R 241227Z MAR 09
FM AMEMBASSY BERLIN
TO SECSTATE WASHDC 3651
INFO WHITE HOUSE WASHINGTON DC
SECDEF WASHINGTON DC
DIA WASHINGTON DC
CIA WASHINGTON DC
DEPT OF TREASURY WASHINGTON DC
FRG COLLECTIVE
AMEMBASSY BRUSSELS 
AMEMBASSY LONDON 
AMEMBASSY PARIS 
AMEMBASSY ROME 
USMISSION USNATO 
USMISSION USOSCE 
HQ USAFE RAMSTEIN AB GE
HQ USEUCOM VAIHINGEN GE//J5 DIRECTORATE (MC)//
CDRUSAREUR HEIDELBERG GE
UDITDUSAREUR HEIDELBERG GE

UNCLAS BERLIN 000344 
 
 
STATE FOR INR/R/MR, EUR/PAPD, EUR/PPA, EUR/AGS, 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 AF IS IZ TU RS SF DA CH
SUBJECT: MEDIA REACTION: ECONOMY, AFGHANISTAN, ISRAEL, IRAQ-TURKEY, 
NATO, RUSSIA, AFRICA-CHINA 
 
¶1.   Lead Stories Summary 
¶2.   U.S. Bailout Plan 
¶3.   U.S. Strategy on Afghanistan 
¶4.   U.S. Budget Draft 
¶5.   Obama on AIG Bonuses 
¶6.   New Israeli Government 
¶7.   Turkish President Gul Visits Iraq 
¶8.   10th Anniversary of NATO Intervention 
¶9.   Future NATO Secretary General 
¶10.   Russian Democracy 
¶11.   South Africa Bans Dalai Lama Visit 
 
 
¶1.     Lead Stories Summary 
 
ZDF-TV's early evening newscast Heute and ARD-TV's early evening 
newscast Tagesschau opened with stories on the U.S. government's 
plan to stabilize banks with a combination of public and private 
funds that could total one trillion dollars.  This morning's Heute 
newscast opened with the commitment of some AIG managers to repay 
their bonuses.  Newspapers led with stories on the agreement of Abu 
Dhabi's Aabar Investments to become carmaker Daimler's largest 
shareholder, and the U.S. plan to rescue the banking system. 
Editorials focused on a range of economic stories, such as Daimler, 
the U.S. bank rescue plan, and AIG bonus payments. 
 
¶2.   U.S. Bailout Plan 
 
ARD-TV's late evening newscast Tagesthemen broadcast the following 
commentary: "The American people are currently paying for the 
mistakes of the government and banks.  Treasury Secretary Geithner 
used clear words aimed at the incredible mistakes of the Bush 
predecessor government.  But these words also sound like slogans of 
a politician who stands with his back to the wall, too.  Now a new 
bailout package is to bring a turnabout for Geithner and the Obama 
administration.  It entered office with the promise to end the 
excesses at the financial markets once and for all.  It has now 
arrived in the real world." 
 
Under the headline: "Dance with a Zombie," Sueddeutsche Zeitung 
argued: "After listening to Geithner's plan, the listeners 
immediately come up with one question: If everything is so simple, 
why has thus far no one come up with this idea? The answer: because 
at least one of the actors will lose, namely the American people. 
In his new version, the Geithner plan is so complicated that its 
effects cannot be forecast now.  But there are two indications why 
the taxpayers will lose: First, they are supposed to finance the 
purchase of the [toxic] bonds...and second, the investors are safe 
because of state guarantees shouldered by the American people. 
Following each bailout package for the banks, the financial crisis 
seemed to have been resolved, but each time, it came back like a 
zombie.  Now Geithner is asking this zombie for a dance.  It is 
really an absurd idea to allow the financial sector, which caused 
the crisis, to profit from a solution to the crisis.  There is a 
radical alternative:  the state must take over control of those 
banks which would otherwise go down - and for this risk, it must 
make profits from the sale of toxic assets on its own.  This variant 
smells of socialism, it would require the shareholders to make 
greater sacrifices, and would not create a big business for hedge 
funds, but it is much fairer than the Treasury Secretary's plan." 
 
