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E.O. 12958: N/A 
TAGS: OPRC KPAO AU
 
SUBJECT: AUSTRIAN MEDIA HIGHLIGHTS: July 19, 2007 
 
 
Elsner Blames Floettl 
 
¶1. When questioned by presiding judge Claudia Bandion-Ortner how 
bank Bawag came to lose around 1.4 billion Euros in currency 
speculations in the late 1990s, former bank CEO Helmut Elsner blamed 
his co-defendant, investment banker Helmut Floettl. Losses incurred 
prior to 1998 were the result of "bad luck, not criminal acts," 
Elsner said. The huge amounts lost in currency speculations after 
1998 were "Floettl's fault," because he "ignored all written 
directives from the Bawag, staking everything on the Japanese Yen," 
the former CEO claimed. 
Like all Austrian media reporting on the bank Bawag trial, 
mass-circulation tabloid Kronen Zeitung quotes former bank CEO 
Helmut Elsner, who in his testimony yesterday blamed all losses from 
the Bawag's so-called "Caribbean deals" on investment banker Helmut 
Floettl. According to Elsner, his co-defendant Floettl had "failed 
to stick to agreements, lost the money in speculations," and finally 
told the former CEO in 2000 that "all the money is gone." Floettl 
has meanwhile dismissed these allegations, and defended himself, 
saying that the losses were "no one's fault. The markets just 
developed differently than anticipated. It was an investment 
failure." The Kronen Zeitung comments that this was likely the 
"first major duel in the Bawag case." 
Semi-official daily Wiener Zeitung also reports a request by 
Elsner's lawyer that his client be released from investigative 
detention has been rejected by the court. Elsner has been in 
detention since his extradition from France in February, because 
officials consider him a flight risk. 
 
 
Debate over Residence Rights Continues 
 
¶2. Rejecting Austrian Chancellor Alfred Gusenbauer's proposal to 
grant residence rights to immigrants who have lived in Austria for 
more than ten years, Interior Minister Guenther Platter of the 
People's Party said he is opposed to a general right of residence, 
suggesting that it would be "immigration under the guise of asylum." 
Gusenbauer earlier said that foreigners who have integrated well 
into Austrian society after years of living in the country legally, 
and who have no criminal record should have the right to stay. 
According to semi-official daily Wiener Zeitung, Chancellor Alfred 
Gusenbauer appears to have "caused a new quarrel over Austria's 
asylum and immigration laws" with his call to grant residence rights 
to foreigners who have been living in the country legally for many 
years. Interior Minister Guenther Platter has dismissed the 
Chancellor's proposal and his colleague, OeVP Secretary General 
Hannes Missethon criticized Gusenbauer's plan as "yet another issue 
where the SPOe has gone back on its word," and which "would leave 
the door wide open to immigrants exploiting Austria's asylum laws." 
SPOe party manager Josef Kalina in turn urged the Interior Minister 
"not to permit pointless hardship cases." Likewise, centrist daily 
Die Presse headlines "Quarrel over residence rights for asylum 
seekers," and quotes experts from the business sector as warning in 
would be a bad move economically to force skilled workers seeking 
asylum in Austria to leave the country. 
 
 
US Warns Of Kosovo Plan Failure 
 
¶3. The US Ambassador to the United Nations has warned Russia not to 
block a UN Security Council resolution on the future status of 
Kosovo. Ambassador Zalmay Khalilzad said failure to pass the 
resolution could lead to the UN losing control of the political 
process in the Serbian province. 
Independent provincial daily Salzburger Nachrichten, reporting on 
Russia's threat to block a UN Security Council resolution on the 
future status of Kosovo, writes that Serbia - being vehemently 
opposed to independence for Kosovo -- is apparently banking on 
Moscow's assistance in the dispute. The daily speculates that 
Russia's unrelenting stance on the issue may be an attempt at 
affirming its role as a superpower that has re-emerged on the scene. 
In addition, there might be a psychological motive: Moscow may still 
be smarting from the "humiliation of 1999," when the weakened 
Russian state under President Yeltsin had nothing to set against 
NATO's involvement in the conflict, the daily suggests. 
 
 
A Permanent and Growing Threat 
 
¶4. ...headlines a leading Austrian daily, publishing an analysis of 
al Qaeda's recovered strength. It seems that the United States has 
been unsuccessful in its fight against terrorism: The organization 
is now as strong as in 2001, and the threat it poses has not 
lessened, US intelligence services have found. 
In an analysis in centrist daily Die Presse, Washington 
correspondent Norbert Rief argues that the latest intelligence 
reports from the US concerning the strengthening of al Qaeda "are 
bad news for the Bush administration for several reasons: President 
Bush and his government have made the war on terror their top 
priority. Also, the US has contributed to increasing the threat of 
new attacks with its invasion of Iraq." According to Rief, the 
Senate Intelligence Committee warned the President before the US-led 
military operation in Iraq that invading the country could 
indirectly boost Osama bin Laden and his fellow terrorists, as it 
would only provide al Qaeda with more options to increase its 
influence. The Presse also says that the US intelligence services 
believe a key reason for al Qaeda's re-emergence is the relative 
security the organization can rely on in the border region between 
Afghanistan and Pakistan. The United States, however, has been 
reluctant to increase pressure on Pakistani President Pervez 
Musharraf, who the White House sees as a key ally in its fight 
against terrorism. Meanwhile, US policy has also radicalized 
Lebanese organization Hezbollah, Rief writes. 
 
 
Mideast Quartet Meets in Portugal 
 
¶5. British Prime Minister Tony Blair will make his first appearance 
today as the new Middle East envoy for the international quartet - 
the UN, the EU, the US and Russia. Diplomats are gathering in 
Lisbon, Portugal, to discuss strategies for the long-stalled peace 
talks between Israel and the Palestinians. US Secretary of State 
Condoleezza Rice, UN Secretary General Ban Ki Moon, and EU foreign 
policy chief Javier Solana will also attend the meeting, says 
independent daily Salzburger Nachrichten. 
 
 
New Suicide Attacks in Pakistan 
 
¶6. At least five people have been killed and more than twenty 
injured in a suicide car bombing at a police college in northwestern 
Pakistan. In another bombing near Karachi, at least four people were 
killed in an attack aimed at a convoy of Chinese workers. There has 
been a series of bomb attacks since troops stormed the Red Mosque in 
Islamabad earlier this month, which was run by Islamist radicals, 
according to ORF online news. 
Kilner