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Why Germany opposes a powerful euro solution

Despite rising international pressure, Merkel refuses to allow the ECB to act as the lender of last resort

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Why Germany opposes a powerful euro solutionGerman Chancellor Angela Merkel(Credit: AP Photo/Michel Euler)

BERLIN, Germany — With the debt conflagration now blazing across Europe’s borders, the world is urging the euro zone’s leaders to staunch it by unleashing the powers of the European Central Bank.

Global Post

Many European leaders are advocating this as well. The problem: Germany is resolutely opposed to this.

The stakes could hardly be much higher. Forget about tiny Greece, Portugal and Ireland. Italy, the zone’s third largest economy, owes $2.55 trillion. It will have to refinance a staggering $530 billion next year alone, and investors are currently demanding unsustainable rates, in excess of 7 percent. Meanwhile, France’s interest rates are rising, and ratings agencies are threatening its AAA status. Even Germany — the continent’s economic powerhouse — is having trouble financing itself.

Fear is mounting that Europe’s debt crisis could rage out of control, ultimately causing the breakup of the currency union or worse.

The most surefire solution would be for the ECB to declare that it would act as a lender of last resort. That option would require a change in the bank’s charter, but it wouldn’t even demand taxpayer money, given that the central bank can simply print it.

In a dramatic speech, Polish Foreign Minister Radosław Sikorski virtually implored Chancellor Angela Merkel to act. “I fear German power less than I am beginning to fear German inactivity,” he said in Berlin on Monday. “You have become Europe’s indispensable nation. You must not fail to lead.”

A New York Times editorial characterized Germany’s stubborness more succinctly, calling it “absurd.”

Despite this rising chorus of pleas, Germany still says “nein” to using the ECB. (The country is also rejecting another powerful option, of issuing euro bonds that would pool the zone’s credit rating, reducing costs for the highly-indebted nations that are straining the continent, but increasing the cost for more fiscally-disciplined countries.)

So is Germany’s refusal really absurd, as The Times suggests? What exactly are its leaders thinking?

Analysts say that firing up the ECB’s printing presses to solve the crisis is something that goes deeply against the grain here. Instead Germany has been pushing austerity on indebted countries and calling for closer coordination of the euro zone’s spending and budget policies and tough sanctions on those who break the rules.

Some experts say Chancellor Angela Merkel is simply playing hardball, holding out on the issues of the ECB and eurobonds in exchange for concessions.

“Mrs. Merkel’s position has been to use the pressure that is exerted by the markets to help push countries that have budget or generally public finance problems towards a much stronger reform drive,” said Timo Klein, senior economist with IHS Global Insight. He adds that she is using that same pressure to try to make changes in the EU treaties to allow for greater budget supervision. “Obviously this is a high risk strategy,” he adds.

But Berlin also disagrees with its foreign detractors regarding the wisdom of using the ECB as a lender of last resort. “If this were to be seen as a standard procedure in future — that the ECB would be obliged to buy up large quantities of government bonds — then that is nothing else than monetizing that debt, and then before long you will have noticeable increases in inflation,” Klein said. (Printing currency essentially means that more money is chasing the same goods, which drives up prices.)

Inflation is profoundly worrying to Germans, due to the traumatic experience of hyperinflation in the early 1920s, when the personal assets of the majority of the population were wiped out. “That fear is so deeply ingrained, almost 90 years on, this is still very much present on people’s minds,” Klein said.

“Germans are probably more inflation averse then people in other countries,” said Sebastian Dullien, professor of international economics at Berlin’s HTW University. But he adds that they have become more concerned with inflation recently than they were between World War II and reunification, even though inflation was actually higher then. One possible explanation, he says, is that wages have stagnated in Germany, meaning that even slight inflation eats into people’s spending power more.

Moreover, where other see a necessary bailout, Germans see a handout to countries that are living beyond their means. They regard this as letting them off the hook for their profligate ways. Berlin is convinced that only by imposing stringent sanctions on these debt sinners will they enact reforms. It also sees this as the best way to win back market confidence.

This is a view many German economists share. “In Germany there is this feeling that if you just cut spending strongly enough then confidence will return and you will have more investment,” Dullien said. He points out, however, that market panics show that financial markets are not always efficient and don’t always process information adequately.

Nevertheless the thinking in Germany is that inflationary policies are wrong-headed in that they might cover up the cracks but don’t address the real issues.

“The use of the ECB will not solve this problem in the long term,” said Matthias Kullas, of the Center for European Policy, a conservative think tank based in Freiburg. “It can only buy time. The basic problem is that the euro zone is a suboptimal currency union, in which the states’ competiveness differs so widely.” That breeds imbalances that inevitably lead some countries to become indebted.

The German government, Kullas argues, wants to make sure that Europe gains the power to supervise budgets before it resorts to the ECB or eurobonds. “If the ECB is used before that is agreed, then many states would quickly give up their efforts to reform.”

The government also knows that it will have to wrest concessions at the forthcoming December 9 summit in order to placate voters back home. The bailouts have been deeply unpopular among Germans, who see their taxes flowing to others less disciplined than themselves. Indeed, at times Merkel has seemed paralyzed by the prospect that the electorate will punish her for throwing German taxpayers money at the problem.

“Merkel [has] always acted tactically in this crisis,” said Dullien. “She always tried to do what was most popular but she didn’t have a strategy and didn’t know where she actually wanted to end up.”

