More German travelers have been using foreign airports since a flight tax was imposed early this year.

 

 

Consider two small airports in the middle or Europe. At Maastricht Aachen Airport, business is booming thanks to an influx of German passengers who are fleeing a national aviation tax introduced on January 1, 2011. Meanwhile, just 80 kilometers across the border, Germany's Weeze Airport has been steadily losing customers.

A few years ago, things were exactly the opposite. The Netherlands had its own, yearlong experiment with an aviation tax, but revoked it in July 2009 after it saw Dutch hubs like Maastricht Aachen Airport lose passengers to rivals in neighboring countries, including Germany.

The levy cost Dutch airports, airlines, and related businesses between 1.2 and 1.3 million euros in lost revenue, according to a study by Amsterdam Aviation Economics, a research institute affiliated with the University of Amsterdam.

Hans van Mierlo, a professor of public finance at the University of Maastricht, said the abundance of transportation options in Europe means travelers can and will seek out alternatives whenever one country unilaterally imposes an air passenger tax.

"The [Dutch] crowd went to Germany; now the German crowd comes to us," he told Deutsche Welle. "I am surprised that the German government didn't learn from the Dutch failure."

Maastricht-Aachen Airport may be small, but traffic is growing rapidlyHefty rates

The German aviation tax runs at a rate of eight euros per one-way flight within Europe, 25 euros for medium-haul services to the Middle East and Sub-Saharan Africa, and 45 euros for long-haul flights. The tariff only applies to flights originating in Germany. The German Finance Ministry reported the duty raised 434 million euros in revenues in the first half of 2011.

However, for travelers, the tax can double the total cost of a bargain ticket. That has driven Irish budget carrier Ryanair to cancel some of its services from Weeze Airport and add flights at Maastricht. Meanwhile, rival airline Germanwings has launched a service linking Maastricht to Berlin 12 times per week.

Those moves helped drive Maastricht Aachen Airport's whopping 70 percent increase in passengers so far this year. That is quite a comeback from the time of the Dutch aviation tax, when it lost 25 percent of its customers.

Maastricht's airport has new routes to Bucharest, Tenerife, and other spotsAmong the new clientele is Ne Pham from Jülich, Germany. She told Deutsche Welle that she used to fly out of Cologne or Dusseldorf to destinations like Italy, the United States and her native Vietnam.

"It's cheaper to fly from [Maastricht] than from Germany," she said. "It's easy to find, has lots of parking spaces, and a very fast check-in. It's small but nice."

Maastricht makeover

To accommodate new passengers, Maastricht Aachen Airport has renovated its main waiting area and sole restaurant. A new bus line runs from Cologne directly to the Dutch airport, where travelers are greeted by a row of flags from seven European countries. Airport staff members are required to speak German and English in addition to Dutch, and a number of them speak French as well.

Marion Schramm and her husband, from Geilenkirchen, Germany, echoed Pham's reasons for choosing Maastricht Aachen Airport. But they were not as impressed by the small airport's recent makeover.

"It's obviously dinky," Marion Schramm told Deutsche Welle, "You see everything right away. But it's a lot cheaper than Germany at the moment."

Customers have mixed reviews for the small Dutch airport's facilities

Weeze's woes

The German Airport Association, which represents German air hubs, has called for an immediate end to the national flight tax. It reported a tepid growth rate of 3.2 percent at airports throughout the country this July, compared with the same month last year.

Weeze Airport, near Dusseldorf, had 22.8 percent fewer customers in the same time period. Ludger van Bebber, the airport's managing director, said many of the hub's clients used to come from the Netherlands.

"The aviation tax destroys the level playing field for us," he told Deutsche Welle. "That is the main issue we have here at Weeze."

Meanwhile, Berlin's two hubs are seeing travelers hop across the border to nearby Polish airports. And people in Munich do not have to drive far to reach a number of alternative airports in Austria and the Czech Republic.

The chairman of the Maastricht airport's board is planning for growth to continueDutch chairman confident

While the German Finance Ministry has denied recent media reports that it might lower the aviation tax rates, the ministry is scheduled to evaluate the levy's effects on small and medium-sized airports in June 2012.

The chairman of Maastricht Aachen Airport, Jan Tindemans, said he is not worried about his business in the short term - even if Berlin ends up decreasing or revoking the tax.

He told Deutsche Welle that winning back market share in the wake of the Dutch tax experiment was very difficult. He does not expect things to be any easier for German hubs.

"No bakery wants its customers to go for one or two times to another bakery, because they always think [the customers] will stay there," he said. "There will be some people who will go back, but I don't think there will be much of an effect."

Tindemans said Maastricht Aachen Airport is seeking to add more airlines and destinations to its roster. He added that his airport could double annual traffic to almost one million passengers over the coming years if economic conditions remain stable.

FSA broke its own rules in Keydata probe, judge rules

 

High Court judge found that the Financial Services Authority (FSA) had wrongfully used privileged emails to bring its case against Keydata. A further "relief hearing" will now determine the impact of the ruling, which could de-rail the case altogether. It is the latest in a line of setbacks for the regulator, which has been investigating regulatory breaches at Keydata and millions of pounds of missing retail funds for two years. Keydata invested in "life settlement funds", which buy and sell US life insurance and generate high returns. In June 2009 the FSA applied for Keydata's closure "to protect investors", saying it was concerned about "potentially missing assets". The business was fast-tracked into administration and referred to the Serious Fraud Office (SFO). It emerged that £103m of life insurance policies managed by a Luxembourg business, SLS Capital, and sold to Keydata investors as low-risk bonds might have been "misappropriated".

