Thursday, November 27, 2014

Switzerland considers a gold rush



A referendum requiring the central bank to hoard gold may spell more trouble for the euro zone.
By Jason Overdorf
GlobalPost (November 2014)

BERLIN, Germany — Switzerland may be best known for its bucolic Alpine scenery, chocolate and banking secrets. But they’re sometimes overshadowed by the country’s traditional policy of neutrality.

Now the controversial tendency to avoid alliances is raising eyebrows again as the Swiss prepare for a national vote on Sunday over compelling the national bank to hoard gold instead of foreign currency.

In one of the country's frequent exercises in direct democracy, voters will have the chance to walk back the country's growing ties with Europe by supporting a “Save Our Swiss Gold” initiative by the right-wing populist Swiss People's Party, the SVP.

Critics believe a yes vote could spell more trouble for the euro zone along with a spike in gold prices.

The proposal would force the central bank to increase its gold stocks to a minimum of a fifth of its total assets. It would also bar future sales, effectively handcuffing the country's monetary policy for better or worse, currency experts say.

It may not come to that, however. Support for the measure has fallen from 44 percent in favor in October to 38 percent early this month, according to a recent poll.

If it succeeds, however, the referendum could hold political implications across the Alps.

On one side of the coin, currency experts like Axel Merk of Merk Investments argue that the move would cut the strings that all but made Switzerland part of the euro zone when the Swiss National Bank vowed to intervene to keep the franc below 1.20 euros in 2011.

By buying large amounts of euro- and dollar-denominated assets, the bank is going beyond its mandate by speculating in the currency markets, Merk says.

“This initiative would not have come up if the Swiss National Bank had not veered away from its traditional way of conducting policy,” he said. “The backlash comes because the Swiss don't want to join the euro.”

On the other, Swiss National Bank chairman has called the initiative “dangerous” because it would make it prohibitively expensive for the bank to protect the franc by forcing it to match any acquisition of euros with a purchase of gold to maintain the required asset ratio.

"The connection between a minimum share [of gold] and a ban on selling which it embraces would very greatly restrict our monetary policy room for maneuver," SNB chairman Thomas Jordan said last week.

The implications go beyond the gold and currency markets.

Coming after a February vote to introduce curbs on immigration despite Switzerland's membership in the visa-free Schengen Area, the referendum is essentially about the country's present and future role in the European Union, says Patrick Emmenegger, a professor of political science at the University of St. Gallen.

“It is a reflection of the mindset that we would be better off on our own and being more isolated from our neighboring countries,” he says.

A yes vote could also boost euro-sceptics in countries such as the United Kingdom and Germany, where the anti-euro Alternative for Germany Party has already drawn fire forinstituting an online gold shop that skirts the borders of the country's campaign financing laws.

Specifically, a yes vote could increase opposition to European Central Bank Chairman Mario Draghi's commitment to do “whatever it takes” to increase the bank's balance sheet and protect the euro, Merk says.

“It doesn't have practical implications for the rest of the world, but the debate could heat up in other places,” he says.

After the Swiss voted to curb immigration, Britain's UK Independence Party, or UKIP, leveraged the news to open a discussion about leaving the EU.

“This is wonderful news for national sovereignty and freedom lovers throughout Europe,” UKIP leader Nigel Farage said at the time. “A wise and strong Switzerland has stood up to the bullying and threats of the unelected bureaucrats of Brussels.”

This time, the Swiss banking referendum is likely to inspire critics of the European Central Bank's efforts to stave off deflation through negative interest rates, prompting banks in savings-obsessed Germany to start charging depositors to hold onto their cash.

Across Europe, the economic crisis has raised the stakes in debates about such sovereignty-related issues. Meanwhile, mainstream parties’ reluctance to take up such issues has greatly encouraged the rise of right-wing populism, Emmenegger says.

“These parties come from unpleasant corners, but they articulate things that are very clearly on people's minds,” he says.

Two more measures on the Swiss ballot reflect similar isolationist sentiments from the left, although they’re even less likely to pass. One sponsored by the environmental group Ecopop would introduce a more severe limit to immigration at 0.2 percent of the resident population. Another would scrap tax breaks for wealthy foreigners.

Switzerland's low threshold for putting such measures to a vote is yet another way the mountainous country differs from the rest of Europe.

The gold market is already jittery about the prospect that the Swiss bank may be compelled to buy as much as 1500 metric tons over the next five years, equal to nearly three-quarters of all gold mined around the world in a year.

By some estimates, prices could spike 18 percent next week if the initiative goes through.

http://www.globalpost.com/dispatch/news/regions/europe/141126/switzerland-gold-referendum-euro-eu

The 'Grand Budapest Hotel' and other great day trips from Berlin

By Jason Overdorf
CNN Travel (November 2014)

(CNN) -- Europe's hottest destination for tourists, Berlin offers more than bargain-priced nightclubs and Cold War nostalgia.

Some of the most interesting sights in Germany are just a few hours away -- and with the deregulation of the intercity bus system, getting around is cheaper than ever.

Here's a shortlist of three great day trips from Berlin.

Potsdam

The site of the famous "Potsdam Conference" that negotiated the end of World War II and a series of opulent Hohenzollern palaces, Potsdam lies only about an hour from the center of Berlin, with all the major attractions easily reachable by public transport.

