Turkey and Russia.

Turkey argues that the two natural gas pipeline would be complementary to each other.

According to the Financial Times, about 15 billion Euros in the future of Nabucco natural gas not provided sufficient to justify the investment because of doubts about the uncertain situation.

İsa Burak GONCA 

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North Korean leader Kim Jong-il dead

Chosun Central News Agency (KCNA) reported on the morning of the 19th that North Korean Leader Kim Jong Il died on his private train due to overwork on the 17th at 8:30 a.m.

In a short dispatch, KCA stated, "Chariman Kim passed away in the train on December 17th, 2011 at 8:30am due to physical overwork."

He took the helm of the communist state upon the death of his father and national founder Kim Il-sung in 1994. His successor, Kim Jong-il has announced that 20 year-old son, Kim Jong Un.

According to press in South Korea, North Korea test-fires missile after Kim Jong-il had died. South Korea's Yonhap news agency claimed, a military official made ​​a statement that the missile test is linked to the death of Kim Jong-il. South Korea and Japan is on the emergency situation.

After the death of North Korean leader, North Korea may behave aggressively in the short term in order to sort of show weak or not exposures. But in the long run, this aggressive attitude of North Korea will give up if the young leader of North Korea does not become the victim of his ambitions.

It’s a surprise but nothing to get alarmed about. There is probably no need to put the South Korean military on alert. Let’s see how this is digested in North Korea. There might be interesting developments in North Korea in near future.

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Putin's party wins but suffers setback in Russian Duma Election

Today's parliamentary elections in Russia, Vladimir Putin's ruling United Russia Party had won the day. Putin's United Russia Party won 49.5 percent of votes, a significant drop from their current two-thirds majority in parliament with a decline from 315 seats to around 220 in Russia's 450-seat State Duma - lower house of parliament after Sunday's election. Putin's party won 64 percent of the vote in 2007, but his party won 50 percent of votes in the last election.

The Communist Party of the Russian Federation came in second to United Russia, polling 19.8 percent of the vote. Third and fourth were closely contested, according to exit polls, with the Liberal Democratic Party of Russia brining in 12.8 percent, and the centrist Fair Russia party gaining 11.4 percent.

In the meantime, the Communist Party, said in a statement from its website, the elections were conducted largely systematic and lawlessness.

United Russia has been the country's leading political force for the better part of a decade. It was created by Putin in 2001. A strong showing in the parliamentary elections would be considered a boost to Putin's campaign for president, which will be decided in a vote 2012.

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10 years of BRIC countries

Ten years ago, Goldman Sachs' global economist Jim O'Neill introduced the BRIC statement into our lives. He argues that "the economic potential of Brazil, Russia, India and China is such that they could become among the four most dominant economies by the year 2050" (Financial Times, 2006).

Since 2001, the BRIC countries continued to develop rapidly. 2008 Financial Crisis affected even if they are not influenced much of Europe and America. In ten years, the BRIC countries have made a lot of meetings and have signed for co-operation.

Can the BRIC be rival of the European Union or ASEAN as a political alliance?

BRIC countries (Brazil, Russia, India, China) continued to develop in the last 10 years. Today when we look at the European Union, we can see that the Euro zone started to clattered. Moreover, the European Union appears as economical union instead of a political union, the biggest disadvantage of the union is that there is not a common foreign policy and energy policy. ASEAN also has the same problems. If your union has not a powerful country like China, you cannot influence your region easily. Therefore, a strong association between the BRIC countries will affect both the European Union and ASEAN.

CIVETS versus BRIC

The biggest rival or alternative of BRIC can be CIVETS. "A colleague at the Economist Intelligence Unit has suggested more attention be paid in 2010 to the CIVETS: a second tier of big emerging markets consisting of Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa" (Economist, 2009). The CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa) is an acronym for favored emerging markets coined in late 2009 by Robert Ward, Global Forecasting Director for the Economist Intelligence Unit (EIU). The term has also been used by HSBC's chief executive Michael Geoghegan. These countries are favored for several reasons, such as a dynamic and diverse economy and a young growing population. So, CIVETS can be a powerful alternative of BRIC. 

Last but not least, both BRIC and CIVETS countries can affect deeply G-6 countries (France, Germany, Italy, Japan, the United Kingdom and the United States. To become politically active, the United Nations Security Council five permanent countries' veto right needs to be resolved. 