US to pressure Iran over 'plot to kill Saudi envoy'

 

US Attorney General Eric Holder says the alleged conspiracy was "conceived, sponsored and directed from Iran" Continue reading the main story Related Stories Clinton hails break-up of 'plot' Middle East rivalries play out in US The US secretary of state has called for a "very strong message" to be sent to Iran, after allegations of a plot to kill the Saudi ambassador to the US. Hillary Clinton said Washington was preparing new penalties against Iran, which is already subject to a variety of international sanctions. Two Iranians were charged over the plot which US officials said implicated Iran's Revolutionary Guard Corps. Meanwhile the US issued a worldwide alert about possible anti-US actions. "The US government assesses that this Iranian-backed plan to assassinate the Saudi ambassador may indicate a more aggressive focus by the Iranian government on terrorist activity against diplomats from certain countries, to include possible attacks in the United States," the alert said. It urged Americans residing and travelling abroad to review the information available when making travel plans. Iran has dismissed the allegations as false and baseless. Continue reading the main story “ Start Quote The idea that they would attempt to go to a Mexican drug cartel to solicit murder-for-hire to kill the Saudi ambassador, nobody could make that up, right?” Hillary Clinton US secretary of state 'Well-grounded suspicions' Mrs Clinton praised those involved in the operation to uncover the plot. "It was a terrific achievement by our law enforcement and intelligence communities, and we will be consulting with our friends and partners around the world about how we can send a very strong message that this kind of action, which violates international norms, must be ended," she said at a news conference. "This case will, I think, reinforce the well-grounded suspicions of many countries about what they're up to." Mrs Clinton said the suspected plotters had been trying to involve hired killers from Mexican drug cartels. "The idea that they would attempt to go to a Mexican drug cartel to solicit murder-for-hire to kill the Saudi ambassador, nobody could make that up, right?" she said. US Attorney General Eric Holder said Iran's involvement in the plot was "a flagrant violation of US and international law". Continue reading the main story Analysis Mohammad Manzarpour BBC Persian There is a long history of animosity between Iran and Saudi Arabia which stretches back to before the Islamic Revolution of 1979. Religiously, the Wahhabi rulers of Saudi Arabia and the Shia clerics of Iran reject each other's interpretation of Islam. Geopolitically, the two are staunch rivals, engaged in a seemingly never-ending battle for greater regional influence. They have also been engaged in proxy wars for decades, taking different sides in the Iran-Iraq war, Afghanistan, Lebanon and the Palestinian territories. But it is the Saudis' military intervention in Bahrain which may have prompted the alleged plot. It was little criticised in the West but was seen in Iran as a blatant assault on the Shia majority in Bahrain. In a statement, UK Prime Minister David Cameron's office said: "Indications that this plot was directed by elements of the Iranian regime are shocking... We will support measures to hold Iran accountable for its actions." US officials have said military action was not being considered. The US Treasury Department placed five Iranians, including the two men charged, under sanctions on Tuesday for their alleged involvement in the plot. The two accused were named as Manssor Arbabsiar, a 56-year-old naturalised US citizen with dual Iranian and US passports, and Gholam Shakuri, based in Iran and said to be a member of Iran's Quds Force, a unit of the Revolutionary Guard Corps. The other three were described as high-ranking members of the Quds force. Mr Arbabsiar, who was arrested at New York's John F Kennedy airport on 29 September, has confessed to his involvement in the alleged plot, Mr Holder said. A lawyer for Mr Arbabsiar said he would plead not guilty when he was officially indicted. 'Shocking' Mr Shakuri was said to be in Iran. US officials said that on 24 May 2011, Mr Arbabsiar made contact with an informant for the US Drug Enforcement Agency, who was posing as a Mexican drug cartel member. Manssor Arbabsiar appeared at a court in New York City on Tuesday Over a series of meetings, it is said that details emerged of a conspiracy involving members of the Iranian government paying $1.5m (£960,000) for the assassination of Saudi ambassador Adel al-Jubeir on US soil. Justice department officials said the initial envisaged target was the Saudi embassy. But in conversations secretly recorded for the US authorities, Mr Arbabsiar also allegedly considered having the ambassador killed at a purported favourite restaurant, despite the possibility of mass casualties. The plot would have been carried out with explosives, Mr Holder said. But he added that no explosives were ever put in place and the public was not in danger. Mr Holder said Mr Arbabsiar, with approval from Mr Shakuri, wired $100,000 to a US bank account for the informant as a downpayment. Mr Arbabsiar and Mr Shakuri have been charged with conspiracy to murder a foreign official, weapons conspiracy, and conspiracy to commit international terrorism charges. Continue reading the main story “ Start Quote The choice of ambassadorial target is a direct expression of the acerbic tensions in the Middle East between Saudi Arabia, a key US ally, and Iran” Kim Ghattas BBC News, Washington Alleged plot reflects Middle East rivalries Unnamed US officials also told journalists that the Israeli embassy in Washington was also to have been attacked. Iran's official Islamic Republic News Agency called the charges a "propaganda campaign" by the US government against Tehran. The allegations were "a comedy show fabricated by America", Iranian foreign ministry spokesman Ramin Mehmanparast told the semi-official Iranian news agency, Fars. Mr Arbabsiar appeared briefly at a New York City court on Tuesday. He did not enter a plea and was held without bail. He could face a life prison sentence if convicted on all charges, the Department of Justice said.

US issues travel alert linked to Iran plot

 

The US State Department late on Tuesday issued a worldwide travel alert for US citizens, warning of the potential for anti-US action after the United States accused Iran of backing a plot to kill Saudi Arabia's ambassador to Washington.   Murder Plot Iranians charged over assassination plot / Reuters American authorities uncover plot to bomb Israeli, Saudi embassies in Washington, assassinate Saudi ambassador Full story "The US government assesses that this Iranian-backed plan to assassinate the Saudi ambassador may indicate a more aggressive focus by the Iranian government on terrorist activity against diplomats from certain countries, to include possible attacks in the United States," it said in a statement on its website.   The alert expires January 11, 2012, it said.

