A decision by Russia to cut its gas exports to Poland without warning rekindled fears last night about Europe's reliance on Siberian gas at a time of increasing tension between Moscow and the west. The Polish state energy group, PGNiG, said it was trying to find out why volumes had been slashed by up to 24% at a time when it had been exporting gas itself to Ukraine to make up for Russian shortfalls there. Its counterpart in Kiev, Ukrtransgaz, accused Kremlin-controlled Gazprom of deliberately penalising Poland and undermining onward gas supplies to Kiev. "Today Russia started limiting gas supplies to Poland in order to disrupt the reverse (flows) from Poland that we receive ... Poland stopped reverse supplies to Ukraine in the range of 4m cubic metres," said Ihor Prokopiv, chief executive of Ukrtransgaz, according to the Russian news agency, RIA. Nick Perry, a British energy consultant, said that it was not surprising that the west was nervous about Gazprom's actions. "Since the 1990s, the International Energy Agency (IEA) has been investigating how Europe would survive if they lost some of its biggest sources of gas for six months. People have been looking at this for a long time." But Gazprom sources insisted the shortfall could be attributed to maintenance work that was going on fields and pipelines ahead of the important winter season when demand is at its highest. A formal statement from the group sidestepped the issue by saying it was pumping gas to all destinations "according to the resources available for exports and for the continuing pumping to storage facilities in the Russian Federation".

Jonathan Stern, a gas expert at the Oxford Institute for Energy Studies and a member of the EU-Russia Gas Advisory Council, believed there was more likely a technical not a political problem....well ... Doesn't Poland have an agreement with Russian Gazprom, in which it stated that it is not allowed to 'reverse flow' gas? Therefore Poland should blame themselves for breaking the contract in the first place. Think about it as a business. You sell two people apples (A and B). You sell them at difference prices in accordance with the a long-term contract, 'A' for lower price and 'B' for higher. Then A decides to make a himself a profit and starts reselling those apples to the other person (B). Soon, B decides to stop buying apples from you and rather buy them from A. Hence you lose-out on your profits. You can take A as being Poland, B as Ukraine, and you the apple seller as Russian Gazprom. See the logic?

While the German government is sending its first troops to Iraq and preparing to deliver arms, Der Spiegel is lamenting what it calls the decrepit condition of the Bundeswehr (armed forces) and calling for an increase in the defence budget. Under the headline “Appearance and Reality,” the latest issue of Germany’s largest circulation news magazine criticizes the policies of Defence Minister Ursula von der Leyen. The tenor of the article is clear: If Germany wants to be more involved militarily in the world, it needs a suitably equipped army. Der Spiegel sees a major problem and claims that the state of the Bundeswehr’s equipment is “disastrous.” This is despite the fact that the defence minister has, more than any other member of the government, distanced herself from the policy of “military restraint” advocated previously by all post-World War II German governments, including, in recent years, that led by current Chancellor Angela Merkel and former Foreign Minister Guido Westerwelle.  At the Munich Security Conference in January, von der Leyen made it clear that indifference was “not an option for a country like Germany.” Faced with possible genocide, she declared, Germany was “almost doomed to take on more responsibility.”

“But how will that work with the Bundeswehr?” asks Der Spiegel.

German troops are not ready for the new situation, either in terms of personnel or equipment, the magazine writes. It cites a number of major problems, including the military’s “dilapidated equipment.”

Remarkably, Der Spiegel begins its critical survey with the Luftwaffe (Air Force), which is of particular importance for a powerful imperialist intervention force. The magazine quotes a “confidential report” by the Luftwaffe to the Defence Ministry indicating that “almost the entire German Euro Fighter fleet is lame.” The report concludes that the Luftwaffe needs “a major repair operation.” In large diagrams, the reader is confronted with the “dramatic situation” in relation to combat aircraft and transport planes. Of 109 Euro Fighter jets in the inventory of the Bundeswehr, only eight are fully operational, Der Spiegel writes, a particularly “awkward” problem for the government because it has promised to send up to six of these planes to the Baltic States beginning next week. There, the planes are to monitor the airspace in the Russian border region. In the logistics sector too, the situation is disastrous, the magazine writes. Of 67 CH-53 transport helicopters, only seven are currently airworthy, while just five of 33 NH90 machines are operational. There is a severe shortage of spare parts and qualified mechanics. The army is also under enormous pressure, according to Der Spiegel. The prescribed interval of 20 months between foreign missions is often not maintained, leaving many soldiers exhausted.