It is certainly true that Merkel has not effectively explained to her citizens what is at stake. “The story might have been different,” Dullien argued, “if she had stepped up and said: ‘The euro is vital to German national economic interest. It’s not out of altruism that we are doing it. It’s just because we are [heavily] export-dependent — this is what we need to do.’”

In fact German businesses are becoming increasingly uneasy at the way the crisis is dragging on. “It is important that the euro crisis be solved as quickly as possible,” says Anton Börner, president of BGA, Germany’s leading exporters association. “Not just for Germany but for the whole world. This uncertainty is very difficult to cope with and cannot be allowed to continue. Uncertainty is always bad for business.”

Nevertheless, while from the outside Merkel seems to be dragging her feet in the crisis, for many in Germany she has already gone too far. “She is clearly caught in a dilemma between domestic political demands and foreign calls on her,” Klein added. “That is a very difficult position, and she’s trying to muddle her way through.”

Analysts are convinced that in the end Merkel and the other leaders will come to some kind of compromise agreement. “I think the fear of a euro zone break up is simply too great,” Kullas says. “No one will want to be responsible for that.”

The new AIDS crisis: Funding

Scientists believe they can finally stem the epidemic, but money is a major obstacle

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The new AIDS crisis: Funding (Credit: Reuters/Yiorgos Karahalis)
This article originally appeared on GlobalPost.

KISUMU, Kenya – Thirty years after the discovery of AIDS, scientists believe for the first time that they now have the tools to beat back the deadly virus.

Global Post

The evidence is found in HIV prevention research conducted here on the shores of Lake Victoria and in several other parts of sub-Saharan Africa, long the epicenter of AIDS. The most notable research discovery stems from the HIV Prevention Trials Network 052 clinical trial, a U.S.-funded, nine-country study that found early treatment reduced the risk of HIV transmission to an uninfected partner by 96 percent.

The 052 results – announced to a standing ovation in Rome at the International AIDS Society conference in July – was one in a line of recent breakthroughs, including the benefits of male circumcision to prevent infection, and smaller conceptual advances in an HIV vaccine candidate as well as with microbicides, or gels used by women to stop transmission.

But the gloomy global economic situation, and recent scale-backs in HIV funding around the world, have cast great doubt as to whether policymakers will take advantage of the combination of new prevention tools to fight AIDS.

This collision of scientific advances vs. economic realities also comes at a heightened political moment of the U.S.’s own making: Secretary of State Hillary Rodham Clinton earlier this month called for an “AIDS-free generation,” and the United States’ actions on AIDS will be in the spotlight during next July’s International AIDS Society conference in Washington, D.C., which is being held in the U.S. for the first time in 22 years due to the Obama administration’s decision last year to end U.S. entry restrictions on people who have HIV. The conference is expected to attract more than 25,000 people from around the world.

President Obama is expected on Thursday — World AIDS Day — to talk about his administration’s next steps on AIDS, following Clinton’s speech. This would be his first major speech on AIDS as president; he has remained largely silent on all global health issues. Even when Obama announced a bold new Global Health Initiative, the White House put out only an eight-paragraph statement.

“The terrific science in the last year is coming up against the fiscal constraints,” said Chris Collins, vice president and director of public policy amfAR, the Foundation for AIDS Research. “It is going to take choices. That is the big challenge for policymakers in the next couple of years: How to get above the day-to-day politics here and use the resources as strictly as possible. We now need to hear our president articulate his policy action plan for an AIDS-free generation.”

Several sources within the Obama administration said in interviews that Clinton’s speech at the National Institutes of Health was at least partially spurred by the realization that next year’s AIDS conference will shine a spotlight on the U.S. commitment to fighting the virus, both globally and domestically. The idea was that the United States will be able to report back to the conference on its plan of action globally, while also speak about ongoing research in several U.S. cities about the most effective ways of finding those who are infected and then putting them on treatment.

In the meantime, Obama’s top scientists are urging that the research discoveries to prevent HIV transmission are put to use. The one in the forefront is the best known of all: Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, who has advised U.S. presidents since Ronald Reagan on how best to address AIDS.

“All of a sudden we have a convergence of prevention approaches, which includes treatment as prevention, and that really validates the concept of combination prevention,” Fauci told GlobalPost in an interview earlier this month. “There is now an enthusiasm and an excitement if we can implement some of these scientific advances, we can have a major impact in turning around the trajectory of the epidemic.”

Fauci said that future modeling of the AIDS epidemic shows that if prevention tools are effective and if fewer people are infecting others, a precipitous fall in HIV infections could follow. Then, he said, the whole arc of the epidemic could crumble.

“When we can get the incidence of HIV down enough to turn the trajectory of the pandemic, it will assume a momentum of its own in diminishing HIV,” he said.

“That’s because the fewer people who are transmitting infection and the more people who are trying to protect themselves from infection – those are the two arms of the problem – that diminishes the pool of people capable of infecting the other people.”

A UNAIDS report released last week concluded that the global expansion of AIDS treatment has made a significant difference in terms of saving lives and almost surely in preventing infections. It estimated that new HIV infections were reduced by 21 percent since 1997, and deaths from AIDS-related illnesses decreased by 21 percent since 2005. It also found that 6.6 million people were on life-extending antiretroviral treatment in 2010, an increase of 1.35 million from the previous year.

