R 231212Z MAR 09
FM AMEMBASSY BERLIN
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INFO WHITE HOUSE WASHINGTON DC
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DEPT OF TREASURY WASHINGTON DC
FRG COLLECTIVE
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AMEMBASSY LONDON 
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UNCLAS BERLIN 000339 
 
 
STATE FOR INR/R/MR, EUR/PAPD, EUR/PPA, EUR/CE, INR/EUC, INR/P, 
SECDEF FOR USDP/ISA/DSAA, DIA FOR DC-4A 
 
VIENNA FOR CSBM, CSCE, PAA 
 
"PERISHABLE INFORMATION -- DO NOT SERVICE" 
 
E.0. 12958: N/A 
TAGS: OPRC KMDR KPAO GM US IS KN
SUBJECT: MEDIA REACTION: IRAN, FINANCE, ISRAEL, NORTH KOREA 
 
¶1.   Lead Stories Summary 
¶2.   POTUS Nowruz Message to Iran 
¶3.   Bank Stabilization Plan 
¶4.   AIG Bonus Payments 
¶5.   Formation of New Israeli Government 
¶6.   North Korean Satellite Launch 
 
 
 
¶1.   Lead Stories Summary 
 
Editorials focused on the memorial service for the victims of the 
school shootout in Winnenden and the conflict between the coalition 
parties.  The papers opened with various stories ranging from the 
problems in the coalition to Chancellor Merkel's TV interview and 
the financial crisis.  ZDF-TV's early evening newscast Heute opened 
with a story on the conflict in the coalition on the rescue of Opel, 
while ARD-TV's early evening newscast Tagesschau opened with a story 
on CSU leader Seehofer's remark that the SPD should leave the 
coalition if it does not like it any longer. 
 
¶2.   POTUS Nowruz Message to Iran 
 
Weekend media continued to carry lengthy reports and editorials on 
President Obama's video message to Iran.  Lead headlines on 
Saturday: "Obama offers Tehran new beginning" (Frankfurter 
Allgemeine),  "Change of Course in U.S. Foreign Policy:  Obama 
extends hand to Tehran" (Sueddeutsche). 
 
ARD-TV's Tagesschau reported: "Iranians give themselves flowers for 
Nowruz, and a bunch of surprises came from the U.S....  President 
Obama abolished recent preconditions for talks between Washington 
and Tehran.  He offered a new policy of dtente based on the 
principle of mutual respect.  No more threats - the U.S. is 
extending its hand to the former archenemy in Tehran."  The report 
showed Chancellor Merkel saying: "I believe President Obama's 
message reflects exactly what the European always wanted: that an 
offer be made to Iran, which - that's all I can say - will hopefully 
be accepted." 
 
Frankfurter Allgemeine commented: "When Washington says it is ready 
to allow the Islamic Republic to take its rightful place in the 
international community, it means indirectly that it has abandoned 
the goal of regime change, which the Bush government pursued for 
years.  The explicit will to reach a diplomatic solution is only a 
renewal of a maxim Bush had previously used, but out of Obama's 
mouth it rather sounds like a rejection of military means. By using 
the words of mutual respect, the President picks up Ahmadinejad's 
wording and reaches out to the Iranian rival.  However, public 
diplomacy can also tie you down and reduce leeway for later 
negotiations.  Logically, the Iranians responded to Obama's 
statement that one should abandon threats by calling for lifting 
sanctions.  The question of whether it is clever to rush forward 
before the Iranian presidential elections must be raised." 
 
Sueddeutsche noted in a feature article: "The U.S. government's 
initiative shows that Barack Obama is serious about his 
announcements....  The Iranians will not give up the image of an old 
foe easily, but Tehran at least responded in a way that was 
moderately positive."  The paper added in an editorial: "It is 
really innovative to see the crisis states of Iran, Afghanistan and 
Pakistan as one regional problem....  It respects the fact that 
there will not be an isolated solution....  The American offer to 
Iran is the most spectacular part of the new strategy.  However, it 
is also particularly risky.  Not many results can be expected prior 
to the Iranian presidential elections in June....   If Iran rejects 
this charm offensive, it will be further morally isolated. However, 
this strategy does not help much concerning the real conflicts 
between the U.S. and Iran, namely the nuclear program, sanctions, 
regional influence, support for Hezbollah and Hamas.  It will take a 
long time to resolve these problems, which have been developing for 
three decades.  The change in tone will have to, however, bring 
about concessions in the matter." 
 
Die Welt commented under the headline "The mullahs have the choice": 
"Barack Obama's video message to Iran on Nowruz was a remarkable 
gesture and a clever move.   The President's conciliatory words not 
just to the people of Iran, but also to its leadership, are 
astonishing.  And it is clever because he seeks rapprochement not 
just behind closed doors, but gives Iranians the opportunity to get 
their own impression of the new U.S. President....  So far we do not 
have the sense that the leadership in Tehran has grasped the 
historic opportunity.  The mullahs should not be under any illusion: 
if they reject the extended hand, Obama has other options on the 
table." 
 