PM intervenes in Fox flatmate row

 

Beleaguered Defence Secretary Liam Fox is fighting for his political career after the row over his working relationship with a close friend deepened. Prime Minister David Cameron is poised to decide his fate on Monday after ordering the head of the civil service to urgently report back on an internal investigation into whether Dr Fox's links to Adam Werritty, a former flatmate, breached ministerial guidelines. A series of allegations have surfaced over the unusual involvement Mr Werritty had in brokering meetings for Dr Fox, as well as the access he enjoyed to Government despite having no formal parliamentary or Whitehall role. Dr Fox, who has been in Libya on what should have been a publicity coup as he met the country's interim government, was forced to issue an embarrassing statement clarifying comments he made earlier about how a meeting in Dubai in June with a businessman had been arranged. But he also insisted he has nothing to hide and indicated he is the victim of a smear campaign, telling The Sunday Telegraph: "I have absolutely no fear of complete transparency in these matters. I think there are underlying issues behind these claims and the motivation is deeply suspect." Further revelations emerged, however, that cast doubt on previous claims made by Dr Fox that Mr Werritty, best man at his wedding, had never attended formal meetings with overseas dignitaries. According to the Observer, footage has been uncovered that shows Mr Werritty meeting Sri Lankan president Mahinda Rajapaksa with Dr Fox in a London hotel last year. During his visit to Libya, Dr Fox was asked to answer allegations that Mr Werritty arranged the Dubai hotel meeting, away from officials, with him and Harvey Boulter, chief executive of private equity company Porton Group. The Secretary of State said defence industry representatives asked for the meeting "when they happened to be sitting at a nearby table in a restaurant", but emails emerged later that appeared to confirm that Mr Werritty had been involved in setting up the discussions for some time - and Mr Boulter told the Guardian he first met Mr Werritty to arrange a meeting with Dr Fox in April. In a statement issued after the emails emerged, a spokeswoman for the minister said: "Dr Fox was referring to Mr Werritty, and not himself, bumping into Mr Boulter at a restaurant prior to the meeting."

Spanish banks in €6bn merger talks

 

Banco Popular, Spain’s fifth-biggest listed bank by assets, has offered to buy its smaller listed rival Banco Pastor in a merger that marks a new stage in the restructuring of the country’s financial sector. In filings published on Friday by the Comisión Nacional del Mercado de Valores (CNMV), the market regulator, the banks said they were proposing a friendly all-share deal in which Popular would offer to buy 100 per cent of Pastor. More ON THIS STORY Dismay at Spanish bank restructuring Spain nationalises three more savings banks In depth European banks Santander predicts return to big profits Global Insight Italy and Spain The CNMV had earlier suspended trading in shares of Popular, with a total market value of €4.99bn, and of Pastor, valued at €827m, apparently after news of the discussions leaked before the planned announcement on Monday. At Friday’s share prices, the Popular offer represented a one-third premium for Pastor and valued the target bank at 0.75 times book value, according to the Pastor camp, although Popular’s share price could fall once the suspensions are lifted. CaixaBank, the banking arm of the Barcelona-based La Caixa savings bank, was valued at 0.8 times book value at its flotation earlier this year, but Bankia, comprising Caja Madrid and six others, managed only 0.4 times when it was listed. Three savings banks seized by the official bank rescue fund last month were valued at between zero and 0.12 times book. Until now, the Bank of Spain and the Spanish government have focused on forcing unlisted savings banks to recapitalise themselves and merge with each other to reduce costs and improve efficiency after the collapse of the Spanish housing and construction bubble. Listed banks have been seen as potential buyers rather than takeover targets. “This is only the start,” said one person aware of the talks as the boards of the two companies held separate meetings. “There is going to be a huge shake-out in the banking sector.” Popular is a national Spanish bank that has focused on retail banking and lending to small and medium-sized businesses, while Pastor’s activities are concentrated in the north-western region of Galicia. Pastor – along with four Spanish cajas or savings banks – was one of the nine European banks that failed Europe-wide stress tests in July.

Boris Berezovsky tells High Court 'I am not corrupt'

 

Boris Berezovsky, 65, is claiming, in a trial at the Commercial Court in London, that Russian businessman Mr Abramovich ''intimidated'' him into selling shares in Russian oil company Sibneft at a fraction of their value. He is alleging breach of trust and breach of contract and claiming more than £3 billion in damages from Mr Abramovich. Mr Abramovich denies the allegations, disputes that ''oral agreements'' were made and denies that Mr Berezovsky is entitled to damages. Mr Berezovsky today started giving evidence to judge Mrs Justice Gloster as the trial, expected to last more than two months, entered its fourth day. Mr Abramovich, 44, was in court.

Shock and awe from Bank of England

 