It's a day trip not because of the travel time, but because there's so much to see.

Highlights include the breathtaking Sanssouci Palace (Maulbeerallee, Potsdam; +49 331 9694200), the former summer residence of Frederick the Great -- who ruled the Prussian Empire from 1740 to 1786.

A pale and beautiful Rococo villa, its name means "without a care" and reflects the idyllic atmosphere of tranquil reflection Frederick sought to create with a grand, terraced vineyard to the south and sweeping views of the surrounding countryside.

An audio tour covers the palace interior, where most of the original furnishings remain just as the Prussian king preferred them, and on a fine day the huge gardens are perfect for an impromptu picnic.

Hardcore palace fans may have enough energy for a gander at the Orangery and the Spielfestung, or "toy fortress" -- a miniature fort, complete with a working cannon, built for Frederick's son.

But in our opinion it makes a better write-up than it does a visit, and it's better to take the audio tour of the Cecilienhof (Im Neuen Garten 11, Potsdam; +49 331 9694 200)

This mammoth, Tudor-style mansion is where U.S. President Harry Truman, British Prime Minister Winston Churchill and Soviet leader Joseph Stalin negotiated the partition of post-war Germany in 1945. (As always in German museums, it's advisable to spring for the headphones unless you're a history professor).

Depending on where else you're headed, the Old Town of Potsdam itself can be underwhelming -- cluttered as it is with garden-variety shopping.

The varied architecture of the Russian and Dutch Quarters -- built in Germany's first, misguided effort to attract "desirable" immigrants in the 18th century -- is, however, worth strolling through.

Getting there

Pay an extra 2 euros over the standard charge for the Berlin WelcomeCard and get free travel and discounts for various attractions in Potsdam (not the biggies).

Otherwise, day passes for the A-B-C zones of the Berlin transit system -- which covers buses and trains within Potsdam, as well as the so-called "regional train" -- are available for 7.20 euros.

Leipzig

In the wake of the recent 25th anniversary of the fall of the Berlin Wall, the nearby cultural capital of Leipzig -- which was the real nerve center of the peaceful East German revolution, as well as the longtime home of Baroque composer Johann Sebastian Bach -- makes an especially compelling day trip.

It's two hours by bus or 70 minutes by train from Berlin.

Though it was virtually destroyed by Allied bombs in World War II, the reconstruction of Leipzig's old town is so seamless that it's difficult to recognize the Renaissance churches and old market square as reproductions.

Meanwhile, a growing community of artists and hipsters have created a mushrooming bar, dance club and arts scene that has some people calling it "the new Berlin" (or, more disparagingly, "Hypezig").

For a tribute to the movement that brought down the Wall, visit the Nikolaikirche (Nikolaikirchhof 3, Leipzig; +49 341 1245380), the church where a small, East German prayer group known as "Swords into Plowshares" grew into a protest involving thousands of people.

Founded in 1165, the church is a mash-up of Roman, Gothic and Baroque architectural styles, but its moment in history gives it an atmosphere that can't be beat.

You can get a glimpse of Hypezig at the Spinnerei (Spinnereistrasse 7, Leipzig; +49 341 4980200; guided tours by appointment) -- a 19th century cotton mill that was converted into an artists' collective in the 1990s.

Put on the map by the so-called "New Leipzig School" -- which includes the post-reunification works of Neo Rauch, Christoph Ruckhaberle, Matthias Weischer and others -- the complex now comprises artist studios, workshops and galleries.

For classical music fans, the Leipziger Notenspur -- or "Music Trail" -- links prominent sites from the city's musical history along a 5-kilometer (3-mile) walking route.

It includes the homes of the renowned 19th Century composers Felix Mendelsohn and Robert Schumann as well as museums devoted to Bach and Ludwig Beethoven.

Regardless of your take on literature -- or deals with the devil -- it's worth enjoying a meal at the Auerbachs Keller (Grimmaische Strasse 2-4, Leipzig; +49 341 216100).

One of Germany's oldest restaurants, it's where 18th century poet Johann Wolfgang von Goethe, a frequent patron, imagined Mephistopheles downing a few with his eponymous hero, Faust.

Getting there:
Tickets on the high-speed train to Leipzig can currently be had as cheap as 29 euros (around $40) from Deutschebahn.

Luxury coaches with snacks, toilets and WiFi can get you there almost as quickly, starting at just 7 euros. Try MeinFernbus (+49 180 5 15 99 15) or Berlin Linienbus (+49 30 338 448 0).

Goerlitz

Wee little Goerlitz, about three hours from Berlin if you time the connections right, is a bit more off the beaten track.

But the number of Hollywood productions shot here -- "The Reader," "Grand Budapest Hotel" and "The Book Thief," among others -- testify to its status as perhaps the most picturesque prewar German town, even if it doesn't make many guidebooks.

In many respects, it's a place to witness Germany's moribund East -- despite thriving larger cities like Leipzig, many areas are struggling to make a comeback.

There's not a lot in the way of tourist infrastructure, so it's best visited when the weather is good.