Der Tagesspiegel opined: "Barack Obama has paved the way for direct 
talks... but the leadership in Tehran acts as if it does not get the 
message.  They reproach him with the mistakes his predecessor made 
in the past and require action, as if his words were not significant 
given the recent situation.  The Iranian energy minister announces 
that the nuclear plant in Bushehr will begin operating this year. 
This is a serious emergency! ...  America's new strategy is being 
ignored.  Will this be better once Iran holds elections?  Even if 
Ahmadinejad is not reelected, the nuclear program will remain, and 
with it the danger." 
 
Frankfurter Rundschau analyzed: "Obama's video marks a good 
beginning.  The U.S. President promises an end to Iran's isolation 
and he would like the country to take its place as a respected 
member in the international community.  Tehran must now make its 
choice between continuing its provocative approach to missiles and 
centrifuges and acting more cooperatively and transparent in the 
future.  Iran's nuclear program is not just a thorn in the side of 
the U.S., Europe, and Israel.  Almost all Arab countries are 
criticizing Iran's hegemonic ambitions, accusing Tehran of 
sponsoring radical forces everywhere.  And they are preparing to 
build nuclear plants because they fear a nuclear arms race. 
However, Obama's initiative also requires the U.S. to change its 
policy considerably.  Demonizing Iran as a member of an axis of evil 
was only the last chapter in a long list of political mistakes." 
 
Berliner Zeitung's editorial said: "Obama's plan for the entire 
region is risky.  He could fail - due to his own difficulties or to 
Iranian intransigence.  However, in the eyes of the new U.S. 
administration, it is the only way to reach the most important goal 
which is withdrawal from Afghanistan.  A country will be left behind 
that is not a democratic one, where violence might further erupt and 
which could bring fundamentalists into power.  But it will no longer 
be an occupied country - and none that will be democratized from 
outside.  This is the most important and most pleasant difference 
between Bush and Obama." 
 
¶3.   Bank Stabilization Plan 
 
Handelsblatt judged in a front-page editorial: "After a tormenting 
discussion, the United States is finally trying to embark upon the 
only reasonable path to overcome the financial crisis.  With 
taxpayers' money, the government wants to free the banking system 
from toxic assets and is now also striving for waterproof 
regulations.  For U.S. banks, this is probably the last chance to 
avoid a downward spiral into bankruptcy.  But embattled Treasury 
Secretary Timothy Geithner also needs this urgent success in order 
to safeguard his political survival.  That is why both sides are 
dependent on cooperation in view of this intriguing approach: the 
state is now joining forces with private investors and offers them 
cheap money to allow them to buy these toxic assets from banks.... 
It is now up to President Obama to rein in the populists and create 
reliable framework conditions.  That is why the idea is right to 
link the bank stabilization plan to tougher regulation of hedge 
funds.  This demonstrates to the voters and the lawmakers in 
Congress that the era of uncontrolled business deals in a shadow 
world is over.  At the same time the global financial sector knows 
before the G-20 summit what it must expect.  But this will only work 
if Obama uses his full authority and makes clear that these 
regulations will be implemented." 
 
Berliner Zeitung argued under the headline: "Too Much Fear of 
Inflation," that "banks have money but don't want to lend, because 
they know that every loan means taking a risk of not being paid 
back.  And this is increasingly likely in times of crises.  So they 
take a restrained attitude and must now face accusations of being 
risk-averse.  The consequence is that there is no inflation, but 
also no economic recovery.  That is the problem that the central 
banks must now resolve.  Those who are now saying that the expansive 
policy of central banks could lead to inflation some day in the 
future, resemble those who do not call the fire brigade out of fear 
that the water that is used to extinguish the fire could damage the 
building." 
 
According to Sueddeutsche Zeitung, "the most recent figures on the 
record U.S. debt must create unease not only in the U.S. but in the 
whole world.  These billions per se are not so much worrying, but 
what is really alarming is the looming political consequences. 
America could miss the opportunity that President Obama is 
promising: to re-invent itself but first to modernize it such an 
extent that the U.S. leading role in the world could be safeguarded 
for a lengthy period of time.   The president is in a dilemma: his 
reforms are urgently necessary, but his budget experts are also 
right.  America cannot afford the debt that Obama wants to run up. 
In order to finance his reform program, he can't get around asking 
Americans to make even more sacrifices and recanting his promised 
tax relief.  In order to do this, he needs strength, but despite his 
intrepid nature, he does not have enough.  This does not bode well 
for the promised reforms." 
 
