EUOBSERVER / BRUSSELS - A UK cross-party parliamentary committee inquiry into the lobbying industry has issued a report that criticises the European Commission's voluntary registry of lobbyists as having "no real benefit" and of being no model for the introduction of a similar registry in Britain.

The Council has decided not to participate in the joint lobbying registry

After a year and a half of investigations into the sector and its influence on legislation, the eleven-member Public Administration Select Committee on Monday (5 January) called for the creation of a registry of lobbying activity for the UK, but insists that, unlike in the case of the commission's current framework, lobbyists should be forced to sign up to it.

"We see no advantage whatsoever to a voluntary register, which, as has been shown in the European Commission's case," the report reads, "allows those who wish to hide the nature and scale of their activity to do so, and leads to the availability of uneven and partial information of no real benefit to those wishing to assess the scale and nature of lobbying activity."

European consumers were hit with a further slash in Russian natural gas deliveries, as a standoff over energy pricing between the Kremlin and Ukraine worsened.

The Russian reduction, the second since January 1 by Russian gas monopolist Gazprom, would "begin to cause problems in getting sufficient gas to Europe," in a few hours, said Valentyn Zemliansky, a Naftogaz Ukrainy spokesman.

 

Gazprom cut shipments to just 72 million cubic meters of gas for European consumers, from 260 million on Monday and an average of 300 million previously.

 

Officials in both countries confirmed plans to renew talks on ending the conflict in Moscow on Thursday.

 

But the sides remained far apart on a host of issues, while the steep drops in gas supplies critical for heating struck Europe simultaneously with a vicious snap of cold weather.

Germany, Russia's biggest political ally in Europe, tonight warned that its supply of Russian gas could swiftly collapse as the dispute between Ukraine and Moscow intensified and Europeans began freezing in their homes.

The Russian monopoly provider Gazprom accused Ukraine of filching gas supplies due for Europe.

The row escalated today, with gas volumes slashed even further, as a swathe of countries in eastern and southern Europe reported a complete shutdown of supplies or serious disruption on the coldest day of the winter. Russian shipments of gas to the Balkans, including Romania, Bulgaria, Croatia, Macedonia, Greece, Bosnia, Serbia and, beyond them, to Turkey shut down or were slashed by up to two thirds.

The disruption of supplies also spread to Italy, Austria, Slovakia, the Czech republic, Hungary and Slovenia as well as Poland.

Amid a growing political and diplomatic crisis, Oleh Dubyna, head of Naftogaz, Ukraine's state energy firm, said he would restart negotiations on price contracts in Moscow on Thursday with Gazprom executives.

Russia halted gas supplies via Ukraine to the Balkans, Turkey and south-eastern Europe today and flows to EU-member state Austria dropped by 90 per cent in a deepening price row between Moscow and Kiev.

Russia and Ukraine blamed each other for the crisis which has struck at a time of unusually low winter temperatures across Europe, which receives about one quarter of its gas from Moscow.

The dispute threatens to worsen ties with the West already fraught after Russia's war with Georgia last year.

Europe receives about one fifth of its gas from Russia via Ukraine, leaving European customers vulnerable when Moscow reduced volumes to Ukraine on New Year's Day after failing to reach agreement with Kiev over gas prices.

German billionaire Adolf Merckle committed suicide by throwing himself under a train, "broken" as his business empire crumbled under a growing burden of debt, his family said.

Merckle, whose holding company owes banks about 5 billion euros ($6.7 billion), owned stakes in HeidelbergCement AG and drug wholesaler Phoenix Pharmahandel AG. He had been seeking emergency financing for more than two months from a group of more than 30 banks led by Commerzbank AG, Deutsche Bank AG, Royal Bank of Scotland Group Plc and Landesbank Baden-Wuerttemberg.

EUOBSERVER / BRUSSELS - Restarting old nuclear reactors, sharing gas stocks and calling an EU-Russia-Ukraine summit have emerged as potential EU reactions to the gas crisis, as severe supply cuts hit EU consumers and industry.

Twelve thousand homes in Varna, Bulgaria were left without central heating as snow fell on Tuesday (6 January), with Bulgarian fertiliser producers Neochim and Agropolychim forced to halt production after Russian gas to the country stopped flowing through Ukraine in the small hours.

A Naftogaz plant - Ukraine and Russia's reputations have suffered

Gas supplies to Greece, Austria, Romania, Slovenia, the Czech Republic and Slovakia fell by 70 percent to 100 percent, with Slovakia - which imports all of its gas from Russia - expected to declare a state of emergency at midnight.

France, Germany, Poland and Hungary also suffered serious disruptions. Poland reduced gas deliveries to industrial plants and Germany's energy champion - E.ON Ruhrgas - warned the company's "possibilities [of functioning normally] will reach their limits" if the problem drags out.

Several European countries say their supplies of Russian gas have been cut or sharply reduced amid an energy price dispute between Moscow and Ukraine.

Serbia, which has had its supply completely cut, said it was a "critical" situation.

Countries as far west as Italy and Austria say they have received only 10% of their expected supply.

Amid cold weather across the continent, the European Commission said the supply cut was "completely unacceptable".

