R 031251Z APR 09
FM AMEMBASSY BERLIN
TO SECSTATE WASHDC 3758
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 000402 
 
 
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 CH IS
SUBJECT: MEDIA REACTION: G20, NATO, CHINA-US, ISRAEL, ECB 
 
¶1.   Lead Stories Summary 
¶2.   G-20 Summit 
¶3.   NATO Summit 
¶4.   Hu-Obama Meeting 
¶5.   New Israeli Government 
¶6.   Lowering of Interest Rates 
 
 
 
¶1.   Lead Stories Summary 
 
Editorials focused on the G-20 summit and the financial problems of 
the far-right National Democratic Party of Germany (NPD).  The 
headlines in the press are dominated by the outcome of the G-20 
meeting.  ZDF-TV's early evening newscast Heute and ARD-TV's early 
evening newscast Tagesschau opened with reports and stories on the 
G-20 summit in London. 
 
¶2.   G-20 Summit 
 
All papers carried extensive coverage of the summit meeting. 
Handelsblatt headlined: "G-20 Promises One Trillion Dollars." 
Tagesspiegel opened a report under the headline: "Master Plan To 
Save the World," Die Welt said: "One Trillion Dollar to Save the 
Global Economy," and showed a picture showing President Obama and 
Chancellor Merkel  chatting at the photo-op, while Sueddeutsche 
Zeitung reported on "Stricter Rules for the Global Financial 
Markets."  "More Rules for Control and One Trillion Dollars" is the 
headline in Frankfurter Allgemeine.  The papers primarily addressed 
the outcome of the meeting and what it would mean for the global 
economy.  They emphasized that the most important economic nations 
in the world agreed to a comprehensive reform of the financial 
system, i.e. to subject hedge funds to more scrutiny, fend off 
protectionism, and boost loans to developing countries, and to 
circulate a blacklist of countries that serve as tax heavens. 
 
ARD TV's Tagesthemen commented: "What a summit!   We can now hear a 
sigh of relief everywhere...and all this was negotiated by Merkel, 
Brown, Obama, Hu, and Sarkozy -- all those on whose willingness for 
compromise not too many people would have bet before the summit. 
Now they are representing themselves as winners.  In the end, it was 
probably Chancellor Merkel who cut the best figure.  She asserted 
her view that all sides involved have now run up enough debt and 
that it is time for more controls.  In a smart way she integrated 
the host, left it to the French president to play the role of 
Rumplestiltskin and, first of all, ensured that she does not steal 
the show from Barack Obama.  The new U.S. president surprisingly 
held back and gave up playing a leading role.  The results from 
London - the achievements of a team." 
 
Ex-Foreign Minister Hans-Dietrich Genscher commented on ZDF-TV's 
Heute Journal: "The signals from London are encouraging.  The German 
government can be satisfied.  The Franco-German alliance again 
withstood the test.  This alliance also proved its worth by 
insisting on creating rules for an international global financial 
architecture.  This will create confidence.  This is a result that 
is quite respectable, but which continues to require tough work.  In 
this respect, Europe can make an important contribution." 
 
Westdeutscher Rundfunk radio of Cologne commented: "The 'monopoly' 
business model is over.  This will be painful for the City, and Wall 
Street will not dance with joy, but the London decisions will 
restore the stability of the financial system.  The G-20 summiteers 
really laid a new foundation.  Merkel & Co. presented clear rules. 
But it is the great unknown whether controls will be complete.  The 
Europeans must now present proposals and continue to exert pressure 
when it comes to adopting regulations.  The danger is not yet 
eliminated that individual financial markets could fall back into 
their old habits.  That is why the IMF will play a key role....  In 
addition to the chancellor, the IMF is the second winner of the 
meeting.  For decades, no other institution has had so much power." 
 
According to a front-page editorial in Frankfurter Allgemeine, "[the 
summiteers] did not refuse to offer assistance to the least 
developed countries via the IMF and the World Bank.  This will 
hardly leave any mark in the domestic budgets as long as there is no 
country in default.  From a political point of view, the nicest 
thing about such common decisions is that no one will be liable if 
it turns out that enormous sums were wasted without creating any 
effect.  But was this summit meeting not supposed to discuss 
liability and responsibility?  Chancellor Merkel rightfully insisted 
on a correction of the financial market order when it promotes the 
taxpayers to pay for the risks.  Better rules would have been more 
favorable for the global economy than a quick loan from the IMF." 
 
Die Welt argued: "The world hopes that the United States will play 
the global economic engine, while everyone else demonstrates a 
restrained attitude.  We could call it the 
spare-my-house-but-burn-the-other principle of international 
politics.  We live in interesting times. The [financial] crisis and 
two wars are threatening to overstretch the U.S. capacity as the 
leading economic power.  At the same time, it is becoming clear that 
the leadership on the globe is not based on economic power and 
military superiority alone but also on a global mentality.  It is 
certainly not the worst thing that the crisis is teaching the 
Americans greater humility and that they have with Barack Obama a 
president who incorporates this in a credible way.  But Sarkozy and 
Merkel should not understand this as an incentive to pound the table 
in a self-righteous way." 
 
