UNCLAS SECTION 01 OF 04 BERLIN 001148

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"

SIPDIS

E.0. 12958: N/A
TAGS: OPRC KMDR KPAO GM US RS IR PK IN IC
SUBJECT: MEDIA REACTION: AFGHANISTAN, EU, ECONOMIC, U.S.-WILSON


1. Lead Stories Summary

2. (Afghanistan) Presidential Elections

3. (EU) Barroso Election

4. (Economic) U.S. Recession, Lehman Bros.

5. (U.S.) Issue of Race in America



1. Lead Stories Summary

ZDF-TV's and ARD-TV's primetime newscasts opened with stories on the
European Parliament's reelection of Jose Manuel Barroso to a second
term as EC President. Newspapers led with various stories.
Frankfurter Allgemeine, Berliner Zeitung and FT Deutschland led with
reports on election fraud allegations against President Karzai.
Stern magazine's cover story said: "Get out of Afghanistan-but when
and how?" Editorials focused on the Barroso's reelection and the
German election campaign.


2. (Afghanistan) Presidential Elections

The EU observers' statement that a quarter of all Afghan votes are
questionable is a major story in the German media this morning.
Front-page headlines included: "EU accuses Karzai of large-scale
election fraud" (Frankfurter Allgemeine), "EU mistrusts Karzai's
victory" (Berliner Zeitung), "Afghan elections turn into farce" (FT
Deutschland)

Under the headline "Stolen election," Frankfurter Allgemeine
commented: "It is disastrous that, according to the EU election
observers, a quarter of the ballots cast in the Afghan elections
were manipulated or are suspicious. This raises the question
whether the international community can still cooperate with
President Karzai, apparently the main benefactor of the fraud. This
undermines the legitimacy of the Kabul government and its already
weak authority throughout the country.... Is there an alternative
to Karzai? The Afghans themselves must make this decision without
too much interference from outside. However, this poses the risk of
violent conflicts.... Instead of plunging the country into the
turbulence and conflicts of an election campaign, we should have
strengthened the rule of law and fight corruption."

S|ddeutsche Zeitung carried a front-page photo showing women wearing
burqas and holding a sign saying "reconciliation." In an editorial
under the headline "The Afghan disaster," the paper said: "America
and Europe must make the decision whether to recognize Karzai as
president at all." The paper added: "Given the hopeless situation,
it would be better to leave the decision to a Loya Jirga, which
traditionally enjoys legitimacy in Afghanistan. The representatives
like to meet for a long time and that would put us in the middle of
the Afghan winter. This would have advantages: even the toughest
Taliban turn into pacifists in the icy winter. This would give
decision-makers in Europe and the U.S. time to profoundly reconsider
the war and democracy in Afghanistan."

Tagesspiegel opined: "Nobody can believe four weeks after the
election in Afghanistan that President Karzai has reached an
absolute majority. Is the winner clear? Not at all. A new
battlefield is opening up in the country, which is divided more than
any other country.... It must be seen as an affront against the
West that the preliminary results were announced only hours after
the massive fraud allegations. Given the elections disaster, we
might consider whether it would not have been better to put the
elections at the end of the democratization process."

Berliner Zeitung's editorial headlined "Annulling the elections _or
civil war" and remarked: "This election must be annulled. Such a
decision would not move Afghanistan forward, but it would prevent it
from experiencing a decade-long setback."


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Regional newspaper Der Neue Tag commented: "Despite all the praise
he got in advance, President Karzai is increasingly a part of the
problem and not part of the solution. He does not have his country
under control. The administration, army, police forces and the
courts are more corrupt than ever before. It takes a lot of help to
manipulate 1.5 to 5.5 million votes."


3. (EU) Barroso Election

All papers carried reports and editorials on Barroso's re-election,
with much of the commentary expressing doubt whether Barroso was the
right choice. ARD-TV's late evening newscast Tagesthemen commented:
"The outcome of the election is clear, but we have not heard in
Brussels and elsewhere that this was also a good choice. During his
first term, Jos Manuel Barroso did not acquire great respect. Why
then his re-election? This is indeed the question. The reason we
hear almost everywhere including from Berlin is that there was no
alternative. Apart from the fact that this is a poor argument, it
is also nonsense. It is probably right that something else but
Barroso was not desired. Not only because it is much more
comfortable for the big EU countries to have someone at the top in
the EU who gives in readily to their requests. And it is probably
more important that the EU member states are governed by a
generation of politicians whose European ambitions tend to be
zero."

Westdeutscher Rundfunk radio of Cologne broadcast the following
commentary: "the past weeks demonstrated that Europe is witnessing a
change in its political institutions. The [European] Parliament has
become stronger. Basically, there should have been an election
campaign with several candidates and not a just a concert of
complaints about Barroso. But this is something the parties only
realized after his reelection. Very few people acknowledged
regarding Barroso that his job requires more skill in reaching
compromises than any position in the world except for the Secretary
General of the United Nations, who has to find a common denominator
for the policies of China, Russia, Europe, and the U.S. Everyone
who criticizes Barroso these days should answer the question of what
Barroso could have done better [in his first term]."