This is mainly due to a lack of new recruits. Despite an annual budget of 30 million euros for advertising, the Bundeswehr is unattractive, especially for qualified specialists. “Too few young men and women feel the urge to take up poorly paid positions in the army,” says the magazine.

In particular, at the level of noncommissioned officer and in the Navy there are no junior staff entering the ranks. Der Spiegel cites the ending of conscription in 2011 as the reason. Since then, the Bundeswehr has sought 60,000 new recruits every year and spent millions on advertising. Without saying it openly, the Spiegel authors suggest that the simplest solution would be to reintroduce conscription. In any event, the defence budget must be urgently increased. Otherwise, the announcement of a more active German role in international crisis zones remains empty talk, the magazine writes. It complains that developments are currently going in the opposite direction. This year, the defence budget decreased by 400 million euros to 32.8 billion, and is slated to shrink further to 32.1 billion in 2016. By international standards, Germany’s military spending as a percentage of gross domestic product (GDP) is relatively low. Even little Denmark spends proportionately more, the magazine writes scornfully. The NATO summit in Cardiff, which starts next weekend, will set a minimum baseline for military expenditure at two percent of GDP. Germany’s current defence budget stands at 1.29 percent. Implementing the new standard will mean increasing spending on the Bundeswehr every year by about 18 billion euros.

Der Spiegel is using the NATO summit to put the defence minister under pressure from the right, claiming that von der Leyen is shirking the debate over defence spending because Merkel’s highest fiscal priority is a balanced budget. Der Spiegel’s demand for increased military spending means imposing further austerity measures and cuts in social spending to finance the army.

Since the open turn to great power politics and militarism earlier this year, the government has made it clear it is willing to assert its foreign policy interests with military force. In Ukraine in February, it orchestrated a coup together with the US that brought to power in Kiev an anti-Russian regime resting on fascists and anti-Semites. Now it is using the ISIS offensive in Iraq to intervene in the Middle East.

This offensive is accompanied by a media propaganda barrage that aims to intimidate and silence opponents of war. Der Spiegel is playing a leading role in this war propaganda. A few weeks ago, it appeared with the headline: “Stop Putin now!” This was widely understood as a call for war against Russia.

Despite this media campaign, and despite the fact that all of the parliamentary parties support the war course, the government has not succeeded in breaking through the widespread antiwar sentiment in the population. An increase in military spending—especially under conditions of the debt ceiling—will now be associated directly with harsh social cuts. In sections of the ruling class, fears are growing that the current government may not be able to impose such cuts against the resistance of the working class.

The lead article in the same edition of Der Spiegel hints at this concern. It notes that Germany is maintaining the number at work at a record high, the social welfare and tax coffers are full, and the country is not piling up new debts. “We are super-optimists,” it declares. But, it worries, today’s prosperity stems from the Agenda 2010 “reforms,” and one must wonder what new reforms are needed to sustain this situation for another ten years.

“What is necessary is a political stock-taking,” writes Der Spiegel. The election campaign, which mainly revolved around avoiding further burdens, is now almost a year past. “It is time that the government broaden its horizons and that of the country beyond the current well-being.” Der Spiegel calls for a new round of drastic austerity measures, which must be imposed even in the face of resistance from the working class.  Here it becomes clear that the call for increased military spending and better equipment for the army is directed against the German population. The recent events in the working-class town of Ferguson in the US have shown how quickly social protest can develop. When workers and young people responded in Ferguson with demonstrations to the murder of Michael Brown by the police, the ruling class placed the city under virtual martial law and imposed a state of emergency. The German government is preparing similarly scenarios. For several years, special Bundeswehr units have been established that are designed exclusively for use domestically. The so-called “Regional Security and Support Forces” (RSUKr) consist of reservists who are responsible for “homeland security” in direct cooperation with active Bundeswehr units. Their “ability spectrum” includes “security tasks” and the intervention in “disasters” and “severe accidents.” The Bundeswehr web site states: “Here, the soldiers of the RSUKr benefit greatly from their local knowledge, since the units have been widely established throughout Germany.”

In July 2012, the German Supreme Court ruled in favour of the deployment of the Bundeswehr at home. Since November last year, the RSUKr units have achieved a nominal strength of about 3,200 men and are fully established and active.

There is another gloomy assessment of the world's jobs market On Tuesday. The International Labour Organisation, the World Bank, and the Organisation for Economic Co-operation and Development (OECD) have produced a labour market update for the G20 employment and labour ministers' meeting in Melbourne.