Mass-circulation, right-of-center tabloid Bild-Zeitung of Hamburg 
opined: "Around the globe, the crisis creates fear and anger, but it 
also teaches the powers-that-be a new degree of responsibility.  For 
President Obama this is a new chapter: the United States no longer 
sets the tone, the speed, and the direction.  For Chancellor Merkel, 
this is a great success: President Obama followed the policy that 
she suggested.  The G-20 established itself as something that one 
can describe as the global government.  Not on all days but on the 
most important ones, the world follows the same line, not because 
someone gives a command but because all sides involved realize that 
this is necessary.  This is historic." 
 
Sueddeutsche Zeitung judged: "It was the U.S. that was unable to 
assert its view with new demands for even more economic stimuli 
programs.  And we owe it to the German government that the U.S. 
failed.  If too much money caused the crisis, then even more money 
cannot end it.  Those who like the British and the Americans 
continue to fight for the advantage of Britain and the U.S. as 
business sites for their financial industries, and who want less 
rather than more controls to achieve this goal, will soon revert to 
old habits during the rehabilitation period and continue to 'dope' 
their financial sector.  Then Merkel and Sarkozy will again have to 
stand the test.  Only then it will become clear whether the great 
Barack Obama is more than a lobbyist for Wall Street." 
 
Frankfurter Rundschau noted: "The era of deregulation has definitely 
come to an end.  The craze is over that deregulated markets equal 
God or are technically highly efficient.   By giving up this false 
belief, the will has been become stronger to strengthen the IMF, 
which had turned into an extended arm of Washington's power policy. 
Now the IMF will again become the center of the financial markets. 
We owe this not only to the global shift in power, i.e. the end to 
the western dominance in the global economy but also to the insight 
that there is no country in the world that can cope with this crisis 
on its own." 
 
Tagesspiegel had this to say: "As dissatisfying as the outcome of 
the G-20 summit may be, it marks the change of an era in global 
politics.  The G-20 leaders are clearly demonstrating that they have 
learned the most important lesson from the ongoing global crisis: 
there are no national or regional ways out.  The representatives of 
the threshold and developing countries, i.e. the representatives of 
the great majority of mankind, will have an equal say when it comes 
to shaping the rules for a globally interconnected society.  And it 
is also foreseeable that this will be valid not only for the 
informal G-20 summit but also soon for the IMF, the World Bank, and 
the Banking Oversight Committee in Bale." 
 
Handelsblatt opined; "In hindsight, the London summit will be 
considered an important waystation on the path to a new global 
financial architecture - no more but also no less.  However, the 
summit was unable to resolve the contradiction that we have to deal 
with global capital markets that are overseen by national oversight 
agencies.  No country has yet found a solution to the problem of the 
so-called toxic assets.  There is still much to do.  A reform of 
financial regulations can help contribute to restoring confidence. 
But this will not be enough." 
 
¶3.   NATO Summit 
 
60 years and still alive 
 
ARD-TV's commentator in Baden-Baden said: "60 years of NATO is a 
great success story.  No if and or buts!" 
 
Frankfurter Allgemeine's front-page editorial commented under the 
headline "NATO - still alive" that "the fact that NATO celebrates 
its 60th anniversary is a remarkable event.  History shows that most 
military alliances did not live long....  Over the weekend, NATO 
will even welcome Croatia and Albania as its youngest members... and 
France, which thought for a long time it would be stronger on its 
own, returns to the military command." 
 
Afghanistan 
 
Frankfurter Allgemeine commented: "Especially the Afghan people 
suffered from the fact that the allies have been sending too few 
soldiers to Afghanistan.  They were easy targets for the Taliban 
because there was nobody who could protect them.  This reveals a 
great weakness of the powerful alliance:  the members' differences 
of opinion about geopolitical issues." 
 
Handelsblatt editorialized:  "Obama launched an overdue change in 
Afghanistan.  Finally, Washington wants to pursue a comprehensive 
approach that combines civilian matters and military security, which 
Berlin has been demanding for a long time.  At long last, Russia and 
Iran are being approached.  This change of course raises hope. 
However, first of all the war will be expanded to Pakistan.  The 
situation will get worse before it might get better.  NATO will only 
play a minor part in the fight over Afpak.  This will be Obama's 
first war.  If he wins, his allies will depend ever more on America. 
 Let's not consider what happens if he loses.  Of course, this is a 
welcome breather for the Europeans.  They are no longer under 
pressure to send more soldiers to Afghanistan." 
 
Future Strategy 
 
ARD-TV's special report this morning noted:  "In its last 60 years, 
NATO turned into a global policeman.  This is exactly the 
problem....   With its adamant eastern enlargement strategy for 
NATO, the U.S. put off Russia as a partner." 
 