Given the findings of the 052 study, scientists and researchers said that the more people who are put on treatment, the more infections will be averted. The experts said that funding isn’t the only issue. Another key one is making sure the prevention strategy matches the specific epidemic in a country.

“Funding is not enough today and probably will never be adequate,” said Robert Hecht, a principal and managing director at Results for Development who has done extensive modeling on what will happen in various scenarios with AIDS funding.

He continued: “What will be important is getting some of these countries to recognize that if they don’t have all the money they need, they need to target programs for the high-risk groups. If you had to choose, say, between a few more dollars for sex education in the schools, or spending it more to reach gay men, or injecting drug users, the countries would be better to use it in the latter programs.”

In Kisumu, the principal city of western Kenya, with a population of roughly 500,000, the 052 trial was stopped in May because it was working so well that researchers felt it was no longer ethically defensible to keep a control group on placebos. Dr. Lisa Mills, the principal investigator for the western Kenya part of the study, and chief of the HIV Research Branch at KEMRI-CDC (a long-time collaboration between Kenya and U.S. researchers), said the Kenyan government already had started people earlier on treatment, but she and others hoped that more funding would allow for another expansion.

“The modeling shows that the amount of funds used for treatment would be much lower by 2015 if you started earlier,” Mills said. “And 2020, there would be a huge savings. There is an increase in start-up costs, but with the costs of the drugs gradually dropping, more efficiencies in treatment, and a reduction in new infections, including pediatric infections, all those add up to fewer people on treatment” in a few years.

Mills said that in fighting AIDS, like other epidemics, “the real issue is when you turn off the tap,” referring to stopping the numbers of new infections. “When you have fewer and fewer new people getting infected every year, turning off the tap starts to happen,” she said.

Kayla Laserson, the director of KEMRI/CDC Research and Public Health Collaboration, said the AIDS research is part of a multi-pronged global health research agenda aimed at finding new drugs, vaccines, and diagnostic tools for a host of diseases. “We have the 052 trial here, but we also have the malaria vaccine trail, and the site for a TB vaccine trial, and many others,” she said. “We see how we make an enormous impact because the results from the community we serve are all around us.”

In the nearby village of Ematsayi, Peter Owiti Omotsi, 39, a father of five, is one of thousands of people in the region now on antiretroviral drugs to fight AIDS. He started treatment in 2008. His wife was HIV negative at the time of his diagnosis, and she has remained negative, he said. Omotsi said the drugs, plus changes to improve the nutrition in his diet, have made him much healthier.

“These drugs work,” he said. “I believe before I die, I will see my grandchildren. Without these drugs, that probably wouldn’t happen. But I have some years to live now. I can at least be proud of my grandchildren.”

In the months and years ahead, the U.S. government will need to make decisions on whether to expand AIDS treatment in the United States as well as around the world to people who are infected but are not acutely ill from the disease. No one is making any promises yet. But no one doubts either that the range of prevention approaches now available, taken together, create a new, powerful weapon to halt AIDS.

“In the last year or so, we have enough scientific advances so that we can start to see some significant turnarounds in the trajectory of the pandemic,” said Fauci, the longtime U.S. AIDS researcher. “But it’s not going to happen alone. We’re going to need a lot more host-country involvement, we’re going to need other donors, we’re going to need to be more efficient in what we do with the resources that we have. Now is a critical time in the history of the AIDS pandemic.”

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John Donnelly is a reporter for Defense Week.

Should the Fed save Europe?

A top think tank wants America's central bank to act as the EU's lender of last resort. Its director explains why

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Should the Fed save Europe? The Federal Reserve Building in Washington, D.C. (Credit: Wikipedia)
This article originally appeared on GlobalPost.

BOSTON — Europe’s inability to devise a strategy for solving its debt crisis has become a dire threat.

Global Post

Economists say it could throw the world back into the kind of crisis that reached its nadir in 2008 and 2009, destroying trillions of dollars in wealth and causing millions to lose their jobs.

In the euro zone mess, so far the U.S. has largely played the role of an outsider, reiterating the urgency of dealing with the mess. On Tuesday, for example, the U.S. Federal Reserve’s second-in-command Janet Yellen urged European leaders to take “forceful action.”

But now a respected Washington economic policy shop is saying that Yellen’s bank itself should get involved directly. The Center for Economic Policy and Research (CEPR) is calling on America’s central bank to become a lender of last resort for the heavily indebted nations, to reduce their interest rates from unsustainable levels — Italy, Europe’s third largest economy is paying over 7 percent for its debt, a level at which other countries have required bailouts.

France, among others, has urged the European Central Bank to play this role. But Germany — which effectively has veto power — has resisted, fearful of inflation and of harm to its economy.

So why should the U.S. get involved? And what would it cost? GlobalPost spoke with CEPR Co-Director Mark Weisbrot to learn more.

Having accurately predicted, in 2002, that a housing bubble would cause a financial meltdown, CEPR is a key alternative voice on economics, and a widely-quoted resource for journalists. (The interview has been edited by GlobalPost.)

GlobalPost: You’ve called for the U.S. Fed to act as a lender of last resort for debt-laden European nations, such as Italy and Spain, to prevent them from having to pay unsustainable interest rates on their debt. Why interfere with the free market, and why is this the United States’ business when we have our own financial problems to deal with?