It's the kind of place where the renovation team at the famous Goerlitz Department Store (Bismarckstrasse 21, Goerlitz) -- once an icon in the style of London's Selfridges or New York's Bloomingdales -- and more recently the setting for Wes Anderson's "Grand Budapest Hotel" -- will drop what they're doing to give guided tours.

In nice weather, there are walks along the Neisse River and across the bridge into Poland -- still fun even if the days of passport stamps are long gone.

For some traditional Silesian food, such as pork cooked in plum gravy, the town has several fine sidewalk restaurants.

Other highlights include a series of late Gothic merchant houses, some of which still have interior fittings dating back to the 1500s, a stunning Schonhof, or town hall, built in 1526, as well as a street where local glassblowers still ply their trade.

The real joy of the place, though, is the feeling of discovery from exploring the streets -- which really do look like, well, a film set.

Getting there:
From Berlin, regional trains run from Alexanderplatz more or less hourly for around 40 euros (about $60). But consult the schedule to avoid a wait when transferring in Cottbus.

Monday, November 24, 2014

Hungarian protesters are starting to rock the boat

Demonstrations against an internet tax are turning into a movement against Prime Minister Victor Orban. Can it maintain momentum?
By Jason Overdorf
GlobalPost (November 2014)

BERLIN, Germany — Hungarian street protests against government policies and plans are morphing into calls for ousting Prime Minister Viktor Orban, exposing the first chinks in the popular leader's armor to emerge since he took power four years ago.

Initially inspired by a scheme to tax internet users, tens of thousands of protesters have since turned out to demand a crackdown on corruption, an end to spending cuts in education and a reversal of Orban's moves to centralize government powers.

With the prime minister’s center-right Fidesz Party enjoying a two-thirds majority in the parliament, the demonstrators face a long, uphill slog before they can hope for a change in government.

Nevertheless, tens of thousands of young people chanting “Orban go away!” and “Down with Fidesz!” have effectively drawn a line in the sand against the prime minister's stated goal to transform Hungary into an “illiberal state” like China or Russia, political analysts say.

Unlike anti-capitalist protesters in Greece, Hungarians are calling for a return to the moderate pro-Western policies of the country’s recent past, says Peter Kreko of the Budapest-based think tank Political Capital.

“There are European Union flags in the crowd and even Norwegian flags, which is funny on the one hand but on the other really expresses the Western orientation of the youngsters.”

In June, before the protests had begun, Orban drew criticism for raids on nonprofits that received financing from Norway.

At the end of October, as many as 100,000 demonstrators turned out to rally against an internet usage tax of $0.60 per gigabyte of data.

After the government caved to their demands by shelving its plan, the movement’s leaders quickly pivoted to target corruption, inspiring tens of thousands to challenge Orban's refusal to sack the head of the country's tax authority, who was banned from entering the US because of bribery allegations.

Although subsequent demonstrations — including a rally by teachers on Saturday protesting cuts to the education budget — have been even smaller, participants say the events are becoming more focused and better organized.

Slogans and speeches have taken aim at what the protesters see as Orban's dismantling of democratic institutions, undermining of freedom of the press and fiddling with the election system to benefit Fidesz, says a protester named Eszter Fero.

“It started over the internet tax, but that was just the last drop in the glass,” she says.

Whether the movement can sustain its momentum remains unclear, however.

The street actions have been limited to urban areas, while in the countryside, the far-right Jobbik Party poses Orban a greater challenge than the liberals.

Still, the demonstrations have been notable if only for progressing beyond the usual squabbling between the government and opposition activists.

Although it's too early for bold predictions, some activists are looking to Spain's far-left Podemos Party for inspiration. Podemos became that country’s second-largest political party by number of members and even won seats in the EU Parliament within four months of its formation in January.

“The mood is angry,” says former student leader and veteran protester Benedek Cseri. “And it is also like the masses are getting to know their strength.”

The authorities are downplaying the protests’ importance.

Although he admits the protests have had a “spontaneous element,” government spokesman Zoltan Kovacs says they were orchestrated by the opposition rather than the result of a genuine outpouring of anger.

“Street demonstrations are a natural component of any nation's daily life,” he said. “We don't see it as a threat to our development agenda.”

The protests’ main significance lies less in any immediate impact they may have than in signifying the start of something new, says Political Capital's Kreko.

“I don't think these protests can maintain the same intensity until [parliamentary elections in] 2018 or that they can sweep away the government,” he says. “What I can expect is that there will be more demonstrations and the mobilization capacity can remain.”

As recently as April, Orban was able to build on his populist, anti-EU rhetoric to strengthen Fidesz's two-thirds majority in parliament. That puts holding a no-confidence vote in the government out of the question.

The opposition faces huge problems at the same time. Its fractured leadership is about as unpopular with the protesters as the government itself.

Even if demonstrators were able to agree on enough common ground to form a political party, various constitutional changes Orban has pushed through make it difficult for newly formed political groups to make an impact.

For now at least, Orban's move to postpone and repackage the internet tax — which government spokesman Kovacs now says was never the government's intention to pass in its current form — has galvanized normally apathetic young Hungarians who are disgusted with party politics.