Frankfurter Allgemeine noted: "The self-praise we will hear in 
Baden-Baden and Strasbourg should not deceive us.  NATO is 
internally disrupted.  Although it is deploying tens of thousands of 
soldiers, it has been lacking a strategy for years.  It faced the 
great challenges of our time, including terrorism, proliferation, 
and Russia's posturing, as a collation of the unwilling.  This has 
had serious consequences the public hardly knows about. 
Particularly in Germany, NATO is perceived as an alliance whose 
(American) generals call for more soldiers....  The most remarkable 
feature of today's NATO is Germany's disorientation.  The Germans, 
who would not be united in peace without NATO, recently kept their 
heads down...  Since September 11, 2001, the majority of Germans no 
longer understand the world.  The German government is therefore on 
the defensive in NATO to calm the public opinion at home.  At the 
summit, NATO must task itself with reworking its strategic plan.... 
First of all, NATO is there to guaranty security.  In a globalized 
world, this leads [the army] abroad and to other continents. 
Germany also needs security...  Politicians must become more aware 
of this again." 
 
Handelsblatt editorialized:  "NATO has gotten a bit long in the 
tooth but it still doesn't know where it stands.  This is the sad 
result on the eve of its 60th birthday.  Twenty years after the end 
of the Cold War, NATO is searching for a new raison d'tre.  The 
former enemy, the Soviet Union, is no more.   The former military 
doctrine of defending the north-Atlantic area was thrown over board. 
Since the wars on Kosovo and Afghanistan there are no clear borders 
any more.  Will the NATO summit in Strasbourg and Kehl be the 
turning point?  We can be doubtful." 
 
¶4.   Hu-Obama Meeting 
 
Die tageszeitung is of the opinion that "for many observers, the 
summit was over before it really had begun.  They called the first 
meeting between Barack Obama and Hu Jintao G-2, as if China and the 
United States were able to settle the financial and economic crisis 
on their own.  But the new G-2 catchphrase is distracting attention 
from the EU and pretends that the world has been reinvented. But 
China and the U.S. are spending money on economic stimuli programs 
that only try to maintain the status quo, while the most radical 
suggestions for a reform of the global financial system come from 
Europe.  In reality, China's contribution to solving the crisis will 
be small.  Even if Beijing succeeded in stimulating the economy, 
China's domestic economy is not much bigger than the one of the 
Benelux countries.  No, the U.S. and Europe must resolve the crisis 
they caused on their own.  This time, China will only stand on the 
sidelines." 
 
¶5.   New Israeli Government 
 
Under the headline "Embarrassing Beginning in Jerusalem," 
Sueddeutsche editorialized: "Lieberman said the Annapolis agreements 
are dead.   However, he has no alternative to offer, apart from the 
idea that the Palestinians must first renounce violence and get rid 
of the Hamas radicals.  The new foreign minister is referring to the 
roadmap of the Mideast Quartet, but it seems like he has not read 
the plan carefully enough.  It says that Israel must simultaneously 
stop the settlement plans in the West Bank.  He claims he 
purposefully ignored it because he himself lives in one of the 
settlements in the West Bank." 
 
Handelsblatt commented:  "Things are never as bad as they look. 
However, if Israeli Foreign Minister Lieberman has given us a 
foretaste of his future policy, the Middle East faces a bad 
phase....  Everybody knows that Israel's top diplomat is a 
poltergeist; someone who ignores the etiquette.  We now know that 
the ultra-nationalist is scrapping his predecessor's policy just 
like that.  Lieberman acknowledged the 2003 roadmap, but the fact is 
that it failed in 2007 despite enormous efforts of the Mideast 
Quartet to persuade the Palestinians to renounce violence and the 
Israelis to build no more settlements in the West Bank.  Israel is 
playing the martial card." 
 
¶6.   Lowering of Interest Rates 
 
Berliner Zeitung had this to say: "Indeed, the other important 
central banks in the world have gone much further than the European 
Central Bank.  In the U.S., the key interest rates have practically 
reached zero, while it is hardly higher in Britain with 0.5 percent. 
 The problem is that the British and U.S. central banks have 
exhausted their possibilities.  The decision of the ECB to lower 
interest rates only by 0.25 percent indicates that it wants to 
remain steadfast.  It deserves praise for this courageous decision, 
for courage can also be expressed by showing restraint." 
 
According to Sueddeutsche Zeitung, ECB head Jean-Claude Trichet and 
his colleagues are hesitating to start the money printing machines. 
But why?  The economy is in a deep recession, and, according to the 
OECD, the number of jobless will rise to more than five million in 
Germany alone, while inflation rates will continue to drop.  But the 
ECB is not in a rush to stop the decline in prices.  The fear of 
inflation is unfounded today.  It is certainly true that the money 
volume is on the rise, but a lot of money does not result in a 
higher inflation.  Prices will begin to rise only if people spend 
the money instead of saving it.  Insecurity is high today and now 
one is really in the mood to consume and invest.  The only thing 
that grows is deflation and is the burden of debt.  This is 
dangerous.  And that is why the ECB would be well advised to follow 
in the steps of the U.S. a bit." 
 
 
KOENIG