Mark Weisbrot: The problem is that Europe’s financial crisis is already slowing the global economy. The OECD just lowered its growth projection for the U.S. economy from 3 to 2.1 percent for next year, and estimated that the euro zone is already in recession.

The OECD’s projections assume that there won’t be a major crisis in the banking system. Such a crisis gets increasingly likely each week that the European authorities fail to act. So this is the U.S.’ financial problem. If Europe has a systemic problem of the type that happened after the collapse of Lehman Brothers in 2008, or worse, the US economy could get pushed into recession.

How much would this cost, and what would the impact be on U.S. taxpayers and the American economy?

There would not be any cost to the taxpayers, since the Fed could carry out this program just as it has done its $2.3 trillion of quantitative easing (QE) since 2008, by creating money.

If the Fed would be printing money to buy Europe’s sovereign debt, wouldn’t that cause inflation?

The Fed’s QE program since 2008 did not have any measurable effect on inflation, so there is no reason to expect that these purchases would either. The OECD projects inflation for next year to be 1.6 percent for the euro area and 1.9 percent in the U.S. So even if inflation did rise some, it would not hurt. In fact, a higher level of inflation in current circumstances would probably lead to greater economic activity and higher employment.

Has the Fed ever tried anything like this before? Was it successful? And how is it in the Fed’s mandate to intervene outside US borders?

The Fed has a mandate to promote full employment within the United States. Avoiding a recession caused by a financial crisis in Europe certainly falls within this mandate.

To my knowledge the Fed hasn’t done this before, but it has coordinated with other central banks, for example in 2008, to provide liquidity to the banking system in Europe during the financial crisis.

The Chinese successfully pushed U.S. long-term interest rates down from 2004-2006 by buying long-term U.S. treasury bonds, so we know that this type of foreign purchase can work. The Chinese had to accumulate dollar-denominated assets, in order to maintain their fixed exchange rate. But by buying long-term (instead of short-term) treasuries they succeeded in keeping these U.S. rates low, thereby boosting US growth and stimulating demand for their own exports.

This situation is much more urgent for the US since we are facing the threat of a major financial crisis, and possibly deep recession in Europe, that could push the US economy into recession.

Why not let the IMF be the lender of last resort for Europe? Isn’t rescuing the debt-laden what the IMF specializes in?

This could happen, but it may not; and if it were to happen, the IMF “rescue” would almost certainly include austerity policies as conditions for the loans. That could drive Europe further into recession and thereby be self-defeating — as has happened in Greece and Portugal, and is now happening in Italy.

Doesn’t using the Fed in this way set a dangerous precedent — that governments can live beyond their means and then they’ll simply be bailed out if they are too big to fail? Shouldn’t the profligate countries pay for their sins?

The “debt crisis” of Europe was not caused by profligacy, but by the collapse of bubble-driven growth and the resulting financial crisis — most prominently in the U.S. but also in the euro zone. Prior to this collapse, these countries had mostly reduced their debt burdens, with the exception of Greece. And even the Greek debt problem of two years ago was manageable with minimal intervention from the European authorities.

So this is not really a debt crisis at all, nor a crisis caused by governments over-borrowing. It is a crisis of policy failure. The whole mess has been caused by the failure of the European authorities to engage in the proper monetary and fiscal policies to restore growth; in fact their forced austerity has made it much worse.

Why use this power for Europe and not for Zimbabwe or Japan or other heavily-indebted countries?

Japan can take care of itself, and doesn’t really have a debt problem anyway. Its net interest payments on the debt – which are what matters, not the gross debt/GDP ratio — are still under 2 percent of GDP. As for other countries, the Fed is not responsible for them. The main reason for intervening in Europe is that the European authorities are threatening to push the US economy into recession.

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David Case is a senior writer and editor at GlobalPost. Follow him @DavidCaseReport.

What to expect from Egypt’s elections

As the first round of voting begins, we look at who's running and whether the military will actually step down

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What to expect from Egypt's electionsAdvertisements for parliamentary candidates hang from scaffolding in Cairo in October 2011 (Credit: Lauren E. Bohn/GlobalPost)
This article originally appeared on GlobalPost.

CAIRO – In the aftermath of a week of violent protests in Tahrir Square, Egyptians head to the polls Monday hoping to take a step closer to establishing a new democracy.

Global PostA protest movement in January may have led to the ouster of former president Hosni Mubarak, but most Egyptians are left wondering how much has actually changed. Were the heady days of street demonstrations truly a revolution or a popular uprising that has resulted in a military takeover?

Political reform has moved at a snail’s pace. Some of the most brutal hallmarks of Mubarak’s autocratic regime have returned, including arbitrary detention, military trials and torture.

And an already stagnating economy is deteriorating amid ongoing workers’ strikes and sporadic violence.

Many now blame the country’s ruling military leaders, the once revered Supreme Council of the Armed Forces (SCAF), which assumed power in the transition following Mubarak’s departure.

“We are all united with one hand against the military,” said Ahmed Gheith, a 22-year-old Muslim Brotherhood member who was at a recent protest in Cairo’s Tahrir Square. “Egyptians should be able to choose whomever they want to lead our country.”

For the most part, Egyptians are optimistic that the final stage of their revolution will take place at the ballot box. The hope is that these elections will be a departure from the Mubarak-era, when voting was often marred with violence, ballot box stuffing, and other fraudulent activities.

