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Cablegate: Media Reaction: U.S.-Budget, U.S.-Qdr, U.S.-Eu, U.S.-China,

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1. Lead Stories Summary
2. (U.S.) Draft Budget
3. (U.S.) Quadrennial Defense Review
4. (U.S.-EU) Summit Meeting
5. (U.S.-China) Relations
6. (U.S.-Russia) START Talks
7. (EU-U.S.) SWIFT
8. (Iran) Nuclear Program
9. (Environment) Climate Policies
10. (EU-Greece) Budget Trouble

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1. Lead Stories Summary

Print media led with a variety of issues this morning. While
Sueddeutsche Zeitung and Frankfurter Rundschau reported that Germany
would buy a CD with data of tax evaders, Frankfurter Allgemeine
dealt with a reform of the job centers. Other issues in the media
were a ruling by the Federal Court of Justice on water prices
(Berliner Zeitung, Handelsblatt) and a remark by Health Minister
RQsler that he would step down if he failed with his efforts to
reform the healthcare system. Editorials focused on the CD with the
tax evaders and on the financial troubles of communities and
regional governments. ZDF-TV's early evening newscast heute and
ARD-TV's early evening newscast Tagesschau opened with reports on
warnings by cities and communities that they would face financial
collapse if the government did not help out.

2. (U.S.) Draft Budget

Reports on the President's draft budget are no longer prominent in
Germany. There was only one paper that carried an editorial.

Regional daily Mnchener Merkur (2/3) argued: "The carrier of hope
has turned, for the time being, into a politically assailable debt
president. With the biggest budget deficit since WW II around his
neck and a budget plan in which savings and freezing efforts only
have an alibi role to play thanks to numerous exceptions, Barack
Obama is offering further ammunition to the opposition in the year
of Congressional mid-term elections. With his financial forecasts,
the President was totally wrong when entering office and his
economic stimulus program also completely failed to have an effect
on the labor market."

Handelsblatt (2/3) noted in an editorial: "What will the Americans
and the British do to achieve economic growth? It is likely that
they will allow a higher inflation rate in order to reduce their
debt burden. In the euro zone, however, there are many people who
save money and it is the state that runs up debt. In the U.S., the
state is also running up debt but the Americans, too, are fighting
red numbers. That is why many more Americans are less interested
than we are in getting a stable currency. The problem is that, in
the future, it could be possible that the euro zone stagnates, while
the economy in the United States will grow again. We will then have
more unemployed and will admire the Americans. We will find out
that they have a more flexible labor market, are more willing to
take risks, and do everything better. At the same time, we will
realize that our rigid structures prevent higher economic growth.
But we can also say there is a certain probability that history will
repeat itself. But at least Europe has the consolation of knowing
it is more virtuous and has less but more stable economic growth."

3. (U.S.) Quadrennial Defense Review

Only a few papers carried reports on the Pentagon's Quadrennial
Defense Review. Sueddeutsche (2/3) carried a report under the
headline: "Pentagon Adapts to 'Small Wars"" and wrote: "More than
ever before the United States is adapting its military strategy and

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arms planning to the global fight against terror networks and to
dangers emanating from unstable and failed states such as
Afghanistan, Yemen, and Somalia. Defense Secretary Robert Gates
said the U.S. success in the fight against the insurgents in
Afghanistan or Iraq depends on 'America's ability to face the
threats of the coming years' when presenting the Quadrennial Defense
Review (QDR). The new QDR version...definitely breaks with the
traditional U.S. dogma according to which the U.S. armed forces
should be able to stand two large-scale conventional wars at the
same time. Gates said: "This condition is 'outdated' and 'no longer
reflects the real world.'"