İsa Burak GONCA

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Energy giant Shell signs Turkish oil and gas deal

Energy giant Royal Dutch Shell signed a deal Wednesday with the Turkish state-run petroleum company, TPAO, to explore oil and gas.

The deal will allow the two companies to search for oil and natural gas offshore in the Mediterranean as well as onshore in Turkey's southeast region, the paper said on its website.

Turkey has long-running disputes with Greek Cyprus over delineating the Mediterranean and Aegean seas for the exploration of oil and gas resources.

Turkish Energy Minister Taner Yildiz said last Wednesday in Ankara that the deal, if sealed with Shell, would pave the way for the exploration of oil and natural gas on the Turkish lands and seas. 

 “TPAO [Turkish Petroleum Corporation] and Shell will undersign a joint operation agreement on Nov. 23 that covers exploration in the maritime areas of [the southern province of] Antalya,” Minister Taner Yıldız told the Hürriyet Daily News yesterday.

“This will be an important opening in the Mediterranean. We are moving our strategic weight from the BlackSea to the Mediterranean Sea,” Yıldız said during a phone interview.

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Hungary could not resist the impact of the economic and financial crises

The Hungarian government requested financial assistance from the EU Commission and the IMF that cancel the agreement with the IMF last year.

Hungary could not be reached the desired level of growth and financial stability and the government is obliged to ask for help from the IMF again.

The statement made by the Commission to "Today the Hungarian authorities have requested for a possible EU financial assistance. Moreover, Hungary have requested similar financial assistace from the IMF."

According to the Commission, financial assistance on Hungary will be decided in consultation with members of the EU and the IMF.

Among the EU's new members, Hungary has the worst economic indicators. 

Hungary's public debt has reached 82 percent of economic size. In Hungary, the EU Commission expects the growth rate of 0.5 percent next year, the budget deficit to 2.8 per cent and an 11 percent unemployment rate for Hungary.

İsa Burak Gonca 

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Is Portugal Next?

Portugal's economy shrank 0.4 percent in the third quarter from the previous quarter.

Also, the economy shrank by 0.1 percent year-on-quarter in the second quarter.

According to the Portuguese National Statistics Institute (INE), the country's gross domestic product (GDP) shrank by 0.4 percent in the third quarter-quarter basis.

The country’s economy declined by 1.7 percent in the same period of last year in the third quarter. Portugal's GDP declined by 1 percent in the second quarter on an annual basis.

“Portugal, a country of nearly 11 million, is Western Europe’s poorest, with growth that has trailed its neighbors over the past decade, something economists blame on an uncompetitive and rigid labor market. The unemployment rate has risen above 12% this year” (Financialsense, 2011).  

Portugal became the third country in the euro zone affected by the debt crisis. After Greece and Ireland, Portugal received 78 billion Euros in foreign aid from the International Monetary Fund (IMF) and the European Union. In return for this help, Portugal had promised to decrease budget deficit as the level of 3 percent in 2013 which it reached year 9.1 percent of the gross domestic product in last year. 

It is not far that the Euro zone debt contagion spread to all Europe. So, the possible domino effect is inevitable. 

As a result, Portugal does not bode well for the economic indicators. Portugal may be the next after Greece. In Italy, Ireland, Spain and Belgium also things did not go well. For the European Union, this situation can be very difficult to carry. Of course, other countries will be affected by the situation. In particular, Europe's two biggest neighbors, Russia and Turkey that seems like unaffected by the financial crisis, but they will be affected by this situation in long-and short-term.

İsa Burak GONCA

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Why Berlusconi stepped down?

After the adoption of amendments of the financial stability law in Italy by the House of Representatives, Prime Minister Silvio Berlusconi met with President Giorgio Napolitano and submitted his resignation. Republican Senate previously approved changes to the financial stability law in Italy, was also accepted by the House of Representatives. President Napolitano accepted the resignation and expected to press the button for early elections.

Silvio Berlusconi was born on 29 September 1936. He is a conservative Italian politician and businessman who was the longest-serving post war Prime Minister of Italy, and third longest-serving since the creation of Italy, after Benito Mussolini and Giovanni Giolitti. He held this position on three separate occasions: from 1994 to 1995, from 2001 to 2006 and 2008 to 2011. He is also known by the nickname Il Cavaliere (literally, The Knight), due to the knighthood of the Order of Merit for Labour he received in 1977. He is also one of the richest men in the world.