But at the first polls on November 28, they will encounter a new electoral process that observers have called convoluted, confusing and mismanaged.

Election Basics

About half of Egypt’s population of more than 80 million residents are eligible to vote in the upcoming elections.

Voter turnout is expected to be much higher than in any election during the Mubarak regime. Earlier this year, a record 40 percent of Egyptians over the age of 18 voted in a referendum on amendments to the nation’s current interim constitution.

There will be elections for both houses of Egyptian Parliament in 2011 and early next year — the People’s Assembly, or lower house parliament, and the Shura Council, or upper house.

Egypt’s next parliament will nominate a constituent assembly that will one day write the nation’s new constitution.

The People’s Assembly (PA) election will consist of three phases across Egypt’s 27 governorates, and will take nearly two months to complete.

The first round begins on Nov. 28, and will take place in Cairo, the Fayoum oasis, Alexandria, Damietta, Kafr El Sheikh, Port Said, Assiut, the Red Sea in Sinai, and Luxor.

The second phase is scheduled to take place on Dec. 14 in Giza, Beni Suef, Ismailia, Sharqia, Menoufiya, Suez, Beheira, Aswan, and Sohag.

On Jan. 3, the remaining governorates will vote – Qaloubia, Gharbia, Dakhliya, North and South Sinai, Marsa Matrouh, Qena, Minya, and the New Valley in Egypt’s Western Desert.

Each round of voting will take place over two days, according to new rules implemented by Egypt’s transitional government only this weekend.

Voting for the Shura Council will begin shortly after the three rounds of PA have been completed.

The Electoral Process

A total of 498 seats are up for grabs in the upcoming PA election.

How the seats will be chosen has changed substantially since the Mubarak era, and has been the subject of much debate and confusion among political parties since the departure of the former president this year.

In past elections, individual candidates were elected from their parliamentary districts.

This year will feature a mixed-system election, including proportional representation party lists as well as individual candidates. Two-thirds of the PA’s seats will be chosen by party list plurality. The remaining third will come from independent candidates in a so-called ‘first-past-the-post system.’

Political parties are required to field at least one woman. From the individual candidates, at least half of the PA will be filled by “farmers and workers,” a throwback to a 1950s-era quota law.

The complex election laws of 2011 were implemented by SCAF, based mostly on recommendations from Egypt’s civil society and political groups as a way of leveling the playing field by reducing the likelihood of a sweep by remnants of Mubarak’s disbanded National Democratic Party (NDP). Mubarak’s former ruling political party maintains a large grassroots movement that was left mostly intact following the uprising.

But the result is a confusing system that will require each voter to submit multiple ballots on election day, possibly with long waiting periods in between for runoffs, according to the Washington, D.C.-based International Foundation for Electoral Systems.

“These issues also pose great and unknown challenges to the legitimate and successful administration of the new election system,” stated the IFES in a briefing paper on November 1. “There is a significant need to educate voters and administrators about the new election system and limited available time to accomplish this important task.”

Who is running?

The days of one-party victories swept by Mubarak’s NDP are over.

This election, over 6,500 candidates are running from more than 45 political parties, many which were launched this year following the uprising. The entire political spectrum will be represented, from liberal seculars to Islamists to socialists.

The formidable parties include the Muslim Brotherhood’s Freedom and Justice Party, with its large grassroots base from years of charitable work in communities throughout the country.

Although the NDP has been dismantled, several remnants from Mubarak’s old party will be running as independents and as part of new parties.

A recent lawsuit attempted to directly bar the participation of former NDP members, one of the major goals of protesters in Tahrir Square.

Following the violent clashes in Cairo last week, SCAF issued a long-awaited “politcal corruption” law that bans anyone convicted of corruption from running for office.

The move, however, did not appease protesters. Most criticized the law for being too vague and coming too late.

Some members of Mubarak’s former party are still on the ballots for at least the first round of voting, according to reports.

Judge Ahmed Abdel Rahman, a member of Egypt’s Supreme Elections Commission, told GlobalPost that condemning members from the former ruling party would be unconstitutional.

“As a people that made a revolution, we should be able to differentiate between the good and the bad; who is a regime remnant and so,” said Abdel Rahman, “we are demanding freedom, we are choosing our representatives in the parliament, and we have the freedom to choose.”

Currently, most experts predict substantial victories for both the MB and the NDP.

Ziad Akl, a researcher at Al-Ahram Center for Political and Strategic Studies, a state-funded think tank, said that remnants of the NDP could win a large plurality in the upcoming election.

Egypt’s revolutionary activists have made little headway with voters in the rural north and south of the country, according to Akl.

“My biggest fear is that these elections would result in a parliament that is 30 or 40 percent NDP,” said Akl.  “And that would not be a parliament reflective of revolution, yet it will be legitimate. Then we could have a real problem because you would have a state claiming legitimacy and a public claiming that this is not what we signed up for.”

Administering the election

When Egypt’s military rulers took power, they promised to hold “free and fair” elections within 6 months — one of the biggest demands of the protest movement in Tahrir Square.

But weeks before the once-delayed elections, several candidates have already come forward with evidence that Mubarak-era fraud is still present among some in the country. An “election market” of people who will rig votes, sell voting blocs, and even thugs-for-hire are all still present in Egypt, according to many observers.