In an editorial under the headline: "The Pentagonal Parallel Power
Center," Sueddeutsche Zeitung (2/3) judged: "The draft budget for
the Pentagon and the QDR allow the conclusion that the Pentagon has
established itself as a parallel power center which has left behind
all reasonable limits. The Pentagon has quietly bid farewell to the
strategy of waging two large-scale wars at the same time. Now it is
focusing on a number of small conflicts which are nurtured
everywhere in the world due to ethnic and religious rivalries. At
the same time, the budget is to increase to 708 billion dollars. If
we look at the spending graph, then the arrows have shown a steep
ascent since 9/11. There is no doubt: The U.S. deficit problem has
a military core. The United States considers itself to be at war.
That is why the budget is not being questioned. It is unthinkable
to reverse it and melt it down. This fixation on defense will
create a bad situation for the allies. They are no longer available
as a corrective for the U.S. mission policies. For America, this
interplay of mission doctrine and budget deficit is dangerous
because there is no escape from the arms logic. But, at the same
time, America ignores the real enemy: the breathtaking deficit."

4. (U.S.-EU) Summit Meeting

Many papers (2/3) carried reports on A/S Gordon's news conference in
which he explained why President Obama would not attend the EU-U.S.
summit. Sueddeutsche (2/3) carried a front-page report under the
headline "Controversy over EU Responsibilities Irritates U.S." and
wrote that "President Obama neither comes to Brussels or Madrid [for
an official visit]. The United States is obviously irritated at the
bickering of the leading personnel [in the EU]. This is the only
interpretation of the reason not to come, which was presented in a
smug way" by A/S Philip Gordon. The daily cited Gordon as having
said: "We are willing to come as soon as the Europeans are ready."
The paper wrote that the Lisbon Treaty has been adopted "but,
instead of speaking with one voice, the EU now has four: a permanent
president of the European Council, a rotating EU presidency, a
foreign minister who is not even allowed to call herself foreign
minister, and the president of the European Commission are all
squabbling about powers and responsibilities. It is understandable
that the Americans are no longer in the mood to accept
inner-European arrangements."

FT Deutschland (2/3) noted that "the U.S. President does not believe
that the EU-U.S. summit is worth a visit. Brussels is shocked,
particularly because the EU wanted to demonstrate after the Lisbon
Treaty that it is more than a coffee shop.... The Lisbon reform was
supposed to raise the EU's foreign policy profile. From the U.S.
point of view, this seems to have failed."

Under the headline: "Setback for Zapatero," Die Welt (2/3)
editorialized: "There are good reason why President Obama wants to
stay at home in the coming months...and now he even announced that
he would not attend the EU-U.S. summit in Madrid. Spain's President
Zapatero had planned to orchestrate this summit as the culmination
of the Spanish EU presidency: How nice would it have been to
demonstrate the support of his government for Obama's America and to
bathe in its splendor! But the times in which the Zapatero

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government was supported by a wave of sympathy are long since over.
For Europe, however, one thing is true: It is a pity that Obama
cancelled the invitation, but it will not touch the core of
European-American relations. They need less show at summit meetings
but more, concrete arrangements for the new shaping of international
financial relations."

Frankfurter Allgemeine (2/3) opined: "Spain's President Zapatero
would certainly have liked to play the host for President
Obama...but the U.S. President does not want to supply nice pictures
since he will not take part in the EU-U.S. summit. Now the
Europeans have their ideal president and he obviously has better
things to do than flying across the Atlantic for a few hours in a
coffee shop. But to get serious: Does Obama really have nothing to
discuss with the European leadership what would be important to him
and would make a flight worthwhile? Or does he not consider the EU
to be relevant? One should not make a great fuss about the
cancellation of the invitation but, nevertheless, it is an
expression of dissatisfaction and indifference. Maybe the truth is
beginning to dawn on Europeans: they are not the center of attention
of this president either. They should wonder why this is so."

5. (U.S.-China) Relations

Frankfurter Allgemeine (2/3) headlined: "Beijing warns
Obama-measures will be taken if he meets the Dalai Lama."
Deutschlandfunk radio reported that "the topic of Tibet continues to
cause diplomatic disturbances between the U.S. and China. A
spokesman of the Beijing Foreign Ministry expressed vehement
opposition to meetings between representatives of the U.S.
government and the Dalai Lama, adding that Washington must recognize
the sensitivity of the topic of Tibet."

