British embassy reopens in Tehran as Iraq crisis helps thaw Iran relations
William Hague says diplomatic base in Tehran to be restored as west looks to Iran to help tackle Isis-led insurgency in Iraq. Read more…
Clegg: Britain may let US planes use its bases to target extremist forces in Iraq
Deputy prime minister discusses possible UK support for ‘well-judged and well-targeted’ action by US. Read more…
UK and Iran agree to re-establish direct diplomatic relations
Two countries to quit contact through third-country intermediaries but embassies in their respective capitals are to remain closed. Read more…
Iran to implement nuclear deal as Obama repeats Congress sanctions plea
John Kerry says Tehran will start to implement November’s ‘comprehensive agreement’ on 20 January. Read more…
Iran seals nuclear deal with west in return for sanctions relief
Barack Obama hails historic accord as first step towards resolution of decade-old impasse over Iran’s nuclear programme. Read more…
John Kerry statement on Syria polarises world leaders
Iran and Russia stand alongside Bashar al-Assad’s regime while the UK, France and Australia follow Washington’s lead. Read more…
Foreign affairs chief Omer Celik states June meeting is only chance for nations to salvage credibility after 80,000 deaths
If the planned Geneva peace talks on Syria fail, it will mark the end of the road for attempts to find a negotiated solution to the conflict, and should open the door to the wholesale delivery of arms to the rebels, a Turkish minister has said.
Omer Celik, the foreign affairs chief in Turkey’s ruling AKP party, portrayed the Geneva meeting planned for mid-June as a last chance for the international community to salvage its credibility in the face of two years of slaughter in which more than 80,000 people have died.
Serious obstacles remain to the talks being held at all, however, including divisions in the international community over whether Iran should take part, and disarray among Syrian opposition groups.
On Wednesday evening the Syrian government confirmed for the first time that it would attend the peace talks. It has not decided on the make-up of its delegation. Russia has previously said it can guarantee a high-level presence from Damascus.
A senior UN official involved in preparing the talks told the Guardian that the biggest problem was getting the right people from both sides of the conflict to attend. “We need credible negotiating partners. This is the most important issue. This is not yet solved. The first condition concerns the quality of the talks,” he said.
Russian officials have also warned that the lifting of the EU arms embargo, due to take effect on Saturday, undermined prospects for the talks. In a further sign of mounting friction in the runup to the Geneva meeting Sergei Lavrov, the foreign minister, also took aim yesterday at a US-backed resolution at the UN human rights council condemning the Syrian government. Lavrov described the resolution as odious and unwholesome.
Russia, the Assad regime’s longstanding protector has continued to supply it with heavy weaponry throughout the conflict and responded to the EU arms embargo announcement by confirming its intention to deliver sophisticated air-defence missiles to Damascus.
Celik, who is Turkey’s culture minister as well as being one of Prime Minister Recep Tayyip Erdogan’s closest foreign policy advisers, said the Assad regime had been arming itself and receiving direct military support from Iran and the Lebanese Shia militia Hezbollah.
“If the Geneva meeting becomes just another means of gaining Assad some additional time, that will mean that all diplomatic initiatives will have been exhausted,” he told the Guardian.
“If the Geneva meeting does fail, we believe the international community should take all necessary measures to support the protection of opposition forces,” Celik said. Asked if that meant arming the opposition, he replied: “Of course.”
Otherwise, he added: “Concepts of international community and international justice would be meaningless and the international community would just be standing by watching a dictator butcher his own people.” He rejected objections that sending weapons to the rebel Free Syrian Army would add “fuel to the fire” in Syria and simply lead to escalation.
“We went through all the same arguments over Bosnia and in the time we went through those arguments 100,000 people died. Now we are doing it again, and 100,000 people have died in Syria,” Celik said. Turkish officials draw close parallels between the Bosnian conflict in the 1990s and Syria. They see both as cases of the international community standing by in the face of the mass killing of Muslims, and argue that in both cases indifference has led to radicalisation.
The biggest hurdle to cross before the Geneva talks can convene is the international row over the participation of Iran, which is an active party to the conflict, sending Revolutionary Guards to train pro-government militias. It also backs Hezbollah, which has taken a key role on the government side of the war.
Russia is adamant that an Iranian delegation should be present.”The issue of Iran is key for us,” Lavrov was quoted as saying by Russian news agencies. “Iran without question is one of the most important nations.” Tehran has voiced readiness to attend and Turkey has backed the proposal.”This can be overcome by negotiation because it is a must to have all the parties in that meeting if you want to it succeed,” Celik said.