Attempting to guarantee the legitimacy of the 2011 elections will be the judicial branch, one of the few institutions to maintain credibility among a majority of Egyptians.

Around 10,000 judges and other officials will be dispatched across the country to administer the vote.

Several local non-governmental organizations will also send members to polling stations to observe the vote. But many of these groups have criticized SCAF for limiting transparency in the voting process by denying them any real authority to report fraud.

Most foreign poll monitors have been barred from supervising the election. Shortly after taking power, SCAF denied all foreign observers except for one, citing the need to protect Egypt’s sovereignty.

“There is very bad management of this entire electoral process. It has been going on ever since the government released the legislation pertaining to how the elections would be run,” said Ghada Shahbandar, a former poll monitor and activist working at the Egyptian Organization for Human Rights.

The Expatriate Wildcard

Just over a month before the start of the PA elections, an Egyptian court ruled that its citizens living overseas should have the right to vote — a first for the country’s millions of expatriates, and a key demand of protesters in Tahrir.

But with so little time to prepare before the election, and with basic information about the methods of expat voting still undeclared, very few are confident that that the system will work.

The government does not maintain statistics on the number of Egyptians living abroad. Official figures place the number of expatriates at seven million, while some independent estimates are as high as 10 million.

“If Egyptians abroad are not given their chance to vote, it means that at least six percent of Egypt’s population is deprived from their basic political rights,” said Ahmed Ragheb, a lawyer and human rights activist.

Already, there have been numerous complaints about the electronic registration process for expatriates and the Egyptian government’s capacity to monitor and organize millions of potential votes overseas.

Even the government does not seem confident in the process. Just weeks before the historic court ruling, Judge Abdel Rahman told GlobalPost that it would be “impossible for Egyptians abroad to vote.”

He said the preparations would be too complicated and time consuming with such a short period before the elections.

Will the army ever leave power?  

SCAF has already delayed the parliamentary elections once this year. Logistical preparations by both candidates and administrators only started earlier this month. With the shortened process, and signs pointing to a desired lack of transparency, many critics believe that Egypt’s military will be unwilling to transfer power to a civilian government.

On November 18, with less than ten days before the election, tens of thousands of Egyptians returned to the streets of Tahrir Square to criticize military rule in Egypt.

More than nine months after the unfinished revolution, various political elements — mostly led by Islamist groups like the Muslim Brotherhood — all raised “one hand” to say no to the once-vaunted army.

The protesters’ immediate concern was the so-called supra-constitutional document set forth by various political groups and SCAF, several months before the election. The document was meant to solidify certain principles “above” the constitution, in other words, certain inalienable rights that Egyptians would have regardless of which people from which parties come to power.

But the masses in Cairo’s city center were challenging a SCAF amendment to the supra-constitional document that would cement the army’s budgetary immunity into the future constitution, essentially bypassing oversight and accountability to the Egyptian people.

Loai Nagati was one of the protesters in Tahrir.

Nagati knows the perils of military rule better than most. The 22-year-old was one of more than 12,000 Egyptians who have been jailed and tried under secret military courts since the ouster of Mubarak. He said he was abused and tortured during the eight-day detention earlier this year.

“We want an end to military rule in Egypt, finally. In this election, hopefully we can show them that the country is refusing to give the army the ultimate power,” said Nagati.

(GlobalPost-Open Hands Initiative reporting fellows Ahmed Ateyya, Reem Abdellatif and Stephanie Rice contributed reporting to this story.)  

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Egypt’s military can’t quell protests

Violence rages on as the army's proposed concessions fail to reassure demonstrators

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Egypt's military can't quell protestsA protester throws a tear gas canister away during clashes with the Egyptian riot police near Tahrir square in Cairo, Egypt, Tuesday, Nov. 22, 2011 (Credit: AP Photo/Khalil Hamra)
This article originally appeared on GlobalPost.

CAIRO, Egypt — Egypt’s ruling military general pledged to transfer political power to a civilian government by mid-2012, one of several concessions that appeared aimed at containing the growing protest movement and prevent a revolt that has raged in downtown Cairo for 5 days from spreading further.

Global PostMohamed Tantawi, the country’s top army commander, who assumed the de facto presidency in February, made the announcement in his first televised speech to the nation.

Tantawi assured the Egyptian people that parliamentary elections would proceed as planned, scheduled to begin on Nov. 28. And he repeatedly promised that neither he, nor anyone in Egypt’s military, would seek for higher office.

“We are not looking into the presidency,” said Tantawi, in a pre-recorded statement on state television Tuesday.

“The Supreme Council of the Armed Forces is only interested in the interests of the people. We don’t care about who will win elections or who will be the next president. It’s up to the people to decide,” he said.

But the proposed concessions failed to quiet protesters on the street, who have now been clashing with security forces for more than 96 hours.

Immediately following the televised speech, which was broadcast throughout Tahrir Square, furious demonstrators began screaming, “Leave, leave!”

The military also accepted the resignation of the entire transitional cabinet and protesters who had been arrested over the weekend were set to be released. Tantawi also allowed for a civilian inquiry into a violent crackdown at a protest in October that left more than 20 protesters dead on the streets, some crushed under the weight of charging military vehicles.

The stakes, however, became much higher for Tahrir demonstrators following this most recent series of clashes in Cairo, where violence between police and protesters over the weekend led to at least 30 deaths and more than 1,000 injuries.

