Over-Dependence On Fossil Fuel: An Urgent Call For Green Initiatives

By Zahrah Rizwan –21November 2017 

Petrol Crisis in Sri Lanka

“Petrol” has been the talk of the town since early November. The daily lives of the public have been disrupted with rising traffic congestions and transportation issues. Vehicles have been queuing up at petrol stations fearing a petrol shortage since last Friday, creating traffic jams in the streets of Colombo, amidst the heavy showers. Public transportation services and taxis available for hire reduced its functioning, further exacerbating the situation. The ongoing debates about the petrol shortage contain allegations against Lanka IOC (LIOC) for its low-quality petrol shipments being rejected and on the other hand hold Ceylon Petroleum Corporation (CPC), the main supplier of petroleum catering to eighty-four per cent of the local market, responsible for being unable to meet the demands of the people. Moreover, the Government of Sri Lanka as a whole is held accountable for its inept decision-making and policy procedures in responding to the supply shock.

Leaving aside the political commotion behind the issue, let us have a look at the issue from a different angle. ‘Petrol’ alone has been able to create a country-wide issue affecting lives of people irrespective of demographic or geographic differences. Can we all then agree to the fact that ‘petroleum fuel’ has then entered the list of basic needs of humans? Willingly or unwillingly, we need to agree to the fact that we as a nation are highly dependent on fossil fuels for the daily functioning of our lives. Imported petroleum oil is the primary source of fuel for vehicles in Sri Lanka. About six percent of the gross domestic product (GDP) of Sri Lanka is spent on petroleum imports. Hence, this is an economic burden as well as a threat to the climate.

 

Sri Lanka’s commitment to reduce GHG Emissions

Moving on to the climate change debate, the combustion of fossil fuels (coal, oil, gas) dominate total greenhouse gas emissions (GHG) globally, while locally the transport sector is one of the main GHG emitters in Sri Lanka. Given the fact that Sri Lanka has signed and ratified the Paris Agreement that entered into force on 4 November 2016 in the country, we have committed to keeping the global temperature rise this century below 2 degrees Celsius above pre-industrial levels and to limit the temperature increase even further to 1.5 degrees Celsius.  This Agreement requires parties to present the intended procedures to achieve the above goal in terms mitigation, adaptation, loss and damage and implementation under Nationally Determined Contributions (NDCs). The NDCs for Mitigation of Sri Lanka intends to reduce the GHG emissions 20% in the energy sector and by 10% in other sectors (transport, industry, forests and waste) by 2030. Apart from the NDCs, the recent launch of the Sri Lankan government’s policy framework, ‘V2025: A Country Enriched’ has further included actions to be taken within the transport sector to promote clean energy and an energy efficient transport system.

Proposed Energy-Efficient Initiatives for the Transport Sector

In order to achieve the reduction in GHG emissions in the transport sector, Sri Lanka has presented various activities under the NDCs for transport. The encouragement and introduction of low emission vehicles such as electric and hybrid (electrified three-wheelers to reduce emissions, electrified boat service, electric buses, and other electrified vehicles), electrification of the railway system from Veyangoda to Panadura, establishment of energy efficient and environmentally sustainable transport systems by 2030 by developing Urban Transport Master Plans (UTMP) to improve the transport system in line with the Megapolis Plan, introduction of an Intelligent Transport System (ITS) based bus management system and a canal transport system are some of the initiatives documented in the NDCs submitted by Sri Lanka.

The development of a more environment-friendly transport sector and the promotion of energy efficient vehicles that will reduce fuel consumption are objectives stated in ‘Vision 2025’ document as well. This document states that the Government of Sri Lanka will establish multi-model transport centres with park and ride facilities, upgrade and construct more than 70 bridges, including the new Kelaniya Bridge, modernize and expand the rail system by setting up a new railway line between Matara and Kataragama and construct new rail tracks connecting Kurunegala and Habarana via Dambulla. To ease current passenger congestion in the system bus priority lanes are to be introduced along with an advanced traffic management system.

 

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Ceylon Tea: go back to basics

Tuesday, 21 November 2017 

During the last couple of weeks the banter between a brand owner for Tea and the Tea Exporters Association was very interesting. Ultimately the editor of the said newspaper mentioned that no more correspondence would be entertained and closed the debate. In my view the answer lies in the statistics and how strategy can be development based on data.

Theory - back to basics 

To be honest there was logic on both sides of the arguments presented in the last three weeks. The key debate is on the basics of business - segmentation, targeting and positioning- and as a strategy are we going to differentiate or niche market the brand or category.

If we analyse the data for the last 50 years we see that Sri Lanka’s performance in the basics of business segmentation and targeting has been very poor. As per the table below we see that every 15 years the top 10 export markets keep changing which means that Sri Lanka’s equity in the market for ‘Ceylon Tea’ does not gain traction.

In 1960 it was the UK, Australia, the US, Iraq, South Africa, Canada and New Zealand. In 1985 (15 years after), Egypt, Syria, Saudi Arabia and Russia came into the key export markets which meant a new set of customers.

Once again after 25 years if we analyse the data we see Russia, the UAE, Iran, Turkey, Jordan and Kuwait have come into targeted markets for Ceylon Tea which means once again a new set of customers.

Just six years after Azerbaijan and China is in the top 10 markets but the good news is that the top five markets have been stable, which is good news for Sri Lanka. Let’s analyse what is happening in the top market, Russia, which has held ground as the number one market for our tea.

Target market: Russia

Apart from the Russian Federation being the key market for Sri Lanka, it is also the number one market globally for importing tea, with a 175 million kilograms per annum performance.

If we dive deep into the dynamics of this market data, the bulk of tea exports out of Sri Lanka have increased from 21,166 in 2000 to 28,743 metric tonnes as at end 2009. On the other hand, packeted tea volumes have come down from 18,377 to 7516 metric tons during the same period. The reason for the shift was that Russia duty on bulk exports had been reduced to 0% and thereby the Russian policymakers were to give space for organisations to set up in Russia to pack teas that are imported from many countries for blending purposes and thereby spruce up FDIs into the country.

The Russian policymakers also introduced a labelling law to allow tea products to carry the tag ‘Ceylon Tea’ even if it contains only 51% of tea from Sri Lanka whilst the rest can be blends from other countries. This can be seen with facts, as less expensive teas imported into Russia from countries such as Kenya had increased from 5,123 MT to 11,821 MT from 2002 to 2009 whilst imports from Vietnam had catapulted from 4,720 MT to 13,183 MT.

