8 March 2014 by Pelle Neroth
Well, in the short term, probably not much, say experts. A mild winter, and America's fracking revolution, has led to a glut in the global gas markets. Gas reservoirs are filled up with about four months' worth of supplies. If the pipelines through the Ukraine somehow become cut off by Ukrainians, perhaps in the event of civil unrest, there is the Nordstream pipeline across the Baltic, and the Yamal pipelines through Belarus and Poland, that could pick up the slack. If Russia cut off supplies, gas could be shipped in through LNG terminals, although Germany, for one, lacks such terminals. However, Russia, even in the darkest days of the Cold War, always honoured its gas contracts.
Which leads us the question of how the Ukraine got into this crisis, and whether the EU played a part in its making.
One hears all sorts of hostile comments about Russia these days. I don't agree with those who argue that Putin is the new Stalin. And it is a bit rich for the nation that invaded Iraq, killing hundreds of thousands and effectively destroying the country, to condemn an "invasion" of Crimea, which has killed no one so far. If Russia acted in the world the way the United States, or its allies, has done, in the last decade, the calls to do something would be deafening.
I think the EU made a serious mistake in sending the negotiators into Ukraine with a free trade deal that included a back door clause that would have made Ukraine part of the foreign and defence policy of the EU. Buried in the small print, not many may have paid attention to it. But it was certainly noticed by the Russians. It shows the problems of allowing unelected technocrats to effectively make policy an autopilot with huge political ramifications, without political oversight.
Russia sees EU defence policy as a kind of back door to NATO. NATO membership for Ukraine is a neuralgic issue for Russians which, whether Putin is in charge or not, has legitimate geopolitical interests.
Gorbachov, the last Soviet president, was promised by the West when he let the East European states go their own way that NATO would not be allowed to expand into Eastern Europe. The Clinton regime brazenly ignored this and allowed Poland, then Hungary and the Baltic States in.
Then there has always been this idea that NATO could expand further yet, to Ukraine and Georgia. Ukraine is strategically important to Russia. Even if one does not accept that a country that was invaded by Europe twice last century had security interests, one must not discount the reality that Russia is a country armed with nuclear weapons.
It was a bad calculation by the EU in that, while the commission's negotiators may have thought they were making a dry free trade agreement, the Ukrainians saw it differently. There is absolutely no support among the European public for letting in Ukraine as a member of the EU. Ukraine is even poorer than Romania and Bulgaria, the newest and most controversial entrants, and would be the most populous arrival since the UK itself joined in 1973.
Ukraine is poorer by far than neighbouring Russia and Belarus even, caused in large part by the efforts of its gargantuanly corrupt political class, and so would require huge subsidy transfers. We can assume that in the medium term, EU membership for Ukraine is just not on. Ukrainian young liberal idealists, though, the free trade agreement must have been seen as an opening towards just such a membership, and saw it snatched away before their very eyes by their president, attracted by the promise of immediate soft loans from Russia - more appealing than the short term austerity of the EU Free trade agreement - and that was what prompted the initial demonstrations. It is irresponsible to encourage a nation's young to go onto the streets with promises one was not going to to able fulfill.
An alliance of idealist liberals and far rightists has now topped their pro Russian leader and Ukraine is in limbo. Relations between Europe and Russia are at a post cold war low. The western media nearly to a man blame Putin's peaceful occupation of Russian speaking Crimea for the breakdown in relations. (The Russian media say Russia was just responding to fears about new nationalist noises coming out of Kiev against the Russian speaking East), but the EU on autopilot has been irresponsible with its promises.
Pelle Neroth -- EU correspondent
Edited: 08 March 2014 at 10:55 AM by Pelle Neroth
Finland's technology industry restructuring made harder by being member of the Eurozone
27 February 2014 by Pelle Neroth
Finland and Sweden's economic policies have been characterised by high taxes, generous welfare systems and an active labour policy market aimed at helping workers adapt as quickly as possibly to technological change. High R&D expenditures and a clever focuses on targeted hi tech manufacturing sectors have also been ingredients in the mix.
This, combined with high levels of foreign trade, have allowed the countries to grow their productivity and production levels and export their way to higher levels of wealth in the last decade or two, while maintaining enviably egalitarian societies. What has been interesting is that Finland's and Sweden's successes went in parallel, despite the fact that Finland was in the euro, while Sweden was outside the euro. As long as the good times rolled, it did not really matter what currency choice the two Nordic countries had made. Other factors mattered more.
However, the picture has diverged between the countries since about 2008, the start of the great financial crisis. Finland has grown a great deal slower while Sweden has continued to prosper. Finland's GDP is still, today, four percent lower than in 2008, while Sweden's is six per cent higher.
The reason for this is that, while Finland's membership of the euro mattered less when the global and European economies were going well, the euro mattered more in times of crisis. Nokia, Finland's technological crown jewel, fell behind when its competitors, like Apple and Google, developed new operating systems for their mobiles. Nokia is now selling its handset division to Microsoft. At the same time, Finland's wood pulp industry is exporting less because of a drop in the demand for paper following the digitalisation of people's reading habits. Finland, extremely dependent on foreign exports of specialised goods, would have been able to manage the readjustments far better if it had had a separate currency that would have devalued in response to Finland's lost competitiveness. As it is, Finland has had to restore competitiveness by wage restraints, which is far harder.
It is a problem for small countries: how to focus research and innovation broadly enough so they don't put all their eggs in one basket, yet at the same time ensure their research efforts in a few areas at least put them in the forefront of technological innovation. It is a hard line to balance, and the Nordics have generally done it well, but Euro membership had made Finland's challenge harder.
Significantly, only a very small percentage of the Swedish population wishes to join the euro. Very few want to leave the EU altogether, on the other hand. Brits take note.
Pelle Neroth -- EU correspondent
Edited: 27 February 2014 at 11:43 AM by Pelle Neroth
Will the European elections deal with how Europe is falling behind in the technology race?
23 February 2014 by Pelle Neroth
According to a study by the consulting company AT Kearney, R&D investment in Europe is a proportion of GDP, 2%, is less than half the figure of South Korea and 0.8 percentage points less than the United States. Britain, at 1.7%, falls below even this European average. Europe has only a fifth of the venture capital , $4bn, available to its startups compared to the $20bn that US businesses have access to.
When Finnish-based Nokia's sale of its handset division to Microsoft is finalised this spring, Europe will lose one of its flagship technology symbols and Europe will lack a single entrant among the world's top ten handset makers. Europe's countries are outperformed even in an area where one would think they would dominate, that is, European patent filings. The United States tops that list with 25% share of European patent filings in 2012. Japan is second with 20% and Germany third with 13%. Britain is not among the top six patent filers in Europe, beaten even by Canada.
The AT Kearney team concludes that "No matter how you slice the global ICT industry, Europe's representation is low, even as the continent accounts for one-quarter of the industry's global sales." Europe succeeds in some smaller niche sectors, but the tech firms lack the resources to scale up and become a top 100 tech firm: as they become more successful, they become more vulnerable to buyouts from more powerful non European firms. Europe lacks the large ICT firms that could act as consolidators for European companies in their market segment, the consultancy argues.
Although the EU has just launched the next iteration of its science and technology funding programme, Horizon 2020, which will invest about 70 billion euros into promising technology sectors, the consultancy argues that this is still far less than is needed. It called for a strategic master plan from the commission.
Well, some might debate the necessity of a European industrial policy as the consultancy's chiefly continental European consultants seem to be calling for. But where is the debate? There isn't one. The debate in Europe in the runup to the European elections to be held in May ought to start with one basic, agreed upon fact. Europe is falling behind Asia and America in the chief driver for future economic prosperity and growth, which is technology investment. Britain, the chief Eurosceptic country, is absolutely no over achiever in this area. It can't be boiled down to anti or pro European stances. Opinion formers ought to be debating if and then how Europeans, who are in the same boat, can collaborate when competing on a global scale. That is not airy fairy euro idealism, but clever self interest. However, debates about science and technology will probably be as marginal in these Euro elections as they always have been in national ones.