In addition to this, after his immunity from prosecution was lifted by the Constitutional Court in October 2009, he declared:

"I am without doubt the person who's been the most persecuted in the entire history of the world and the history of man." 

"In my opinion, and not only mine, I am the best prime minister we can find today."

Moreover, Berlusconi’s relationship with media can be defined as “media control and conflict of interest”. Berlusconi's extensive control over the media has been widely criticized by Italian people. However, he has been wracked by sexual scandals such as wiretaps and accusations of corruption through the exploitation of prostitution in 2007, Prostitution scandal and divorce in 2009, Ruby Rubacuori in 2010. I do not want to talk too much about this subject, but all of these have created the infrastructure of the resignation of Berlusconi.

Despite he declared himself as the best politician in Europe, supporters of Berlusconi declined and lost the majority in parliament.

“It comes after the lower house of Italy's parliament has passed a package of austerity measures demanded by the EU and designed to restore markets' confidence in the country's economy. The austerity package includes a rise in VAT and the pension age, rising fuel prices and the sale of state assets. Members of the lower house voted 380-26 with two abstentions, after the Senate approved the measures easily on Friday. President Napolitano later signed the bill” (BBC, 2011).

The austerity package will create some social problems in long-term in Italy.. Maybe Italians will not miss Berlusconi, but Russian leader Vladimir Putin will miss him. Will South Stream pipeline to be completed on time without Berlusconi? According to some, Berlusconi may be a bad leader. They can be sent Berlusconi away from active politics. But they cannot finish the hegemony of Berlusconi in Italy. I hope Italy recover from the financial crisis without Berlusconi.


İsa Burak GONCA

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The Top 20 Most Valuable Countries of the World

 

Brand Finance Brand assessment body, identified Turkey as a brand value of $ 373 billion. 

According to this survey, Republic of Turkey is the most valuable 19th in the world and 10th most valuable country in Europe.

Brand Finance made a statement regarding the results of research, Turkey's brand value increased by 19.8 percent from a year earlier rose to $ 373 billion, was emphasized. This value comes between the first time in Turkey's most valuable brand in 20 countries, including Austria and Denmark, where also left behind many developed countries. In addition, Turkey has reached this value in Europe's most valuable brand in 10 countries succeeded to be among. The top 3 in the list when the United States, Germany and China is located.

Brand Finance Forum, held in various cities for many years for the first time in Turkey on November 24, "My brand's value and my business - The opportunities for building valuable brands in Turkey". Brand Finance is committed to the development of theoretical and practical issues surrounding brands. As part of this process, we organise a series of events and forums around the world where leading practitioners in the area of brand strategy, brand building and brand valuation come together to share their experiences and to better understand the process by which valuable brands are created.

In recent months, "Turkey's Most Valuable Brands" also published by Muhterem İlgüner who is Brand Finance Director of Turkey, so far the country brand, branding abroad, suggesting that creates difficulty in front of the business world, this table should be pointed out that assessment. Countries in determining brand value, economic policies, GDP, unemployment rate, the tourism income, the perception of country risk, competitiveness, health services, total exports, such as the banking system indicators were not ignored.

According to the survey, The Top 20 Most Valuable Countries of the World

1) U.S.A. - 12.576 billion dollars
2) Germany - 3.146 billion dollars
3) China - 3.001 billion dollars
4) Japan - 1.940 billion dollars
5) U.K. - 1.849 billion dollars

6) France -  1.673 billion dollars
7) Italy - 1.515 billion dollars
8) Canada - 1.309 billion dollars
9) India - 1.266 billion dollars
10) Brazil - 959 billion dollars
11) Netherlands - 829 billion dollars
12) Russia - 752 billion dollars
13) Spain - 729 billion dollars
14) Australia - 702 billion dollars
15) Mexico - 672 billion dollars
16) South Korea - 605 billion dollars
17) Switzerland - 551 billion dollars
18) Sweden - 471 billion dollars
19) Turkey - 373 billion dollars
20) Belgium - 369 billion dollars

For more information: http://www.brandfinance.com/

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Steve Jobs: The magician

The revolution that Steve Jobs led is only just beginning.

When it came to putting on a show, nobody else in the computer industry, or any other industry for that matter, could match Steve Jobs. His product launches, at which he would stand alone on a black stage and conjure up an “incredible” new electronic gadget in front of an awed crowd, were the performances of a master showman. All computers do is fetch and shuffle numbers, he once explained, but do it fast enough and “the results appear to be magic”. Mr Jobs, who died this week aged 56, spent his life packaging that magic into elegantly designed, easy-to-use products.