According to Handelsblatt, "the U.S. government is finally tackling 
the core of the problem by buying illiquid assets with the support 
of private investors.  Without cleaning the balance sheets of banks, 
the credit markets cannot be revived and the economy will not get 
going again.  But two questions will be decisive for a successful 
bailout plan: Is the volume high enough?  And will prices build that 
will clean the market of illiquid assets?  Nevertheless, it is it is 
worthwhile for the taxpayer to accept these risks, not only because 
there is no alternative to the Geithner plan but also because these 
assets are not only made up of useless junk.  If this plan succeeds 
and if the panic is replaced by economic calculations, it would not 
only be the first step out of this quagmire, but the costs would 
also be much smaller than feared." 
 
Financial Times Deutschland editorialized on its front page: "The 
great irony of Geithner's plan is that he basically comes back to 
the plan which his predecessor Hank Paulson wanted to implement half 
a year ago to restructure the banks.  Geithner now wants to 
implement the failed concept by using those instruments that were 
responsible for so many financial problems: private investors will 
now de facto get the possibility to speculate with taxpayers' money. 
 Geithner proudly said: 'We are the United States, not Sweden.'  But 
the great risk he is now taking is that the enormous amount of money 
is not clearly targeted enough.  This maneuver cannot be repeated as 
often as he likes." 
 
Die Welt editorialized: "Barack Obama and Timothy Geithner are on 
the offensive again.  First, Congress adopted populist bills on the 
taxation of bonus payments and yesterday, Geithner presented the 
Public Private Investment Program, which is a political, but 
probably also, an economic, act of liberation. Treasury Secretary 
Geithner's plan could turn out to be the golden way out of the 
financial crisis.  The governments in Europe are well-advised to 
closely follow this experiment." 
 
Regional daily Kieler Nachrichten noted: "It is pure despair which 
has driven the U.S. Treasury Secretary to develop the new banking 
bailout plan.  Even though the U.S. government has been pumping 
billions of dollars into the financial markets, the core problem, 
which has really caused the recession, remains unchanged.  There is 
no market for toxic assets. And as long as this does not change, all 
attempts to get the economy going again must fail." 
 
According to die tageszeitung, "the U.S. administration is obviously 
willing to pay almost every price to avoid taking over the banks, 
even though this would be cheaper; it can be ruled out that private 
investor make profits with state banks.  But U.S. politicians seem 
to fear that they could be accused of pursuing a 'socialist' policy. 
 As far as the ideology is concerned, the investment bankers have 
now won.  This message of the Geithner plan will have global 
consequences.  The taxpayer will have to pay the damage." 
 
¶3.   U.S. Strategy on Afghanistan 
 
Several papers carried reports on the review of U.S. strategy on 
Afghanistan, focusing particularly on President Obama's CBS 
interview and Special Representative for Afghanistan and Pakistan 
Richard Holbrooke's talks with NATO and EU representatives in 
Brussels. Berliner Zeitung's intro said: "President Obama's new 
strategy on Afghanistan does not rule out the possibility of 
withdrawal."  FT Deutschland headlined: "Obama is searching for the 
exit from Afghanistan." 
 
Frankfurter Allgemeine headlined "Dissent over expanding Afghan 
police forces" and reported that "the international discussion on 
the new strategy to stabilize Afghanistan is still at odds over the 
division of labor in the buildup of Afghan police forces.  While the 
EU began to talk about deploying European police officers in the 
country, Americans want NATO to take the lead in this mission." 
 