Many protesters were hesitant to trust Tantawi and an “illegitimate” military government that had failed to put an end to more than five days of non-stop tear-gassing and active conflict on the streets surrounding the square.

Some are even calling for Tantawi to stand trial.

“People are in the square dying and they are talking about another seven months of military rule? We will stay until they leave, but now it’s about when they should be tried as murderers and criminals,” said Mohamed Effat, 22, a protester who was shot with rubber bullets by police on Sunday.

If the reaction in Tahrir was not enough to convince the military of the shortcomings in Tantawi’s speech, they needed only to look three blocks to the east, where a pitched battle between hardcore protesters and armed riot police has been going for five days straight.

The fight turned a few-block radius of downtown Cairo into a virtual war zone. Police and protesters formed ever-shifting battle lines delineated by torched-out car skeletons and blackened sheets of corrugated metal, along a street littered with broken bottles and chunks of asphalt.

By day, the incessant roar of agitated battle cries from both camps was pierced only by the hollow thud of police tear gas canisters and booming shotgun blasts fired into the crowds.

After dark, the unlit streets and shuttered storefronts were illuminated by the bright orange glow of protesters’ Molotov cocktail explosions and blazing bonfires, some fueled by wooden desks and chairs from a nearby girls’ school that was looted.

“The police are sons of garbage! This government is garbage!” screamed the enraged protesters on the front lines at Mohamed Mahmoud street, which is just off Tahrir. “Down with military rule!”

Last week, tens of thousands of a mostly Islamist crowd — including the popular Muslim Brotherhood — gathered for a peaceful protest at Tahrir Square to call for an end to military rule. The last straw had been a recent attempt by the ruling generals to slip budgetary immunity for themselves into the future constitution.

The gathering turned violent only the next day, long after most had gone home. A police crackdown on several hundred overnight campers drew only more angry protesters to Tahrir.

Recent street battles near the square underscore the systemic problems with abuse of authority by police forces in Egypt. More than nine months after police brutality fed the flames of January’s uprising, security forces have yet to be reformed.

For many in Tahrir, the sieges over this weekend highlighted in gruesome detail the immediate need for a complete overhaul of the very forces designed to serve and protect them.

Arrested protesters were beaten mercilessly this weekend by police wielding blunt wooden batons, in plain view of the advancing crowds. Dozens of officers swarmed around detainees, attacking with punches to the head and kicks to the groin.

But the feared police are not the only ones in Egypt that may be losing popular support.

Outside of the square, life for most in Cairo has been relatively normal despite the past weekend of violence. Many average Egyptians are eager to see an end to Tahrir protests — and the resulting frontline clashes — even if it means continued military rule.

For most of Egypt’s “silent majority,” stability is the primary concern in a country that has been wracked by economic uncertainty and security woes for the past nine months.

Even several political movements — including the Muslim Brotherhood — have called for an end to the proposed sit-in in Tahrir, hoping to put the good of the country above the possibility for ongoing clashes.

In Tuesday night’s speech, Tantawi left many in the square skeptical that the military would ever cede power completely from a state that has been run by armed forces behind the scenes for nearly 60 years.

Of particular worry to many liberal activists in Tahrir was Tantawi’s offer to hold a national referendum testing the public will for a complete military withdrawal to the barracks. The protesters’ fear was that a majority of Egyptians might actually vote for the military to stay — giving legitimacy to martial rule.

“The Supreme Council of the Armed Forces… is ready to immediately hand over authority and return to its original task to protect the homeland, through a public referendum, if that is what the people want and if that is what is needed,” Tantawi said.

How elections could proceed next week, amid ongoing violence and the possibility of a Tahrir Square jam-packed with protesters, was far from certain.

Late in the afternoon on Wednesday, an uneasy calm returned to the streets surrounding Tahrir, as police forces finally made a full withdrawal from Mohamed Mahmoud Street.

Hundreds of young protesters milled about the scene of destruction. The road was nearly impassible, littered with rocks, torched vehicles, and at least one broken armoire used as a barricade. Nearby apartments were covered in pockmarks, and a fire still smoldered on the third floor of a building overlooking the rubble.

Many of the protesters were skeptical that any “ceasefire” between the two sides could stick. But they hoped that the worst was over.

“Peaceful! Peaceful!” chanted protesters, screaming into an empty street the police had just fled.

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Egyptian press still not free

Media outlets play cat-and-mouse game with government censors as they remain forbidden to scrutinize the military

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Egyptian press still not free (Credit: Ben Brody/GlobalPost)
This article originally appeared on GlobalPost.

CAIRO — On the streets of post-revolution Cairo, opinions are expressed freely and loudly. They come in the angry voices of protesters marching through traffic, and the graffiti scrawled across buildings and bridges. The days when criticism of the country’s leaders was confined to hushed whispers in smoke-filled cafes are gone.

Global PostBut while many Cairenes on the street have broken free of the fear that silenced them before, journalists and analysts say fear — or at least a sense of caution — still pervades many of the newsrooms trying to document a chaotic city in transition.

Ziad Akl, an analyst with the government-financed think tank Al-Ahram Center for Political & Strategic Studies, said that although the country’s military rulers allow a slightly “higher ceiling” than ousted President Hosni Mubarak, media outlets and researchers like himself are still “very much bound and constrained by the state.”

“We’re still in the very same cage,” he said. “It’s a just bigger cage.”