Shock and awe was the order of the day from the monetary policy committee on Thursday as it cranked up the electronic money printing presses and set them whirring faster than anyone expected. By promising to buy £75bn in gilts with money created by the central bank over four months, the Bank of England showed its willingness to look beyond Britain’s immediate inflation problem towards the underlying weakness of the economy. Adam Posen, the most dovish MPC member, had called for a purchase of £50bn at the previous meeting. More ON THIS STORY Bank of England increases QE by £75bn Lex Bank of England’s QE2 Pound falls after Bank launches more QE London stocks boosted by fresh Bank stimulus Bank of England statement The Bank’s statement was clear about the aims of QE2 and why it was justified. Current high inflation notwithstanding, weak global growth and the gathering eurozone sovereign debt and bank funding crisis “has made it more likely that inflation will undershoot the 2 per cent target in the medium term,” it said. Buying gilts was necessary to boost economic growth “in order to keep inflation on track to meet the target in the medium term”. Clarity of ambition does not guarantee success. Officials say QE works by encouraging people to switch out of gilts into other assets, raising the price of those and putting downward pressure on sterling; it has an automatic effect improving commercial banks’ funding; it lowers market interest rates by directly raising the price of gilts and it improves confidence. Judging by the market reaction immediately after the announcement, the Bank will be pleased by the initial reactions to its move. Equity prices rose, sterling fell sharply and the yield on gilts tumbled too. Economists are nonetheless unsure of the effects of QE on growth and inflation. The best rules of thumb come from a recent article published by the Bank itself, in which it estimated that the £200bn of assets purchased under the original QE programme had the same effect as a reduction in interest rates of between 1.5 and 3 percentage points. Applying the same conversion factor, the Bank thinks Thursday’s action is equivalent to a rate cut of 0.5 percentage points and 1.1 percentage point, an easing of monetary policy that would qualify as large in the MPC’s record. The same rules of thumb suggest that the Bank expects this round of QE to boost economic output by up to 0.75 per cent and to raise inflation by 0.3 to 0.6 percentage points in the medium term. One of the unsung effects of quantitative easing is the direct effect the policy will have on bank financing, MPC members think. With banks experiencing difficulty in obtaining funding, every pound of electronic money created will buy a gilt, and the recipient will deposit that money in a UK bank. Bank funding is therefore automatically boosted by the £75bn purchase – and possibly further enhanced if banks use the money to finance lending. Inside the Bank, officials are privately dismissive of the chancellor’s “credit easing” efforts at improving funding to small companies directly. They say that QE trumps credit easing because the holders of gilts will seek to buy other corporate assets such as corporate bonds, thereby encouraging greater bond and equity issuance and allowing companies to bypass the banks. They point out that four-fifths of business investment is financed by large companies so action here is most important for growth. Small companies are already griping. John Walker, chairman of the Federation of Small Businesses, said it was important that small companies “can directly benefit from this cash injection and that the banks use it to decrease the costs of credit and to increase the availability of lending”. Even with these rules of thumb regarding QE2, MPC members privately acknowledge that the most important effect of the policy is the least predictable. Will it improve general confidence? If it does, companies will invest and households will decide to spend now in the hope that the Bank has got a grip on Britain’s economic woes. On this, the Bank will not have an answer for some time. But in moving hard and early, the Bank has already created expectations of more QE action to come. Andrew Smith of KPMG, the accountants, said the move “is likely to prove just the first instalment of a larger injection”, while Richard Barwell of the Royal Bank of Scotland said “actions speak louder than words, so we forecast another £50bn in February”.

Spain Regions Race to Sell $1.3 Billion Property This Year

 

Catalonia and Andalusia, two of Spain’s largest and most indebted regions, are trying to sell $1.3 billion of real estate by the end of the year as the country tries to slash its budget deficit and keep borrowing costs from ballooning. “We put the cream of the crop in the portfolios to ensure the sales are completed,” Jacint Boixasa, director of assets for Catalonia, said in interview in Barcelona. “Our target is to sell 550 million euros ($742 million) of real estate by year- end, which is relatively little time.” Spanish regions, which control more than a third of public spending, will play a pivotal role in the nation’s effort to cut its deficit to 6 percent of gross domestic product this year from 9.2 percent in 2010 as the country tries to avoid following Greece, Ireland and Portugal in requiring a bailout. In August, Moody’s Investors Service put Spain’s credit rating on review for a downgrade, citing the worsening finances in the regions. Catalonia is trying to find buyers for 37 properties including the Barcelona stock market on Paseo de Gracia, Spain’s fourth-most expensive commercial street, as well as the Catalan Agriculture Ministry on Gran Via. Jones Lang LaSalle and Madrid- based real-estate consultant Aguirre Newman are advising the government on the sales. Andalusia hired BNP Paribas SA to help raise at least 400 million euros selling 76 properties including the cultural department in Granada and youth centers in Malaga, according to the region’s treasury department. The government will pay around 30 million euros a year to lease the buildings after the sale

Spain's first ever retirement home for gay and lesbian residents.

A landscaped, luxury home is envisaged

A short train ride from central Madrid is a scruffy plot of land covered in weeds and surrounded by wire fencing. In just a couple of months work is expected to start to transform the site into Spain's first ever retirement home for gay and lesbian residents.

Spain has been at the vanguard of Europe in terms of gay rights in recent years, but activists say reforming laws has been easier than changing attitudes.

"Gay old people have to go back in the closet when they enter retirement homes," explains Federico Armenteros, who runs the December 26th Foundation in Madrid.

It is named after the date in 1979 when the law used during Gen Franco's dictatorship to imprison homosexuals - or to send them for "cure" with electric shocks - was repealed.

"For many years, a lot of people believed that homosexuals were sick and sinners," Mr Armenteros says.

"That is more pronounced among older people, and hard to change,"

So the foundation has been working on a solution.

'Insulted and alone'

Continue reading the main story

“Start Quote

I have to make myself as invisible as possible - go back in the closet - so they don't notice me”

Jose Maria Herreras

It has formed a co-operative, recruited architects and designed a luxury, landscaped retirement complex - complete with 115 apartments, gym, spa and restaurant.

There is space for yoga, Tai Chi and dance classes - and plans to house archive material for the first research centre on the history of the gay rights movement in Spain.

Designed to be "gay-friendly", the Foundation says the home will be open to anyone regardless of their sexuality.

Jose Maria Herreras describes it as a dream come true.

He looks relaxed, sitting at street cafe in Chueca - the gay heart of Madrid. But Jose is 65 and lives in a retirement home. He says his life has been miserable ever since the other residents discovered he was gay.

"They started to steer clear of me and insult me," he explains.

"They called me 'queer' and it made me feel awful. My room has two beds but no-one wants to share with me. So I'm alone and it's bad.