And the debate is likely to be dominated by those whose minds have been made up and say "We don't like Europe" rather than ask "How can Europe work for us". At the last general election, the arch eurosceptic Ukip's science policy was roundly criticised by a national newspaper, which looked at the party's climate change denial, hostility to stem cell research and various other things: "On science, Ukip is dire, with no credibility in the scientific community and candidates who have a demonstrably poor grasp of basic scientific principles".
Can't Ukip's patriotic voters, who are on course for making the party the second largest, if not the largest, of the UK parties in the European parliament, ask what is patriotic about having ill thought out science and technology policies?
Pelle Neroth -- EU correspondent
Edited: 23 February 2014 at 11:59 AM by Pelle Neroth
UK life science industry seeks EU reform, not exit
14 February 2014 by Pelle Neroth
The life sciences are one of Britain's great areas of expertise: the industry has a turnover of 50 billion pounds and employs 167,000 people in 4,500 companies. Medical research makes up 45% of all business R&D in the UK. One in four of the world's top 100 medicines and 45% of Europe's product pipeline originate in the UK. The pressure on global resources in a world whose population is expected to hit 10 billion by 2050 means there is a need for innovations to help "feed, fuel and heal" the world with the cleverest possible use of technology - and the UK is well placed to provide it, as it seeks pay in its way in a world with an economic model that plays to the UK's strengths.
So is the EU a help or a hindrance for the industry? Having organised four hearings in parliament and taken evidence from 50 British stakeholders - pharmaceutical companies, charities, investors and researchers - the report finds the British life sciences industry has a lot of good to say about the EU. The "vast majority" of stakeholders made the point the EU was a major sponsor of science and research through its various funding programmes, where Britain routinely wins a disproportionately large slice of the grant funding. Many EU policies have worked well, opening up the European market for British companies by imposing a common regulatory framework on 28 member states, for instance, in the area of medical devices. The European Medicines Agency (EMA), based in London, incidentally, is often praised for allowing European pharmaceutical products to come to market faster, by up to three years compared to the US. Professor Derek Hill, CEO of IXICO Ltd, reported that when it came to imaging biomarkers aimed at improving the efficiency of Alzheimer's trials, the EMA process is much more rapid and much less formal than the American equivalent, the FDA.
The EU is able to strike beneficial Free Trade deals with other countries on favourable terms using its size as a negotiating factor - and this has been particularly beneficial for UK pharmaceutical companies. The EU-South Korea Free Trade Agreement abolished tariffs on imports of European medicines, and British exports leaped 20% in 2013 even before the new agreement took effect. The figure could rise yet further this year. Finally, the EU provides "critical mass" in the treatment and research of rare diseases, The EU tissue and cells regulatory system increases the potential donor pool for UK patients to undergo a particular type of stem cell transplantation.
Stakeholders had a lot of good things to say, at the same time, there was also a lot of griping about bad law-making, particularly but not limited to the European parliament, susceptible to the appeals of well organised "green" lobbyists and "fringe political groups" with "little or no support or public legitimacy" who "often pushed science regulations on ignorance rather than evidence". This sometimes pushed the EU institutions beyond their level of competence, and small UK life science companies lacked both the resources and the expertise to compete in the lobbying game.
The big area of EU regulatory failure here was GM crops, which have enormous potential. not just as pest resistant high productivity foods, but as "foods as medicines"; for instance, doctored crops that produce omega 3 fatty acid substitutes for fish oils that benefit human health. Although the commission itself concluded in 2010 that there is no evidence that associate GM crops with higher risks for the environment, an anti-scientific bias has still crept into EU decision-making on biotechnology issues.
As a result, there was just one GM field trial in 2012 in the UK compared to 28 in 1995. With biotech giant Monsanto saying it has dropped plans to introduce new GM crops in Europe, even as they are flourishing elsewhere, the UK's leading agricultural technology company, Syngenta, has also indicated that unless progress is made it will not able to avoid reviewing its commitment to the EU and UK market.
In its list of suggestions for reform, the Tory Fresh Start group calls on a clear statement of the EU policy on biotechnology and the bioeconomy. "The EU needs to make it clear that it aims to be a player in this fast growing and increasingly global field". There ought to be ways to amend flawed EU legislation and European Court of Justice rulings. As well as more joined-up policy making in the EU level, since one of the problems of the EU process is that policy proposals can have a significant, but not immediately obvious, impact in other areas. More transparent and accessible early consultation processes before proposals are put on the table. And better engagement from UK government and MPs in the Brussels policymaking process. Even though more powers for national parliaments was often mooted, UK MPs should liaise with their MEP counterparts at the European level on a regular, informal basis to ensure UK interests are taken into account.
Stakeholders said it was important to avoid the "'better off out' sentiments so often put forward by those not engaged in developing scientific solutions to the global challenges".
With the UK media so overwhelmingly Eurosceptic, it is useful to publicise tones of moderation like these from the Life Sciences industry.
Pelle Neroth -- EU correspondent
Edited: 14 February 2014 at 04:49 PM by Pelle Neroth
Germany embraces Snowden, moves forward with surveillance inquiry
9 February 2014 by Pelle Neroth
The programme featured a correspondent from ARD, the German television network, who remarked that, in Germany, Edward Snowden, the NSA whistleblower, was regarded as a "hero" while in Britain he was often regarded as a "traitor". On cue, an implicit criticism of Snowden was offered by a fellow panellist, a British popular philosopher, whom one had always thought of as a kind of anarchic, freedom loving guy, who said he was deeply uncomfortable with the kind of cyber libertarianism which saw no positive role for the state. And a former head of GCHQ, David Omand, laced his remarks with an air of menace throughout the programme.
He condemned the Guardian for presuming to know which secrets to leak without damaging the national security. The Guardian's correspondent, the final panellist, came across as a somewhat chastened schoolboy to this attack. The ARD correspondent did not say much. But she was brought back into the conversation with a joke that, well, the German stance was understandable because they had had experience of snooping dictatorships, two in fact. While Britain thought of its spies as heroic, think James Bond.
Until the Snowden revelations, the British and Germans were getting along so splendidly Merkel and Cameron had established a personal friendship and the two North European countries made common cause against South European profligacy during the euro crisis. I wonder though if the Snowden revelations won't tear the alliance apart, and isolating Britain in Europe. At the same time, though, it could be a coming of age moment for Germany, that the country have finally found an ideological issue that could resonate with the global public.
A BBC World Service poll from last May showed that modern Germany most popular country in the world. Britain does well too: significantly, much of its respect comes from developing countries and the English-speaking nations. Britain is not particularly popular in France and Germany. And I fear that the image of an offshore casino economy centre that can't make cars whose doors don't fall off may be replaced as a country of run-amok intelligence services who shore up the country's fading position through dirty tricks campaigns. Grossly unfair, but perceptions are as important in politics as realities. It saps the good will Britain is going to need from other member states it seeks to reform Europe.
Last week, stories emerged in the German media that one of the country's top lawyers, Wolfgang Kaleck, has agreed to represent Snowden in discussions about whether it will be possible to strike some kind of deal and return to his homeland. According to der Tagespiegel newspaper, the 53-year-old lawyer will also advise Snowden on the rights of asylum seekers in Germany. That is a very remote possibility at the moment, but the fact it has even been suggested suggests that the climate of opinion is believed to be more sympathetic in Germany than elsewhere. Elsewhere in Germany, the governing Social Democrat (SPD) and Christian Democrat (CDU) coalition has made further moves in setting up a parliamentary committee and inquiry to discuss the revelations of "public surveillance from allied countries".