That’s buoying the hopes of protesters like Fero, who says, “People could feel for the first time that they have the power to challenge the corrupt political elite.”

http://www.globalpost.com/dispatch/news/regions/europe/141124/hungary-budapest-protests-orban-internet-tax

Saturday, November 22, 2014

Romanians choose change

A surprise new president offers renewed hope for reform in central Europe.

By Jason Overdorf
GlobalPost (November 2014)

BERLIN, Germany — The surprise victory of a political outsider in Romania's presidential election last week has offered a boost to the country's nascent battle against corruption as well as a renewed commitment to its Western allies.

But Klaus Iohannis’s promise to shake things up also introduces new elements of uncertainty.

Tipped as an also-ran from the beginning, the center-right National Liberal Party's candidate overcame a ten-point deficit in the first round vote to come away with a ten-point margin of victory in the runoff last weekend, defeating sitting Prime Minister Victor Ponta with a 54 percent majority.

The win put to rest fears that Ponta's Social Democratic (PSD) party would stymie the fight against political corruption by gaining control of presidential powers to appoint the head of the National Anti-corruption Directorate, the NAD, as well as other key posts in the judiciary.

The vote also signaled a renewed optimism in Romanian politics that — along with recent anti-corruption protests in Hungary — may herald winds of change across central Europe, observers say.

The vote for Iohannis was a clear affirmation of Romania's pro-Western stance amid worries that the region is drifting toward Russia, says Paul Ivan of the Brussels-based European Policy Center.

“It was clear during the campaign that he had a very clear, pro-Western message,” he says.

In contrast, Ponta's controversial efforts to consolidate power at home and focus foreign policy toward China rather than Europe had prompted comparisons to Hungary's President Viktor Orban, whose open declaration that he’s seeking to create an “illiberal” state is now helping motivate tens of thousands of anti-corruption protesters in Budapest and other Hungarian cities.

Iohannis is a member of Romania's German minority and observers have also hailed his win as an important rejection of the ethnic nationalism on the rise throughout the region.

“This is a very good message of tolerance,” Ivan says.

Corina Rebegea of the Washington-based Center for European Policy Analysis agrees early indicators for reform are promising.

“This is a good sign for the fight against corruption,” she says.

In his first speech as president-elect, Iohannis called on the legislature to scrap a controversial proposal to offer amnesty to political leaders jailed for corruption and lift immunities for others that had been shielded from investigation by parliament.

The Social Democrat-led parliament responded within a week even though rejecting amnestywill threaten several prominent leaders from Ponta's party, including former PSD Prime Minister Adrian Nastase, who was jailed for a second time in January.

It was a strong signal that Iohannis’s popular mandate offers him a window of opportunity.

“I wouldn't go so far as saying this is a new commitment and things will be different from now on,” Rebegea says, adding that nevertheless “he seized the legitimacy he gained through this vote. This gives him the weight and the leverage to demand that from the political class.”

In other ways, the election results make Romania's future path more uncertain, however.

The swing against Ponta, who was aiming to gain control of the executive as well as the legislative branch of the government, could presage the breakup of his center-left coalition before parliamentary elections scheduled for 2016, says Otilia Dhand of the political risk consultancy firm Teneo.

Moreover, Iohannis’s political future still hangs on an unanswered legal issue despite his having won the presidency.

As mayor of Sibiu, a Transylvanian town located 130 miles northwest of Bucharest, he allegedly violated the law by simultaneously serving on the board of directors of a local public utility, a violation that could still make him ineligible to hold the presidency.

A lower court acquitted him of wrongdoing and the parliament has since passed a law allowing mayors to serve on such boards to represent voters’ interests. Nevertheless, Romania's top court is set to review the law and Iohannis' so-called “incompatability” case later this month.

Although not even the country's constitutional lawyers can predict the outcome, Iohannis's commitment to judicial independence probably gives him an advantage in the proceedings.

However, if the judges rule against him before he officially takes office — and gains presidential immunity — on December 22, a protracted court battle could well determine the country's next president.

Assuming Iohannis overcomes that hurdle, as most observers do, he could still struggle to deliver on some of the broader reforms he promised during his campaign after the early sheen of victory fades.

Opposition legislators have already begun criticizing the president-elect for “issuing orders” — a veiled reference to the historical prominence of ethnic Germans in Romanian society, says Laura Stefan, a former official in the Justice Ministry.

“In Romania, miracles only last for three days, so I expect we'll recover quite soon and go back to the old ways of doing business,” she says.

On corruption, he will need to distance himself from controversial members of his own party and build on a marriage of convenience with civil society that emerged as a de facto anti-Ponta coalition rallied behind him in the election runoff.

A first step could be using the bully pulpit to expand the public's focus from prosecutions to prevention — comparatively boring work on transparency and accuracy in reporting on the use of public resources, Rebegea says.

Still, specific measures to reform economic policy and the political process lie outside the reach of presidential powers, which are limited to foreign policy and judicial appointments.

“When it comes to economic policy, his input is relatively limited,” Dhand says.

But with a far-reaching national security policy — one of the president's most powerful tools for influencing the country's direction — Iohannis also has an opportunity to emphasize Romania's ties with the EU and US in ways that could encourage Western investment.

With some deft maneuvers, he could step into a vacuum of pro-Western leadership created by Hungary's Orban in the region.