"I have to make myself as invisible as possible - go back in the closet - so they don't notice me. And I spend as much time outside the home as possible."

For now the site of the home is just wasteland

Gay rights activists believe that experience is widespread.

Predominantly Catholic Spain was among the first countries to legalise gay marriage and adoption.

Gay pride celebrations in Madrid are among the best-known and most extravagant.

The formerly run-down neighbourhood of Chueca now has a thriving gay scene including clubs, saunas, bars and bookshops.

But four decades of Gen Franco's right-wing dictatorship meant that change came late to Spain and has spread slowly.

'Anti-camp law'

"We only started fighting for our rights in the 1980s," explains Mili Hernandez, who opened Madrid's first gay and lesbian bookstore, Berkana, in 1993.

"Until 1979 there was a law that [they] could take us to jail just for walking on the streets and being a bit camp."

Continue reading the main story

“Start Quote

I think we should go to the homes and ask for our rights”

Mili HernandezSpanish gay rights pioneer

The 1980s Aids epidemic was another setback for equal-rights campaigners.

"Now we have [some] of the best laws in the world for homosexuals, but we didn't have enough time to change mentalities," Ms Hernandez says, and points out that there are still very few high-profile, openly gay role models in the country.

"We're still in the closet," she says.

The bookstore owner sympathises with the problems of gay pensioners in care but she would prefer a different approach.

"I think we should go to the homes and ask for our rights. Ask for a double room, and tell them we are gay. We should try to insist."

But plans for the alternative home are already well advanced.

"It's too tough to make people who are suffering now wait until society changes and the discrimination ends - when people whisper about you and call you names, and won't enter your room," argues Federico Armenteros.

"These things are shrinking but unfortunately they exist."

He and his partner have already signed up for an apartment.

"I'll be living in a quality place, with people who respect, understand, love and care for me," Mr Armenteros says.

"Usually, when you end up in a home you're just another number. But this is something completely different."

'Social need'

A flat at the new complex should also work out considerably cheaper than the average retirement home.

How the home should look eventually

That is largely because a sympathetic local mayor has granted a low-cost 75-year lease on the land.

The co-operative system means members will cover 40% of the home's costs in advance while remaining funds will be sought from the banks.

For the architects who have drawn up the plans - for no charge, so far - the project makes sound sense.

"This is a project which will actually happen - that's important because we've done a lot of unnecessary building in Spain," says chief architect Julio Touza Sacristan, walking the plot with his sketches and artist's impressions.

But he also got involved because he saw a social need for the residence.

"I'm not sure everyone would like to be associated with such a project," he says.

"We're not as modern as we think we are in Spain but we think this is really necessary."

For Jose Maria Herreras, the place cannot be built quickly enough.

"This is somewhere where everyone will be equal," he says. "It's a totally different home where we won't have to hide who we are. We will be people. I will be free again."

Spain judge frees 5 suspected of financing terror

 

Five Algerians suspected of financing al-Qaida's North African branch have been freed by a judge who said there was no significant evidence against them. The judge ordered the men to stay in Spain, report to judicial authorities twice a month and declare any change of address. The men are being investigated on suspicion of providing logistical and financial support to al-Qaida in the Islamic Maghreb, or AQIM. The arrests took place Tuesday in the northern Basque and Navarra regions. Mohamed Talbi, Hakim Anniche, Mounir Aoudache, Abdelghaffour Bensaoula and Ahmed Benchohra have not been charged. National Court Judge Fernando Grande-Marlaska said Saturday that there was no evidence the men had sent "significant sums to Algeria" or that the recipients were "persons related to terrorist activity." The five men had also been under investigation on suspicion of maintaining contacts with radical Islamists in France, Italy and Switzerland. Police seized a large amount of documents and computer material as part of their probe. AQIM operates in Algeria and emerged in the 1990s from armed groups fighting the Algerian government after the army stepped in to cancel the 1991 elections in a bid to stave off a victory by an Islamist political party. The group declared allegiance to al-Qaida in 2006, changed its name and renewed a campaign of bombings and kidnappings across the Sahara. AQIM is currently holding four French hostages, and French officials have called it the biggest terror threat to France and its interests. Dozens of suspected radical Islamic militants have been arrested in Spain since the Sept. 11, 2001, terror attacks in New York and Washington, and again after the 2004 commuter train bombings in Madrid.

EU subsidies fuel Spain’s ravenous fleet

 