While the SPD 's main candidate for the European elections in May, Martin Schulz, a former president of the European parliament. has written and argued for a the project for Social Democracy in the 21th century: just as the 19th century Social Democrats looked to claw workers' rights from rapacious employers, the new citizen's rights to privacy will have to be carved out from a world of ever increasing state surveillance. Once upon a time, the effects of industrialization have tamed and channelled into socially acceptable paths, Social Democracy ought to put itself in a position to meet the recent revolution, Whether you agree with him or not, it is interesting that there are leading politicians in Germany looking to formulate a politics to cope with the challenges posed by technology in the new century. You don't get that in Britain.
In Britain, meanwhile, with the bizarre exception of the Daily Mail (and a few smaller technology news websites) silence has greeted the astonishing revelations published by NBC news in America that GCHQ have employed "dirty tricks" including false flag operations (ie posing as someone else), and 'honey traps' to trap nations, hackers, terror groups, suspected criminals and arms dealers.
Pelle Neroth -- EU correspondent
Edited: 09 February 2014 at 08:19 AM by Pelle Neroth
New science programme may provide lifeline for cash squeezed European scientists
23 January 2014 by Pelle Neroth
Of the 7.8bn euros to be spent in 2014, down slightly from 8.1bn euros in 2013, 1.8billion euros will support Europe's industrial leadership in areas such as robotics, manufacturing and ICT.
Three billion euros will go towards "excellent science" projects, including1.7 billion euros for the prestigious grants for "top scientists" awarded by the European Research Council, and 800 million euros for the Marie Curie fellowships for younger researchers. Marie Geoghegan Quinn, the commissioner for science, told a press conference that the money would provide a welcome boost for researchers who in many countries find science budgets squeezed.
In fact, both the ERC programme and the rest of Horizon 2020 programme are expected to receive more than the normal flood of applications since crisis-hit governments are holding back on their science spending, and 18 months, rather than the usual 12, have passed since the most recent call for proposals.
That may increase competition for grants, so the ERC part of the programme has announced rules designed to discourage those who are less likely to make the grade. Researchers who apply for ERC grants are being asked to ask themselves whether they have the "right level of excellence".
A new rule has been introduced against candidates whose proposals receive a low score this year: they will be barred from reapplying for a grant in the next two years. While those who receive a middling score will be barred from reapplying for one year. The mainstream programme , will not be subjected to those rules - but the commission warns that acceptance rates may be slightly lower than the 20% of previous years.
Apart from that, the new rules are designed to make paperwork easier for applicants. Ever since they began decades ago, the EU's science programmes, even Framework Programme 7 that ended in 2013, have been plagued by accusations of bureaucracy: researchers have been put off by the elaborate, time consuming application procedures where feedback for failed proposals was minimal. Another common criticism was that that the bureaucrats were too prescriptive in the way they wrote their calls for proposals, leading to accusations of "top down" science. And projects with many multinational teams seemed to be rewarded just for the sake of it.
Auditing requirements were complicated and onerous. The European Research Council grants, introduced in 2007, tried to deal with those criticisms: the commission was looking for "blue skies science" where the best ideas were awarded generous grants, and single country teams were not penalised. With the ERC popular despite the low acceptance rates, the industry-facing mainstream research programme has borrowed from that model, trying to be less prescriptive and more streamlined than ever before.
The commission says that the "strong challenge-based approach of Horizon 2020 will allow applicants to have considerable freedom to come up with innovative solutions". Of the 12 focus areas, one is digital security where applicants are expected to work for solutions that increase the security of current applications, services and infrastructures. Another spending area is "smart cities and communities", energy efficiency in town neighbourhoods, and smart mobility services.
Business plans that allow easy large scale replication will be especially favoured. In another novelty, the commission is promising a faster turnover of applications - a pledge of eight months rather than a year - and a simpler method for accounting for grants. The old ways provided plenty of income for consultants to advise clients how to stay out of trouble with the EU's auditors. So there was a sense of optimism in the presentation from the EU science directorate . The consultants, if simpler rules put them out of business, might be less happy about the EU's new science programme launch.
Pelle Neroth -- EU correspondent
Edited: 23 January 2014 at 10:59 PM by Pelle Neroth
Should Europe's defence industry be reformed?
16 January 2014 by Pelle Neroth
These cuts have widened the defence spending gap with the United States. Last year, the US spent 682 billion dollars on defence, the EU countries only 153 billion dollars. Of these, only France, Britain and Greece reach the figure of 2% of GDP. For Spain the figure is just 0.8%. The figure is down a quarter compared to just a few years ago. Whole weapons programmes like Germany's Eurohawk unmanned aerial vehicle, and Britain's Nimrod programme, have been scrapped. The EU institute of strategic studies in Paris talks about the emergence of "Bonsai" armies in three to five years.
Worse, EU states are not just spending less, they are spending it badly. A new European parliament report has highlighted this. It says that if the EU operated in a more integrated manner and in conditions similar to the United States, it would get a lot more bang for its buck: those 153 billion dollars would go a lot further. Or, they could spend a lot less than the current defence budget of 153 billion and still achieve the same level of efficiency.
The cost, the report says, comes from lack of integration of the military structures of the EU member states. European armed forces often operate together on an international basis, but are still organised on a mainly national basis, with national defence staffs and national procurement policies. This leads to a needless multiplication in the cost of maintaining, forming and operating military forces in Europe, argues the report.
Also, there is a lack of a truly integrated market, with 28 different national defence markets, each with their own regulations and admin burdens. The cost of being "non European" in defence issues costs the EU between 26 billion euros at a low estimate and 30 billion euros at a high estimate. It mattered less when defence budgets were large, and the
USA's defence interests coincided more with Europe's, but neither of those situations any longer apply. The war in Syria show that security threats can erupt on Europe's doorstep. Not having armed forces is not an option - but it would be nice if it was cheaper. The combined cost of development of the three European combat aircraft, the Eurofighter, the Rafale and Gripen, was 10.2bn euros more than American Joint Strike Fighter. In Europe, there are 16 shipyards for making warships, in the USA, two. Europe prices itself out of the export market like this. The loser is the European taxpayer.
Governments know this, but are worried about two things: the loss of sovereignty that would result in creating the political structures that would oversee a common defence market, and the loss of jobs and income that would be the consequence of removing duplication of effort and merging defence firms to create European leaders.
Bernard Levy, the CEO of Thales, told a recent conference in London: "On the one hand, governments want competitive products. On the other hand, they want to buy from companies that create jobs in their own countries." Engineering jobs, one might add,
The regular summit of EU leaders in Brussels in December, Cameron opposed a European defence policy. Part of this was for sound reasons: a refusal to underwrite a French vision of a common and defence policy, which would start with - quelle coincidence - the Europeans funding French military missions in Africa. But there were also cheap points scored against the commission for wishing to oversee things.
The British arms industry has conducted a long campaign in Whitehall against an "over regulated market place" for arms procurement, where the "commission is involved in everything". And in that it seems to have been successful. But scoring against the commission does not alter a basic fact that Europe's defence industry is too expensive for purpose.
Pelle Neroth -- EU correspondent
Pirates seek new ways to avoid internet blocking
10 January 2014 by Pelle Neroth
But now the organisation is trying to overcome attempts to take the site offline by creating a browser-like client that avoids the need for a public-facing URL.
A new browser-like app will allow the site's torrent file index to shared among users in a peer-to-peer manner. Since the index will be stored on individual users' computers rather than a central server, IP blocking and domain blocking will become a thing of the past, the organisation says. A standalone client and plugins for browsers Firefox and Chrome are expected soon.
In a separate development, one of the company's founders, the Swede Gottfrid Svartholm Warg - also known to the online world as Anakata - has been in a Danish jail over Christmas, living under solitary contact conditions and denied books or any other reading materials pending a trial hearing in February. The Danish police are continuing to gather evidence to provide cause for an indictment. Supporters set up an online petition addressed to Danish prime minister Helle Thorning Schmidt to alter the terms of his custody. The invitation to sign was, yesterday at least, placed prominently on Pirate Bay's homepage.
