Cablegate: Media Reaction: U.S.-Budget, U.S.-Nasa, U.S.-China, Middle

DE RUEHRL #0145/01 0331306
R 021306Z FEB 10






E.0. 12958: N/A

1. Lead Stories Summary
2. (U.S.) Draft Budget
3. (U.S.) Reaction to Plans to Stop Moon Mission
4. (U.S.-China) Arms Shipment to Taiwan
5. (Middle East) Goldstone Report
6. (Yemen) Anti-Terror Measures
7. (Russia) Demonstrations in Kaliningrad, Moscow

1. Lead Stories Summary

Primetime TV newscasts and almost all major papers led with stories
on Chancellor Merkel's statement that she is in favor of buying data
on tax dodgers even though it was obtained illegally. Headlines
included: "Merkel: we want the data" (Frankfurter Allgemeine),
"Merkel in favor of buying the database on tax sinners"
(Sddeutsche), "Merkel is hunting tax evaders" (Bild). Frankfurter
Rundschau led with the beginning of token strikes in public
services. Editorials focused on the problem of tax evasion in
Germany and the U.S. budget proposal.

2. (U.S.) Draft Budget

All papers (2/2) carried extensive reports on the President Obama's
budget, noting that the budget deficit will be the highest in the
U.S. since WW II. Sueddeutsche Zeitung carried a front-page report
under the headline: "1.560 Billion Dollar Deficit in the U.S.
Budget" and wrote in a separate report on its economic pages under
the headline: "America Running up Debts As Never Before" that the
deficit in the budget for FY 2010 will even exceed the record
deficit for the 2009 crisis year by 150 billion dollar. But, at the
same time, President Obama announced the first plans for a
consolidation of the budget. President Obama said: 'We will save as
much as we can, spend as much as we must, and live according to our
means.' As a first step to get indebtedness under control, Obama
said that he would freeze all available expenditure for three years
with the exception of the defense and social security budgets."

"Obama Plans 3.800 Billion Dollar Budget," headlined Die Welt (2/2)
and reported: "that debts are reaching record levels and that
President Obama announced a tough austerity course." Tagesspiegel
(2/2) headlined: "One Third Is Debt," and reported that "the
president is now presenting concrete figures for the priorities he
recently sketched out in his State of the Union Address." Financial
Times Deutschland (2/2) carried a front-page report under the
headline: "Debts Creating Dilemma for Obama" that "with his
financial plans, U.S. President Obama is faced with a dilemma. On
the one hand, there is dissatisfaction among Americans about the
great indebtedness, while, on the other hand, Obama's Democrats are
afraid of a sound defeat in the Congressional elections in the fall
if the unemployment rate of currently ten percent does not decline
by then." In a report, headlined: "Obama Gives up the Moon to Save
the United States," Handelsblatt (2/2) wrote: "With 1.56 trillion
dollars, the gap in the U.S. budget is as wide as never before. In
order to avoid bankruptcy and to create jobs, the President relies
on tough cuts."

In an editorial Sueddeutsche (2/2) argued under the headline: "State
Bankruptcy 2010," that "the United States needs a general overhaul
of its budget.... The figures as such are not the real problem.
The enormous budget deficit of this year is mostly a product of the
past - the great recession and the spending policy of the Bush era.
Measured against these preconditions, Obama submitted a reasonable
budget proposal. This is a first step to consolidate the budget,
but no more. The real task is still to come, since Obama's budget
proposal reflects the past and the presence of the country's
finances but not its future. And this will result in an avalanche
of costs. The crisis can be prevented only if taxes are increased

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and cost cuts - but for both measures there are no majorities in
Washington. The crucial issue is not the President but Congress and
the political culture in the capital that make pragmatic solutions

Die Welt (2/2) editorialized under the headline: "Careless Fiscal
Policy," that "we feel a pity even for the most powerful man in the
world. President Obama could have done whatever he wanted with his
budget draft, he would have been criticized anyway. On the one
hand, he must guarantee that the economic recovery gets a sound
footing and, on the other hand, Obama must pursue a drastic
consolidation course to maintain Washington's capability to act.
This means Obama must achieve quite a feat, but what he presented
was an unsuccessful attempt. The return to a sound fiscal policy
will be postponed again. As in the previous year, the spending of
the government will reach 25 percent of national economic output and
even if the economy continues to grow, the deficit will hardly fall
below four percent. This is careless. The president has
disappointed - once again."