If we want to further validate these numbers, packeted tea exports from Sri Lanka came down from 18,377 to 7,516 MT between 2000 and 2009. If we carefully examine the private sector numbers we see that the top six exporters’ numbers have come down from 15,623 MT in 2002 to 9,346 MT by 2009, which is a decline of almost 40%.

What this means is that the consumer in Russia wants a value for money tea whilst also wanting a Ceylon Tea product, which means that unless Sri Lanka understands this reality and adjusts to this reality we will lose volume, customers and traction in this market, just what has been happening for the last 50 years. Going back to the theory segmentation, targeting will be the decision to take. In the area of ‘targeting’ do we set up blending facilities in Sri Lanka or allow the blending to be done in Russia as seen above given the changing customer behaviour? In other words a tea hub concept in Sri Lanka or not.

Global case - Kodak 

If we take a global case in point on the importance of having to change to the customer requirements the best case in point is Kodak, which is a top-of-the-mind brand synonymous with the category for decades.

With a turnover of almost $ 14 billion and brand value estimated at $ 1 billion, it was one of the strongest companies globally. However, the company refused to change the values chain based on the changing consumer who wanted convenience. It refused to understand the changing consumer requirements where consumers wanted convenience and there was a convergence of the camera and a mobile phone where images were captured electronically and shared online.

Today, the brand has crashed to a loss of $ 0.3 billion for the last five years and sales revenue has plummeted to less than $ 0.1 billion that finally led to the company having to file for bunbkruptcy under Chapter 11. It is a classic case to the world of an organisation which did not want to change the value chain based on the changing consumer requirement.

Positioning - single origin 

French wine and Colombian coffee:  Whilst segmentation and targeting are the basics of business, ‘positioning’ is now emerging as the only competitive edge in today’s world. On this front we see another perspective where strong marketing is conducted by France to maintain its premier positioning supported by the high quality image which has successfully fought cheaper wines. 

If Ceylon tea does not want to take the ‘tea hub’ option of blending, the French wine strategy can be pursued to drive up the position of ‘Ceylon Tea’ single origin tea linked to brand manufacturers. But sadly Rs. 5 billion has been in the bank account with the global campaign not taking off just like Sri Lanka’s tourism destination marketing campaign, which is sad for Sri Lanka.

Policymakers: from the above data, we see that policymakers can solve the issue without creating conflicts in the private sector space. From a demand side if the ‘positioning’ route can be taken then it must drive aggressively and follow the French wine strategy or the Colombian coffee success story. The aggressive policy intervention can solve the demand side issue in Russia and it must also aggressively take a call on the supply chain to avoid the tea industry going through the Kodak saga.

Ceylon Tea - supply

side challenge 

On the supply side, research reveals that from the total extent of Old Seedling Tea (OST) in Sri Lanka, 75% of it belongs to the corporate tea sector. On this front almost 90% of the tea stock is above 60 years of age which means that senility of the tea bushes is a foregone conclusion.

This is the key reason for the declining productivity and production in this segment over the last couple of years. Around six years back the corporate tea sector was generating almost 148 kg million of tea but this number has fallen to approximately 126 kg million. The Tea Research Institute estimates that the volumes from the corporate sector will decline to 98 kg million of tea within the next five years. If one computes the loss to the country in volume terms it will be 28 kg million of tea per annum and in value it can be as high as Rs. 10 billion, which captures the supply end saga that the tea industry is up against. One can argue that the RPCs must embark on a rapid replanting program but if the cost of replanting a hectare acre of land is over Rs. 3 million and as at now given that most of the organisations are under pressure for profits, this option is only an academic discussion. Hence policymakers must fight and direct the CESS collected to a replanting program rather than directing promotional funds towards this purpose, which tells us the importance of the policy direction to the total tea industry (demand and supply) side.

Ceylon Tea = Kodak saga 

Given the challenges we have from the demand side of the business and from the supply chain side of the business, from the above data we see that we are facing a Catch-22 situation. Hence unless we develop a new business model, it will be absolutely realistic to say that Ceylon Tea is going the Kodak route.

In fact a senior planter, who is a CEO of a top Regional Plantation Company, has openly stated that “now we are in a lunatic mode as doing the same thing expecting different results is lunacy.”  Whist is required now is not banter in the media but action on the ground.

Ethical route - Tea must follow apparel model

If we track back the success of the apparel industry, in the early ’80s Sri Lanka was termed mere contract manufacturers and some even used to refer to the industry as tailors, but thereafter with some strategic thinking by the industry, Sri Lanka grew into a global hub for ethically-manufactured clothing. This has given teeth to the industry in competing with price-savvy merchandise coming in from Cambodia, China and Bangladesh and today this noble industry is targeting $ 5 billion plus in export revenue by making Sri Lanka an apparel hub in Asia for R&D and technology sharing for fast fashion.   

We see a similar trend in the tea industry, where with strong leadership the plantation industry was nationalised in the 1970s when it came under Government control; it went on in the 1980s to make a bold decision to make the Colombo Auction control the global demand chain by breaking away from the great London Auction system, which has held ground for many years. The Colombo Stock Exchange, commanding the highest values for tea globally, offers testimony that this decision was correct. Then in the 1990s the supply chain was privatised, which gave the opportunity for new thinking to be introduced to the industry with strong R&D power and capital infusion that resulted in Sri Lanka becoming the best performing country globally for value addition tea at a commanding 43%.

Next steps

The above argument explains that the Sri Lankan tea industry has the skill and focus but what is required is strong policy and robust implementation. With a 25% implementation of Budget proposals in 2017 and the commitment by the Minister if Finance to move this up, all ministries now must change the tide at least in the next half of the current Government.


[The writer was appointed by the President to the 10-man committee studying the privatised tea industry of Sri Lanka in 2010. He also served the Sri Lanka Tea Board Promotional Committee for six years. He is a Group CEO of a global property company. The thoughts expressed in this article are strictly his personal views.]

Israeli “law center” Shurat HaDin admits Mossad ties

Shurat HaDin’s director outside a Manhattan courthouse in 2015.Brendan McDermidReuters

Asa Winstanley Lobby Watch 16 November 2017

An Israeli group which claims to be a “civil rights” organization has admitted to being a front for Mossad, Israel’s deadly spy agency.

Shurat HaDin’s intimate links with Mossad were first exposed in 2013, when a US embassy cable was published by WikiLeaks.

In that classified 2007 document, the group’s director Nitsana Darshan-Leitner told US embassy staff that the group “took direction” from Israeli spy agencies, including Mossad.

In an interview to promote her new book Harpoon, Darshan-Leitner this month laid out just how intimate the organization’s ties with Mossad are.