Perhaps out of a sense of guilty gratitude for being allowed to download so much expensive software, ebooks and pirated first run movies for free, members of the public dropping into Pirate Bay have been signing at a rate of hundreds per minute, 96,000 in total by the morning of 10 January 2014.
The petition text drew comparisons to the treatment received by Scandinavia's most notorious prisoner, the mass murderer Anders Breivik, who massacred 77 youths at a summer camp on a Norwegian island in 2011. He, the petition claimed, is allowed books, while their man isn't. "Stop treating internet activists worse than mass murderers," the petition says. Yesterday evening some sources reported that Warg was out of solitary confinement, and a link to petition appears to have been removed from the Pirate Bay's homepage.
The case that Warg potentially faces in Denmark has nothing to do with Pirate Bay. Rather, he could face prison on allegations of a separate activity: hacking into a public database controlled by the IT firm CSC, containing police passwords, Denmark's social security database , driving licence database and the register of wanted persons in the Schengen region zone for passport free travel in Europe.
Last year Warg was convicted in Sweden last year on allegations of hacking the database of the IT services firm which provides tax services for the Swedish government. He was extradited when his sentence had a month to run.
According to the English language Copenhagen Post, his Danish lawyer Luise Hoj has been critical of Danish police tactics to isolate him. "It is simply another case of trying to bring him down and put pressure on him, It is a deliberate strategy by the police, I guess to try and make him in participate in more questioning and talk about other issues," she told the paper. She also objected to the hearings being held behind closed doors. "I don't think the things we are discussing are particularly delicate, and it would be good for the Danish people to see what is really going on this case."
She expects him to win his case on a similar argument that got him acquitted in a second Swedish case, involving the Nordea bank: that the prosecutors can't prove that his computer was not being remotely operated by a third party when the hack took place.
Pelle Neroth -- EU correspondent
Edited: 10 January 2014 at 11:47 AM by Pelle Neroth
Video game techniques enliven spying
3 January 2014 by Pelle Neroth
Nicknamed "the Dagger Complex", the American NSA spy agency's intelligence centre in the German state of Hesse is the most effective of the NSA's many snooping installations, at least if you judge by staff high scores in the incentive structure borrowed from computer games to increase spooks' effectiveness. To motivate operatives, the NSA have incorporated many features from computer games into the top secret spy software program, called XKeyscore, as revealed by the German magazine Der Spiegel. Hence the skilz points.
The ECC, the NSA's European Cryptographic Center, the formal name of the Dagger Complex, is located inside one of the US military compounds in Germany and is responsible for the biggest throughput of intelligence data in Europe, it is claimed. ECC information finds its way into the President's top secret daily briefing twice a week, on average.
The German news magazine has been at the forefront of leaking information from the treasure trove of documents stolen by the American whisteblower Edward Snowden on American cyber spying activities on friends and enemies. XKeyscore, it says, is one of the most interesting programs the NSA uses because it enables non specific search methods. XKeyscore is apparently the NSA's most powerful program for spying on webusers by utilising a system, called Digital Network Intelligence, which allows real-time ongoing surveillance of a user's whole internet activity: metadata email contents, website visits, and all internet searches.
In interesting, evocative language in briefing documents, spooks comparing XKeyscore with older methods of surveillance say spying used to be like "shrimping off the coast of Alabama". In the old days, you would get a boot, a toilet seat, and three small shrimp. With the new tool, the byproducts are left out and you net far larger catches of shrimp - ie information - than ever imagined before. To train spooks on the program, GCHQ, the NSA's British counterpart, and which works closely with it, turned up at the ECC with a training schedule that included exercises in 20 different "stations" within the complex: ECC operatives trained on the system compared the experience of 20 minutes at each station to "speed dating".
The ECC is important for many reasons: it spies on terrorists, and many terrorists from the Middle East pass through Europe. Hackers - like the group Anonymous - are numerous in Germany and they are likely targets too Then there is the German government, which ranks as a 3 on a scale of 1 to 5 on the American spy priority list. The German authorities are subjected to surveillance, particularly relating to questions of foreign policy and stability of the financial system. The EU institutions are also interesting targets, particularly on issues like international trade.
At the same time, it has been revealed that NSA cooperates with the BND, German intelligence, as well as several other European member states agencies ,including Denmark, the Netherlands and Sweden. So Washington spies on many countries as well as sharing information with them. Only the old Anglo-Saxon powers, Australia, New Zealand, Canada and the UK - along with the US called the Five Eyes group - are off limits in terms of US spying. The former director of the NSA, Michael Hayden, told Der Spiegel that the damage to US-German relations was "huge".
Another interesting recent revelation, which I have seen little if at all republished in the British press, is how a division of the NSA called ANT has manufactured different kinds of malware capable of burrowing their into nearly all the architecture made by American digital security companies. An NSA "shopping catalogue" is available to NSA employees with a list of electronic break in tools, the costs varying from free to a quarter of a million dollars. A specific example: an instrument that makes it possible to mimic a mobile phone tower and thus intercept mobile calls costs $40,000. The ANT tream also manufacture malicious software that implants itself in the PC BIOS that can survive any manner of software upgrades or clean installs. Der Spiegel adds none of the companies mentioned in the catalogue, eg Cisco, appeared to have any knowledge let alone cooperation with the NSA over this,.
Maybe Russian President Vladimir Putin wasn't just joking when he said the Russian government was going back to typewriters for official correspondence.
Pelle Neroth -- EU correspondent
Edited: 05 January 2014 at 01:32 AM by Pelle Neroth
Do the French have a point when they are edgy about China?
20 December 2013 by Pelle Neroth
China is witnessing what it calls a "European season of diplomacy" with a visit in the same week by the prime ministers of France and Britain, desperate to boost business with what is expected to the world's largest economy. The French language edition of the People's Daily newspaper muses on the differences between the two delegations. David Cameron has made clear the importance he attaches to Chinese relations and orchestrated a series of meetings to show how he wishes to build on the good momentum built up between Britain and China in the past year.
But the French visit is more low key, and the paper speculates that this because the prime minister - Jean-Marc Ayrault - plays second fiddle to the president in the French system, and also, that French-Chinese relations are "characterised by some drawbacks". Britain is the second biggest European trading partner, after Germany, of China, while France is only fourth, and total bilateral trade is down 2% on last year. "Business with France must go beyond the usual areas of nuclear technology, aerospace and high speed trains," said the semi official paper somewhat admonishingly.
To be fair, French business - if not the general public - is aware it has to catch up in investment in China. To coincide with the Ayrault's visit, earlier this month [5 December] Renault became the last of the big European vehicle manufacturers to announce at tie up with a company in what is already the world's largest auto market, and which analysts predict will grow to 40 million sales a year by 2020. The potential market is enormous, as German carmakers are already well aware, having grabbed by the largest slice of the foreign car market: car density in China is just a tenth of what it is in Europe, and the population is several times larger than that of Europe.
The 50-50 joint venture with China's Dongfeng auto maker will see Renault invest 932 million euros in Wuhan to produce the Koleos 4x4 vehicle. At the same time, French rival carmaker Peugeot PSA is hoping for a Chinese cash injection after struggling to contain losses of 3 billion euros last year. Critics of PSA says its traditional patriotism, worker solidarity and sheer Frenchness - over half of its generously remunerated workers are based in France - has held it up in the global hunt for strategic partnerships to keep its head above the water. But even the fiercely conservative Peugeot family seems to have seen the writing on the wall.