Decades of overfishing have left Europe’s fish stocks in peril and its fishermen in poverty. It’s an impasse paid for by EU taxpayers. Yet a proposed revision of the EU’s fishing law, hailed as sweeping reform, is rapidly losing momentum. A look at the industry’s biggest player - Spain - shows what officials are up against. Billions of euros in subsidies built its bloated fleet and propped up a money-losing industry. All the while, companies systematically flout the rules while officials overlook fraud and continue to fund offenders, an investigation by the International Consortium of Investigative Journalists has found. “Spain has earned its bad reputation,” said Ernesto Penas Lado, director of policy and enforcement at the European Commission’s Directorate-General for Maritime Affairs and Fisheries. “The problem is others don’t have the reputation and deserve it just as much.” Spain may not be alone. But as the EU’s most powerful fishing fleet, it is the starkest example of a failed EU policy, critics say. The Spanish fishing industry has received more than €5.8 billion (more than $8 billion) in subsidies since 2000 for everything from building new vessels and breaking down old ships to payments for retiring fishermen and training for the next generation, an fresh analysis by ICIJ shows. Subsidies account for almost a third of the value of the industry. Simply put, nearly one in three fish caught on a Spanish hook or raised in a Spanish farm is paid for with public money. ICIJ’s analysis is the first in-depth look at just how much public aid Spain has received for fishing - primarily from EU taxpayers, but also from Madrid and regional governments. The country has cornered a third of all the EU’s fishing aid since 2000, far more than any other member state. The central government doles out even more for things such as low interest loans and funding for its largest industry associations, which in turn lobby the EU for more industry subsidies, records show. Since 2000, the sector has avoided paying €2 billion in taxes on fuel to the Spanish Treasury. Public monies also fund a surprising range of services. More than €82 million ($114 million) has been spent to promote the fishing sector through advertising and at trade shows. After fishing vessels were hijacked by pirates in the Indian Ocean, Spain in 2009 changed its law to allow vessels to hire private security forces onboard, and then it helped foot the bill to the tune of €2.8 million. The root of the problem, regulators say, is that out-of-control subsidies encourage countries to build up already oversized fleets that are rapidly depleting the seas. “Fish are not an unlimited resource,” said fisheries economist Andrew Dyck of the University of British Columbia. “When the public purse is the only thing propping this industry up, we are paying for resource degradation.” The EU Commission itself recently concluded that “too many boats continue to chase too few fish.” It blamed the situation, in large part, on subsidies. Fish, not human rights One of the most controversial forms of public aid pays for foreign fishing licences. With its own waters increasingly empty of fish, the EU buys rights to the fishing grounds of developing countries such as Morocco, Mozambique and the Ivory Coast. Green groups, fishing experts and some EU politicians have criticised the agreements, saying European fishermen take advantage of poor countries that often lack knowledge and resources to protect their fish stocks. And key agreements cost more than they return on the value of fish. This is the case with Morocco, where each euro invested returns only €0.65 in value added, according to a study funded by the EU. The Spanish industry has received more than €800 million ($1.15 billion) in foreign licenses over the past decade — about two-thirds of the EU licences overall, according to the ICIJ analysis. The agreements have the support of Carmen Fraga Estévez, the European Parliament’s most powerful legislator on fisheries issues. A sharp-tongued politician with an encyclopedic knowledge of the industry, Fraga served as fishing secretary in Spain and has held a seat in the parliament’s committee on fisheries - which she now chairs - for 17 years. Her loyalty to the industry appears to be so deep that when she had to choose between human rights and fish, she voted for the latter. “The fisheries committee has to discuss fisheries issues, not human rights,” she was quoted in the press as saying when in 2009, the committee for the first time voted down a fishing agreement. Days before the vote, 157 civilians died after Guinea’s totalitarian regime opened fire on pro-democracy protesters. The agreement would have handed the Guinean government €450,000 ($639,000) a year for fishing licences. Fraga Estévez declined requests for interviews from ICIJ. Spanish member of the European Parliament (MEP) Josefa Andrés Barea said the subsidised foreign fishing licences are vital. When Spain entered the EU in 1986, very few Spanish vessels were allowed in the Union’s waters. So fishing in foreign waters was - and still is - the only way for many ship owners to make a living. And if Spain isn’t fishing, she said, less savory global players will scoop up the catch instead. "There's a fundamental problem here, which is that major [fishing] powers like China will be there if we're not. And they don't have any rules,” Andrés said. “They're much more predatory than we are." Fewer fish, poorer fishermen EU waters are among the world’s most exploited. Scientists say three quarters of assessed fish stocks are overfished. Eels once served as a delicacy are so depleted scientists doubt they can recover despite a Europe-wide rescue plan. Irish Sea Cod, Baltic Sprat and West of Scotland herring are all dwindling. The trend stretches across the globe. In 2006, the UN’s Food and Agriculture Organization estimated that 75 percent of the world fish stocks were fished to the very limit of - or beyond - sustainable levels. In its latest report, from last year, that figure had risen to 85 percent. “Europe has a long and dark history of overfishing,” said Boris Worm, one of the world´s most renowned marine biologists, working at Dalhousie University in Nova Scotia, Canada. In a 2003 study, Worm showed that industrialised fishing has, since 1950, emptied the oceans of nine out of 10 fish longer than 20 inches such as salmon, cod and halibut. Fewer fish mean fewer - and poorer - fishermen. Across the EU, the sector often costs taxpayers more than it produces. According to a recent report by the environmental group Oceana, at least eight countries received more money in public fisheries aid in 2009 than the value of their landed fish. The fishing industry was the only segment of Spain’s economy that shrunk in the 2000s. The northwestern region of Galicia more than anywhere else in Europe relies on the industry - and the subsidies - to stay afloat. Yet the area lost a third of its fisheries-related jobs in the decade leading up to 2006. In the Galician port of Vigo on the Atlantic coast, more fish pass across the docks headed for consumers’ plates than in any other port in the world. Coastal towns are riddled with signs boasting subsidised fishing projects. Politicians include the sector as a central theme in their campaigns. The industry’s power was propelled by the 1960s push for industrialisation by the fascist Franco regime. Franco himself was an avid fisherman and a Galician by birth. “Economically the [fishing] industry is between the tomato and the potato. But politically it is more important than