Soon after the group’s foundation, she told Reuters, “she was invited to Mossad headquarters for a consultation.”

She said that she “explained to them what we do, how and where lawsuits are filed, what evidence and jurisdiction is required … Their response was: What do we have to do to file more lawsuits? What do you need?”

Also known as the Israel Law Center, Shurat HaDin is notorious for attacking Palestine solidarity organizations with frivolous lawsuits.

Although the group portrays itself as “bankrupting terrorism - one lawsuit at a time,” a primary Shurat HaDin target is BDS, the boycott, divestment and sanctions movement which aims to hold Israel accountable through non-violent campaign work.

The early Mossad contact “evolved into regular briefings, held in quiet cafes,” Reuters reported. The group would “get tip-offs about suspect finances to focus on during the US courts’ discovery hearings.”

“Lawfare”

These early links seem to have continued until the present day.

In the 2007 cable, it is noted that Shurat HaDin “continues to receive evidence and witnesses from Israeli intelligence.”

Her new book is praised on its cover by Tamir Pardo – Mossad director until last year – something Reuters describes as “the closest that the secretive Mossad can come to a public endorsement.”

Darshan-Leitner and her co-author Samuel Katz willingly submitted the book to Israeli military censors, who then “cut a fifth of the text to suppress some details about intelligence methods and personnel,” according to Reuters.

Shurat HaDin now has a long record of harassment targeting human rights campaigners. It does so using the threat of expensive lawsuits, usually on flimsy grounds. This is a tactic it calls “lawfare.”

Civil rights group Palestine Legal showed in a 2015 report that Shurat HaDin “threatened or initiated legal action against several organizations that have contemplated or passed BDS initiatives, including the Presbyterian Church (USA), the ASA [American Studies Association] and the Park Slope Food Coop.”

The report also details how Shurat HaDin in 2011 sued former US President Jimmy Carter for $5 million after he published his book Palestine: Peace Not Apartheid.

The group also stopped a 2011 boat of activists headed for Gaza to break the Israeli siege by filing an anonymous legal complaint which alleged the vessel was not seaworthy.

Reporting this at the time, journalist Max Blumenthal described it as “a baseless but startlingly successful exercise in legal harassment.”

BDS a threat

All of this gives a good indication of how much of a threat Mossad considers BDS and the wider Palestine solidarity movement to be.

Reluctant to suffer potential political consequences from using Mossad’s normal methods of assassination, torture and kidnapping against the movement for Palestinian rights, Israel’s spy agencies instead use front organizations and “lawfare” harassment.

In the 2007 cable Darshan-Leitner explained that the Israeli government “saw the use of civil courts as a way to do things that they are not authorized to do.”

In a 2012 talk she said that “The Israeli government has some constraints … they have international treaties they are signed of and they cannot do what private lawyers can do.”

Israel’s strategic affairs ministry is now also involved in this dirty war against Palestine solidarity, having been tasked in 2015 with leading the fight against BDS.

Last year it was revealed by a veteran Israeli journalist that the ministry, led by Gilad Erdan, is involved in “black-ops” against BDS.

This campaign has included death threats against and harassment of Palestinian lawyers who are working to file human rights cases against Israel in the Hague, as well as cyber attacks on pro-BDS websites.

“Sabotage” and “attack”

The ministry has an “intelligence section” run by former spy operative Shai Har-Zvi and receives assistance from “a special unit” within Israeli military intelligence and from the Shin Bet secret police.

As long ago as 2010, the influential Reut Institute urged Israel to “attack” and “sabotage” BDS and the Palestinian rights movement.

But this year it issued a report to some of Israel’s supporters, admitting that this campaign was failing, and that the BDS movement had achieved “impressive growth” and “significant successes.”

This week, the Tel Aviv newspaper Haaretz quoted Erdan as saying that he had now “set a policy of moving from defense to offense concerning the fight against [BDS],” after he banned a European delegation from entering the country.

The evidence shows, however, that Israel has actually been “on the offense” against BDS for years – and yet the movement only continues to grow.

As long as Israel continues to deny Palestinians freedom, equality and the right of return, it is likely to continue doing so.

Below the radar in Russia and China

Oligarchic-Capitalism and Party-State Structure: Same or Different?

Published by Marylou Strickland

China’s Provincial 2020 GDP compared with nearest other country (Sources: HSBC, CEIC, IMF, CIA)
URL for images http://slideplayer.com/slide/4889288/ http://image.minyanville.com/assets/FCK_Jan2011/Image/china2.png

Kumar David-November 18, 2017

Superficially they look similar. Both issued from Communist revolutions; polity and society still carry birthmarks of their separate but similar origins and arduous but different puberties. The most striking current similarity is a powerful new Tsar in Russia and a grand new Emperor in the Middle Kingdom. Of course, analogy with Tsarism and Chinese Empires is facetious, not a shred of the politico-economic fabric is the same as centuries ago, but the authoritarian totalitarianism of the two new masters is similar. Other similarities include scant regard for democratic and human rights, arbitrary misuse of judicial power, lock-down on press freedom, and people’s general fear of the state. Likeness notwithstanding, I will argue, after an initial descriptive account, that the social-economic architecture of the two states is different. To foretell whether the systems will converge to something akin decades from now, I leave to soothsayers.

In the economic domain, if you take a long view, both are doing well. China’s rise in the generation to date is described as the most spectacular transformation in history; a slowdown in the last three years notwithstanding - just a pause to catch its breath. The breakdown after the 1989-91 counter-revolution in Russia defies adjectives; starvation, decline in population, economic collapse, and drunkenness were frightening and omnipresent. The Putin period was a turnaround heralding stabilisation of society and economy. Russia’s inclusion in BRICS, a group of fast growing large economies - though the first and the last, Brazil and South Africa, have fallen off a cliff - and its advent as a potent political player in the Middle East and the Ukraine are remarkable. Its aviation, military and information technology are classy and the last named has been a game-changer in Donald Trump’s backyard and backside. To insert a corollary; Chinese technology too is striding on, though like Russia, not on par with America in avant-garde innovation.

It is richer in natural resources than any other country – the Soviet Union of course was even richer. Russia has 30% of the world’s natural resources including the largest gas, second largest coal and seventh largest oil deposits. It has valuable minerals; copper, lead, zinc, bauxite, diamonds, nickel and tin, mercury, gold and silver – mostly in Siberia and the Far East. But not as much is extracted as rich deposits elsewhere. Her vast forest and timber resources dwarf those of even Canada and Brazil by 60%. It is intrinsically a rich country whose citizens should enjoy a high standard of living.