The Germans and British say its typically French to be cautious about globalisation, and the People's Daily gently reminds the French they could be more helpful about "nuclear technology transfer", but some French commentators believe only France starkly sees the problem its free trade obsessed neighbours - meaning Britain and Germany - don't. The invincible penetration of China into international markets have crippled whole sections of European industry - textiles, shoes, phones, electronics - which have gone to the wall since the fall of the "bamboo curtain" in 1990. Britain - and Brussels for that matter - only look to the benefits of the consumer: the cheaper prices that Chinese imports provide.
But what of the interests of European manufacturers and workers? Even European tie ups and knowledge transfer in nuclear technology and cars will come back and haunt Europeans when the Chinese markets get saturated, and Chinese manufacturers look to unload 20 million cars or nuclear technology built to western standards in Europe. Worker wages in Europe would have to fall by half to be truly competitive in a global free trade regime, and that would cause enormous social unrest. A solution proposed by some French commentators is to retire the World Trade Organisation, fiercely devoted to reducing all tariffs, and impose European protectionism. No more British style global free trade.
The French and British delegations might be both European. To the Chinese, the two countries have very different mind sets indeed.
Pelle Neroth -- EU correspondent
Iran deal brokered by Ashton, once butt of European criticism
12 December 2013 by Pelle Neroth
Lady Ashton was the untipped, second choice candidate for the post of EU High Representative for Foreign Affairs and Security in 2009, when favourite David Miliband, then UK Foreign Secretary, refused the post and Gordon Brown, who had been "given" the post to fill with a Brit, cast around for other candidates. She was a replacement as trade commissioner after Peter Mandelson and had zero foreign policy experience. But she fitted the bill as someone who was, first, British and, second, not seen as a threat to European leaders' egos. Her responses in the European parliament appointment hearings were suitably bland. The down to earth "Lancashire lass" with a coal mining background soon, however, became the target for gossip in Brussels's French- and German-dominated foreign policy establishment, who wanted someone who wanted to be a conductor of a specifically European foreign policy. "She has no vision for the position, there is no reason to get excited," opined Elmar Brok, the doyen of MEPs.
Being quietly spoken and not having visions was one thing: as said, it was almost a prerequisite for her being given the job by national leaders.
Being inactive is another matter. She was criticised for lacking commitment, which was bad in every continental European's books. She didn't speak French, let alone another language. She was attacked for spending her weekends in London with her husband and family, rather than bringing them over to Brussels at a crucial time when the EU foreign service had to be built up from scratch. Michel Barnier, a fellow commissioner, implied she should have gone to Haiti because he, when foreign minister of France, certainly had flown off to humanitarian crises. A CND activist in her youth, she failed to attend a regular defence ministers' summit, which was something her predecessor, Javier Solana, would never do, and widely seen as a faux pas. Solana travelled a lot; she, in the beginning, did not travel so much. She was seen as Britain's revenge on Brussels: a sabotage attack on European dreams for a foreign policy. One French magazine gave her the "carton rouge", red card, for "three years of inaction at the head of European diplomacy".
Her critics must be eating their words, though, now she has helped pull off the diplomatic deal of the decade: the Iran vs West standoff, which many feared would end up with an American attack on Iran, with incalculable consequences for Middle Eastern stability. Doubtless there were other factors involved in the deal, which bans Iran's high level uranium enrichment in return for a relaxation of sanctions. The Obama administration decided to take Iran seriously for the first time in decades and the change of regime in Iran this summer probably played more important parts. But Ashton was praised for keeping the show on the road with much patient negotiating between all the parties. At the breakthrough summit in Geneva, a confusing series of bilaterals and plenary meetings between Iran and all the various western parties, Ashton was the only figure with an overview of the whole situation.
The good news about the deal is that it frees up about seven billion dollars of Iranian money frozen in foreign bank accounts to spend on some of the imports the damaged Iranian economy so desperately needs. Not just precious metals, spare car parts and civilian aircraft, but also oil industry investment - production facilities, pipelines, export facilities and refineries all need rebuilding. Iran's return to the international oil market could be transformational and that is a major reason why Saudi Arabia is so worried about a peace deal - which is not just about religious differences with a Shiite state. Iran's oil output, currently a million barrels a day, could rise quickly to 2.5 million barrels a day, and from there could go up to 4 million barrels a day or more. European consumers will benefit. If the six month "trial period" for Iran develops successfully, the new economic relationship with the rest of the world could lead to an upsurge in power and influence of the moderate business class in Iran, and weaken the ideological Shiite radicals. Iran could then play a positive role in moderating the war in Syria and Afghanistan. With Iran back in the international fold, America might wind down its network of bases that surround the country in four directions.
These past four years in Brussels have seen the most effective and high profile commissioners being women: Viviane Reding, on privacy issues, Neelie Kroes, on the digital agenda. Now Catherine Ashton has joined their ranks.
Pelle Neroth -- EU correspondent
Edited: 12 December 2013 at 12:39 PM by Pelle Neroth
UK places third in European venture capital league
28 November 2013 by Pelle Neroth
The American financial information firm Dow Jones's VentureSource service analysed the amount of venture capital gained by tech companies in each European country since 2003, averaged it out per quarter, and divided by the population to get a figure that allows for population differences. Let us be clear: experts say start up figures per se don't tell the whole story; start up exit is more revealing, but it says something.
And the winner is Ireland, which pulled in an astonishing 650 times amount of venture capital per capita as lowest ranked Bulgaria, and four times the European average. This should not be surprising. Britain's island neighbour does host, after all, European offshoots of Twitter, Apple, Google, Amazon, Dropbox and Facebook - attracted by low corporate taxes, an English speaking environment, and a youthful and relatively well educated population, global in outlook by necessity.
What may surprise those whose knowledge of Irish prospects come from gloomy headlines about the death of the Celtic tiger is that the figures show how the country has weathered the recession quite well. Of over 300 venture capital backed deals since 2003, 43% have come in since 2009, the year of the big recession.
After Ireland comes Sweden, Britain, Finland, Denmark, the Netherlands, Norway, France, Germany and Switzerland. Bottom of the rankings come the usual suspects in the Balkans and South Eastern Europe.
Britain's figure looks good, but is not quite as good as its seems. Only a third of its ten year figure of 4,200 deals has come in since the recession in 2009, so representing a marked slowdown of entrepreneurial activity in the past five years compared to the previous five year period 2003 to 2008.
The British figure also looks better than it really is, inflated as it is by the fact many companies that originate elsewhere in Europe are registered in the UK, which exaggerates Britain's performance and downplays other countries' true performance.
And to further put the news into perspective, all of Europe lags behind America and Israel. In the past ten years, for every one dollar raised in Europe, the US pulls in ten dollars and Israel $16. That puts even Ireland's success at attracting venture capital in the shade.
Pelle Neroth -- EU correspondent
Edited: 28 November 2013 at 01:41 PM by Pelle Neroth
German media step up spy revelations
21 November 2013 by Pelle Neroth
Berlin has a very active hacker community, and activists in Germany had secured copies of whistleblower Edward Snowden's files of secret Anglo-American internet mass surveillance even as the Guardian took the early lead in publishing them. While Snowden is enjoying temporary asylum in Russia, and Guardian journalist Glen Greenwald having quit the Guardian is based in Brazil, it could be that the leaks to the world press, via Der Spiegel's recent reportage efforts, could be originating from these copies of the files Snowden filched from the NSA.
It is a good thing that Der Spiegel is stepping up to the plate. The Guardian has been a bit more restrained after pioneering the leaks through the summer period. The New York Times, whose lofty leadership columns more usually target antidemocratic tendencies in China or the Middle East, rather than the USA's closest ally, has the following take on the situation in Britain, which surely can't help but diminish Britain's soft power a little bit, coming from the world's most prestigious publication. Unlike the United States, the newspaper fulminates, Britain has no constitutional guarantee of press freedom. And "parliamentary committees and the police are now exploiting that lack of protection to harass, intimidate and possibly prosecute The Guardian newspaper for its publication of information based on National Security Agency documents that were leaked by Edward Snowden."