Sueddeutsche wrote on the President's CBS interview that "Obama 
reveals how he wants to resolve the problem of Afghanistan," 
highlighting that he "wants a clear plan to end the mission in 
Afghanistan."  The paper raised expectations for next week's POTUS 
visit to Europe: "Obama's statements are further details of the new 
American strategy on Afghanistan, which the President wants to 
present to Europe next week....  Obama's recent statement, however, 
do not suggest a quick end to the mission." 
die tageszeitung editorialized on the new U.S. strategy: "Day by 
day, the discussion focuses on a new issue in Afghanistan....  Many 
of the proposals are worth consideration but the uncoordinated and 
arbitrary way they are presented does not make the impression of a 
thorough and fully developed change of strategy.  It looks like 
conceptual chaos, if not even like panic in the face of defeat. 
Given this chaos, it is not convincing to talk about an exit 
strategy....  'Change we can believe in' must be communicated 
differently in Afghanistan." 
 
¶4.   U.S. Budget Draft 
 
Frankfurter Allgemeine had this to say:  "President Obama 
understands this serious economic crisis as a chance to readjust the 
relationship between market and state.  Evidence of this is the 
budget draft for next year and the time thereafter.  The president 
pins his hopes on higher taxes for wealthy American, state 
intervention to protect the climate, and improved control of the 
healthcare sector. In addition, the actors in the financial markets 
are to be controlled much better than in the past with more 
regulatory measures.  This corresponds to the spirit of the time and 
meets with support among the America people.  But the president 
should not succumb to the fallacy that only greedy Wall Street 
bankers are to be blamed for the crisis.  The state, too, has failed 
because it set false incentives and contributed to the development 
of the bubble on the housing market.   Obama must see to it that he 
does not overshoot the mark and paralyze the very forces  he wants 
to strengthen: corporate spirit and the willingness of the people to 
take risks." 
 
¶5.   Obama on AIG Bonuses 
 
In the view of Sueddeutsche Zeitung, "all of a sudden, President 
Obama has constitutional concerns about the AIG bill.  This is 
reasonable, but the question is why he did not present his concerns 
a week ago.  This vacillation does not cast a favorable light on the 
president.  He acted in an opportunistic way.  Obama promised a new 
straightforwardness in his policies.  But the staggering course of 
the past few days has now damaged him." 
 
Financial Times Deutschland observed: "It is extraordinary that 
President Obama is losing popularity.  In order to explain this 
decline, it is not enough to refer to historic challenges. But 
liberal and conservatives in the U.S. expect the president to 
demonstrate a similar degree of leadership, inspiration, and clear 
communication as he demonstrated as election campaigner.  Instead, 
Obama is sending contradictory signals by showing his outrage at 
bonus payments for AIG managers without having done anything to 
prevent them.  Obama's problem is not so much that he had to make 
painful decisions but that he changed course too often.  Four years 
before the next elections, Obama could well afford to make decisions 
that could damage him in opinion polls.  But the president of the 
biggest economic power in the world cannot do without a clear course 
- even though he will not always get the necessary applause for 
these decisions." 
 
¶6.   New Israeli Government 
 
Sueddeutsche Zeitung editorialized: "In the elections, Ehud Barak's 
Labor Party achieved the worst result in its history, but Barak 
wants to use all his might to keep the portfolio of the defense 
minister.  That is why he is now betraying the ideals of his party. 
He is negotiating a coalition with designated prime minister 
Netanyahu, thus approving the sellout of his principles.  Netanyahu 
wants to lull the world into believing that he will form a grand 
coalition with Barak's Social Democrats.  But he needs the Likud 
Party not to govern but as a fig leaf for his hopelessly right-wing 
coalition." 
 
Regional daily Braunschweiger Zeitung opined: "Benjamin Netanyahu 
has decided to play a risky game: to form a coalition of faltering 
candidates.  He succeeded in winning the support of the nationalist 
'Our House' and of the ultra-orthodox Shas parties. But this is 
still not enough to form a coalition majority.  It would be perfect 
only if the Labor party joined the coalition.  And its chairman Ehud 
Barak is only waiting.  If this coup succeeded, it would be like 
putting a bomb in charge so to speak.  Our House chairman Avigdor 
Lieberman can imagine the Israeli army acting in a similar way as 
the Russians did in Chechnya.  Barak, in turn, does not seem to have 
problems with his kow-tow to Likud.  In the long run, there is no 
way this coalition will work." 
 