China is resource starved compared to both Russia and the US and carries a population four times that of the US and nine times Russia’s. Its gross land area is the same as the US but arable acreage is much less. Since for two thousand years prior to 1800 India and China dominated world output (together about 60%), it would take a brave clairvoyant to prophesy the shape of the world economy at the end of this century, except that it will be a four-sided game – China, India, and the two new boys on the block, Russia and America. That’s enough star gazing; now for more prosaic stuff.

Oligarchic-Capitalism

The Russian economy was usurped by oligarchs who grabbed the nation’s assets when the Soviet Union collapsed. In the greatest robbery of material wealth in all history, upstarts under the guidance of the IMF and American economic gurus, grabbed coal and mineral mines, oil fields, factories and financial assets. Some Communist Party apparatchiks cement ownership of profitable banks, oil, natural gas and precious metals. Fortunately, western raiders (companies and investors) were not able to appropriate much and those who did were seen off in a surge of Putin nationalism. The Russian economy is owned by oligarchs. An oligarch is a member of a small group of oil and coal mine robbers, industry grabbers and finance captains who became fabulously rich during the Yeltsin years - the 1990s. Organised crime was also a player in cementing this process. Bread-lines, population decline and devastation of society were the other side of this process.

Putin’s ascent to power brought this mayhem to an end and the state regained control of production and trade of oil and gas. He detained rebellious oligarch Mikhail Khodorkovsky, nationalised his Yukos conglomerate, and brought the oligarchs to heel. There is symmetry with China in that the nouveau-riche, though filthy-rich, survive only by the grace and goodwill Party and/or President. There is no confusion whatever in China or Russia about where power lies.

Interestingly, 70% of the Russian state budget is met directly or indirectly from gas and oil revenues. The private sector and non-mineral output fell to just 10% of GDP at one stage but there has been some recovery recently and 25% of GDP is now in its hands. Though inflation is running at 6% to 7% and GDP growth low (below 3% much of the time after 2008), real wages have been rising at 11% thanks to Putin’s social policy. I have collected data from many sources since official data blanks out a lot; finicky readers are invited do their own research.

Superficially, Russia’s macro-economy looks like China. The similarity stretches to counting billionaires! This time my data is from Wikipedia and more reliable. There are about 100 US$ billionaires in Russia. Alexey Mordashov said to be worth $18 billion is number one and Vladimir Lisin ($16 billion) number two. There are alleged to be seven others worth $10 billion or more. It’s not that different in China which has about 200 US$ billionaires. Wang Jianlin and Alibaba’s Jack Ma are numbers one and two; each worth about $30 billion. I am not quite sure, but there may be another 20+ worth $10 billion or more. For comparison there are 540 billionaires in the US and the top two, Bill Gates and Warren Buffet, are worth $85 and $75 billion, respectively, says Wikipedia.

China’s 2017 GDP is estimated at $11.8 trillion and Russia’s at $1.56 trillion. Per capita nominal GDP: China $8,550 and Russia $10,800; PPP figures are about double this in both cases. Sri Lanka’s per capita nominal GDP is a shade below $5,000.

Party-State Architecture

The appellation State-Capitalism is misleading when applied to China. It denotes Capitalism as the principal noun with an adjectival status conferred on the State. In truth, in China, the Party-State leads and capitalism and the capitalist class are subordinate. Chinese economic architecture has six cardinal features that do not denote socialism, but not capitalism either.

*Management and decision making dominated by the Party-State

* Power monopolised by the Party which dictates to Central and Provincial governments.

* Basic factors - land, banks, finance, energy, mining and large industry, state owned.

*Village land de-facto peasant owned, but nominally administered by county/village entities.

* A dynamic, technically vibrant, capitalist sector driving growth and dominating exports.

*Rich and super-rich classes devouring economic riches but wanting of political power.

Russia’s socio-economic architecture does not fit this description. Putin and Xi Jinping’s power, the preponderance of the state in the economy, and billionaire counting games aside, the absence of a CPC-like entity underscores that they belong to different species.

The CPC is an 80-million-member web that penetrates and determines every pore of society; there is no foreseeable prospect of anything like that in Russia.

Hence, the superficial similarities outlined in previous paragraphs notwithstanding, I opine that the socio-economic architecture of China and Russia are different; the former a non-capitalist genus, the latter a variant of capitalism. Capitalist states can be dictatorships or democracies, non-capitalist ones may be authoritarian or relatively free; that’s beside the point. What one admires or abhors is a matter of sentiment; socio-economic structure (Marx called it "mode of production") a matter of theory and precision; never mix the twain.

Still, it must be conceded that proof of the pudding is in the eating; will Russia and China, one day, converge to like-systems or will they not? I cannot see China turning into a state of the type we habitually call capitalist; that is, extracting and reinvesting surplus value at the discretion of a property-owning class which also holds the reins of finance capital, and runs foreign affairs and directs global investments like the New Silk Road. Such a transformation would require a counter-revolution as in the USSR in 1989-91. There is nothing like it on the horizon. The Chinese Party-State looks rock solid; of course, frills, trimmings and substantive features will evolve. Recall the momentous changes in China in the last generation while the sway of the Party-State remained secure!

I am less sure whether Russia will evolve into a conventional type of capitalist state - leaving aside entirely the question of democracy. It may not; it may go chasing other rainbows. In both cases post-Xi, post-Putin succession talk has political observers agog. But, in truth, in China whether Xi gets another chance to play top-dog after 2022 matters little to the structure of the state. What does it matter if it’s Xi, Yi, or Zi? The Yangtze will still pour into the East China Sea.

In Russia things are dicier. Post-Putin directions are harder to foresee; Putin’s victory for a second second-term in the March 2018 elections is of course certain. After that whether his successors are like-minded will matter because the Russian apple-cart is less stable. Another cohort of Qutin, Rutin or like-minded zombies will cement an unorthodox state-system in Russia alongside China and less formidable Vietnam, Ethiopia, the Central Asian Republics, Cuba and god-willing, a democratic version in Sri Lanka. The government has made a sharp turn to economic neo-liberalism in the new budget. The left has no place in this government apart from the effort to enact a hopefully half-decent new constitution – if it ever materialises!

Reference: Relevant and interesting essays can be found in a trilingual volume released by the Communist Party (Sri Lanka) on 7 November 2017 celebrating the centenary of the October Revolution: Oktober Viplavaya Idiriyatama edited by Michael Fernando, Premadasa Dissanayake and Wilfred Jayasinghe.