Tagesspiegel (2/2) argued under the headline: "Discouraging," that
"in fiscal policy matters, the United States increasingly resembles
the Europeans. In the economic crisis, revenue declines but the
politicians lack the courage to cut spending. In his budget draft,
there are billions that are based not on reason but on particular
interests. In two aspects, however, the United States is different.
Even in the crisis, there are no calls for a drastic increase in
taxes and the Americans are so angry at the debts that Obama could
lose the majority in Congress in the fall of this year."

"Deficit Billionaire" is the headline in Frankfurter Allgemeine
(2/2) which opined: "The President's budget draft rarely survives
deliberations in Congress, which is keen on spending. Each program
that is now to be stopped or frozen has its beneficiaries and
defenders in Congress. That is why it would be a sensation if the
deficit for the next year is not higher than projected. But this
approach to make savings has a basic flaw: the big social security
programs and the defense budget are excluded. The defense budget
increases to 700 billion dollar and, for Washington's allies in
Europe, this is an unimaginable sum."

Berliner Zeitung (2/2) judged under the headline: "Forced to Make
Savings" that "in the crisis there is no alternative [to this draft
budget] but some day in the future, the United States must change
course, otherwise it will be threatened with financial ruin. With
his draft budget, Barack Obama is planning the beginning of the
unavoidable consolidation. As painful as a budget ceiling may be,
all this is only the beginning. A few cuts here and there won't be
enough. The United States must finally address its structural
deficit, since it will otherwise be threatened with enormous debt
for decades to come. This is unpopular, but there will be no way
around higher taxes and a reform of the social security system....
The alternative would be something like a political instability."

In an editorial, Handelsblatt (2/2) opined: "These record number
hide a radical change of course of U.S. politics. As announced
before, President Obama is radically changing course: supply side
policies and unrealistic moon projects will be a thing of the past.
Instead, Barack Obama is focusing on education, research and
employment, and this more than ever before. After the most recent
election defeats, Obama has realized:Qit's the economy, stupid!'"

3. (U.S.) Reaction to Plans to Stop Moon Mission

Sueddeutsche Zeitung (2/2) headlined; "Moon is Becoming a Distant
Goal," and wrote under the sub-headline: "Barack Obama gives NASA
more Money - but Not Enough to Implement his Predecessor's Space
Travel Dreams," and noted: "George Bush had a vision. At the latest

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in American would leave his footprint on the moon, but
this is not likely to come true. Bush's successor Barack Obama does
not want to offer more money for such an adventure. If the U.S.
Congress approves his budget plan, which is by no means sure, the
moon mission would be over. Instead the President backs the
privatization of manned space travel. This would be a drastic break
with the previous principles of U.S. space travel.... Especially
parliamentarians from Florida and Texas, which have both NASA
headquarters, and where thousands of jobs are in jeopardy, do not
want to accept the end to the moon mission...and they are not
without a chance. In the talks about the previous budget bill, they
were granted a right to veto any changes of the 'Constellation'

In a lengthy article, Die Welt (2/2) noted under the headline:
"Obama Stops Flight to the Moon," and reported: "President Obama has
now shelved his predecessor George W. Bush's space travel plans.
This is probably the most drastic change of course for U.S. space
travel NASA will now have to postpone the return to the moon and
the other projects of its Constellation program to a distant
future." Formally, the end of the 'Constellation' program is not
yet sealed, because Congress must approve the new budget and
observers expect heated debates, but a drastic increase in NASA's
budget cannot be expected."

"Back to Reality" headlined Tagesspiegel (2/2) and wrote: "For cost
reasons, the U.S. moon program will be eliminated. In the future,
private companies are to offer taxi services to the ISS space

Berliner Zeitung (2/2) carried a report under the headline: "The
Dark Side of the Moon," and reported: "What is the price for the
crisis? Well, first of all the dream of the return to the moon. In
view of the financial situation, there is no money available for
symbols." In another report, the daily wrote under the headline:
"Return to the Moon Cancelled for the Time Being," and wrote: "Now
NASA must seek new destinations for its astronauts. The good news
is that NASA will now take part in the operation of the
international ISS space station by 2020. This is a good sign for
the other ISS partners."