UN headquarters in New York is keen to see Tehran involved in the talks. “Iran should be there, but the resistance is very strong,” said a senior UN official. “If we can’t get Iran to the talks, we will need a parallel channel.”
Saudi Arabia and France have led opposition to an Iranian presence. Riyadh has said it will boycott Geneva if Tehran takes part, while the French foreign minister, Laurent Fabius, said that to include Iran would be “extremely dangerous” as it would harm prospects of reaching a deal on its disputed nuclear programme.
“We fear that if they are part of the Syrian conference they will try to drag things on to such an extent that they will blackmail us saying that the Syrian crisis can only be resolved on condition that they have the nuclear bomb,” Fabius told France Inter radio. Tehran denies having any aspirations to build a nuclear weapons.
A spokesman for the UK foreign office said discussions on participants at Geneva were still being negotiated but pointed to remarks by William Hague in parliament last week, in which the foreign secretary argued that Iran would have blocked any agreement at the first Geneva talks and that the UK’s “starting assumption” is that the same countries which attended the first negotiations should come to the second. The US state department has said the issue is still being negotiated.
Deep divisions within the political opposition represent a stiff challenge to the Geneva conference organisers. A meeting of the National Coalition in Istanbul, which began on 23 May and was meant to last three days, is still deadlocked a week later on the first major item on its agenda, the admission of new members. That has to be resolved before new leaders are elected and a decision is taken on whether to go to the Swiss talks.
The military opposition is even more fragmented, with the UN special envoy, Lakhdar Brahimi, estimating that there as many as 1,400 different groups, battalions and brigades fighting government forces. Each currently has to negotiate for ammunition with an array of mostly Arab state and private backers.
However, a Syrian businessman involved in supplying rebel-held areas since the start of the uprising two years ago said the structure for distributing arms and ammunition is gradually being rationalised, with groups applying to a joint military commission for supplies for specific operations, and being judged by their effectiveness.
“It is getting to be a more rational streamlined setup,” the businessman said. “You don’t just turn up any more and say I have this many men, give me this many bullets.”
As a practising member of the criminal bar, I am horrified at the proposed changes to the provision of legal aid, currently undergoing a so called “consultation period” by the Ministry of Justice (Editorial, 22 May), albeit the justice minister refuses to meet the chairman of the Criminal Bar Association. It is clear that the truncated consultation period is no more than window dressing. Chris Grayling is disinterested in any contribution from the profession. It is beyond doubt that the tendering out of legal aid to private business will herald a decline in standards in a legal system that has been a model of justice for centuries. There is no provision whatsoever in the proposals to ensure standards are maintained when individuals are unable to choose their representation. Once in possession of a contract, a company’s clients will be guaranteed, irrespective of the quality of service. The idea that this service would be properly provided by employees of a profit-driven company, whose lowest bid has rewarded them with the responsibility for the representation of citizens accused of crime by the state, is dubious. The prospect that the same company could be responsible for housing prisoners, transporting them, and representing them is, frankly, Orwellian.
East Langton, Leicestershire
• You report dissidents in Iran “have been denied adequate legal representation” (22 May). In the UK we are a long way from Iran’s repressive regime, but the present government’s proposals on reforming legal aid to allow Eddie Stobart and the like to turn a profit by supplying third-rate representation to people who are (to use Grayling’s analysis) “too thick to know better”, will have us catching up with the regime in Tehran in no time. Whatever one’s view of defence lawyers, the importance of ensuring that only those proved to the satisfaction of their peers are found guilty, is a matter of social, democratic and constitutional importance to us all.
Legal aid barrister, London
President insists wealthy must pay their share and says he will not extend Bush-era tax cuts for wealthiest 2% of Americans
Barack Obama adopted a tougher approach to the fiscal cliff showdown on Wednesday when he made an unequivocal pledge that he will not cave in to Republican demands for tax cuts for the wealthy.
Apparently emboldened by his election victory and free from the pressure of another campaign, Obama told a White House press conference that while almost everything else was up for discussion, the wealthiest Americans would have to pay their share.
During last year’s showdown with Republican leaders in Congress that almost brought Washington to a standstill, Obama was forced to accept a compromise just days before Christmas that included extending tax cuts for the richest Americans, introduced by George W Bush.
Asked at the press conference if he could offer an assurance that he would not cave in again, Obama said: “What I said at the time is what I meant. Which is: this was a one-time proposition. What I have told leaders privately as well as publicly is that we can not afford to extend the Bush tax cuts for the wealthy.”
