President Sarkozy in Kazakhstan to secure contracts

French President Nicolas Sarkozy is in energy-rich Kazakhstan as part of a two-year diplomatic push aimed at securing French companies valuable space, energy and defence contracts in the Central Asian country.

AFP – French President Nicolas Sarkozy arrived in Kazakhstan Tuesday for a swing through the energy-rich state expected to yield billions of euros in space, energy and defence contracts for French firms.

The visit, the first by a French president to Astana, is being touted as the culmination of a two-year diplomatic push aimed at securing French companies a larger role in Central Asia’s largest economy.

In the largest deal the Spie Capag consortium, owned by construction giant Vinci, is expected to net a 1.2-billion-euro (1.75-billion-dollar) contract to build a pipeline for Kazakhstan’s massive Kashagan oil field.

The pipeline will be part of a transport system to bring Kazakh oil to Europe, which analysts say would most likely take the form of tanker shipments across the Caspian Sea to Azerbaijan, without transiting Russia.

Oil giant Total and GDF Suez are also expected to formalize a venture worth one billion dollars to develop the Khvalinskoye gas field in the Caspian Sea.

Kazakhstan, ruled since its independence by strongman President Nursultan Nazarbayev, has long been courted by the West for its natural resource reserves and strategic position vis-a-vis neighbours China and Russia.

Although Sarkozy is expected to praise the ex-Soviet state as an island of stability in a volatile region, the trip comes at an awkward time as international criticism mounts over Kazakhstan’s spotty human rights record.

Kazakhstan is set in January to become the first former Soviet state to chair the Organization for Security and Cooperation in Europe, and Human Rights Watch called on Sarkozy to press them to implement promised reforms.

Most notably, the New York-based watchdog asked him to raise the case of activist Yevgeniy Zhovtis, sentenced to four years in prison in September for a traffic accident that resulted in a man’s death.

The United States and OSCE have both criticized the conduct of the trial, raising questions about its fairness and the impartiality of the judge.


Sarkozy labels Iranian prisoner exchange as ‘blackmail’

Clotilde Reiss

President Nicolas Sarkozy has spurned an offer by Iran to grant amnesty to French teaching assistant Clotilde Reiss, detained in Iran, in exchange for Iranian prisoners held on French territory, calling it “blackmail”.

“There will be no exchange,” Sarkozy said during an interview on French television. “This is blackmail.”

Sarkozy was responding to President Mahmoud Ahmadinejad who said Tuesday that Iran would not grant amnesty to Clotilde Reiss unless France was willing to help Iranian prisoners held on its territory.

Reiss was arrested at a Tehran airport on July 1 for taking part in protests triggered by Ahmadinejad’s re-election the previous month.

The 24-year-old university teaching assistant appeared in court in a mass trial on August 8 and Iranian state media said she was accused of “collecting information and provoking rioters.”

France insists that Reiss is not guilty and has managed to negotiate an agreement allowing her to remain at the French embassy in Tehran pending her verdict.

French officials believe Ahmadinejad was referring to Iranian national Ali Vakili Rad, jailed in France for the 1991 murder in Paris of Shapour Bakhtiar, Iran’s last prime minister under the shah, and Majid Kakavand.

Police were acting on a request from the United States when they arrested Kakavand for allegedly purchasing sensitive technology on the Internet and his extradition is before the French courts.

“Do you think I would be ready to swap the assassin of Shapour Bakhtiar for a young student whose only crime is to speak Iran’s language and love Persian civilisation?” Sarkozy said.

Asked about Reiss’s fate, Ahmadinejad told France 2 television on Tuesday that “there were some Iranians in prison in France for years. These are prisoners who also have a family, they also have a father and a mother.”

“Unfortunately we have seen no action by the French government in favour of these prisoners,” he said.

French foreign ministry spokeswoman Christine Fages earlier said “there is no comparison between the situation of Clotilde Reiss and these people.”

France’s trial of the decade set to begin

Former French prime minister Dominique de Villepin goes on trial Monday for allegedly plotting a smear campaign against President Nicolas Sarkozy in France’s most politically-charged case in years.
Dubbed the trial of the decade, the judicial drama features a cast of powerful players in politics, industry and intelligence circles, beginning with Sarkozy, who is a civil plaintiff in the case.

A suave diplomat best remembered for leading the charge against the Iraq war at the United Nations, Villepin is accused of conspiring to slander Sarkozy at a time when the pair were waging a vicious battle to succeed Jacques Chirac as president.

The case dates back to 2004 and centres on a list — later proved to have been fabricated — of account holders at the Clearstream financial clearing house who allegedly received kickbacks from the sale of French frigates to Taiwan.