“His new strategy needs to really substantiate what he means by pro-NATO, pro-EU and so on,” Rebegea says. “He needs to look at defense modernization and concrete projects by which Romania can really take on a leadership role in Southeast Europe.”

http://www.globalpost.com/dispatch/news/regions/europe/141121/romania-presidential-election-klaus-iohannis-central-europe

Wednesday, November 12, 2014

Is Washington losing central Europe — or throwing it away?

As American officials respond to Russian actions in Ukraine, some worry Cold War-style rhetoric may be alienating the countries it’s supposed to help secure.
By Jason Overdorf
GlobalPost (November 2014)

BERLIN, Germany — Five years ago, a group of renowned European leaders, including former Czech President Vaclav Havel and Polish ex-President Lech Walesa, published an open letter to President Barack Obama warning him against abandoning his allies in central Europe in order to cozy up to Russia.

Now it’s America’s turn to worry.

As a new generation of central European leaders strives to balance the demands of Brussels and Washington with their vulnerability to Moscow, commentators and officials in the United States are expressing their concerns about losing the central region to Russian influence.

Some worry that Cold War-style US rhetoric over Ukraine may be alienating the countries it’s supposed to help secure.

Assistant Secretary of State Victoria Nuland encapsulated Washington's fears earlier this month.

"Across the region, the twin cancers of democratic backsliding and corruption are threatening the dream so many have worked for since 1989," she said, referring to the year the Berlin Wall fell and central Europe broke free of Soviet control.

"And even as they reap the benefits of NATO and EU membership, we find leaders in the region who seem to have forgotten the values on which these institutions are based."

The veteran journalist Jackson Diehl phrased it more bluntly.

“In reality, a big chunk of the NATO alliance has quietly begun to lean toward Moscow,” hewrote in the Washington Post.

To be sure, the days of blinding love for Europe are over as NATO's newest members realize that the “benefits” Nuland mentioned also come with costs.

In stark contrast to Havel's distrust of Moscow — the former dissident playwright spent four years in prison under communism — the current Czech president, Milos Zeman, founded his Party of Civic Rights in 2009 with the financial support of Russia's Lukoil. Now he's under fire for a foul-mouthed defense of Putin's jailing of Pussy Riot.

This summer, Czech Prime Minister Bohuslav Sobotka opposed Poland's call for expanding NATO's presence in Europe in response to Ukraine’s crisis, while his Slovakian counterpart Robert Fico obliquely compared the idea of stationing NATO member troops on his country's soil to the Soviet invasion of 1968.

Even Austria, which was never part of the Soviet Bloc, welcomed Putin with broad smiles while Brussels was pushing for tougher sanctions in June. Vienna, like Budapest, is steadfastly moving ahead with plans to help construct a natural gas pipeline that would link Russia to southern Europe against EU objections.

Then there’s Hungarian Prime Minister Viktor Orban, who recently said he aims to make Hungary an “illiberal state” like China or Russia rather than emulating his European neighbors.

But experts say it's wrong to conflate his extreme position with the more nuanced maneuvers of other central European countries.

Some believe Washington’s rhetoric have been more threatening than reassuring for them.

“It pushes [Russian President Vladimir] Putin to a more defensive and frankly irrational position,” says John Feffer of the Washington-based Institute for Policy Studies.

Outside Budapest, central European leaders are walking a tightrope because of an understanding that despite its tough words, NATO may not be as willing to confront Russia militarily as they once believed, says Carnegie Europe director Jan Techau.

“There's a very strong feeling at the moment, particularly with the Obama administration, that people in Washington don't really care at all about cntral Europe,” he says.

In an effort to help pressure Putin to back down in Ukraine without a military confrontation, NATO wants its members to stand united over economic sanctions and threats of a Russian energy cutoff.

At the same time, some of those members increasingly see NATO as unable or unwilling to defend Europe even as it asks them to fight outside its borders — urging Poland to send soldiers to Afghanistan, for example — but declining Warsaw’s requests for a missile defense shield and its own NATO base.

Poland and other former Soviet Bloc countries believe the answer lies in strengthening NATO.

Others say a more robust response to Putin's aggression would bring about even more serious consequences.

“Basing in central Europe is not crucial,” Michael Emerson, former EU ambassador to Moscow, said in an email. “Rather, the strategic choice not to go to war over Ukraine has been the issue, but who would say that was a miscalculation?”

But if relative caution has so far largely prevailed, growing demand within Ukraine to join NATO could soon raise the ante for the military alliance.

Some believe NATO's eastward expansion in the 1990s has already pushed it to a crisis point. “Now it's facing the consequences of the expansion territorially and conceptually," Feffer says.

He advocates a new security architecture that would include Putin in NATO's decision-making process before rather than after conflicts arise. Beefing up the Organization for Security and Co-operation in Europe could help, he says.

Other factors are affecting central European attitudes.

Europe’s economic crisis has also prompted countries in the region to try to reduce their westward focus.

The Czech Republic once sought to bind its economy to Germany's to cement its place in Europe. Now that a third of its exports go to Germany and two-thirds to the EU, Prague is looking to reduce what it has come to see as a kind of economic vassalage, says Czech journalist Ondrej Soukup.

