In this issue:

Former BBC Chairman Denounces Blair Witch-Hunt

BBC To Be Cut Down to Size

Chancellor Schroeder Imposes Silence on SPD

Saxony Government's New and Dangerous Welfare Scheme

Malaysia-Germany Trade Increasing

Saxon Christian Democrats in Panic Over Vote Losses

Chancellor Schroeder's Hectic Day in Moscow

New Left Party Takes Shape, But Short on Program

From Volume 3, Issue Number 28 of Electronic Intelligence Weekly, Published July 13, 2004

Western European News Digest

Former BBC Chairman Denounces Blair Witch-Hunt

BBC chairman Gavyn Davies said in a July 6 speech that the Blair government has waged a campaign against the BBC "in a remorseless and aggressive manner, with scant regard for the freedom of the press, or the independence of the BBC." The Guardian received a copy of the speech, delivered at Middlesex University. Davies and BBC director general Grey Dyke, who is now writing his memoirs, resigned in January in the brawl over weapons expert David Kelly's "suicide" and the Hutton Report whitewash of Prime Minister Tony Blair and his government, in the Kelly death and the question of hyping of Iraqi WMD, before the Iraq war.

The pre-Hutton BBC had twice interviewed Lyndon LaRouche on the Cheney neo-cons in the U.S. and Iraq.

Davies said he was "proud" to have stood up to Downing Street. "They may have thought that they were pursuing a legitimate grievance. From where I sat, their methods of seeking redress for that grievance looked more like a witch-hunt."

Davies said BBC governors had agreed to a strong defense against the Blair government's objections of its coverage of the now totally discredited Iraq dossier. "In a historic decision, the governors roundly rejected these complaints, and the manner in which they had been made, and reasserted the right of the BBC to report British and international politics without interference from Downing Street. I was proud to be chairman of the governors that night, for it would have been much easier to have bent the knee to No. 10."

Davies criticized Downing Street's treatment of weapons inspector Dr. Kelly: "The government discovered that David Kelly was the source of the BBC story, and instantly decided to expose him, and discredit him, simultaneously. When David Kelly tragically committed suicide, the government found Lord Hutton to conduct a public inquiry. The evidence given to Lord Hutton suggested both the BBC and the government may have made some errors, but much of the gist of Mr. Gilligan's original story had been correct."

BBC To Be Cut Down to Size

The July 6 Guardian reported that a broad review of "editorial policy" at the BBC took place after the Hutton Report, and the result is a new regime, including cost-cutting and separation of the directors and the Board of Governors, who were alleged to be "too close" to control of the directors. A "journalism school" is to be set up to train reporters, clearly to exert greater editorial control. The BBC 10-year royal charter is up at the end of 2006, and a lot of changes are to be made in the interim.

The new director general, Mark Thompson, and chairman Michael Grade agreed that BBC programs should have to pass a "public value test." They also agreed to a "reformed" board of governors independent of BBC management, which would hold BBC management "to account."

Chancellor Schroeder Imposes Silence on SPD

In response to the public uproar against the planned "Hartz IV" labor/welfare cuts, Germany's Chancellor Gerhard Schroeder deployed the head of his office, Frank-Walter Steinmeier, to summon leading politicians of the Social Democratic Party (SPD) to Berlin July 6, telling them not to make any more public statements on the issue, because "too much is being said, too much damage has been caused already."

SPD leaders have been instructed to keep their mouths shut until after the closed-door session of the government on details of how the Hartz IV package is to be implemented.

This leak from a leading SPD source converges with the other leak, broadly covered in the press July 7, that during Monday's special meeting with labor union leaders, the Chancellor threw a fit, yelling that he represents labor and not the labor leaders.

Saxony Government's New and Dangerous Welfare Scheme

Press in the eastern German state of Saxony reported July 7 that the Saxon government will offer "relief" to municipalities that are faced with bankruptcy because of skyrocketing expenses for welfare.

The government plans to scrap fixed entitlements of state loans to municipalities for infrastructure projects, such as construction of schools and hospitals, roads, and water supply, and replace these with "free" funds that can then be spent on welfare and other social expenses.

For the fiscal years 2005 and 2006, this involves 90 million euros and another fund of 55 million euros, plus 200 million which will be "granted" to the municipalities via cancellation of their tax debt to the Saxon state. Furthermore, 55 million euros will be made available in the program for fiscal years 2007 and 2008.

Malaysia-Germany Trade Increasing

Trade volume between Malaysia and Germany is expected to reach $1.84 billion in 2004, up from about $1.76 billion in 2003, through enhanced economic bilateral relationships, said Wolfgang Trautwein, Germany's deputy head for economic relations with Asian Pacific countries.

"The German government is intensifying efforts to help small and medium-sized enterprises (SMEs) find business partners in Malaysia," he said, adding that the Malaysian-German Chamber of Commerce and Industry (MGCC) had been bringing in delegations from Germany for this purpose.

Trautwein is accompanying 10 SMEs from the state of Saxony who will be holding up to 60 meetings over the next two days, with 20 Malaysian companies to discuss possible joint ventures, trade, or distribution partnerships.

German delegates represent textiles, shipbuilding, fire protection and rescue, machine tools, and agriculture. The Malay timber industry was identified as having the highest potential for increased trade between the countries at July 5 joint meeting in Kuala Lumpur, Malaysia.

Saxon Christian Democrats in Panic Over Vote Losses

The incumbent Saxon state government is run by the Christian Democrats with a solid absolute majority of 56%, which is more than five times the SPD's 10.7% in the 1999 election, but the CDU is far from secure, because it lost 9% of the 1999 vote in the June 13 European elections. In municipal elections that same day, the CDU lost votes massively in Leipzig and Dresden, despite the party having deployed two of its most prominent members, Robert Clemen and state CDU vice chairwoman Christine Clauss, into salvage the vote. Victory in the Sept. 19 state parliament elections in the Leipzig, Dresden, and other districts is not at all secure. The mood among considerable sections of the Saxon population is certainly not for the SPD, but is it not for the CDU, either. There is panic in both parties.

Chancellor Schroeder's Hectic Day in Moscow

Accompanied by a dozen industrialists, German Chancellor Gerhard Schroeder arrived in Moscow July 8, where he met with President Vladimir Putin, before proceeding to the Financial Academy, where Schroeder delivered a speech and held a discussion with students of the academy.

In the evening, Schroeder and Putin attended the German-Russian industrial seminar, which included, on the German side, leaders of Siemens, EADS, Daimler-Chrysler, Knauff, Metro, Ruhrgas, EON, Lufthansa, Deutsche Bank, and Commerzbank, among others.

Russia was represented by President Putin, and leaders of Gazprom, Irkut, Aeroflot, Lukoil, RusAl, and Sberbank, among others.

New Left Party Takes Shape, But Short on Program

Meeting in Berlin July 3-4, leaders of at least 40 to perhaps 70 local and regional dissidents of labor unionists, Social Democrats, and disgruntled members of other leftist parties resolved to form an "Election Initiative Labor and Social Justice" with a national coordination center. Those meeting in Berlin claim to represent about 10,000 voters nationally.

The initiative is preparing to run as an independent party or election alliance separate from, and against, the SPD in elections from 2005 on. It plans to run in elections for state parliament in North Rhine-Westphalia and Schleswig-Holstein in spring 2005, if the government's Agenda 2010 and its most brutal part, the new Hartz IV welfare package, remains German government policy.

The initiative's programmatic proposal is weak, calling for reversal of the Hartz IV package and essential aspects of the health reform, increased taxes for higher income-earning citizens, and reviving the property tax. There is no pro-investment, pro-growth proposal.

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