Saturday's Sueddeutsche carried an editorial headlined: "Europe's 
Creditworthiness Increasing" and wrote: On the 20th anniversary of 
the fall of the Wall of all things, another old truth is now 
overtaken by reality--that America will always point a path out of a 
crisis.  In this crisis, the new U.S. government is acting in such a 
discouraging way that the Europeans feel forced to do what they have 
never done before, to move ahead on their own.  All of a sudden, the 
EU is united in its crisis policy.  As a matter of fact, Europe has 
every reason to act in a self-confident and strong way.  This 
strength has even increased because the EU succeeded in getting its 
act together.  The EU will be able to lead in this crisis because it 
has gained valuable experience: each nation had to realize that all 
of them could be well off only if all sides involved were willing to 
make concessions.  There is no longer any reason why the largest 
economic region in the world should not lead if the new rules of the 
game for the global economic and financial system are rewritten." 
 
¶4.   AIG Bonus Payments 
 
Die Welt noted:  "President Obama is convinced to do the only right 
thing by doubling U.S. debt.  But now his policy is beginning to see 
its first cracks.  Various camps are now forming; they have not yet 
created predetermined breaking points, but soon a few could develop. 
 Barack Obama gave his word that he did not deceive the people with 
respect to the AIG bonus payments.  But if someone refuted his 
statements, while the emotions are still boiling high, the 
suspicious left-wing liberals would turn away from him.  And 
Republicans who still support him would come under great pressure, 
while Democrats who envy Obama would get a fresh impetus.  And 
Hillary Clinton's new circle of friends would see to it in the 
Senate that the president does exactly what the secretary of state 
considers right." 
 
Tagesspiegel argued: "It seems that Barack Obama seems to make more 
opponents day by day: the Europeans reject his demand to spend more 
on the economy; the Republicans voted against his bailout package. 
Some Democrats rejected his request not to inflate the budget even 
more with million dollar gifts for their constituencies.  And in 
foreign policy he is also finding his limits.  Is America and the 
rest of the world witnessing how a presidency that came to power 
with so much hope, is now being derailed?  Nine weeks after coming 
to office, the initial euphoria has given way to an idea of what 
could go wrong.  But it is still too early to say that Obama has 
failed.  Yes, it is right.  Many people are feeling weak in their 
knees, in America and elsewhere.  But what is the reason?  Obama or 
the general helplessness?  Many people are only now beginning to 
realize the depth of the crisis.  In three to four months, we will 
be able to realize whether Obama's recipes will help.  If they do, 
he will be a hero; if not, we can only hope for God's help." 
 
Financial Times Deutschland observed: "It is understandable that the 
bonus payments for AIG officials are making the people angry.  This 
is particularly so when the managers create the public impression 
that they, like the ones of AIG, have damaged their company.  But an 
accountable politician should never give in to the temptation to 
join such outrage or even spearhead it.  But a majority of U.S. 
lawmakers did exactly this, and President Obama verbally joined the 
people's anger. For days and weeks, politicians have been talking 
about improper bonus payments, because they have discovered this is 
a good means of distracting attention from their own deficiencies." 
 
Regional daily Suedwest Presse of Ulm had this to say: "President 
Obama wants to cash in on the bonus payments for managers by levying 
a special tax.  This promises political profits but has a few flaws: 
AIG is unprecedented in its size.  There is no doubt that bonus 
payments to insolvent companies is a questionable idea.  The only 
explanation is that, when the contracts were concluded, no one ever 
expected the company to run up such excessive losses.  But it would 
be misguiding to ban bonus payments.  A bonus is an award for a 
success.  The bonus is good if the referenced size on which it has 
an effect is well chosen.  And it will also be good if it goes down 
in bad times." 
 
¶5.   Formation of New Israeli Government 
 
Regional daily Nuernberger Zeitung opined: "Netanyahu's message to 
Livni's Kadima Party and Barak's Labor Party is clear: look, I could 
also cooperate with others, but I want to form a coalition with you. 
 Israel's President Peres is likely to have approved the extension 
of the deadline, too.  After the murderous mission in the Gaza 
Strip, which has deeply divided Israel's society, the country now 
needs a government of national unity.  In addition, a right-wing 
coalition government would lead the country into isolation with 
respect to foreign policy.  Obama's peaceful tones towards Tehran 
and Damascus are also signaling a global policy spring which Israel 
cannot ignore." 
 
¶6.   North Korean Satellite Launch 
 
Frankfurter Allgemeine judged: "With its attitude, North Korea is 
spoiling its chances to take advantage of political options.  Now 
the regime is challenging the region with the announcement that it 
plans to launch a satellite.  It is also cutting the links from 
which it profited so much over the past years: the exchange of goods 
and services along the border to South Korea.  Now Pyongyang has 
obviously decided to use the Kaesong industrial complex as a means 
of pressure against Seoul and also towards Washington.  If Kim 
Jong-il and/or his advisors had any sense of reality, they must 
realize that Kaesung's closure would cost South Korean investors a 
lot of money, but for the North Korean economy it could be the 
knock-out." 
 
KOENIG