any other industry,” said EU’s head of fisheries control Valérie Lainé. The sector “has always been protected by the government - without the industry, Vigo would be dead, Galicia would be dead.” The powerful Galician industry group ARVI, which boasts of its close ties to lawmakers, acknowledged that fishing would not be viable without public funding. In a recent position paper, it encouraged politicians to support subsidies to modernise outdated vessels, fish in foreign waters and build new on-shore cold storage. Meanwhile, subsidies steadily flow to the region, but sometimes only make things worse. Víctor Muñiz has relied on fishing for decades. He used to own vessels, as did his father before him. Not anymore. Now they operate a fish processing plant in the Galician town of Meaño. The factory was renovated in 2009 with EU subsidies to process and freeze up to 300 tons of fish per hour; it was expected to employ 100 people. But the brand new machinery stands silent. “There should be 10 trucks with mackerel here,” Muñiz said in a bitter tone as he walked through the 8,000 square meter plant in April. But within 20 days of the start of the season, most vessels had already scooped up their entire mackerel quota. Muñiz said the quota is too low, but his major frustration is that too many factories like his were subsidised in the first place. “You present a €2 million project, and they give you 60 percent. You’ve told them how much fish you're going to produce and what kind. Somebody should have told the processing plants: ‘No, sorry, this is the quota for mackerel.’” Policy in a shambles By 2006 it was clear that EU’s fishing policy was in a shambles. Fleets were bloated. Stocks were crashing. Researchers commissioned by the EU drafted a series of reviews of the community’s fisheries law - the Common Fisheries Policy, which will govern the fleet for at least a decade. One little-known document is informally called the “Frankenstein report” because of its damning conclusions. It lays the blame squarely on influence-driven subsidies: The sector would be broke without them. Swedish Green Party MEP Isabella Lövin said the key problem of the EU fisheries policy is that it was “modeled after agricultural policy. You provide fertilizer and farming equipment, you get more vegetables. So they used the same model in fishing - you increase the number of boats, you get more fish. But it doesn’t work that way,” she said. “You end up with less fish.” Subsidies over the past decades built a bloated EU fleet that plundered fish stocks. Efforts to reduce the capacity have focused on paying companies to break down old vessels. But that reduction has been undercut by subsidies given to modernise existing vessels, enabling them to catch more and more fish. According to the 394-page “Frankenstein report”, EU-countries need to cut capacity in half and severely restrict - and adhere to - quotas for fish stocks to recover. But Spanish Fishing Secretary Alicia Villauriz said policymakers must consider more than capacity. “You cannot make a statement saying: If you reduce the fleet everything will be more profitable. You'll also destroy a lot of employment.” Any transition, she said, would need to happen slowly. That the European fleet was bloated was nothing new - calls to cut it down began in the 1980s. But the aid kept rolling in to build new ships and modernise old ones. “The sector has managed to attract more financial resources than would be justified under normal conditions,” the “Frankenstein” report said. The EU researchers also found that groups set up to advise the Commission on a new fishing policy - largely made up of industry representatives - consider the platform “mainly as a channel for political influence, and secondly as a forum for discussion” of the new law. In short: They were lobbying for their interests instead of trying to find solutions. The EU-commissioned “Frankenstein” report concluded that EU policy did “not provide the right incentives for responsible fishing, or may even induce irresponsible fishing.” Turning a blind eye Protected stocks worth as much as €16.7 billion ($23 billion) are illegally traded worldwide every year - making the black market in fish more valuable than smuggling stolen art. Many of the players in the illicit trade set up shell companies in places that do not adhere to international conventions protecting the oceans. Spanish nationals register more vessels to “flag-of-convenience” countries than any other besides Panama, Honduras and Taiwan - which are themselves considered nations where a ship-owner can register their boats without having to adhere to strict tax or safety requirements, and can operate without oversight. It is rare for the commission to take a member state to court. The European Court of Justice - Europe’s highest court - has found Spain guilty three times of failing to implement EU fishing laws. Spain has refused to enforce catch limits, police its fleet or impose adequate punishment, the court ruled. One of Spain’s most widely criticised shortfalls is policing its port of Las Palmas on the Canary Islands off the Moroccan coast. Illegal shipments of fish plundered from West African waters regularly filter into the EU through the port, according to multiple investigative reports. Fishing secretary Villauriz said control in Spain is expensive because of the sheer size of its industry - more than 10,000 fishing boats, 3,084 miles of coastline and 47 major ports. “But that doesn't mean we're not taking care of our obligations in control matters” she added. The Spanish Ministry of Environment, Agriculture and Fisheries told ICIJ that inspections have nearly doubled since 2004 to 9,323 in 2010. That’s still far from the number of inspections other countries are carrying out - the United Kingdom logged nearly 50,000 inspections in 2004. But some things don’t appear to have changed. The number of inspectors in the port of Vigo - Europe's largest fishing port - remains the same as in 2003, when EU officials blasted Spain for the measly number of national inspectors at its ports. Today four inspectors oversee more than 700,000 metric tons of fish a year - that’s nearly 20,000 kilos of fish per inspector for every hour of every day of the year, including Christmas. Subsidised offenders Spanish officials, like those in many other EU countries, do not take into account whether its nationals have been involved in the illegal fishing trade before doling out public aid. Neither Spain nor the EU will make public information about offenders who have been fined for illegal fishing - also called Illegal, Unreported and Unregulated fishing (IUU). But a sliver of insight can been gleaned from a database of appellate court rulings. ICIJ reviewed every court case adjudicated since 2000 in which subsidised companies unsuccessfully appealed fines imposed by the Spanish government. In more than 80 percent of cases in which the appellant could be identified, firms continued to receive subsidies after the court had upheld penalties, the analysis shows. There’s only one case in which the ministry of fisheries tried to prevent a company from receiving subsidies, according to ministry officials. That Spanish ship-owner so exemplifies the quagmire as to make it a near cliché. Government officials and international regulators have repeatedly targeted Vidal Armadores for its alleged involvement in a decade-old international network of pirate fishing vessels, court and law enforcement records show. Brussels demanded multiple times that Spain recover subsidies and “take action against” Vidal