Read the full story on The Economist

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Russia and China veto new UN sanctions against the Syrian regime

As the crackdown on pro-democracy protesters in Syria continues, Russia and China have blocked an effort by Western nations to impose new sanctions against the regime of Syrian President Bashar al-Assad.

After last-minute negotiations delayed a United Nations Security Council vote on Tuesday evening, Russia and China exercised their veto right and quashed a European-led resolution threatening Syria with sanctions.

Germany, Britain, France and Portugal sought the Security Council vote to impose "targeted measures" against the regime of President Bashar Assad for the crackdown that has killed 2,700 people since March, according to rights groups and the UN.

The proposal called for sanctions to be introduced if Assad failed to comply within 30 days with instructions to end the violence and enact reforms.

It would have been the first legally binding resolution adopted by the Security Council since Assad began his military crackdown on the protesters who have been calling for the end to Assad's regime for months.

Hoping to avoid the double veto, the European sponsors had watered down the language three times, even removing the word "sanction."

Russia's UN Ambassador Vitaly Churkin said, however, that Russia opposed because it was "based on a philosophy of confrontation" and included "an ultimatum of sanctions."

Western governments have expressed frustration with the council over its failure to adopt any resolution on Syria since pro-democracy protests began earlier this year.

Both the Russian and Chinese ambassadors maintained that their countries are concerned about the ongoing violence in Syria but did not think the Security Council resolution was the right move.

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Greek Cypriots Start Oil Drilling In the Eastern Mediterranean

The Greek Cypriot administration is reported to have started drilling for oil in the Eastern Mediterranean.

The Israeli media say that the Israeli partnered American company Noble has started exploration on Monday.

According to the Globes website, the company Noble has started drilling for natural gas with ten days to go before the expiry of the agreement it struck with the Greek Cypriot administration.

A Greek Cypriot news agency has said that the company employees were carried by helicopter to a platform set up in the region from Limasol.

Turkey has earlier warned that if southern Cyprus were to launch drilling activities in the region, it was going to sign a continental shelf agreement with the Turkish Republic of Northern Cyprus.

TRT-World

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Merkel and Sarkozy Propose New Economic Government

Sarkozy told reporters that he and Merkel want a "true European economic government" that would consist of the heads of state and government of all eurozone nations.

The leaders of France and Germany called Tuesday for greater economic discipline and unity among European nations but declined to take immediate financial measures seen by many investors as the only way to halt the continent's spiraling debt crisis.

The Dow Jones industrial average fell, the euro slid against the dollar and key European markets edged down in off-hour trading after Chancellor Angela Merkel of Germany and French President Nicolas Sarkozy announced the results of their emergency talks in Paris.

Sarkozy called for a "new economic government" for Europe that would meet at least twice a year with European Union President Herman Van Rompuy as its head, but he offered few other details or indications that the body would have real power.

Merkel and Sarkozy also called for all eurozone nations to enact constitutional amendments requiring balanced budgets. They said they want the process completed by the summer of 2012, but it would almost certainly run into protracted political difficulties in many countries.

Both leaders said the moment was not right to replace 17 government bonds with a single one allowing weaker economies to borrow in cooperation with the powerhouse economies of France and Germany. A growing number of experts are calling for the eurobond as a way to prevent the unaffordable interest rates that have driven Greece, Ireland, and Portugal to seek bailouts from the eurozone countries and the International Monetary Fund.

New figures show slowing French and German growth, and the German government fears it would face higher borrowing costs and more risks if it had to borrow jointly with financially shaky nations.

"We have exactly the same position on euro bonds," Sarkozy said. "One day we could imagine them, but at the end of a process of European integration, not at the beginning."

The two leaders also proposed a Europe-wide tax on financial transactions and pledged to harmonize their countries' corporate taxes in a move aimed at showing the eurozone's largest members are "marching in lockstep" to protect the euro.

Sarkozy told reporters that he and Merkel want a "true European economic government" that would consist of the heads of state and government of all eurozone nations.

The move appeared a step toward the closer long-term economic integration that many analysts have said is inevitable to make the euro experiment survive, though it was unclear how much effect it would have in the short term.

"There has to be a stronger coordination of financial and economic policy" to protect the euro, Merkel said.