Turkish Businessman Implicated in Iran Sanctions Case?

With jury selection scheduled for Monday, Reza Zarrab is MIA.

Reza Zarrab is surrounded by journalists as he arrives at a police station in Istanbul on December 17, 2013. OZAN KOSE/AFP/Getty Images 

BY ELIAS GROLL-NOVEMBER 20, 2017, 7:00 AM

Before he was accused of masterminding a multibillion dollar sanctions-busting scheme involving gold sales to Iran in exchange for oil and gas, Reza Zarrab was one of Turkey’s most visible businessmen. With his vast real estate holdings, private plane, and pop star wife, Zarrab was a symbol of the country’s new elite, with connections at the highest levels of the Turkish government.

Now, his fall from grace has become embroiled in the deteriorating relations between Turkey and the United States. Indicted by federal prosecutors for his role in evading American sanctions on Iran, Zarrab now faces trial in a federal courtroom in Manhattan.

But in recent days his case has taken a bizarre turn, as Zarrab’s whereabouts have become unknown and his lawyers have missed key filing deadlines. The developments have some observers wondering whether Zarrab could be part of a deal between the Turkish government and Washington to secure his release — possibly in exchange for a group of detained American consular employees in Turkey.
Such a deal is still just speculation, but reflects the high-level machinations that have marked the Zarrab case since his arrest in Miami in March of 2016.

“I think there’s a potential for a really big, global deal on Zarrab,” said Henri Barkey, a former State Department official and professor at Lehigh University.

Among the Turkish government’s potential concerns about the case is the possibly that Zarrab’s testimony could point the finger at high-level officials, including President Recep Tayyip Erdogan, in the sanctions-busting scheme.

These allegations have made Zarrab a major liability for Erdogan. If Zarrab talks, “he’s going to implicate a lot of people in the Turkish government — maybe Erdogan and his family, maybe his son,” Barkey said.

Whether those concerns are driving a deal is unclear, but in recent days Zarrab’s lawyers have given indications they are pursuing some sort of agreement with prosecutors. His lawyers haven’t submitted questions to potential jurors in the trial, which is set to begin on Nov. 27, and lawyers for one of Zarrab’s codefendants, Mehmet Hakan Atilla, have said in court filings that it is “likely that Mr. Atilla will be the only defendant appearing at trial.”

The outlines of a possible deal, which could involve a guilty plea and a possible fine, remain unclear. Zarrab’s attorney, Ben Brafman, declined to answer questions on Friday about his negotiations with prosecutors, but members of his legal team have said in court filings that they have attempted to resolve the case through diplomatic channels between Washington and Ankara.

With his trial set to begin in a matter of days, Zarrab’s whereabouts are currently unknown.

A Bureau of Prisons database lists Zarrab as having been released, and federal prosecutors in New York are refusing to answer questions about his exact whereabouts. “Zarrab is in federal custody,” is all James Margolin, a spokesperson for the U.S. Attorney’s office in the Southern District of New York, would tell FP.

This mystery over Zarrab’s whereabouts comes amid a crisis in U.S.-Turkey relations. American support for Kurdish forces in Syria has drawn outraged protests in Ankara, where government officials fear that a resurgent Kurdish movement in Syria will embolden separatists in southeast Turkey. Turkish government forces are currently carrying out a violent crackdown on individuals allegedly associated with the Kurdish PKK.

The State Department refused to respond to questions about Zarrab, including whether he has been subject of negotiations between Washington and Ankara. A spokesperson directed queries about his case to the Justice Department, which did not respond to a list of questions about Zarrab’s prosecution and a possible plea deal.

The Turkish government has loudly protested Zarrab’s prosecution and has demanded that he be returned to Turkey.

According to transcripts of wiretapped calls that are part of the case, Zarrab claimed to have personally spoken to Erdogan about the sanctions busting scheme and pitched his scheme as a way to mitigate Turkey’s trade deficit. “We have to do our best to achieve this $4 billion goal” in exports Zarrab allegedly told one of his co-conspirators in 2013. “I promised the prime minister.”
At the time, Erdogan was serving as Turkey’s prime minister, and since then has accumulated vast power by systematically eliminating his enemies and rewriting the country’s constitution.
Exposing the government’s role in a vast bribery scheme would resonate deeply with the Turkish public at a time when the country’s economy is slowing.

Last week, the Turkish Foreign Ministry presented a formal demand for information about Zarrab, a possible indication, Barkey said, that the gold trader has been isolated from his Turkish lawyers ahead of a guilty plea feared by Ankara.

Turkish prosecutors attempted to unravel Zarrab’s gold-for-gas scheme, which allegedly included bribes and kickbacks to senior government officials in Turkey, but Erdogan appears to have intervened to protect the business mogul. Following Zarrab’s arrest in Turkey in 2013, Erdogan purged the government of thousands of prosecutors and policemen that he claimed were linked to the cleric Fethullah Gülen, who is living in exile in Pennsylvania and Erdogan claims is trying to unseat him. Following the purge, Erdogan appears to have used his additional power to push officials to drop charges against Zarrab.

But when Zarrab traveled to Miami in March of 2016 — a decision that confounds observers of the case — U.S. officials were at the ready and promptly arrested him upon his arrival.

Since that arrest, Zarrab has hired the best lawyers money can buy.

His legal team is led by Brafman, a brash New York lawyer who has featured in some of the city’s most prominent criminal prosecutions in recent years. He represented the rapper Sean Combs on weapons charges, took on former IMF boss Dominique Strauss Kahn as a client to combat sexual assault claims, and this year defended the pharmaceutical executive Martin Shkreli notorious for price gouging. The Hollywood mogul Harvey Weinstein recently signed up Brafman to defend him against a slew of sexual assault allegations, which prosecutors are reportedly examining as part of a criminal probe.

Other lawyers on Zarrab’s defense team include former New York mayor and Donald Trump condidante Rudy Giuliani and former Attorney General Michael Mukasey, who have attempted to broker a deal between the U.S. and Turkish governments for Zarrab’s release. In February, shortly after Trump’s inauguration, Giuliani and Mukasey traveled to Turkey to meet with Erdogan in an attempt to broker the gold-trader’s release.

“Senior officials in both the U.S. government and the Turkish government remain receptive to pursuing the possibility of an agreement,” Mukasey wrote in a court filing earlier this year.