One name on the bogus list was that of Sarkozy, then Chirac’s ambitious finance and interior minister, who suspects the president’s chosen heir Villepin of using the list to try to torpedo his bid for the presidency.

Villepin, 55, has repeatedly denied any wrongdoing and maintains that the case would have never gone to trial had it not been for Sarkozy’s “meddling” in the judicial process.

The trial is shaping up as a showdown between the two men, whose mutual hatred is legendary in French political circles.

But it will also cast light on the murky dealings of French intelligence and of one of the world’s top aerospace companies, EADS.

A former EADS vice president and Villepin ally, Jean-Louis Gergorin is also on trial as is the former head of an EADS research center, Imad Lahoud, who has reportedly confessed to falsifying the list.

Also on trial are management consultant Florian Bourges, accused of stealing Clearstream documents, and journalist Denis Robert, who broke the story.

Villepin faces up to five years in jail and a 45,000-euro (66,000-dollar) fine if convicted of “complicity in slander, complicity in the use of forgeries, dealing in stolen property and breach of trust”.

In the weeks leading up to the trial, Villepin has waged a media offensive, accusing Sarkozy of being “a bit twisted” for insisting that the Clearstream affair was a plot to sabotage his bid for the presidency.

Sarkozy reportedly vowed to “hang up whoever did this on a butcher’s hook”.

“Some day, he will have to explain his relentlessness,” Villepin said last week. “This is not without consequences for the office of president, on the human and political level.”

Among the star witnesses are former spymasters including Yves Bertrand of the RG police intelligence and Mike Turner, former head of Britain’s defence giant BAE Systems.

General Philippe Rondot, a former intelligence official whose notes — seized by investigators — detail secret meetings that appear to incriminate Villepin, is to testify in early October.

Chirac’s name came up at the outset in connection with the Clearstream case, but he was never formally investigated, has denied all knowledge of the affair and has not been called to testify.

Villepin himself is expected to take the stand next week, defending himself in the exact Paris courtroom where Marie Antoinette was sentenced to the guillotine in 1793.

“This is the trial of an era,” said Robert, the investigative journalist among the five defendants.

“It is the trial of a kind of French political practice, where spooks and the powers that be use the legal system as a political tool.”

“We see that inside domestic intelligence circles there was a rift between those who were loyal to Villepin and those who were close to Sarkozy,” he told AFP.

Villepin’s trial comes five years after another prime minister, Alain Juppe, was convicted of corruption in an illegal party financing scheme and given a 14-month suspended sentence and a one-year ban on holding public office.

The hearings at the Paris criminal court are scheduled to run until October 23.

French competitiveness commission starts work

Two former French prime ministers, Michel Rocard and Alain Juppe, have been tapped to head a commission looking at financing ways to boost France’s long term competitiveness.

The commission will decide how much money is needed and how it should be spent. The cash will be raised through a national loan.

President Nicolas Sarkozy said: “This loan is intended to finance strategic priorities for the future, not to address everyday demands, even if they are legitimate, which should be dealt with in the national annual budget.”

The commission is to include scientists and economists and will suggest strategic sectors to invest in such as technology and infrastructure projects.

The loan will be raised early next year with bonds sold to the general public or professional investors.

Sarkozy said one aim of the project is to safeguard jobs in the euro zone’s second largest economy.

Shortly after he spoke the latest unemployment figures were released. They showed the number of people out of work in France rose by 10,700 in July, a 0.4 percent increase on June. The jobless total is now 25.6 percent up on July last year at 2,535,200.

France cracks down on banking bonuses

New rules for French banks limiting traders’ bonuses have been unveiled by President Nicolas Sarkozy and he wants the leaders of the G20 richest countries to do the same.

Speaking after meeting the heads of France’s biggest banks Sarkozy said bonuses now have to be linked to performance.

He has been one of the most outspoken international critics of unrestrained financial market practices that have been widely blamed for encouraging the excessive risk-taking that contributed to the financial crisis.

Sarkozy said: “Things can’t stay they same as they were. I have made that commitment to the French people, I won’t go back on that. It is a moral question and it’s something that is crucial to ensure financial stability.”

The banks have agreed to spread compensation out over several years, to reflect long-term profits and reduce risky decision-making.

They will also provide more information about how bonuses are awarded and traders will be penalised if they lose money for their banks

The issue is expected to be high on the agenda at the G20 finance ministers and leaders’ gatherings in September.

Sarkozy said he wants the G20 to tighten financial regulation internationally, including agreed limits on individual bonuses but will not back down on the new rules, even if other countries do not follow France’s example.