4. (U.S.-China) Arms Shipment to Taiwan

Under the headline "Warning shot from Washington," an editorial in
Sddeutsche (2/2) highlighted that "with the supplying of weapons to
Taiwan, the U.S. demonstrates that it does not accept China's
growing power." The paper added: "Barack Obama has sent a clear
message to the Chinese leadership. The supply of weapons to Taiwan
is clearly a political message... The timing and extent of the
supplies make clear that Washington wants to put its irritation over
China's increasing self-confident and arrogant foreign policy on the
record.... Also China's attitude at the climate conference in
Copenhagen has substantially damaged relations. Chinese PM Jiabao
sent a junior member of his staff to the meeting with Obama not just
once, but several times, which the Americans clearly understood as
an insult. The angry response shows how much Beijing has
miscalculated the situation... Beijing's candid threats of
retaliation show how painful Obama's message is. However, economic
sanctions are a two-edged sword. China will not want to order
planes only from Airbus forever. It needs the U.S. and it will
return to a more realistic policy toward the U.S. after a while."

Handelsblatt (2/2) opined: "This is a new tone from Beijing. China
wants to impose sanctions on U.S. companies that participate in the
arms deal with Taiwan. The Chinese government has never gone so far
in the past. There is no doubt: relations with the United States
face a new low. China is testing Obama's persistence in the fight

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over global power claims.... U.S.-Chinese relations are
deteriorating. China is probably deliberately damaging the
relationship out of power calculations. China is looking for an
independent profile at a time when the U.S. is financially,
economically and politically wavering."

5. (Middle East) Goldstone Report

Frankfurter Allgemeine (2/2) editorialized: "The so-called Goldstone
report of the UN on the Gaza War has damaged the international
reputation of the Israeli army - and that of Israel.... It is good
that Israel has kept quiet about its historically known aversion to
the UN and the Goldstone Report to investigate the allegations. The
support for the country's security interests also depends on whether
the violation of martial law is investigated. Although
appropriateness means something else in a country that is constantly
at war..., threats cannot justify the unlimited use of force."

6. (Yemen) Anti-Terror Measures

FT Deutschland (2/2) commented: "President Salih wants to have the
best of both worlds. He wants to get into the extremists' good
books while pleasing the Americans at the same time. The longtime
ruler of Yemen does not care about leading his country out of its
poverty. He wants to stay in power. Salih and his entourage
therefore do not care much that two-thirds of the Yemenite people
chew Khat at midday - a drug that is illegal in the West and the
neighboring country of Saudi Arabia. It is a serious obstacle to
the country's development. As long as there is no good governance in
Yemen and the society does not open up, the prospects for
development will be small, regardless of how much money the West
provides. The U.S. and Europe cannot pick the president of Yemen,
but they can bring their influence to bear when it comes to
development aid and the approach to al Qaida. Only then is the
fight against terrorism and underdevelopment not lost right from the

7. (Russia) Demonstrations in Kaliningrad, Moscow

Die Welt (2/2) dealt with the most recent protests in Kaliningrad
and editorialized under the headline: "Citizens onto the Barricades"
that "the Medvedev-Putin tandem in Moscow saw the writing on the
Kremlin's walls over the weekend. For more than nine years, such a
large demonstration has not taken place in Kaliningrad. Together
with the demands in St. Petersburg and Moscow for complying with the
constitution and the protests in Tomsk against the fatal
arbitrariness of the militia forces, a potential for unrest could
develop that could even be intensified through ignorant decisions of
the bureaucratic apparatus. In Kaliningrad, the protesters for the
first time turned against the political leadership in Moscow. For
the first time, Vladimir Putin was confronted with calls to step
down. The economic climate has become rougher and money is no
longer available for everyone. This means that the possibilities of
the system of 'vertical power' will deteriorate. Protesters
demanded the right to elect the governor, a move Putin abolished
seven years ago without producing resistance. But the
powers-that-be are unable to deal with such a form of resistance.
If they continue to make international intelligence services
responsible for the increasing uneasiness and continue to turn the
thumbscrews, such a policy will lead into a dead-end street."

die tageszeitung (2/2) centers on protests in Russia in general and
observed under the headline: "Fear of Poverty Revolts" that "the
systematic persecution of dissidents and the disrespect for human
and citizens rights is an everyday fact in Russia. Little has
changed under President Medvedev despite announcements the opposite.
The fact that the security forces are using brute force against the

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protesters allows one conclusion: The Kremlin is getting nervous.
There have good reason to be, because the economic crisis has hard
hit the country. Unemployment is rapidly rising, and the
impoverishment of many people continues to increase. And if there
is a reason for Russians to take to the streets, then it is the need
to give vent to their unease about the deteriorating economic
situation. That is why it cannot be ruled out that the government
could soon face mass protests. In the long run, clubs, arrests, and
fines will then no longer suffice."


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