Earlier this month, Turkish Prime Minister Binali Yildirim met with Vice President Mike Pence, fueling speculation that a deal for Zarrab was in the works. The White House readout of the meeting said that Pence “expressed deep concern over the arrests of American citizens, Mission Turkey local staff, journalists, and members of civil society” but made no mention of Zarrab.
A spokesperson for Pence’s office did not answer repeated questions about whether Yildirim took up Zarrab’s case.

For now, the U.S. government isn’t saying what it plans to do with Zarrab. As the trial approaches, lawyers for Zarrab’s codefendants have pleaded with the judge in the case, Richard Berman, to tell them whether Zarrab will be one of the defendants.

“The one perk of being a judge is you don’t have to answer questions, as witnesses or lawyers do,” Berman said. “So I would say, ‘Just keep your eye on the docket.’”

Ivanka Trump touts GOP tax cuts with data borrowed from the Obama administration

Ivanka Trump claimed the GOP tax plan would ease the financial burden of childcare for families, but it doesn't even directly address the issue. (Meg Kelly/The Washington Post)

By Nicole Lewis November 20 at 3:00 AM

“We spend less than any country in the developed world on children between the ages of zero and 5. It’s just a fact, we don’t invest enough resources.”

— Ivanka Trump, assistant to the president, remarks during an interview with Tucker Carlson, Nov. 6

Ivanka Trump has vowed to champion working women and families in her role as an adviser to her father, President Trump. She has advocated for paid parental leave and to make child care more affordable; over the past few weeks, she has touted the GOP tax plan as a benefit to middle-income families.

During an interview with Fox News Channel’s Tucker Carlson, Trump said the tax plan would provide relief, in the form of tax credits and deductions, to families struggling to pay for child care. Then she said something that stopped us in our tracks. She added that “we” spend less on young children than any other developed nation. “It’s just a fact,” she said.

The claim seemed like a non sequitur. One minute Trump is explaining how the GOP tax cuts would help middle-income families pay for child care, and the next she is comparing the United States to other high-income countries, many of which offer a broader array of social programs and levy high taxes to pay for them. It’s a talking point we don’t expect to hear from prominent Republicans.

Trump’s statement left us wondering: Is it true that the United States spends the least in the developed world on young children, and if so, what effect would a tax cut have on boosting that investment?

The Facts

Part of what makes Trump’s statement perplexing is that she didn’t initially specify who, exactly, spends so little on preschool-aged children. In terms of the context of the conversation, it seemed she was referring to the U.S. government. Without government investment in families, the cost of raising kids is a burden for many families, Trump argues, positioning the tax plan, which would expand the child tax credit and maintain the dependent-care credit, as a means to manage the cost.

When Carlson tried to clarify, asking Trump whether she indeed meant that the “government spent less,” she initially said, “society,” then she said, “families,” laughed, changed course, and said “government.”

We don’t try to play “gotcha” with political figures, so we reached out to the White House for clarity on Trump’s spending claim. A White House official said Trump was referencing a Council of Economic Advisers report that found that the United States spends less on child care and early-childhood education as a percentage of gross domestic product than almost every country in the developed world. The CEA provides the president with research and advice to support the formulation of economic policy.

But the official did not send over the report initially, which raised some questions about its origins. We wondered: Could it be possible that the report was from the Obama era?

We reached out to a CEA staff member from the previous administration, and he pointed us to a 2016 white paper on the economic benefits of public investment in young children. The report details at length how public investments in children ramp up once kids enter school, leaving families with younger children without much-needed support. The argument is similar to the one Trump makes on the Carlson show, except for one key thing: The report calls for greater spending on pre-kindergarten programs, not tax cuts.

One of the report’s key findings is that the United States lags behind other developed countries in its public spending on young children. In 2011, based on data from the Organization for Economic Cooperation and Development, the United States ranked 33 out of 36 with respect to total investment in early-childhood education relative to country wealth.

Let’s set aside the fact that Trump takes this government-spending factoid out of context to advocate for tax cuts, and take a deeper dive into the data.

The OECD report on which the CEA white paper is based notes that “local governments often play a key role in financing, and sometimes provide childcare services.” But in countries such as the United States, spending at the state and local level is “not properly captured in the data and it is much more difficult to get a good view of public support for childcare across such countries.”

In the United States, that means state-funded pre-kindergarten programs wouldn’t be counted. As of the 2016-2017 school year, 43 out of 50 states, as well as the District of Columbia, offer state-funded pre-kindergarten programs. According to a report by the Education Commission of the States, funding for these programs has increased by 47 percent over the past five years, and by nearly 7 percent since the previous school year. The commission estimates that in 2017 states spent nearly $7.6 billion on pre-kindergarten programs.

To move the needle on public spending, however, the United States would need to invest much more than $7.6 billion, as it is such a small fraction of the U.S. gross domestic product, which hovers around $18.7 trillion. 

We reached back out to the White House to confirm the 2016 white paper was in fact Trump’s source. The official confirmed. And based on this report, Trump’s claim is in the ballpark. The United States clearly lags behind most developed countries in spending on kids 5 and younger. But that doesn’t answer the question of how tax cuts would help boost public investment.

There are a few problems with this premise. For one, the tax cut for families Trump touts isn’t really a tax cut for many families, as we’ve pointed out in a previous column. More than 40 percent of families with children would see a tax increase under the House GOP plan. And even if the tax cuts would keep money in families’ pocketbooks, the increased cash wouldn’t translate into increased public spending on child care.

So, how did Trump wind up mashing these concepts together?

It turns out that Aaron Sojourner, the author of the 2016 white paper, served as a senior economist for labor under the Obama administration and during the first five months of the Trump administration. Sojourner worked closely with Trump, providing research in support of her advocacy for women and children.

In his white paper, Sojourner lays out the benefits of expanding access to high-quality pre-kindergarten programs, calling it “a win-win opportunity for participating children, their parents, and society as a whole.”

Somewhere along the line, Trump decided tax cuts could be that win-win. Her political views might help to explain how Sojourner’s ideas got co-opted to suit an alternative political agenda. During the Republican National Convention in July 2016, Trump laid out her party affiliation: “Like many of my fellow millennials, I do not consider myself categorically Republican or Democrat,” she said. “More than party affiliation, I vote based on what I believe is right, for my family and for my country. Sometimes it’s a tough choice.”

The Pinoccohio Test

Trump claims that the United States spends less than other developed nations on children ages 5 and younger. We are generally skeptical of sweeping statements like this, but Trump’s claim caught our eye because it seemed better suited for an argument in favor of increased government spending on social programs. Yet Trump uses the factoid to advocate for the GOP tax plan, which she says would help middle-income families pay the high cost of child care.