Strong stuff, and there is more. The New York Times is critical of the weak responses by British politicians in defence of press freedom.
"In the United States, some members of Congress have begun pushing for stronger privacy protections against unwarranted snooping. British parliamentarians have largely ducked their duty to ask tough questions of British intelligence agencies, which closely collaborate with the NSA., and have gone after The Guardian instead," rails the American newspaper. The extent to which British politicians have been supine might be contested by the MPs themselves, but in politics it is perceptions that matter, and Britain is now getting a worldwide bad rap which I wonder whether the British public is aware of. It is ironic that the authoritarian regime Iran's mouthpiece Press TV and Russia's Pravda, famously a byword for censorship, are gleefully publishing stuff that appears less than prominently, if at all, in some British media outlets. The FT argues that Britain likes and trusts it spies. (Err, Kim Philby anyone?)
While the BBC limited its coverage of GCHQ's alleged scheme to infiltrate the Belgian telecoms giant Belgacom using spoofed LinkedIn websites - Wired magazine has a good report - to a report on the European parliament's civil liberties committee's proceedings. Surely journalist David Leigh's allegation once in the British Journalism Review that every news desk in Fleet Street had a resident spook was an exaggeration, no?
So what exactly has Der Spiegel been breaking? There was the Belgacom story, and then, this week, a report that GCHQ has been monitoring the reservations of 350 of the world's elite hotels where foreign diplomats and leaders usually stay. It's called Operation Royal Concierge and allows operatives to take further spying action against the aforesaid targets. The Guardian wrote recently that it had been behaving responsibly and published only 1 per cent of Snowden's information, stuff that was clearly in the public interest, and for all that still got a tonne of opprobrium from the spy agencies. Will Der Spiegel - under the jurisdiction of the less secrets obsessed German government - now be publishing some of the other 99% of secrets? You can be sure that the spooks in London and Cheltenham will watching closely.
Pelle Neroth -- EU correspondent
Edited: 21 November 2013 at 12:06 PM by Pelle Neroth
Cameron resists Europe on data protection regulation
14 November 2013 by Pelle Neroth
Companies that violate the rules face fines of up to several billion dollars.
That should make it much tougher for US digital giants like Facebook, Yahoo and Microsoft to share confidential data on their European customers with the American signals intelligence agency, the NSA.
But the British government is trying to put a brake on the reforms, backed by precisely one other EU member state, namely Sweden. At one of the regular summits of EU leaders, on 24 October, after the European parliament vote, David Cameron won a delay for the law's implementation. The European commission, which is onside with the European parliament on this legislation, called for the law to be processed in the spring of next year - before the European parliament elections and the appointment of a new commission.
But under pressure from David Cameron, the proposal will become law "by 2015", probably after the crucial date of the European elections of June 2014, which could end with the proposals being watered down, depending on the political composition of the new parliament.
Further, European indignation at the NSA's bugging of European leaders' phones, which exploded into public consciousness last month, may also have subsided by then. And new revelations could change the equation, with signs that the NSA is already preparing a fightback to give its version of events.
That could weaken the impetus to change, and the Data Protection Regulation also has pass through several more hoops of the Brussels machine: the full parliament, and the Council of Member States. US technology companies are expected to lobby furiously against change, by persuading MEPs favourable to their cause - typically British Conservatives - to water down the rules.
But we have to look at the wider picture as well. As with all EU legislation, the proposals come in many parts. While restrictions on the information that may be sent to third party countries, ie the USA, is the headline-grabbing bit of the legislation, the Data Protection package contains other components.
And these aspects may ultimately be more far reaching for British and European companies.
The EU Data Protection Regulation would replace member states' own, 28 different, rules for data protection with a single European regulation. One clause of the regulation allows "the right to be erased", which would allow citizens to ask service providers to delete the data they hold on them.
There would also be restrictions on user profiling, which would force companies to minimise the data they hold on customers, seek consent from users on holding data and explain in detail why they are holding that information. Lawyers asked to comment on the issue say this could have a significant impact on the way European and British companies operate. They would no longer be able to hold data willy-nilly on people as a "comfort blanket". And there would be costs as well, as companies would be forced to hire data protection officers to ensure compliance with the new European rules. That could significantly affect the costs for smaller companies.
Claims that the regulation would increase red tape is David Cameron's stated reason for wanting to delay the legislation. But it cannot but help give the impression to Continental European observers that Cameron is on the side of big American companies - and possibly the American intelligence community - rather than the European citizen.
Perhaps it is also partly a cultural issue. Europeans arguably care more about their privacy than Anglo-Saxons. Witness the restrictions on publishing photographs of celebrities in France. At the October summit, Britain's failure to sign a Franco German statement reviewing spy relations with the US, and the failure of Cameron to hold a post summit press conference, suggested tensions with Britain's European partners, yet again.
Pelle Neroth -- EU correspondent
Edited: 14 November 2013 at 08:37 AM by Pelle Neroth
Google proposes remedy for alleged search abuses
6 November 2013 by Pelle Neroth
So far, the commission has kept the dispute on a consensual, informal basis. The latest developments came last week. In its latest bid in the three year saga to allay European Union concerns about anti-competitive practices, Google has offered rival search services a guaranteed place in searches on its specialist search sites - Google Shopping, for example.
But the placements won't be free, they will still be placed below Google's own results. And the rivals would not necessarily appear on the main Google search site at all, which is the overwhelming port of first call for most web users. A screenshot of what a product search on a specialist site would look like if Google's proposals went through can be seen here, FT.
So would it make a difference to rivals' business, which they say is being stymied by Google's interservice favouritism across its expanding empire of internet applications? Google's rivals - including arch competitor Microsoft - have another three weeks to review the proposals.
Google makes a big issue over the fact that the minimum reserve bid for the slots that appear below Google's own results are lower than an offer made last summer: three euro cents a click, down from Google's original proposal of 10 cents. But in truth, these concessions represent small change for Google since it only apply to the "verticals" - insider jargon for specialised sites like shopping and travel - and not to the main site, where Google says the search results are still decided by a neutral algorithm.
There is a certain amount of weariness from the commission,, which is keen to wrap up before the end of competition commissioner Joaquin Almunia's term next summer. If the rivals reject the deal, the commission could still launch anti trust proceedings against Google, which could be painful, and political, as Google still enjoys an enormous amount of goodwill among the general public. Most Europeans value the enormous benefits that Google provides. Relatively speaking, Google is far more dominant in the European market than in the US market, where Microsoft's Bing has a relatively greater presence. Google opponents are reported as being sceptical of the new proposals. Offers to shade the box containing rival links to give them somewhat greater prominence haven't cut much ice.
There is even irritation that the Google will actually profit from this whole affair. Since the proposed auction for the three prized slots beneath Google's own results, would allow Google to extract even more profit from its rivals. However, there is weariness among Google's rivals too. Whether they will take Google in the hand in three weeks' time is anyone's guess.
Pelle Neroth -- EU correspondent
Edited: 14 November 2013 at 07:57 AM by Pelle Neroth
Allegations that American spy agency bugged Merkel's mobile phone calls threaten US European diplomatic rift
24 October 2013 by Pelle Neroth
This surely takes the biscuit, and could make a new stage in the seriousness of the NSA/GCHQ snooping scandal revealed this summer by the Guardian.
Angela Merkel, German chancellor and the most powerful woman in the world, has had her mobile calls monitored by the Americans, according to an extensive investigation by German intelligence, and reported by German and global media today. It has the ring of truth about it. The US and UK routinely spy on lesser allies to get a head start in diplomatic negotiations and just basically know what is going on in rival nations' minds.