The press conference was his first formal, televised appearance before the White House press corps in eight months. He used it to take a swipe at two senior Republican senators, John McCain and Lindsey Graham, who criticised the UN ambassador, Susan Rice, over comments she made about the September 11 attack on the US consulate in Benghazi.
He also addressed the scandal over General David Petraeus for the first time in detail, said that tackling climate change would be a priority in his second term, and promised to press ahead with immigration reform.
One of the biggest criticisms of Obama in his first term from fellow Democrats is that he was too passive in dealing with Republicans and failed to show sufficient leadership.
Speaking in the East Room of the White House, Obama was more confident in dealing with the media than some of his laboured performances in the past. He indicated that he understood the criticisms of his first term: “I hope and intend to be a better president in the second term than I was in the first,” he said.
Democrats in Congress as well as many activists and supporters regard the tax issue as a touchstone. Many of them were dismayed that Obama appeared to be too passive, and at times too willing to bend, in his dealings with Republicans in Congress over the last two years. But given the unequivocal nature of his comments on Wednesday, Obama will find it hard to row back from his promises on tax.
The Republican leader in the House, John Boehner, and other senior members of the party have adopted a more conciliatory tone since the election. But they have gone on to say that they remain opposed to any tax rises for the wealthy.
At the press conference, Obama reiterated that there were only two options facing the nation on January 1: either everyone’s taxes go up, or just those of the top-earning 2% of Americans.
Although he repeated he was seeking compromise with the Republicans, Obama combined with this with a new-found air of determination not to bend on the 2%. He is putting the pressure on the Republicans in a way he failed to so last year, suggesting that if everyone faces tax rises on 1 January, it will be the GOP’s fault.
Obama is seeking a quick bill before Christmas to guarantee that taxes will not go up for the the other 98%. “What we can do is make sure that middle-class taxes don’t go up. And so the most important important step we can take right now – and I think the foundation for a deal that helps the economy, creates jobs – is if right away that 98% of Americans are not going to see their taxes go up, 97% of small businesses are not going to see their taxes go up.
“If we get that in place, we are actually removing half the fiscal cliff. Half of the danger to our economy is removed by that single step.”
The showdown has potential ramifications beyond just the next few months.
If Obama can win this confrontation, it might make it easier to get other legislation through over the next two years until the mid-term congressional elections. If he does not, Republicans, who retain control of the House, will feel more confident of being able to fend off other legislative initiatives.
Obama said that as long as the tax cuts for the top 2% were dealt with, he was open to discussion of the whole tax system, particularly loopholes, and – a contentious point for some Democrats – consider serious reform of entitlements, in particular health costs.
“There is a package to be shaped, and I am confident that folks of goodwill in both parties can make it happen. But what I am not going to do is extend Bush tax cuts for the wealthiest 2% that we can’t afford and, according to economists, have the least impact on our economy.”
He added: “I want a big deal, a comprehensive deal.”
Reflecting his new-found confidence, Obama rounded on McCain and Graham for a press conference at Congress earlier in the day in which they said they would block any attempt by the president to nominate Rice as secretary of state in place of Hillary Clinton, because of what they claim is a misleading account she gave of the Benghazi attack.
Obama accused them of “besmirching” her with their “outrageous” comments. He told the press conference he would nominate whoever he wanted as secretary of state.
On immigration, which most Republicans have long opposed but which they might now be willing to consider given the importance of Latinos in the election, Obama promised reform “very soon” after his inauguration on January 21.
“I am very confident we can get immigration reform done,” he said. He wanted to “seize the moment”, adding that he was “already seeing signs” that some Republicans are beginning to come round.
He favoured strong border controls and a pathway to legal status for those already living in the US, provided they paid taxes and were not engaged in criminal activity.
One of the biggest foreign policy challenges in his second term is Iran, and Obama said there is still a window for a diplomatic solution, insisting he will push for dialogue between Iran and the US and other countries. He denied a pre-election report that the US would engage in direct, one-to-one talks with Iran.
On Syria, he said the US is not yet ready to recognise the coalition of rebels that has just been formed as an alternative government. He would not go beyond describing them as representing the “legitimate” aspirations of the Syrian people. His concern was that extremists elements might infiltrate the coalition and he did not want to supply arms that might then be used against Americans.
Obama hinted again at a possible role for his Republican challenger, Mitt Romney, praising his handling of the 2002 Winter Olympics in Salt Lake City and acknowledging that he had good ideas on the campaign trail. But he added: “I am not suggesting I have a specific assignment.”