Under the headline "Frosty relations," Frankfurter Rundschau (2/3)
editorialized: "Prior to the 2008 presidential elections, Beijing
secretly hoped that the winner would be McCain or Clinton, but not
Obama. The charismatic itinerant preacher made China's leadership
feel uncomfortable. Rightly so. In his first year, the U.S.
President clashed with the Chinese in almost every possible field of
conflict: currency manipulation, climate protection, internet
censorship, U.S. weapons sales and Obama's planned meeting with the
Dalai Lama. Relations have not been so frosty for years. The
confrontation is unwanted and still inevitable. The conflicts of
interests between the U.S. and China are increasingly difficult to
cover up in the times of a global crisis.... As little as Obama can
allow himself to appear weak on China at home, China cannot afford
to let him play freely on the global stage because China wants to be
a superpower."

6. (U.S.-Russia) START Talks

According to an editorial in Sueddeutsche Zeitung (2/3), "in his
Prague speech, President Obama proclaimed his vision of a world
without nuclear weapons. Two hundred prominent advocates of this
idea of 'Global Zero' have now gathered in Paris.... This alliance
from Paris is creating global attention for the second stage of the
disarmament campaign. The supporters of a zero solution are now
concretely saying how not only the number but also the military
significance of nuclear weapons can be reduced. These would be
important stages on the path to their abolition. By doing so, they
keep up the pressure on Washington and Moscow. In view of the
increasingly difficult domestic situation, President Obama can
really use such support.... None of the participants in Paris
harbors the illusion that the U.S., Russia or any other nuclear
state would be able to completely do without nuclear weapons in the
near future. The date, 2030, as the final date for their abolition
is a psychological date. The goal must be within reach to motivate
others. It would be an important success to break the trend of

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putting nuclear weapons again in the center of military doctrines.
The key question is not whether the U.S. and Russia will be
satisfied with 1,000, 750 or 500 warheads It is much more important
whether a global, primarily regional, stability can be achieved that
is not based on the balance of terror. Those who point the way to
such a policy must accept strain, but the result would deserve a
Nobel Peace Prize much more than any political proclamation."

7. (EU-U.S.) SWIFT

Under the headline "Strasbourg, say no to SWIFT!," FT Deutschland's
(2/3) Reinhard HQnighaus wrote a lengthy commentary on the U.S.-EU
agreement to exchange bank data for counterterrorism purposes,
opining that the SWIFT agreement "violates data protection and
barely increases security. EU parliamentarians must reject it."
The author wrote: "It was a modest request from the European
parliament. The governments of the 27 EU countries were asked to
wait a few days until the parliament could make the decision on
February 10 or 11 on the agreement to hand over financial data to
U.S. investigators. However, the foreign ministers brusquely
ignored the request of the parliamentary president. Without any
further debate, they decided last week to enforce the agreement on
February 1. This was only the most recent affront in a long serious
of humiliations which elected representatives had to cope with in
the name of fighting terrorism. Ignoring the EU parliament,
negotiators of EU Justice Commissioner Jacques Barrot and the member
states previously negotiated with the Americans that U.S.
investigators are provisionally allowed to continue to scan
financial transactions of EU citizens that are made through the
Belgian provider SWIFT. Also the German government allowed this
diminution of data and legal protection rights, although there were
doubts about whether this would improve security. This and next
week, the European parliament will have a unique chance to correct
this nonsense. If the parliamentarians take their new rights
seriously, given to them by the introduction of the Lisbon Treaty,
they must reject the provisional SWIFT agreement. There are three
good reasons for this. First, security authorities have not
provided any plausible evidence that such widespread interference
with data protection rights is reasonable to this end.... The EU
commission claims that the SWIFT data led to the arrest the four
members of the Sauerland cell who planned attacks on U.S. sites in
Germany. German investigators have long since made clear that this
is not true.... The EU parliament is not opposed to an intelligent
surveillance of the financial sources of terrorism... However, the
current text does not meet the minimum standards. Secondly, the
parliament demanded that only an independent judge is allowed to
decide which banking data can be given to U.S. investigators.
According to paragraph 4 of the agreement, the key authority of a
member state makes this decision. This would be the Federal
Criminal Police Office in Germany, not an independent judge. In
addition, the agreement does not meet the standard of legal
protection required by the parliament. In case their data are
mistreated, EU citizens have no right to file a suit in a U.S.
court.... Finally, it is not clear which data are involved.... If
the parliamentarians take their conditions seriously, they have no
option but to reject the agreement. This is the third, tactical
reason for a rejection: those who do not accept shortcomings
concerning the data and legal protection rights for a provisional
period of time, will not be able to insist on higher standards
during negotiations with Americans on a permanent agreement, which
begin soon. The pressure coming from European capitals to pass the
agreement is great. The 736 representatives must withstand it.
Concerning such an important topic, which touches on the basic
rights of all EU citizens, the protection of civil rights must be
the guiding rule, not reasons of state."