Early on in the Guardian revelations, it was shown that the UK government bugged the delegates at a Commonwealth summit in 2009. But doing so against one of the UK and US's closest - and most powerful - allies is altogether more sensitive.
Merkel's response was unusually sharp in her phone call to President Obama, German newspapers report, and her personal press spokesman Steffen Seibert went even further, stating his "unambiguous disapproval" and saying it was "completely unacceptable" to monitor the calls of the head of government of a close ally and partner for decades. He called it a "serious breach of trust" by the Americans against Germany if the call monitoring had taken place, in tough language not seen for a long time.
The American response was quite interesting. US presidential spokesman Jay Carney, clearly treading on egg shells, said, carefully and unusually reading from a prepared manuscript, insisted that there was no monitoring taking place at the moment and there wouldn't be any monitoring in the future. But German television and newspapers have been quick to point out that this carefully crafted statement did not imply anything about what the NSA, the US signals agency, had done in the past.
These latest embarrassing revelations come on the back of outrage in France over allegations that the NSA has been listening in on over 70 million calls in France, prompting a phone call between French president Francois Hollande and president Obama on Monday in which Hollande expressed his "deep disapproval". Last month, at the annual meeting of the UN General Assembly, Brazil's president Dilma Rousseff launched a scathing attack on American spying just minutes before Obama was to walk on to the same podium to deliver a speech of his own.
But relations with Brazil and France have always been a bit prickly, you could say. In contrast, the Angela Merkel is incident is all the more embarrassing because, ever since the spy revelations began, she has been taking a very phlegmatic approach, quietly supportive of the Anglo-Saxon governments, behaviour perhaps in part explained by her close personal relationship with David Cameron. This incident, however, makes her look extremnely foolish. In TV interviews earlier on in the spy scandal she has looked visibly sanguine as she has stated how she has felt assured that the Americans have been complying with German law.
In international polls Germany regularly emerges as the most respected and admired country in the world.
The United States has been rising in these rankings of "soft power" since the Iraq war, but, as one German news outlet put it, president Obama has gambled with American credibility even with his allies just as the United States was beginning to restore its soft power. As for Britain, it will probably be that little bit more unpopular in Berlin and Brussels.
Pelle Neroth -- EU correspondent
Edited: 24 October 2013 at 11:12 AM by Pelle Neroth
Is Estonia ruling threat to anonymous comments online?
12 October 2013 by Pelle Neroth
The conflict began in 2006 when one of the small Baltic country's most popular news websites, Delfi, featured an article with details of a ferry company's plans to reroute wintertime services in the Estonian archipelago. It gets cold up there in the North in winter. These new routes delayed the formation of ice roads that many Estonians find preferable to taking the ferry. The ice is so thick it is relatively safe, and it faster than taking a ferry too.
So the ferry company's decision irked a lot of Estonians. A torrent of abuse from anonymous commenters followed. The ferry company sued Delfi for hosting defamatory comments and an Estonian court agreed. Delfi appealed to Europe, saying it was impossible to monitor all users' comments and cited article 10 of the European convention of human rights that guarantees the freedom of speech. No luck. The ECHR has upheld the original judgment.
The respected UK-based free speech organisation Index on Censorship is up in arms over this. You can see why. The ECHR argued that it was the anonymous nature of the comments that prevented individuals from being sued, and so, faute de mieux, the news site took the flak. The moderation team hadn't caught and modded the libellous remarks. The fine was admittedly small, the equivalent of a few hundred euros, but Index on Censorship are worried this will act as a disincentive for news websites elsewhere in Europe to allow anonymous commenting. Ironically, one line in the Julian Assange film the Fifth Estate which is making the rounds in the world's cinemas had the Wikileaks activist extolling the importance of anonymity on the internet. "Man is least himself when he talks in his own person, but give him a mask and he will tell you the truth." You could argue that anonymous commenting is really importaint to maintain. Index on Censorship clearly thinks so. It quotes a key passage in the ECHR's judgment which it finds worrying.
"However, the identity of the authors would have been extremely difficult to establish, as readers were allowed to make comments without registering their names. Therefore many of the posts were anonymous. Making Delfi legally responsible for the comments was therefore practical; but it was also reasonable, because the news portal received commercial benefit from comments being made."
Thus the ECHR judgment. Index on Censorship adds: "It is difficult to see how any site would allow anonymous comments if this ruling stands as precedent." One is inclined to agree, although the key phrase here is "if". The ECHR is far less powerful than the ECJ, the European Court of Justice, in Luxembourg, although the two are very frequently confused. And this was a judgement on an Estonian case, not clear whether this has any direct relevance to other European countries. Unlike ECJ rulings, which apply across the Union. Still, Index were probably doing the right thing when sounding a warning, vigilance and all that.
Pelle Neroth -- EU correspondent
EU leaders to discuss taxes on Google and a European cloud
3 October 2013 by Pelle Neroth
Switching your mobile phone data receiver off while abroad to avoid being walloped by huge roaming fees will become a thing of the past. Europe well knows that the most popular thing it ever did was deregulate the air industry and pave the way for £20 flights to the Mediterranean. The way to an EU citizen's heart is through his holiday bill. That is the idea.
Coming up, in addition, at the end of October, is the regular EU summit of national leaders. The theme will be digital. Leaders are worried that Europe is falling behind in digital innovation. A study by the Boston Consulting Group shows that, while investment in next generation networks in East Asia and the US is increasing, in Europe investment is falling by 2% a year. Once the flagship of the European mobile industry, Nokia has moved out of handsets. And all the complaints about Google and Facebook's various privacy violations, particularly by the French, just serve to highlight Europe's inability to come up with an Amazon, a Facebook, a Google or an Apple of its own.
One thing they might be doing is having a go at tax avoidance by the American giants. Their European subsidiaries pay taxes of of millions on European profits of billions thanks to the clever ruse of being registered in low tax European jurisdictions. European telcos such as Vodafone have pressing for change since the US companies pay a fraction in tax compared to the European companies that provide the networks. German, British and French politicians have discussed this separately, but there is a realisation that for any country to act on its own would only drive investment into neighbouring jurisdictions . Precisely how to tax Google is more contentious, however. France is keen to impose an internet tax on data transfers of information outside the EU. Other countries see this as a bit awkward and unworkable.
More agreement is likely to be found on two other issues, one of which is already heading towards closure.. For years, European service companies have complained that Google prejudices against them in the search results and favours its own services instead. A new deal being finalised, after some negotiations, would allow Google's competitors to display their results next to Google own services, while giving them greater control over what appears in Google search results. If Google fails to comply it could be fined ten percent of its annual turnover, a much greater sum than national regulators in some countries are allowed to levy. The EU's trustbusting mandate is one of its most powerful instruments.
Another issue on which there is likely to be agreement is using some of the EU's bloated science budget, Horizon 2020, to invest in provision of a European cloud. Polls by an outfit called the Cloud Security Alliance have shown that 56% of global cloud users were less likely to use US-based cloud computing than before, after the spy scandal this summer that revealed that the NSA, the American spy signals agency, is able to access everyone's information through backdoor agreements with US digital firms. Currently US cloud providers completely dominate the field, accounting for 85% of global markets. European commissioners are saying this is a massive own goal by the United States, and a pro European cloud lobby group is now finalising a proposal for a strategy to develop a European cloud that could be presented to the European leaders at the summit.
Whether all this will lead anywhere is anyone's guess. Europe will remain Europe, and America will remain America, even after the October summit.
Pelle Neroth -- EU correspondent
Could the Brits ever be as happy and therefore as productive as Europeans?
25 September 2013 by Pelle Neroth
The slight difficulty with that argument is that the most productive Europeans at work, the French (!), are even more miserable than the British. The Germans are also more productive than the British but less happy. Mind you, the Danes, who have topped not only the UN happiness index in recent years, but a Eurobarometer index on happiness every since back to 1973, are among the most productive Europeans at work. Followed by the Dutch, who also are among the most happy. The Norwegians meanwhile are best at just about everything.