“Russia is the most viable other option,” he says.

That doesn't necessarily mean an embrace of the Russian model, however.

Despite the president's dislike for Pussy Riot, the Czech Republic's rejection of new NATO forces doesn’t reflect some new allegiance to Putin or a budding love for curbing freedom of speech, says Vaclav Bartuska, Czech ambassador-at-large for energy security.

“Brussels is our second capitol,” he says, “not Moscow.”

http://www.globalpost.com/dispatch/news/regions/europe/141107/washington-central-europe-nato-eu-ukraine-russia

Monday, November 10, 2014

Tinder not working for you? A German website may have an alternative

Kaufmich.com is promising a free market for prostitution.

By Jason Overdorf
GlobalPost (November 2014)

BERLIN, Germany — Flashbulbs light up for a gay porn star hawking DVDs as Julius Dreyer blithely threads his way through booths touting everything from dildos and depilatory cream to accounting services (“Sex and Tax?”).

Taking part in the world's largest trade show for “erotic lifestyles” is old hat for this young entrepreneur, who’s been in the adult industry practically as long as he's been an adult. But his latest venture may be the most controversial here.

As Germany continues to debate the legalization of prostitution a decade ago, Dreyer is promising to make it safer and reduce exploitation. In 2009 he and his two brothers founded Kaufmich.com, a social networking site for sex workers.

They say it will improve the profession by creating a free market for independent prostitutes.

“Our vision is to see sex work an equal and fully accepted part of society,” Dreyer says. “We believe that all kinds of problems arise from sex workers being isolated and judged [by others].”

Slim with tidy, close-cropped hair, Dreyer founded Germany's most popular hookup site, Poppen.de, before he turned 21.

But the success of his newest site isn’t assured. With free sex apps such as Grindr and Tinder gaining acceptance and brick-and-mortar “swingers' clubs” practically mainstream here,Kaufmich.com — which translates as “BuyMe.com” — may face an uphill battle.

Although pimping and other related activities remain against the law, prostitution has been legal in Germany since 2002.

This spring, the increasing visibility of large commercial brothels and a perceived if unproven uptick in street prostitution prompted a parliamentary call for a debate on tougher regulations.

The expressed aim of proposed new rules for the industry is to protect sex workers. They include a ban on unlimited “flat-rate sex” offers, mandatory registration for prostitutes and tougher licensing regulations for brothels, which proponents say could improve working conditions and help fight human trafficking.

However, sex workers and their advocates say measures such as the introduction of ID cards for prostitutes would be counterproductive. Critics say they could enable customers to blackmail single mothers frightened of losing their children, for example.

“Until such time that our children can say, 'My mother is a sex worker,' without anybody in kindergarten class batting an eye, many of us believe the best protection lies in anonymity,” the Trade Association of Erotic and Sexual Services said in a statement about the proposed regulations.

With 250,000 active members logging in every week, nearly a million page views and more than 100,000 messages sent between users each day, Kaufmich.com offers an alternative to tougher regulations, Dreyer says.

“We can’t say how many actual dates result from this, but I have to assume it's in the thousands,” he says.

The company earns its revenue from membership fees and online advertisements, not facilitating transactions.

The prostitution portal ranks among Germany's top 200 websites and the top 10 of adult sites.

Like an X-rated Facebook-meets-eBay, it offers sex workers direct access to thousands of customers, which makes operating independently from brothel owners or an illegal pimping service more financially viable, says a sex worker called Undine de Riviere.

“I know other providers who get the majority of their business from [Kaufmich],” she said in an email.

Other features promise to make potentially dangerous interactions safer.

Sex workers and customers can identify themselves as “safe-sex only” users, which has reduced an industry-wide problem of condomless oral sex, according to online feedback.

More than half of Kaufmich's users have opted for the safe sex badge.

An eBay-style ratings system also rewards cleanliness and better customer service.

Prostitutes can rate their customers, helping create virtual identities with histories that promise to reduce the risk of meeting strangers for sex while retaining the anonymity that's essential to the business.

Sex workers can even blacklist customers.

“We want to bring a level of safety and transparency into this whole thing,” Dreyer says. “When you post an ad on Craigslist, you don't really know who the guy is you're going to meet. That's a little scary.”

Although it's essentially a marketing tool, the website also complements the work of Germany's nascent sex worker unions by hosting an online venue for prostitutes to discuss concerns such as taxation that may not receive mainstream media attention, Dreyer says.

The fact that the site makes its users money makes it especially attractive, said de Riviere, who is also a spokeswoman for Germany's recently formed Trade Association of Erotic and Sexual Services.

“You reach a lot of sex workers that way who aren't politically interested much or wouldn't attend actual physical meetups,” she said.

In a country where Amazon and Uber are embroiled in union disputes, that could well make an online marketplace for sex Germany's most labor-friendly website.

http://www.globalpost.com/dispatch/news/regions/europe/germany/141105/germany-social-media-sex-website-kaufmich.com

Sunday, November 09, 2014

On Sunday Berlin celebrated the 25th anniversary of the fall of the wall. So let's clear up a few things.
By Jason Overdorf
GlobalPost (November 2014)

BERLIN, Germany — As hundreds of thousands of Germans gather at the iconic Brandenburg Gate to celebrate the spontaneous destruction of the Berlin Wall 25 years ago, the world is taking stock of the success or failure of just about everything that's happened since.