The governing coalition in Germany on Monday (5 January) indicated that its latest economic stimulus package could run to €50 billion over two years.

According to Germany daily Die Welt, Chancellor Angela Merkel's Christian Democrats (CDU) and their junior coalition partner, the Social Democrats (SPD), have still to agree which measures should be financed with the money.

Germany's first economic package was criticised as being too small

While both sides continue to work on the details of the package, it is expected to deliver help for business, more infrastructure spending and modest tax cuts.

Tax was one of the areas causing the most difficulty. The conservatives wanted to see sharp tax cuts included in the measures while the SPD were pushing for a rise in taxes on the rich.

Eurozone inflation has tumbled to its lowest level in more than two years on the back of crumbling economic activity, extending the steep sell-off in the euro that has emerged since the start of the year.

Annual inflation in the 16-country region fell to 1.6 per cent in December from 2.1 per cent a month earlier, according to an initial estimate by Eurostat, the European Union's statistical office. That was the same as in October 2006 but otherwise the lowest since November 1999.

With further falls in inflation expected in coming months, the latest figures added to the pressure on the European Central Bank to cut interest rates again. Since October the ECB has slashed its policy rate by 175 basis points to 2.5 per cent. However, it has not yet sent any clear signals about whether a further cut is likely at its meeting next week.

VIENNA -- With an aggressive style that stood out in the staid world of Austrian banking even more than her bouffant red wig, Sonja Kohn made few friends gathering billions for Bernard L. Madoff from wealthy investors in Russia and across Europe.>

Now, she has even fewer. Mrs. Kohn has dropped out of sight, leaving the firm she founded, Bank Medici, in the hands of Austrian regulators, who took it over last week.

Embarrassment from investing heavily with Mr. Madoff could explain wanting to disappear from public view. But another theory widely repeated by those who know Mrs. Kohn is that she may be afraid of some particularly displeased investors: Russian oligarchs whose money made up a chunk of the $2.1 billion that Bank Medici invested with Mr. Madoff.

"With Russian oligarchs as clients," said a Viennese banker who knew Mrs. Kohn and her husband socially, "she might have reason to be afraid."

[...]

It is a stunning reversal for the 60-year-old Mrs. Kohn. The daughter of Jewish refugees from Eastern Europe who moved to Vienna after World War II, she came to New York in the 1980s and was one of the rare women to found and head a small brokerage firm. At that time, she started a decades-long friendship with Mr. Madoff. Once known here as "Austria's woman on Wall Street," she became one of Mr. Madoff's international conduits for securing billions of dollars from the global rich.

Unemployment in Germany rose last month for the first time since February 2006, ending an unprecedented labour-market recovery in Europe's largest economy and casting renewed doubt over the country's prospects for this year.

Figures released by the Federal Labour Agency showed the number of jobseekers had risen by a seasonally-adjusted 18,000 in December, almost twice as much as economists had anticipated, bringing the jobless rate from 7.5 to 7.6 per cent month-on-month.

The rise in unemployment brings an abrupt end to Germany's spectacular job-market recovery, which lasted uninterrupted for 34 months and had brought the number of jobseekers from more than 5m down to less than 3m.

Alistair Darling warned on Tuesday that Britain was "far from through" the recession, in a clear signal that he will have to abandon the government's forecast that the recovery would start in the second half of this year.

The Bank of England is on Thursday expected to respond to the slump by cutting interest rates to their lowest point for 300 years, which could provoke tension with the Treasury and ultimately threaten its independence.

Mr Darling said that if rates fell close to zero, the central bank and Treasury would have to work "hand in hand", since any operations by the Bank of England to print money would have to be authorised by him. His stance will disappoint many at the central bank who wanted to be given authority by the Treasury to operate quantitative easing - creating money to buy assets - within parameters agreed in advance.

...

"The gas crisis and the Israeli situation demonstrate the true character of the EU," said Fredrik Erixon, head of the Brussels-based European Centre for International Political Economy. "They want to be a big global player but they don't have the tools, or the skills or the clout to do so."

...

The disarray was underscored by a pair of simultaneous missions this week to mediate a cease-fire in the 11-day conflict pitting Israel against Hamas in the Gaza Strip. French President Nicolas Sarkozy, who gave up the EU presidency on Dec. 31, met officials in the region as a separate delegation headed by the Czech Republic, which now holds the EU leadership, sought a solution.

...

Gas deliveries from Russia to Europe through Ukrainian pipelines were reduced due to a pricing dispute between Russia's state-owned OAO Gazprom and Ukraine. The EU today invited Russia and Ukraine to attend a Jan. 9 meeting of its Gas Coordination Group. Europe gets about 25 percent of its gas from Russia.

...

"It's very silly of the EU to try to depoliticize its Russian energy policy," said Erixon. "You can't deal with a politically driven company like Gazprom the way you deal with a Western company."

...

George Alogoskoufis, Greece's finance minister, was sacked on Wednesday in a reshuffle prompted by deteriorating public finances and fears of continued social unrest following last month's street riots in central Athens.

He was replaced by Yiannis Papathanassiou, the deputy finance minister responsible for handling transfers from the European Union's structural funds.

Mr Alogoskoufis faced growing unpopularity over recent efforts to boost tax collection as the economy slowed.