8. (Iran) Nuclear Program

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Deutschlandfunk radio (2/3) reported: "Things are on the move in the
nuclear dispute with Iran. President Ahmadinejad said on TV that
his government is willing to allow the enrichment of uranium abroad
- as demanded by the United Nations." Mass tabloid Bild headlined a
front-page report "Trick or real offer? Iran wants to give in on
the nuclear dispute." Tagesspiegel carried a short report under the
headline "Softening its tone on the nuclear dispute?" Frankfurter
Allgemeine also carried a report headlined "Iran plans further
executions," noting "Despite international protests, nine other
dissidents are supposed to be executed in Iran soon."

9. (Environment) Climate Policies

Sueddeutsche Zeitung (2/3) carried an editorial under the headline:
"The World in a Glasshouse," and judged: "If there has ever been
evidence of rigidity in climate protection, then it has been
presented now in the form of an omnibus volume of collective
failure. Empty phrases, conditions, provisos - after the colossal
failure of Copenhagen, the states are unable to present anything
else. The main principle of climate protection is still valid: no
one moves before the other side moves, and, in the end, no one
moves.... What the various states have submitted [to the UN Climate
Secretariat] is even less than their offers during the climate
conference. The world is in a downward spiral and this leads into a
greenhouse. A way out is not visible.... The international
community of nations seems paralyzed as a result of the Copenhagen
conference. But it is high time to think of Plan B, for instance, a
two-year extension of the Kyoto Protocol, if President Obama needs
more time for his climate bill. Or finding a coalition of the
willing in which important industrialized countries organize climate
protection among themselves, for instance, the controlled trade with
emission rights for carbon dioxide. The world can do without an
agreement that is as weak as the most recent state proposals. It
would help no one."

"Let Fresh Air into the Greenhouse," headlined Die Welt (2/3) and
editorialized: "Since the Copenhagen summit, we learn almost on a
daily basis new facts that cast doubt on the basis of the summit
meeting: the report of the Global IPCC Climate Council. The
objections to the IPCC's reports have now grown into a mountain and
no one can ignore them any longer, neither Germany where the IPCC
was beyond all doubts just a short time ago. The question now is
whether the German government will take note of the new situation.
But, with the exception of some grumbling from Environment Minister
RQttgen, we have heard nothing. Germany is considered the model
country of climate protection and it would have great weight if
Chancellor Merkel suggested de-politicizing the IPCC. The next UN
report should collect all available information and discuss it
without a result that is known before."

10. (EU-Greece) Budget Trouble

Under the headline "Euro crisis -your bankruptcy is my bankruptcy,"
Tagesspiegel (2/3) editorialized on its front-page: "Greece is the
weakest country of the Euro zone and faces bankruptcy. Hedge fund
managers are making big money by fueling the crisis, betting that
Greece will default to repay its debt. Opponents of the euro in the
Anglo-Saxon financial world are already hoping that the common
currency will fail, although the banking crisis made the advantage
of having the euro obvious." Handelsblatt headlined: "Greece's
nervousness is rising - Athens' warnings against speculative attacks
fall on deaf ears within the euro zone."


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