But amid all the talk, some vital facts have dangerously slipped under the radar. Here are four of the most important ones, in our opinion:

1) The wall really fell in Budapest

A young girl places flowers in between slats of the former Berlin Wall on the 25th anniversary of the fall of the wall on Nov. 9, 2014 in Berlin, Germany. (AFP/Getty Images)

Sure, the protesters that made up East Germany's Peaceful Revolution deserve some credit. But the first crack in the Berlin Wall appeared in Budapest. In May 1989, six months before the first Berliners got out their hammers, Hungary opened its border with Austria — a response to Soviet leader Mikhail Gorbachev's policy of Perestroika — prompting tens of thousands of East Germans to pack their bags for then-Czechoslovakia. Many of them, of course, hoped for a permanent vacation in loophole land.

Budapest officially announced in September that it would allow thousands of East Germans waiting for permission to leave the Soviet bloc cross into Austria. With the flight of 15,000 people over the next three days — the sort of exodus that had prompted the building of the wall in the first place — East German leader Erich Honecker sought to stop people from getting to Hungary by shutting the Czech border. The genie though, had already left the bottle.

2) David Hasselhoff did (not) bring down the wall
Let's face it: nobody can really explain Germany's love for Baywatch star David Hasselhoff. You could say it's because he helped bring down the Berlin Wall. But that would ignore the glaringly obvious fact that the Hoff was big in Germany before anything went down (we're talking the dark, post-Knight Rider, pre-Baywatch years).

Hitting Germany's pop charts in March 1989, his so-bad-it's-good-no-it-really-is-bad “Looking for Freedom” somehow became the unofficial anthem of the Peace Movement, making his New Year's Eve performance amid the rubble of the wall an indelible camp counterpoint to East German kitsch.

There are a couple ways of looking at this. The first way is to watch the video above of “Looking for Freedom." But you can't unsee it afterwards.

Another way is by analogy. Imagine if instead of La Marseillaise — which sounds awesome even if it is all about slaughtering your enemies and bathing in their blood — the French had commemorated their revolution with Britney Spears doing “Oops, I did it again.” Then imagine something so much worse that you shouldn't even watch it on Youtube.

A third way of looking at it is, well, intellectually. It's tempting to believe that the benighted East Germans were so starved for western rock and roll that they confused “Looking for Freedom” with “Free Bird.” But Bruce Springsteen played East Berlin in 1988, and long before that East Germans were able to get compilation records with music from bands like the Rolling Stones — albeit with a bunch of parental advisory type warnings on the album covers. Blaming rock-and-roll starvation would also be overlooking the disturbing fact that the Hoff's stunningly bad song topped the charts in West Germany.

3) The wall did not divide Berlin

Picture taken on Oct. 13, 1976 of a checkpoint along the Berlin Wall between East (Soviet sector) and West Berlin (American sector). (AFP/Getty Images)

If you can remember Knight Rider, you probably imagined the Berlin Wall as a big brick barrier that cut across the center of the city, like the world's ugliest suburban privacy fence. In reality, the wall wasn't straight, it didn't divide Berlin in half, and it didn't fence in East Germans. It actually zig-zagged all the way around West Berlin, creating a weird sort of island quasi-nation behind the Iron Curtain.

Russia's grim push to take the city in the 1945 Battle of Berlin gave the Soviet's the upper hand in negotiations when it came time to divide territory at the Potsdam Conference a few months later. Citing heavier casualties, Stalin held out for the lion's share of the city, forcing the British and Americans to give up some of their sectors to make room for France. The actual division was done by administrative district, not an arbitrary line on a map, so when East Germany eventually built the wall in 1961 it was as jagged as any gerrymandered political border.

It had to surround West Berlin because the entire city lies in what was then East Germany, so in some ways it created problems for West Germans too. Free or not, for example, you couldn't hop in the car and drive to Munich. There were only a handful of places to cross the border, and you needed a visa, so funny alternatives to the weekend getaway arose — including semi-urban campgrounds and special farms where kids could be taken to observe exotic animals. Like cows.

West Germany had to essentially pay people to live on the weird island, and pockets within the wall's zigs and zags never really developed — creating the grungy artist haven now being overrun by German hipsters.

4) The East didn't give up. They messed up.
Watching the old footage of mullet-haired Germans in acid-washed jeans scrambling over the wall, it's easy to think that the Peaceful Revolution defeated the Stasi.

But another video is more revealing. The one above shows spokesman G√ľnter Schabowski announcing to journalists that the politburo has decided to allow “every citizen to travel out of East Germany by way of the border checkpoints.” When a journalist asked him when the new rules come into affect, he flips through the press release, seeming to look for something written on the backs of the pages, and says, “As far as I'm aware, immediately.”

Hours later, tens of thousands of people overwhelmed the checkpoint at Bornholmer Strasse — eventually leading to the spontaneous destruction of the wall.

As it turns out, however, the government's actual plan hadn't been to allow free travel, but to defuse the protest movement by granting so-called malcontents a one-way ticket out. But Schabowski had apparently missed the meeting when that scheme was hashed out.