As an oil industry whistleblower, I know the energy sector is even more flawed than this week’s exposé of gas prices reveals
The Guardian’s investigation into the alleged “Libor-like” fixing of UK gas prices was doubly ironic for me. The first irony is that, as director of compliance and market supervision of the International Petroleum Exchange (now ICE Futures Europe) in the 1990s, I was heavily involved in the development and legal architecture of the gas-market contract that has now allegedly been manipulated.
The second painful irony is that in 2000 the Guardian published detailed allegations made by me on very similar micro-manipulation of the International Petroleum Exchange’s Brent futures contract-settlement prices. This systemic manipulation was so pervasive that traders referred to the on-exchange profits they made at the expense of the manipulators – who profited “off-exchange” – as “grab a grand”.
Unfortunately, I described the manipulation as “systematic” – taken to mean that some of the players were routinely manipulating the price most of the time – rather than “systemic”, where most of the players manipulate the market some of the time. On this basis the commissioner appointed to investigate my allegations rejected them, and in finest whistleblower tradition my reputation was destroyed: I lost my livelihood, home and marriage. Had the crude oil market been properly investigated at that time, subsequent oil market history would probably have been very different.
One thing I have come to realise since my failed attempt at whistleblowing is that the short-term trading exposed this week is only part of the problem. The malaise runs much deeper. If you want to find out who really has an interest in rigging the market, ask who benefits from medium- and long-term high commodity prices: it’s the producers, stupid. From De Beers’ diamond hoarding to coffee-grower cartels, if the history of commodity markets tells us anything it’s that if producers can find leverage to support commodity prices, they will.
The real problem in the energy market lies not with gas, but crude oil – which is suffering perhaps the greatest market manipulation the world has seen. This is due to financialisation of markets which began in crude oil about 12 years ago, but only became significant from around 2005 onwards. From the mid-90s, a new type of investor entered the markets as investment banks created new vehicles – index funds, exchange traded funds and so on – which enabled investors to invest directly in equities, precious metals; commodities generally and above all, in energy, with a view to “hedging inflation”. Rather than speculatively taking a risk in search of a profit, they sought only the return of their capital, and the preservation of the value of their investment relative to dollars, sterling and so on.
To understand what happened to oil, we just need to look at the Enron scandal. The fundamental scam perpetrated here was based on an ancient financing method known as “prepay”. Quite simply, this occurs when producers sell their product at a discount for cash now, with delivery later. So via intermediary banks such as JP Morgan and Citigroup, Enron were able to opaquely obtain “off-balance sheet” financing disguised as commodity trades of which Enron’s investors and creditors were blithely unaware.Essentially, Enron was borrowing dollars and lending commodities.
A similarly opaque prepay technique has been responsible since 2005 for the inflation of two oil market bubbles. The first – a private sector bubble – culminated in July 2008 in a spike to $147 a barrel, and then a collapse to $35, causing great pain to producers used to high prices. At this point key producers – facilitated by friendly investment banks – resorted to prepay to finance themselves, and a public sector bubble was rapidly inflated during 2009.
In my analysis, the US and Saudis then hit upon a strategy that loosely “pegged” the oil price against the dollar within an agreed trading range, keeping prices relatively stable. But this trick only worked until early 2011, after which Fukushima and supply shocks in Libya and Iran have caused more turmoil.
I believe that there is now virtually nothing holding the oil market up, and that when (not if) Iran reaches an accommodation with the US on terms similar to those spurned by Dick Cheney in 2003, we will see the oil market price fall, possibly dramatically.
I have been warning for some time that risk-averse investors – whose very presence in the market causes the inflation they wish to avoid – are taking a much higher level of market risk than they appreciate. If I am correct, this will – sooner rather than later – give rise to the next Great Regulatory Disaster.
Perhaps worse than this, and particularly relevant to my work on financial market resilience, there is a significant risk of the sort of discontinuity in market price that took place in the tin market in 1985 when the market price collapsed overnight, from the price level supported by producer cartel stockpiling of $8,000 a tonne to the much lower price of $4000 a tonne, which reflected the influx of new low-cost tin supply.
The presence in the market of middlemen who have an interest in volatility and opacity means that we have now reached a stage where market manipulation is no longer an aberration: the market is the manipulation.
So what can be done? In the long term, crude oil prices can only go up, and many would argue that for the sake of the environment it is essential that carbon fuel prices are set at levels at which demand is low. The problem then is how best to distribute interationally and domestically the surplus value thereby created, in particular in investment in renewable energy, and above all in the cheapest energy of all – energy savings.
This will require a new (in fact very old) – and non-toxic – type of market architecture, and the good news is that this are already emerging as the current market paradigm approaches its end.