AUSTRIAN MEDIA HIGHLIGHTS: July 19, 2007

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SUBJECT: AUSTRIAN MEDIA HIGHLIGHTS: July 19, 2007


Elsner Blames Floettl


1. When questioned by presiding judge Claudia Bandion-Ortner how
bank Bawag came to lose around 1.4 billion Euros in currency
speculations in the late 1990s, former bank CEO Helmut Elsner blamed
his co-defendant, investment banker Helmut Floettl. Losses incurred
prior to 1998 were the result of "bad luck, not criminal acts,"
Elsner said. The huge amounts lost in currency speculations after
1998 were "Floettl's fault," because he "ignored all written
directives from the Bawag, staking everything on the Japanese Yen,"
the former CEO claimed.
Like all Austrian media reporting on the bank Bawag trial,
mass-circulation tabloid Kronen Zeitung quotes former bank CEO
Helmut Elsner, who in his testimony yesterday blamed all losses from
the Bawag's so-called "Caribbean deals" on investment banker Helmut
Floettl. According to Elsner, his co-defendant Floettl had "failed
to stick to agreements, lost the money in speculations," and finally
told the former CEO in 2000 that "all the money is gone." Floettl
has meanwhile dismissed these allegations, and defended himself,
saying that the losses were "no one's fault. The markets just
developed differently than anticipated. It was an investment
failure." The Kronen Zeitung comments that this was likely the
"first major duel in the Bawag case."
Semi-official daily Wiener Zeitung also reports a request by
Elsner's lawyer that his client be released from investigative
detention has been rejected by the court. Elsner has been in
detention since his extradition from France in February, because
officials consider him a flight risk.


Debate over Residence Rights Continues


2. Rejecting Austrian Chancellor Alfred Gusenbauer's proposal to
grant residence rights to immigrants who have lived in Austria for
more than ten years, Interior Minister Guenther Platter of the
People's Party said he is opposed to a general right of residence,
suggesting that it would be "immigration under the guise of asylum."
Gusenbauer earlier said that foreigners who have integrated well
into Austrian society after years of living in the country legally,
and who have no criminal record should have the right to stay.
According to semi-official daily Wiener Zeitung, Chancellor Alfred
Gusenbauer appears to have "caused a new quarrel over Austria's
asylum and immigration laws" with his call to grant residence rights
to foreigners who have been living in the country legally for many
years. Interior Minister Guenther Platter has dismissed the
Chancellor's proposal and his colleague, OeVP Secretary General
Hannes Missethon criticized Gusenbauer's plan as "yet another issue
where the SPOe has gone back on its word," and which "would leave
the door wide open to immigrants exploiting Austria's asylum laws."
SPOe party manager Josef Kalina in turn urged the Interior Minister
"not to permit pointless hardship cases." Likewise, centrist daily
Die Presse headlines "Quarrel over residence rights for asylum
seekers," and quotes experts from the business sector as warning in
would be a bad move economically to force skilled workers seeking
asylum in Austria to leave the country.


US Warns Of Kosovo Plan Failure


3. The US Ambassador to the United Nations has warned Russia not to
block a UN Security Council resolution on the future status of
Kosovo. Ambassador Zalmay Khalilzad said failure to pass the
resolution could lead to the UN losing control of the political
process in the Serbian province.
Independent provincial daily Salzburger Nachrichten, reporting on
Russia's threat to block a UN Security Council resolution on the
future status of Kosovo, writes that Serbia - being vehemently
opposed to independence for Kosovo -- is apparently banking on
Moscow's assistance in the dispute. The daily speculates that
Russia's unrelenting stance on the issue may be an attempt at
affirming its role as a superpower that has re-emerged on the scene.
In addition, there might be a psychological motive: Moscow may still
be smarting from the "humiliation of 1999," when the weakened
Russian state under President Yeltsin had nothing to set against
NATO's involvement in the conflict, the daily suggests.


A Permanent and Growing Threat


4. ...headlines a leading Austrian daily, publishing an analysis of
al Qaeda's recovered strength. It seems that the United States has
been unsuccessful in its fight against terrorism: The organization
is now as strong as in 2001, and the threat it poses has not
lessened, US intelligence services have found.
In an analysis in centrist daily Die Presse, Washington
correspondent Norbert Rief argues that the latest intelligence
reports from the US concerning the strengthening of al Qaeda "are
bad news for the Bush administration for several reasons: President
Bush and his government have made the war on terror their top
priority. Also, the US has contributed to increasing the threat of
new attacks with its invasion of Iraq." According to Rief, the
Senate Intelligence Committee warned the President before the US-led
military operation in Iraq that invading the country could
indirectly boost Osama bin Laden and his fellow terrorists, as it
would only provide al Qaeda with more options to increase its
influence. The Presse also says that the US intelligence services
believe a key reason for al Qaeda's re-emergence is the relative
security the organization can rely on in the border region between
Afghanistan and Pakistan. The United States, however, has been
reluctant to increase pressure on Pakistani President Pervez
Musharraf, who the White House sees as a key ally in its fight
against terrorism. Meanwhile, US policy has also radicalized
Lebanese organization Hezbollah, Rief writes.


Mideast Quartet Meets in Portugal


5. British Prime Minister Tony Blair will make his first appearance
today as the new Middle East envoy for the international quartet -
the UN, the EU, the US and Russia. Diplomats are gathering in
Lisbon, Portugal, to discuss strategies for the long-stalled peace
talks between Israel and the Palestinians. US Secretary of State
Condoleezza Rice, UN Secretary General Ban Ki Moon, and EU foreign
policy chief Javier Solana will also attend the meeting, says
independent daily Salzburger Nachrichten.


New Suicide Attacks in Pakistan


6. At least five people have been killed and more than twenty
injured in a suicide car bombing at a police college in northwestern
Pakistan. In another bombing near Karachi, at least four people were
killed in an attack aimed at a convoy of Chinese workers. There has
been a series of bomb attacks since troops stormed the Red Mosque in
Islamabad earlier this month, which was run by Islamist radicals,
according to ORF online news.
Kilner