Yep. The end of history was really just a bureaucratic screw-up.

http://www.globalpost.com/dispatch/news/regions/europe/germany/141109/4-things-you-probably-didnt-know-about-the-berlin-wall

Saturday, November 01, 2014

Romanian election raises concerns about democracy

As voters head to the polls on Sunday, critics say a victory for Victor Ponta could undermine a nascent fight against corruption.

By Jason Overdorf
GlobalPost (November 2014)

BERLIN, Germany — Secret agents, bribery, plagiarism, vote-rigging — on the face of it, the accusations surrounding Romania's presidential election on Sunday are providing more than enough thrills.

Behind the mudslinging, however, observers say the future of democratic institutions in one of Europe’s poorest countries is at stake.

With the frontrunner, the controversial Prime Minister Victor Ponta, now poised to take control of the presidency, critics worry the consolidation of power in the hands of his Social Democratic Party may hamstring a nascent battle against corruption and undermine Romania's commitment to European Union values.

The current president, Traian Basescu, a popular but also controversial former ship's captain, is unable to run for a third term.

A center-right independent, he has accused Ponta, his bitter rival, of illegally working undercover for the country's intelligence agency during his tenure as prosecutor in the late 1990s.

The late entry of former spy chief Teodor Melescanu has increased the atmosphere of intrigue, despite his small chance of winning.

Many voters are taking the spy stories as little more than campaign rhetoric, thanks to the well-known rivalry between Basescu and Ponta.

But the focus on scandal rather than substance is deflecting attention from the risk that Romania's commitment to European integration may decline, says Corina Rebegea of the Washington-based Center for European Policy Analysis.

“In our regional context, the pressure is so high that it's probably a legitimate question to ask,” she says, pointing to other trouble spots, such as the crisis in Ukraine, Bulgaria’s drift toward Russia and the erosion of democratic institutions in Hungary.

“All of Romania's neighbors are somehow sliding in a direction that’s very worrisome,” she says.

Although it may be premature to liken Ponta or any of Romania's other presidential candidates to Hungary's Viktor Orban — who has openly declared he’s seeking to create an “illiberal” state — critics say the indicators don't look good.

Since his election in 2012, Ponta has drawn flak for allegedly politicizing the Romanian Cultural Institute and the country's state-owned television broadcaster.

The prime minister has dismissed EU criticism that he did not appear to respect the rule of law and democratic institutions, and denied allegations that he’s pressured judges.

Romania’s judicial system has been under special EU supervision since the country joined the bloc in 2007.

Ponta’s party is also implicated in an ongoing probe into vote-rigging during a failed 2012 bid to oust President Basescu through a public referendum.

“In the past, the social democrats and Ponta in particular haven't really respected the rule of law,” says Paul Ivan of the Brussels-based European Policy Center.

A savvy horsetrader accused of plagiarizing his doctoral thesis, Ponta is tipped to breeze through the election’s first round on Sunday partly thanks to his successful appeals to Romanian nationalism, says Otilia Dhand of the political risk consultancy firm Teneo.

“It's not necessarily an anti-EU stance, it's more about Romanian nationalist feelings domestically and the return to religion that we have seen during the crisis,” she says. “The EU is an easy scapegoat.”

The merger of the two largest opposition parties gives their compromise candidate, Klaus Iohannis, a fighting chance in the second-round runoff vote scheduled two weeks later. A former justice minister and anti-corruption campaigner, Monica Macovei, also has potential as a dark horse.

Macovei, a Bacescu ally, is running as an independent and Iohannis — a liberal who was until recently the mayor of a tourist town in Transylvania — is a relative neophyte. If either makes it to the runoff, their prospects will hinge on uniting the fractured anti-Ponta vote.

All the main candidates say the most important element of Romania's security and foreign policy is its strategic partnership with the US and its membership in the EU. However, some commentators have expressed concern about Ponta's embrace of China and attempts to deepen Romania's relationship with Russia before Ukraine’s crisis erupted earlier this year.

Critics warn that a victory for Ponta would at the least threaten an ongoing attempt by the National Anti-corruption Directorate, the NAD, to crack down on graft, which they say Russia has exploited in Ukraine and other countries in Eastern and Central Europe in its bid to exert influence.

None of Romania's parties have a reputation for being squeaky clean, to be sure, and some Romanians believe recent high-profile corruption convictions represent little more than score-settling by Basescu instead of a real crackdown.

But Ponta has actively opposed court actions of the sort that have prompted investigations intoallegations that government officials skimmed as much as $20 million from a computer software licensing deal for schools that involved Microsoft and reseller Fujitsu Siemens, his critics say.

By winning control of the presidency as well as the prime minister's office, he would not only weaken the political motivation for such prosecutions, but also gain the power to appoint the chief and deputies of the NAD, as well as the justice minister, says Laura Stefan, a formerofficial in the Justice Ministry.

“The big issue of this campaign is the independence of the justice system and the anti-corruption institutions,” she says. “For me, this is what is at stake.”

http://www.globalpost.com/dispatch/news/regions/europe/141030/romania-presidential-election-ponta-democracy