Under the iron-fisted rule of the Mubarak regime, open criticism of the presidential institution was not tolerated. Today, scathing editorials targeting Mubarak’s loathed and now-dissolved National Democratic Party regularly appear in papers.

But media experts and local reporters say the aura of impenetrability that once surrounded the presidential institution has simply shifted to the country’s military rulers, who replaced Mubarak when he was forced out in February.

There are signs that the military intends to maintain that status quo.

For example, it recently expanded the country’s long-hated “emergency law” to include broad language under which news organizations could be prosecuted for “spreading false news.”

Days before security forces raided Al Jazeera’s Cairo affiliate, saying the station lacked a license and neighbors were complaining of noise, Minister of Information Osama Heikal publicly threatened to “take legal measures against satellite TV stations that jeopardize stability and security,” according to Reporters Without Borders.

The organization says many of the 12,000 civilians being tried in military courts as part of a post-uprising crackdown are journalists and bloggers.

And in March, Major General Ismail Mohammed Etman sent out a letter advising media outlets to consult with the military’s “moral affairs” or intelligence departments on any matters involving the military.

“These are the authorities specialized in reviewing such matters, and that is to ensure the safety and security of the homeland,” the letter read.

The Ministry of Information declined repeated interview requests from GlobalPost. Housed in a fortress-like building on the Nile surrounded by barbed wire and dozens of soldiers in armored vehicles, the ministry has been in a state of turmoil since the uprising and reluctant to talk publicly.

Youssef Sidhom, editor of the small Christian weekly Al-Watani, said he simply avoids all stories about the military to “keep out of harm’s way.”

“Everything military is considered highly sensitive, a matter of national security,” he said. “We don’t question the military. We don’t joke with the military.”

While there is disagreement among journalists on how far reporters can or should go in scrutinizing the military, there is a consensus that it is an area where one must tread lightly.

Fathy Abou Hatab, online managing editor for Al-Masry Al-Youm, a popular daily owned by a wealthy businessman, said the website often publishes pieces critical of the army’s new political role in Egyptian government. Stories on the military budget or inner workings of the institution, however, remain strictly off limits.

While the state largely controls printing presses and circulation, online media like Al-Masry Al-Youm’s website are generally subject to less scrutiny. It’s more difficult for the state to regulate the free flow of online content, and it’s considered less of a priority in a country where only about a quarter of Egypt’s 80 million residents has Internet access.

Still, there are limits to that freedom. For content deemed too sensitive for regular publication, Hatab said he sometimes features it online just long enough to be picked up by Egypt’s social network-savvy youth.

From her desk in the publication’s bright, modern newsroom, Aya Abdullah monitors the nonstop cycle of tweets and Facebook posts. The shy 21-year-old in a shockingly pink headscarf passes along news tips culled from the social networks to reporters who can then head out to cover a protest or other spot news.

Abdullah said the army is paying more attention to social media after the Tahrir Square uprisings but it is still largely an unrestricted space for sharing and gathering information in real time.

“When there are clashes on the street, somebody is tweeting it,” she said.

Revolutionary activist Gigi Ibrahim agreed that social networks like Twitter and Facebook, through which a video or photo can go viral in minutes, are too fluid for the military to effectively censor.

“Now you have a reporter everywhere, on every corner,” she said in an October panel discussion hosted by GlobalPost and the non-profit Open Hands Initiative. “Nothing can be hidden anymore.”

For Safwat El-Alem, a Cairo University political media professor, journalists and social-networking activists have gone too far in their criticism of the military.

“There is chaos in media after the revolution,” he said, sitting in the living room of his spacious home near the Giza pyramids. “There is an uncontrollable flow of information happening now during these sensitive times. Media and citizen journalists are not following the rules of society.”

Egypt’s media scene is complicated by the presence of a powerful state media apparatus used to distribute the official state version of events. The print publications and TV broadcasts have a wide reach and maintain massive influence over the Egyptian public.

Hala Fahmy is a 20-year veteran of state TV. These days, though, the well-known TV personality spends little time inside the government building where she built her career. More often, she can be found protesting from the street below, pushing for reforms to make government-owned news more accountable to the public.

Although still technically an employee of state TV, Fahmy said she has not been allowed to work since the Tahrir Square uprisings, during which she slammed the ministry in scathing on-air interviews with satellite channels.

“They think I’ll plot to overthrow the regime,” she joked on a recent afternoon as she stood outside the state TV building with a small group of protesters.

Dressed casually in jeans and a rainbow-colored top, Fahmy seemed unfazed by the dozens of soldiers and policemen keeping close watch on the demonstration. At one point, she turned to chastise an officer reading off the phrase on her sign to someone on the other end of a cell phone call.

The bright yellow sign said in Arabic: “Why are you confused? Why are you even thinking about it? A revolution ends military rule.”

Akl, the analyst for the state-funded Al-Ahram Center, said he believes government media, including the paper housed in the building where he works, is slowly losing influence to independent publications that strive to print the truth at a critical moment in Egypt’s history.

“I know a lot of people who actually changed their historical cultural habit of reading Al-Ahram every day, and people are starting to read Al-Masry Al-Youm” or other independent papers, he said.

“I for one never read Al-Ahram anymore,” Akl said at one point, laughing. “Yeah, I work for it but I don’t like it, I really don’t.”

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