Turns out, the confusion stems from the fact that Trump pulled her talking point from an Obama-era CEA white paper advocating for expanding pre-kindergarten programs. And even though the white paper found that the United States spends less than almost every OECD country on early-childhood education, the proposed tax cuts wouldn’t boost the United States’ rank. And more important, the tax cuts Trump cites could increase taxes on 40 percent of families with children.

For her mental gymnastics, we award Trump One Pinocchio. The missing context helps to explain why she stumbled through the talking point in her interview.

One Pinocchio

Sean Hannity Has a Long, Revolting History of Undermining Women Who Report Sexual Abuse

His brand practically revolves around protecting predators.

Photo Credit: Gage Skidmore / Flickr

By Andrew Lawrence, Julie Alderman, Dina Radke/ Media Matters-November 20, 2017

Fox News host Sean Hannity has become a reliable ally for powerful men accused of sexual assault and harassment, regularly using his platform to discredit women who report sexual misconduct and cast doubt on their complaints. Here is a look back on the ways Hannity has attempted to undermine these women and defend the men who have been reported.

Roy Moore

Eight women have said [5] Alabama Republican Senate candidate Roy Moore, a former judge of Alabama Supreme Court, sexually harassed or assaulted them, or had relations with them, when they were teenagers. The Washington Post first reported [6] on November 9 that Leigh Corfman was 14 years old when Moore made sexual advancements toward her, and a number of women have since come forward with similar claims.

Hannity: Many women who report sexual harassment “will lie to make money.” [Media Matters, 11/9/17 [7]]

Hannity: “Then you have false allegations that are made, and -- how do you determine? It's ‘He said, she [said].’" [Media Matters, 11/9/17 [8]]

Hannity: “How do you know if it's true? How do we -- what's true? What's not true? How do you ascertain the truth?” [Media Matters, 11/9/17 [9]]

Hannity: “We do have Ten Commandments. One of the commandments is ‘Thou shalt not bear false witness.’ We know human beings break, with regularity, the other nine commandments. Did they break this one?” [Media Matters, 11/9/17 [9]]

Hannity: “But then also, are there false allegations? And when it's ‘he said, she said’ or whatever, how do you tell the difference?” [Premiere Radio Networks, Media Matters, 11/9/17 [9]]

Hannity invoked the Duke Lacrosse team case; Michael Brown, who was shot by a white cop in Ferguson, MO; George Zimmerman, who fatally shot Trayvon Martin; and Freddie Gray, who was killed in police custody to suggest there’s a history of accusers lying. [Media Matters, 11/9/17 [10]]

Hannity: The “swamp,” “the sewer,” and the “establishment” are out to get Moore. [Media Matters,11/9/17 [8]]

Hannity: The Wash. Post “hates anything Republican, anything conservative.” [Media Matters, 11/9/17 [11]]

Roger Ailes

In July 2016, former Fox News host Gretchen Carlson filed a lawsuit [12] against Roger Ailes, the now-deceased former Fox News CEO, alleging sexual harassment and retaliation against her when she would not have “a sexual relationship with him.” An additional 25 women also came forward [13] with similar accusations. Reports later detailed startling revelations of Ailes’ attempts to cover up his sexual misconduct by spying [14] on employees and silencing [15] his accusers.

Hannity to Carlson: “Why did you stay after such ‘harassment’ asking for more airtime?” [Twitter, 7/13/16 [16]]

Hannity about Carlson: “Why did [Carlson] send handwritten notes with smiley faces asking for more airtime after the ‘alleged’ traumatic incident?” [Twitter, 7/13/16 [17]]
Hannity attacked accusations levied by Carlson as coming from a “publicity seeking” attorney. [Twitter, 7/9/16 [18]]

Hannity: “Hundreds of woman (sic) at Fox that I talked to” said all allegations against Ailes are “BS.”[Twitter, 7/9/16 [19]]

Hannity: “I have spoken to many woman (sic) who work at Fox that have the most amazing stories of how kind Roger is to them.” [Twitter, 7/9/16 [20]]

Hannity to Gabriel Sherman who reported on Ailes: “U r an Ailes and Fox stalker.” [Twitter, 7/13/16 [21]]
Donald Trump

In 2016, at least 20 women [22] accused then-candidate Donald Trump of sexual misconduct, including 12 nonconsensual physical encounters. In October 2016, The Washington Post reported [23] on a video clip in which a hot microphone caught Trump bragging to Billy Bush, then of Access Hollywood, “in vulgar terms about kissing, groping and trying to have sex with women.”

Hannity shrugged off accusations against Trump, arguing, “King David had 500 concubines for crying out loud!” [Fox News, Hannity, 10/7/16 [24]]

Hannity suggested that one of Trump’s accusers may have “welcome[d]” the sexual assault.  [Media Matters, 10/13/16 [25]]

Hannity mocked one of Trump's accusers: “Donald Trump groped me on a plane. It was all right for the first 15 minutes, but then he went too far.” [Media Matters, 10/14/17 [26]]

Hannity on Trump accusers: “Just saying ‘help’ would solve the problem.” [Media Matters, 10/20/17 [27]]

Hannity called accusations of sexual assault against Trump “an attempt to neutralize the WikiLeaks revelations,” referring to the stories generated from hacked Democratic emails.  [Media Matters, 10/13/16 [25]]

Bill O’Reilly

On April 1, The New York Times reported [28] that former Fox News host Bill O’Reilly and 21st Century Fox, Fox News’ parent company, paid out at least $13 million in settlements with five women who said O’Reilly harassed them.

Hannity gave O’Reilly a platform on his shows multiple times to attack the women who reported him. [Media Matters, 9/26/17 [29], 10/5/17 [30]]

Hannity hosted disgraced former Fox host O’Reilly after he was fired from the network. [Media Matters, 9/25/17 [31]]

Clarence Thomas

In 1991, Anita Hill, who worked as a former aide to Supreme Court Justice Clarence Thomas during his time at the Department of Education and the Equal Employment Opportunity Commission, “submitted a confidential statement to the Senate Judiciary Committee alleging that Thomas had sexually harassed her 10 years earlier,” according [32] to CBS News. At least two other women also accused [33] Thomas of sexual assault.

While interviewing Thomas, Hannity referred to his accusers as “those that systematically went about destroying you.” [FoxNews.com, 10/3/07 [34]]

Hannity implied that Thomas was “an innocent man” who had had “his reputation destroyed forever.” [Premiere Radio Networks, The Sean Hannity Show, 11/10/17 [35]]

Hannity has praised Thomas for “giving one of the most powerful defenses” against sexual assault accusations. [Fox News, Hannity, 11/10/17 [36]]

Herman Cain

In 2011, at least two women reported [37] that Herman Cain, who was at the time a candidate in the Republican presidential primaries, had sexually harased them during his tenure as the head of the National Restaurant Association in the 1990s.

