Western European News Digest

Blair's Lord 'Cashpoint' Levy Finally Arrested

Scotland Yard said July 12 they were holding a man in custody under the 1925 Honours (Prevention of Abuses) Act. It did not take long for sources to confirm that the man under arrest was Lord Levy of Mill Hill, who is otherwise known as "Lord Cashpoint," being Tony Blair's chief bagman and personal Middle East envoy.

Lord Levy's arrest follows charges by one of those denied a peerage, "Curry King" Sir Gulam Noon, that he had declared his 250,000-pound secret loan to the Labour Party only to be told by Lord Levy that the loan was "not reportable" and he should remove it from his nominating form.

Sir Gulam Noon later had his peerage blocked when the loan became public. Sir Gulam was one of four men nominated by the Labour Party for peerages, who had loaned a total of 4 million of the 14 million pounds in secret loans raised by the party before the 2005 general election. Sources have revealed to the Daily Mail that a letter which set out the terms and conditions of the loans made clear that they did not have to declare the money.

Commenting on the day's developments, Alex Salmond, the leader of the Scottish National Party, said, "The water is [gathering] round the ankles of the Prime Minister," adding about the arrest of Lord Levy this afternoon: "This is Tony Blair's personal friend, bagman, and fundraiser. I think we can say that Tony Blair's personal pack of cards is starting to tumble down." The Scottish National Party was the first to report its concerns about the "cash-for-honours" scandal to the police.

Police To Interrogate Tony Blair Under Caution

The Daily Mail tabloid reported July 12 that following the questioning of Lord Levy of Mill Hill, that the Prime Minister himself will be "interrogated under caution" by Scotland Yard within the next month or two as a target in the cash-for-peerages scandal. Interrogation under caution means that anything a person says can be used against him or her if the person is subsequently prosecuted, and anything that the person refrains from saying can draw adverse implications. This suggests that the scandal will drag on in a most humiliating fashion for Tony Blair into the autumn Labour Party conference, obviously raising once again the happy thought of Blair's early resignation.

A Daily Mail Populus Poll is showing that 75% of British voters (and 59% of Labour's) want Deputy Prime Minister John Prescott to resign. Also, the number of people who want Blair to resign this year has risen from 41% in January to 49%, while an additional 24% want him to leave by next year.

Czech Parliament Fails To Elect Chief Speaker

In its second round of voting on July 7, the votes for Chief Speaker of the Czech Parliament are still equally divided between the Conservative-Green and the Socialist blocs. As long as there is no new speaker, the new Parliament cannot work, nor can it elect a new Prime Minister; therefore, the "constituting session" of the new Parliament could not take place.

The lame-duck Social Democratic Prime Minister Jiri Paroubek will stay in office for the time being, and it cannot even be ruled out that new elections will have to be held, should the 60-day deadline pass for constituting a new Parliament and government after the elections.

Polish PM Marcinkiewicz Tenders Resignation

The resignation of Polish Prime Minister Kazimierz Marcinkiewicz July 7 triggered the first major crisis since the new government came into power last October. While no official reasons have been given for Marcinkiewicz's resignation, the press commented that there have been frictions between Marcinkiewicz and President Lech Kaczynski. Marcinkiewicz reportedly had a recent meeting with opposition party leader Donald Tusk, probably to sound out possibilities for new coalition combinations.

The new designated Prime Minister will be Jaroslaw Kaczynski, the twin brother of President Lech Kaczynski, and the chairman of the Solidarity and Justice party (PiS). The lower house of parliament, the Sejm, will take a vote of confidence next week.

Political observers have underlined that what is fueling the crisis is the question of Poland's future foreign policy orientation, specifically, toward Germany. The Polish press is continuing to play up a German satire piece ridiculing Kaczynski as a potato, which was published by Tageszeitung, a left-wing/greenie daily (see last week's Europe Digest).

Sources report that there is unease about the current orientation of the government. Foreign Minister Wladislaw Bartoszewski sent a letter to the President complaining about his cancellation of the important summit with Jacques Chirac and Angela Merkel. The President, he said, for reasons of state should absolutely have been there to coordinate Poland's policy toward the G-8.

As Bartoszewski put it, a satire can not be a reason to produce a state crisis.

Lazard CEO Kornblum Likely Key to New Merkel 'Impulse'

The former U.S. Ambassador to Germany, John Kornblum, not only served as a chief interpreter of Bush's "new ideas" for the German media, but also as a guide for the President during his sight-seeing tour of Stralsund, along with Chancellor Angela Merkel July 13. Kornblum knows Stralsund from several years ago, for example, when his Lazard bank tried to arrange the sale of the savings bank there to private banks.

The special mission indicates that Kornblum most likely did play a key role in forging the "new partnership impulse" between Bush and Merkel. That partnership includes business, naturally: Kornblum's Lazard has a leading role also in the American Chamber of Commerce, which just two days ago, preceding Bush's arrival in Germany, had an "American investors conference" in Dresden, on the theme of "increased U.S. investments in eastern Germany."

Rather than industrial investments (which are welcome), the kind of businesses promoted by Lazard and other investment banks and funds, is the Fortress purchase of Dresden's municipal housing sector, several months ago.

Enron-Linked Banker Found Dead in London

The body of Neil Coulbeck, a former executive of Royal Bank of Scotland Group PLC, was found in a wooded area near his home. British police reportedly described the death as "unexplained." Coulbeck had given a statement to the FBI in the Enron fraud case, involving the extradition of three other bankers who were scheduled to be sent to the U.S. on July 13, to face fraud charges. The latter concerns the bankers (David Bermingham, Gary Mulgrew, and Giles Darby) advising their employer, National Westminister Bank, a unit of the Royal Bank of Scotland, to sell part of a company owned by Enron for less than it was worth, later purchasing and selling a stake in the sale for their own profit. A further odd twist in the story, is that the three bankers have been extradited under a U.S.-U.K. 2003 treaty—not ratified by the U.S. Senate—under the rubric of counter-terrorism.

Hungarian Unions Demonstrate Against Budget Cuts

There have been mass demonstrations against austerity organized by the labor unions in Hungary in recent days. The demonstrations involved 200,000 in protest against the government's draconian cuts: plans to lay off 12,000 public employees, including thousands of teachers, and to increase the VAT from 15 to 20%. The government is also threatening to close down railway lines.