So it seems that being happy doesn't do any harm anyway.
Positive psychology, the study concerned with making you happier or more successful, has sometimes got itself a bad name. It is associated with snake oil salesmen with flashy smiles on the rear covers of self-help books that pile high in the bookshops, crowding out the quality literature. Or priest hucksters in American mega churches offering platitudes. The expansion of positive psychology, for some, is part of that unfortunate pattern, the Americanisation of Europe.
A lot of thinking Europeans must feel nauseated by the spectre of the movement, flourishing in the States, that aims to see our cancer as a "gift" from God to make you live life more intensely and to appreciate all you have got. You buy pink ribboned teddy bears and various scented paraphernalia with a cancer motif and suddenly everything is going to be all right with your cancer. Some flawed research proving that support groups preaching positive psychology increased cancer survival rates has since been repudiated, but not before it had the unfortunate effect of boosting the public's enthusiasm for talking cures for cancer. These things can be positively harmful if they prevent people from seeking advanced proper medical care as well.
Okay, some scepticism about some of the extreme manifestations of positive psychology is entirely in order, but let us not throw out the baby with the bathwater. A lot of serious research has shown that happiness has numerous positive effects, apart from happiness being, of course, a good thing in itself
Happy workers make better workers
Two researchers took several hundred business students from the prestigious Massachusetts institute of Technology and subjected them to a battery of objective tests of their management skills over a weekend. In one segment of the test, they had to deal with the scenario where they had just taken over from a plant manager who had died of a heart attack. They were bombarded with a steady stream of business problems, which required written responses. Some problems required creative solutions, or quick action, others demanded deep analysis, others still required asking for more information. Before these tests, the students were asked to rate their level pf general happiness, or "positive affect" in psychologists' language, and were classified into three groups, unhappy, neutral and happy. After the tests were completed and the results computed, it could be seen that the happy students outscored the neutral students, who in turn outscored the unhappy students, by a statistically significant margin.
Interestingly, another part of the weekend's activities, where students were rated for their negotiation skills in a competitive team game of resource allocation by a team of professional business scholars who hadn't met the students before, the happy students again outscored everyone else but by a lower margin than they had done on the purely objective, blind scored written tests.
This was an unexpected result.
Positive psychology research is usually thought of by its critics as being bedevilled by the halo effect.
That is, happy people are often rated as better workers not because they are properly, objectively measured in any way, critics say, but because happy workers are usually more likeable and it is this likeability, not that their actual competence, as assessed by managers, that much happiness research actually relies on. Critics say this discredits the whole research field.
However, if there was a halo effect evident in this particular experiment the human interaction judgment tests would show a greater margin for the happy students than the blind scored written tests revealed. But, actually, in the human interaction test, the happy students scored less well relatively, though still better,than in the weekend's first, written tests, suggesting that the halo effect may overrated by critics of positive psychology.
The fact that happy students outperformed unhappy students in this study is not completely intuitive. A plausible counter hypothesis is that "sadder and wiser" people are less likely to overestimate their abilities in ambiguous task situations and less likely to believe the world is under their control when it is is not. One can plausibly make the assertion that less happy people make better judgments than optimistic, happy people because "sadder but wiser" people have a better understanding of risk and more accurate information processing as a result of a less self inflated, more sceptical view of the world. But this proved not to be the case.
The happy people proved not only to be more wide-ranging in their creative solutions but showed greater decision-making accuracy and called on a greater range of information before making critical decisions.
This study linking happiness and productivity is just one of many in the field. Other scientists have asked the obvious question: are people successful because they are happy, or happy because they are successful? (Or do well at business school exercises, or whatever.) To deal with the possibility that it is success, or being good at what you do, that makes people happy, not the other way round, research has looked at research subjects' development over a long period of time and found that those who are happier when young are more likely to end up with higher incomes in later life.
The happiness precedes the success. And testing for the possibility that it is not a third characteristic, sociability, that relates to both happiness and success, that it is a cause and effect and not just correlation between happiness and achievement, scientists in other studies than the one I have just described have carried out tests involving short term happiness boosts like a small financial incentive or making the research subjects view a comedy film before having their productivity test. The result: the short term boost in happiness led to a productivity rise. By isolating the variable, researchers have shown the boost in productivity that a even a short term increase in happiness can make.
Some scholars argue that while happiness among workers has many benefits, there are costs as well as benefits, and that it depends on the situation. You have to be a bit pragmatic about it, and be critical. There is the argument that happy employees are complacent employees, and naturally resist any change from the status quo, which is a problem when, to succeed in a competitive world, organisations have to make difficult decisions all the time
That is the kind of argument that we have also heard from macho Thatcherite entrepreneurs. It is so familiar from 30 years of British debate. You have to be tough in a tough world. But doesn't the European experience show that calm, happy societies can also be the most effective ones? The British government should take note. Of course, the next question is, if happy workers are productive workers, how do you make a nation happy?
Pelle Neroth -- EU correspondent
Bitcoin Berliners sing that the end of the euro is nigh
18 September 2013 by Pelle Neroth
Germany is set to stay inside the single currency, but Germany is on the other hand becoming a European centre for the cyber currency known as bitcoin,
International news channels are flocking to do live reports from the Berlin Bitcoin Exchange, a venue where the currency can be bought from traders in exchange for euros. The current exchange rate is 85 euros for one bitcoin . A few weeks ago the German Federal Finance ministry accepted bitcoin as a legitimate "unit if account" with a view to taxing its use.
Using bitcoins is a cinch, and some Berlin stores, hotels and websites are already accepting the cyber currency. To pay, all you need to do is enter the total into a bitcoin wallet app in your smartphone and then scan a code on the shop's machine. An estimated 30 businesses in Berlin, mainly in the bohemian district of Kreuzberg, accept the currency.
Unlike the euro, the bitcoin has no central authority in charge. The currency is neither created or administered by a central bank. The concept was invented in 2008 by a hacker, or group of hackers, using the pseudonym Satoshi Nakamoto.
Wishing to create a direct anonymous form of payment on the internet that would make PayPal and credit card companies redundant, Nakamoto called it a peer to peer electronic cash system. New bitcoins have to be mined. Users get them by having their computers compete to solve complex mathematical problems. Bitcoins are just strings of numbers. The system is designed to make it increasingly difficult to mine bitcoins, with global supplies set to peak at 21million. The idea is that a system of controlled supply will keep the value high, eventually, just like gold.
Critics though have said that the anonymity bitcoin affords users make it especially attractive to drug dealers and money launderers. Also, people who don't wish to pay taxes. In the last two and a half years, a website called the Silk Road has grown into the web's busiest market place for crack, cocaine, marijuana and heroin. All you need to do apparently is download and run a piece of software that anonymises users called Tor, exchange euros for bitcoins and order the illegal stuff. The volatility of the exchange rate is another source of the currency's credibility problems.
Though experts predict the value will stabilise,, the price of a bitcoin has fluctuated wildly in the past, something has tempted some investors -
Rick Falkvinge, the founder of Sweden's Pirate Bay - invested all his assets into bitcons when its value languished at 5 euros and is now a rich man, he says - as it has scared others away. Among those not fazed, however, were the visitors to the Bitcoin Exchange Berlin (BXB) , housed in the Platoon Kunsthall, an arts centre constructed from stacked shipping containers.
A film maker called Aaron Koenig, the founder and organiser of BXB, and who pays animators in India with bitcoins, rushed around the place as bitcoin vendors had their prices scrawled on blackboards. The salesmen wore bowler hats in a nod to the sartorial traditions of the City of London. And a man in a cowboy outfit and a silver guitar who called himself Bitcoin Bob sang a jolly song about how the euro is a flop and the end of paper money is nigh .
Pelle Neroth -- EU correspondent
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