Under a screen graphic that read “Herman hysteria,” Hannity questioned whether the charges were “politically motivated,” and badgered an accuser for “staying in the car” with Cain after she says she was harassed. [Media Matters, 11/11/11 [38]]

Hannity sought to discredit accusations against Cain and Justice Clarence Thomas, parroting their characterization of the charges as a “high-tech lynching.” [Politico, 11/10/11 [39]]

Hannity on Cain’s press conference denying sexual harassment accusations: “You would think this is going to end it.” [Media Matters 11/9/11 [40]]
Bill Shine

After Ailes was ousted in August 2016 amid mounting sexual harassment allegations, Fox News promoted [41] Bill Shine to co-president of the network. As senior executive vice president, Shine had reportedly [42] “played an integral role” in covering up sexual harassment claims, including those against Ailes. Shine had a role [41] in pushing “women into confidential mediation [and into] signing nondisclosure agreements in exchange for their contracts to be paid” as well as in establishing a “counter-narrative” to discredit Carlson. He later resigned [43] after reports surfaced that he was cited [44] “in at least four lawsuits” that accused him of ignoring, dismissing, and even concealing sexual harassment allegations against Ailes.

Hannity: “Somebody HIGH UP AND INSIDE FNC is trying to get an innocent person fired.” [Twitter, 4/27/16 [45]]

Hannity: If Shine is fired, “that’s the total end of the FNC as we know it.” [Twitter, 4/27/16 [46]]

Hannity: “#Istandwithshine.” [Twitter, 4/27/16 [47]]

Merkel hints fresh elections preferable to minority government as talks fail

German chancellor says she is ‘sceptical’ as president calls for parties to resume efforts after coalition talks collapsed


 Angela Merkel told reporters on Monday: ‘As chancellor, I will do everything to ensure that this country is well managed in the difficult weeks to come.’ Photograph: Sean Gallup/Getty Images

Philip Oltermannin Berlin and Dan Roberts in London-Monday 20 November2017 18.51 GMT 

Angela Merkel has indicated that she would rather have fresh elections than try to rule in a minority government as the collapse of German coalition talks posed the most serious threat to her power since she became chancellor more than a decade ago.

Merkel, who has headed three coalitions since 2005, said she was “very sceptical” about ruling in a minority government and suggested she would stand again as a candidate if elections were called in the new year, telling public broadcaster ARD she was “a woman who has responsibility and is prepared to take responsibility in the future”.

Exploratory talks to form the next German government collapsed on Sunday night after the pro-business Free Democratic Party (FDP) walked out of marathon negotiations with Merkel’s Christian Democrats, its Bavarian sister party, the CSU, and the Green party.

Germany’s president had earlier urged political parties to resume efforts to a build a governing coalition following a meeting with Merkel. “I expect the parties to make the formation of a new government possible in the foreseeable future,” Frank-Walter Steinmeier said, adding that the parties had a responsibility that “cannot be simply given back to the voters.”

Elections in September saw Merkel’s bloc poll first place but with a reduced share of the vote and with the FDP and Greens as its only plausible coalition partners.

The collapse in the talks and possibility of fresh elections brings further uncertainty for the British government over Brexit, which had hoped that a strong German coalition, including the FDP, might help smooth the next phase of negotiations.

After a unusually constructive meeting last week with Merkel ally Manfred Weber, Theresa May, the British prime minister, was reported to be close to conceding to German demands for an increased divorce settlement in exchange for a favourable start to trade talks. The Brexit secretary, David Davis, also appealed directly to German business interests in Berlin on Friday.

However, the mooted moves come as the prospect of any future assistance from the German government recedes.

Prolonged uncertainty in Berlin will also raise concerns in France, where Emmanuel Macron was pinning hopes of eurozone reforms on partnership with a strong German government. “It is not in France’s interest for things to get blocked,” the French president said at the start of a meeting with Bernard Accoyer, a leader of France’s opposition Les Républicains party.

Steinmeier earlier appealed for German politicians to think of Europe as he called for coalition talks to resume. “There would be incomprehension and great concern inside and outside our country, and particularly in our European neighbourhood, if the political forces in the biggest and economically strongest country in Europe, of all places, didn’t fulfil their responsibility,” he said.

Going in to meet the president, Merkel said it was a “day of deep reflection on how to go forward” in Germany. “As chancellor, I will do everything to ensure that this country is well managed in the difficult weeks to come,” she told reporters.

Christian Democrat and Green negotiators on Monday stressed the common ground that had emerged between the two parties during the weeks of talks and focused their criticism on FDP leader Christian Lindner.

Lindner left the talks on Sunday saying the parties involved had missed several self-prescribed deadlines to resolve differences on migration and energy policies, and had “no common vision for modernisation of the country”.

“We continue to treat each other with respect and respect the [FDP’s] decision”, said Julia Klöcker, a CDU delegate. Kristina Schröder, a former Christian Democrat family minister, tweeted that the Free Democrats’ walk-out had “discredited” the possibility of a CDU-FDP minority government.

Veteran Green politician Jürgen Trittin prophesied that the pro-business party would have “a tough time” explaining its intransigence to voters seeking a responsible government in turbulent political times. Rather than taking the opportunity to make a difference on policies it cared about, such as phasing out the “solidarity surcharge” tax introduced to help fund German reunification, he said, the Free Democrats had “done a runner”.

Lindner defended his walk-out, saying a continuation of the talks would have required his party to depart from its core policy convictions. “We wanted a political tide change, and that was not possible at this point,” he said.

The possibility of fresh elections in spring 2018 will continue to loom on the horizon in spite of the president’s appeal, however.

Germany’s constitution requires the president to nominate a chancellor for approval by the German parliament, the Bundestag. If no stable government can be formed after three rounds of voting there, the president would have to ask Germans to return to the polls.

The Social Democratic party, junior partner in a “grand coalition” with Merkel last term, on Monday ruled out talks about a similar arrangement for the next four years and signalled its appetite for a return to the polls.

“Two months after the federal elections the Christian Democratic Union, the Greens and the FDP have brought Germany into a difficult situation”, said the SPD leader, Martin Schulz. “We consider it important that citizens get the opportunity to consider the situation anew. We are not afraid of new elections.”

News of the collapsed talk was received with noticeable disappointment elsewhere in Europe.