Armadores. At least through 2010, however, Spain and the EU continued to pay the firm — at least €8.2 million ($12 million) since 1996. Last year the government finally fined the company and cut off aid, but the case is pending appeal. In an interview with ICIJ, one of the firm owners, Manuel Antonio Vidal Pego, denied allegations of illegal fishing and said the company was entitled to the subsidies it received. Like Vidal Armadores has in the past, seafood giant Pescanova targets Patagonian toothfish - sold in the US as Chilean sea bass. Unlike Vidal Armadores, Pescanova is a member of an association that fights illegal fishing. In Spain, it boasts a trusted motto: “Lo bueno sale bien,” translated as “Good things go well.” But the company has its own troubles. Last year, Pescanova’s US subsidiary pleaded guilty to illegally importing $1.2 million worth of toothfish. While that case — nicknamed “Operation Toothless” — was pending, the US Department of Justice launched a second investigation into another allegedly illegal importation. The status of the second investigation is unknown. Pescanova is one of the Europe’s three largest seafood companies, with a fleet of around 100 boats fishing worldwide and annual sales of €1.53 billion (more than $2 billion). Yet, since 1995 the company has pulled in more than €175 million ($250 million) in subsidies, according to the ICIJ analysis. Pescanova repeatedly declined requests for interviews from ICIJ. “We've had 50 years of positive history,” said spokesman Angel Matamoro during a brief phone exchange. “I don't think you're asking about themes that will promote our image.” Regarding the US investigations, he said, “Whatever we had to say, we said it to the US court. The company follows scrupulously the law in every country it’s in.” One firm that broke the law and continued to receive aid is Albacora, one of the largest tuna companies in Europe. The company’s boat Albacora Uno last year was fined $5 million - the largest fine in US history - for illegally placing fishing gear in US waters multiple times during a two-year period. The boat was built with subsidies and used subsidised fishing licenses. And even after the US fined the firm, Spain granted Albacora €1.8 million ($2.6 million) worth of subsidies to fish in foreign waters. The Spanish ministry of fisheries told ICIJ it had fined Albacora but will not deny the company further aid. Albacora director Jon Uria said the 67 infringements were an “isolated” incident. The company was unaware of the infractions, he said, until the US government alerted executives. In his view, the fine was disproportionate to the offense. A radical reform? Javier Garat is the Spanish industry’s most visible and eloquent lobbyist. He was born into the family that co-founded Albacora. Garat is now a shareholder of the company, but he says that does not influence his lobbying. In his meetings with officials, he often requests subsidies for the sector. “That money has generated wealth,” he said. “It’s been used to modernise an obsolete fishing sector” so that today “we have better, more modern, more secure vessels.” Garat heads Spain’s powerful lobbying group Cepesca as well as the Europe-wide industry group Europêche — both of which operate with EU subsidies. In the halls of the ministry of fisheries in Madrid, the word is that Garat will be appointed Spain’s next fishing secretary following the November elections. Following closed-door meetings at the ministry in April, Garat and Spanish Minister of Environment, Agriculture and Fisheries Rosa Aguilar announced that the ministry and Cepesca were devising a “common roadmap to defend Spanish interests” in the overhaul of the EU fishing policy. After two years of deliberation, the European Commission presented its proposed legislation in July. No one but the commissioner herself appears satisfied with the draft. But the negotiations have just begun. Political alliances and lobbying will determine the final language to be voted upon before the law goes into effect 1 January, 2013. Garat called the reform draft “cowardly.” He said the commission succumbed to pressure from environmentalists and biased media “without taking into consideration the repercussions on the fishing sector.” In his view, the state of the fish stocks is not as “catastrophic” as commission officials appear to believe. Yet it seems the industry’s efforts have staved off its worst nightmares. Nothing came of ambitions to make overfishing a crime, as happened in the US under the Magnuson-Stevens Act, or to require quotas be consistent with what scientists say is biologically sustainable. There was no proposal on how to limit the oversized fishing fleet or to implement quotas in the fishing agreements with foreign countries. EU’s top fisheries official, commissioner Maria Damanaki, told ICIJ her proposal is “radical.” She said Brussels will stop directly subsidising the industry. “Now we are going to give money in a very prudent way and under very strict conditions,” she said. “And we are going to ask for paybacks in the case of illegal fishing.” Damanaki also highlighted proposed changes in the fishing partnership agreements. “We are going to call them sustainable fisheries agreements because we're going to fish only for the surplus — if there is any surplus,” she said. “Also, we're going to respect human rights in these areas.” Given the hype, Green party MEP Loevin said, “I had expected a clause on human rights.” But the human rights clause originally in the legislative text was missing from the final proposal. Loevin ran for office on a ticket pledging to change the fishing policy. She said the proposal is a lot less radical than she had hoped - especially as the coming negotiations will water it down even more. “The law can't allow for politicians to compromise with the environment when long-term environmental goals clash with short-term profit,” she said. Ernesto Penas Lado, director of the European Commission’s fisheries policy unit, said the mindset in Spain and among fishing nations globally is that no single country feels responsible for the fate of the fish in the sea. “It’s the tragedy of the commons,” he said. “Because the resources belong to no one, they belong to everyone.” In the EU, 27 countries have to come to a consensus on a common fishing policy. There’s no mentality of making a sacrifice for preservation, Penas said. “People think: Whatever I do not fish, my neighbor will.”

Spain's Gold Rush

 

Magdalena Gómez knows the solution to her hometown's suffering. Like roughly 20% of the adult population in Tapia de Casariego, the 27-year-old mother of two is unemployed. She has seen many of her neighbors, desperate for work, move away from this corner of northwestern Spain in search of opportunities in bigger cities. Which is why, even though she knows that a sizeable portion of Tapia is opposed to it, Gómez supports the construction of a new mine. "We don't have anything else here," she says. "We need that gold." There's a gold rush under way in northwestern Spain, and Tapia is just one of the places trying to figure out what to do about it. With gold prices skyrocketing, deposits that have lain untouched for decades, if not centuries, are suddenly looking awfully appealing to international mining companies. And with the Spanish economy in profound crisis, the jobs that those companies promise — even if they're not permanent — are looking just as irresistible. But as the controversy dividing the town of Tapia suggests, not everyone is convinced that the benefits are worth the risks.