Reuters

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S&P Downgrades US Credit Rating to AA-Plus

The United States lost its top-notch triple-A credit rating from Standard & Poor's Friday, in a dramatic reversal of fortune for the world's largest economy.

S&P cut the long-term U.S. credit rating by one notch to AA-plus on concerns about growing budget deficits.

"The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics," S&P said in a statement.

"More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011," the statement said.

The outlook on the new U.S. credit rating is negative, the S&P said in its statement, a sign that another downgrade is possible in the next 12 to 18 months.

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Europe’s resurgent far right focuses on immigration, multiculturalism

The far right in Europe has enjoyed a renaissance over the past 30 years, driven by resentment of the growing powers of the European Union and by rejection of the “multiculturalism” that has accompanied rapid immigration from the developing world.

Political parties opposing immigration and integration have done well in elections in recent years — and beyond them, neo-fascist and “national socialist” groups have become well-established across the continent, including in Germany, Belgium, the Netherlands, Italy, Scandinavia, Hungary and the United Kingdom.

Most of those belonging to such groups would not contemplate the sort of carnage that occurred in Norway on Friday, but they would probably sympathize with what appears to have been the manifesto of the alleged assailant, Anders Behring Breivik.

Breivik claimed that “cultural Marxism” had morally degraded Europe, and purportedly wrote: “You cannot defeat Islamisation or halt/reverse the Islamic colonization of Western Europe without first removing the political doctrines manifested through multiculturalism/cultural Marxism.” Elsewhere he said: “One of the most widespread manifestations of the craziness of our world is multiculturalism.”

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Turkey on Cyprus: No More Mr. Nice Guy

Cyprus, that cute little island in eastern Mediterranean, has never been on the top of my following list. I have always wished all the best for its peoples, the Greeks and the Turks, but their never-ending disputes have been not just too complicated but also too uninspiring for me.

However, being Turkish inevitably means being connected to Cyprus, for the fate of the island is unavoidably linked with Turkey’s place in the international scene, including its bid to join the European Union. These days, especially, Cyprus looks more and more definitive for us, with Prime Minister Recep Tayyip Erdoğan’s recent bravado on the island

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LIBYA MEETING OPENS IN ISTANBUL

The 4th meeting of the Libya Contact Group set up by the international community to find a solution to the Libyan crisis is taking place in İstanbul.

The Libya Contact Group formed at the London Conference held at the end of March to defuse the crisis which emerged with the popular uprising in Libya and the Gadhafi administration's crack-down on its own people has convened in Istanbul in a bid to surmount this crisis.

 

The meeting co-chaired by Turkey and the United Arab Emirates, which hosted the previous meeting, is being attended 32 countries, 7 international organizations and 40 delegations comprised of the representatives of the Libya National Interim Council.

18 of the countries are being represented at foreign minister level.

US Secretary of State Hillary Clinton and NATO Secretary General Rasmussen are also attending the meeting.

The 4th meeting of the Libya Contact Group started with a speech by Foreign Minister Ahmet Davutoğlu and UAE Foreign Minister Abdullah bin Zayid El Nahyan each.

The developments in Libya since the meeting in Abu Dhabi on June 9 will be taken up at the Istanbul meeting.

The quest for a political solution on the basis of a roadmap drawn up by Turkey will be the main item of the agenda.

The humanitarian aid to the Libyan people and Libya's re-construction are also among the items to be discussed at the meeting.

TRT-World

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Four parties to form new Turkish Parliament

Four party groups will take their place in Turkey’s new Parliament as electoral officials had opened more than 90 percent of the nation’s ballot boxes by late Sunday.

The ruling Justice and Development Party, or AKP, will form a majority government after winning over 50 percent of the popular vote; the incumbents will be joined again by the opposition Republican People's Party, or CHP, the Nationalist Movement Party, or MHP, and the Peace and Democracy Parliament, or BDP, in the legislature.

A party must have at least 20 MPs in order to form a parliamentary group.

Prime Minister Recep Tayyip Erdoğan arrived at AKP headquarters and is expected to address ecstatic party supporters, who have gathered in front of the building, cheering and chanting slogans.

CHP leader Kemal Kılıçdaroğlu also went to his party's headquarters. It was reported that Kılıçdaroğlu would issue a press statement later in the evening.

Around 35 BDP-backed independent candidates have been elected to the Turkish Parliament after the party supported a number of independents to circumvent the country’s 10 percent election threshold.

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