DeutschlandradioKultur opined: "The question now is whether Barroso
will take advantage of his second term and whether he will really
change his political style in a way he promised. The chances are
not bad. Many previous presidents of the European Commission had a
weak first term. There is a simple reason for this: Commission
presidents are allowed to run only two terms in a row. Barroso can
now enter into the many conflicts much freer than during his first
term."

In the view of Frankfurter Allgemeine, "No other previous European
Commission president has presented such a comprehensive working
program and was asked to make such far-reaching concessions. But
with this great variety of concessions, the old and the new
president confirmed his reputation, namely that he does not pursue
his own independent policy but rather changes his colors like a
chameleon, saying whatever the EU leaders want to hear."

According to Financial Times Deutschland, "the social democratic
members of the European Parliament [EP] must also be blamed for the
lack of competition about the best ideas and the most important
position in Brussels. They shied away from suggesting an
alternative to Barroso. In view of the conservative majority in the
EP, it seemed hopeless to assert one's own candidate. But the
current legal situation must also be blamed for the situation
because the European Parliament only plays a side role when
determining the Commission President. But this will change as soon
as the Lisbon reform treaty will enter into force. The EP will then
gain in significance and a true competition will become possible."


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Handelsblatt editorialized: "The tasks that lie ahead of the next
European Commission are enormous. At issue is not only how to lead
the EU in an orderly way out of the crisis. This is a task for
which Barroso, after his yearlong laissez-faire policy, seems to be
ill-prepared. At issue is also how to lead the EU on a new
sustainable path of growth. Both tasks will become extremely
difficult because, during this crisis, the 27 EU member states have
drifted apart. There is hardly anything in common anymore between
jeopardized countries such as Ireland and Latvia and recovering
countries such as France and Germany. Egotism and nationalism are
on the advance. At the same time, EU policies such as the Stability
Pact and the Lisbon agenda for jobs and economic growth have turned
out to be fragile. Even the EU's internal market, the supportive
pillar of a common economic policy, is suffering. It is high time
for a general overhaul of the EU."

Regional daily Mannheimer Morgen observed: "As far as politics is
concerned, Barroso is only a lightweight. In the coming five years,
the European Commission will have get an even less significance
under his leadership. He owes his re-election to the 27 EU leaders.
He knows this and will act correspondingly. That is why we should
not expect an independent self-confident course from Barroso. Those
who think that he has a great selection of possible EU commissioners
are wrong. That is why the European Commission will fail as an
engine of reform."


4. (Economic) U.S. Recession, Lehman Bros.

Under the headline: "The Right Timing," Frankfurter Allgemeine
judged: "The U.S. economy has finally left behind the worst of the
recession and is again moderately growing. Fed chief Ben Bernanke
stated this. He is right with his assessment that all obstacles for
an economic recovery have not yet been removed. There are still
some burdens for the consumers and that is why Bernanke and some of
his colleagues are not in a rush to end their relaxed monetary
policy Nevertheless, it is necessary to carefully prepare for a
change of course to a stricter availability of money and not to miss
the right timing. The liquidity that was necessary to stabilize the
financial system and the economy must be siphoned off in time.
Otherwise consumer prices will inflate and new dangerous bubbles in
the markets for assets such as stocks and real estate will be
looming."

Financial Times Deutschland headlined: Caught in a Bubble," and
judged: "It may be possible that the largest economic areas have
left behind the recession and are on their best way to recover. But
no one knows how strong the upswing will be and in order to justify
the euphoria in the financial markets, this upswing must be
gigantic. If the stock markets continue to rise and, at the same
time, the interest rates for securities go down, then this is a
clear indication that too much money is in the markets. In the
financial markets, the next bubble is developing and the central
banks should do everything to let the air slowly out of them. But
the Fed and the European Central Bank are in a dilemma. If they now
end the extremely expansive monetary policy of the past
months...they would probably suffocate the fragile economic upswing.
The central banks must resolve a basic problem: consumer prices are
taking a completely different course than asset prices. That is why
the central banks should make up their mind as quickly as possible
on how to deal with this situation. And investors should assume
that this new bubble will not grow forever."

Regional daily Die Tagespost of W|rzburg opined: "The balance sheet
one year after the bankruptcy of Lehman Bros. is not very promising.
The decisive question has not yet been answered: will the G-20
succeed in chaining the international finance world at the upcoming
summit in Pittsburgh? Everyone agreed that another fiasco can be
prevented only if at all three levels - the international, the
European, and the national level - rules are adopted that

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mercilessly tackle non-transparent financial products, greed, and
excessive bonus payments for managers. The market itself does not
have sufficient self-healing forces. This is for sure."


5. (U.S.) Issue of Race in America

Commenting on former President Carter's statement that Rep. Wilson's
outburst during a speech by President Barack Obama was "based on
racism," Frankfurter Allgemeine wrote: "We are currently burying
another hope many contemporaries associated with Obama: the end of
the divide running through American politics and society. The
reform of the health care system is being fought with a
vengeance.... However, [with his comment about Rep. Wilson] the
former President is not exactly a model for a debating culture....
In America accusations of racism can kill even legitimate
criticism."

MURPHY