¶7.   Turkish President Gul Visits Iraq 
 
Die Welt reported: "For the first time in 33 years, a Turkish head 
of state is visiting Iraq. President Gul arrived in Bagdad for a 
two-day visit....  Turkey and Iraq want to take joint action against 
the rebels of the Kurdish Worker's Party, who are operating in the 
north of Iraq.  Talabani and Gul agreed on this common regional 
front." 
 
Tagesspiegel commented: "Realpolitik is gaining ground in the 
difficult relations between Turkey and Iraq.  In recent years, 
Ankara has been postponing a new beginning with its southeastern 
neighbor, fearing that too close contacts could promote the 
establishment of a Kurdish state in northern Iraq.  Turkey has 
realized that it can permanently weaken the PKK rebels only together 
with the Iraqis.  In addition: in a few years the Americans will 
have withdrawn from Iraq, but the Turks and Iraqis will still be 
there and have to find an arrangement....  Ankara and Bagdad are 
obviously prepared to tackle the problems together.  If both sides 
stick to the current policy, not only Turks and Iraqis will benefit 
from it." 
 
¶8.   10th Anniversary of NATO Intervention 
 
Sueddeutsche Zeitung is of the opinion that "NATO's war against 
Serbia was the prototype of a conflict which has been pestering the 
world until today.  On this small theater in Kosovo, all those 
villains, do-gooders?, religious fanatics, legalists, and military 
strategist came together who are still determining the suffering and 
the happiness of the world today.  That is why the Kosovo conflict 
was the first conflict of a new era.  And today, the community of 
nations still raises the question in many conflicts when it or part 
of it is allowed to intervene in other states.  International law 
has not given an answer for more than ten years.  The UN has 
discovered 'the duty to protect,' which is a minor club to use 
against all governments that fail in their work and violate 
elementary moral principles.  The United States has abused? this 
right to intervene, invented a reason for war in Iraq and 
discredited itself with its missionary ideas to democratize others. 
But this moral exuberance has disappeared today.  What is left is 
the insight that international law still does not fight injustice in 
the world and that the UN is too weak to offer a legitimate reason 
to intervene." 
 
Regional daily Mdrkische Oderzeitung of Frankfurt on the Oder 
opined: "NATO's military mission against the former Yugoslavia in 
1999 was politically and morally right beyond all the questions of 
international law that influenced the decision ten years ago. 
Following the bloody consequences of his nationalist policy in 
Croatia and Bosnia, dictator Slobodan Milosevic had to be stopped. 
Without NATO's actions, there would have been a lasting and massive 
expulsion of the Albanian population from the Serbian province of 
Kosovo.". 
 
¶9.   Future NATO Secretary General 
 
Die Welt commented on the increasing number of reports suggesting 
that Danish Prime Minister Rasmussen will be appointed NATO 
secretary general.  "Is Rasmussen's appointment innovative?  Twenty 
years after the downfall of the Soviet empire and the fall of the 
Iron Curtain, NATO's leadership still reflects the time of the Cold 
War as if nothing has happened since autumn 1989.  The time would 
have been ripe to appoint an eastern European.  One could also have 
considered a French candidate." 
 
¶10.   Russian Democracy 
 
Frankfurter Allgemeine commented on President Medvedev's decision to 
fire Murmansk Governor Yury Yevdokimov, saying that Yevdokimov 
"contributed to the embarrassing defeat of Unified Russia by 
promoting an independent candidate.  This was it.  The governor 
violated the rules of the game: not the people but the Kremlin makes 
the decision on who wins the elections." 
 
¶11.   South Africa Bans Dalai Lama Visit 
 
Berliner Zeitung analyzed: "The Dalai Lama must stay out of South 
Africa....  Because China is a very important partner for South 
Africa - politically and economically - the order was given to deny 
the Dalai Lama a visa.  South Africa is not as important as Germany, 
Britain or France, which can stand their ground better against China 
because of their power....  South Africa will therefore do nothing 
that could impede relations with China.  And the door to 
Johannesburg will remain closed for the Nobel Peace Prize winner." 
 
 
KOENIG