It highlights "large employment gaps remain in most G20 countries", the grouping of the world's biggest developed and emerging market economies. The authors also say that "the quality of employment remains a concern" and that "the deep global financial and economic crisis and slow recovery in many G20 countries has resulted not only in higher unemployment but also in slow and fragile wage gains for G20 workers." The paper concludes: "Seven years after the onset of the global financial and economic crisis, the economic recovery may be strengthening but remains weak and fragile. The employment challenges across most G20 countries are still very sizeable both in terms of a persistently large jobs gap and low quality of many available jobs."The current growth trajectory, if unchanged, will not create enough quality jobs – giving rise to the risk that the jobs gap will remain substantial, underemployment and informal employment will rise, and sluggish growth in wages and incomes will continue to place downward pressure on consumption, living standards and global aggregate demand. Underlining these challenges is the fact that income inequality continues to widen across the G20 countries. "The G20 commitment to boost GDP by more than 2% by 2018 over and above the baseline projections is certainly a welcome step, although it will be important to ensure that this additional growth is job-rich and inclusive"....Of course the report is gloomy - and if the present way of sharing out work is to persist it can only get gloomier. Automation is creeping through every aspect of our lives, gone way beyond the industries now and the amount of work left for humans dwindles by the day.It pays businesses to get rid of people wherever they can - people are its greatest expense. They are now commodities to be plugged in then cast aside as the profit/loss account dictates. Unless someone thinks up something soon to share out what remains of human work, the whole edifice will collapse. People unemployed? No money to spend? - No one to buy the outpourings of these factories; to buy services etc. No wonder the rich are worried about the "stagnant" economy.

Spain AND THE REST OF THE CHRISTIAN COUNTRIES are about as close to recovery as a the most drowned of drowned rats. Germany's relatively low growth number will probably beg the question of it sustaining its internal budget commitments & its real problem is the low demand from its ring fenced client base know as the EU/EZ at least for the foreseeable future. France & Italy second & third economies by size of the EZ & stuck within the currency have lost one solution to their problems the use of an independent currency.....so the slide continues. To make matters even worse Chinese demand slow...The UK is the first economy to resemeble the economies of 2007 ... do you remember spiralling house prices... high consumer debt? ...Sound familiar...Have a go at Spain and the Eurozone economies if you like but the reality is it's still the UK's bigggest market even if readers of this paper don't want to hear it, .....look it up ...UK manufacturing down in August because the Eurozone itself is down. The idea that the UK will be sole European supplier to India and China is just a fantasy anyway, and all that stuff about the Commonwealth ha ha ha..... . The best thing you can do is hope the Eurozone does better and that the rats don't drown....The idea that Spain is the latest poster child of Euro austerity working its magic, is risible. Has it moved the 1million unsold properties onto the side of the balance sheet marked 'items it is best to forget about'? Are the thousands last count 30,000 this year alone (though how any one knows the number puzzles me) of Spanish youths coming to the UK to find paying work, an indication that things are going well in Spain, thanks to the Euro? I am also intrigued to know what Germany will do with the Target 2 liability it has built up thanks to the Euro inter country trades. The last time I looked it was standing at €800 billion, but hey what is a few billion between friends? Just ask the Greeks for their unbiased opinion. They have experience of welcoming deep pocket friends round. The last time Angela M dropped by, they placed 7000 armed troops on the streets of Athens to ensure she arrived safely.The Euro, the religion, sorry I mean currency of peace, not very convincing is it? If you have to say it, the chances are the facts deny what you are saying. Best not to look too closely at Ukraine these days. More Baroness Ashton anyone....iN CONCLISION :

The country is dead on its feet.... It may have made a slight recovery from the depths of the recession....

But the banks are still wallowing in a cesspit of bad debt from the housing boom... They are still holding loads of property on the books. The only thing keeping the country afloat is that the banks stuffed their bailouts into the government....

Its not pretty over there High unemployment and bad banks.. The recovery over there is similar to the UK one... It ignores a lot of the rubbish and focuses on the good things... In the UK its property.. In Spain its better exports.

Brussels has called into question whether the French government’s economic plan can bring the country’s deficit back into line with tough EU budget rules, suggesting Paris must make further cuts in welfare and healthcare spending to achieve compliance.

The recommendations form part of the European Commission’s annual review of EU national budget plans ... (The report) notes that “sizeable short-term savings cannot be achieved” unless France significantly cuts increases in social security spending. It also says healthcare and pension costs must be cut further, noting reforms adopted in December still left France’s pension programme in deficit. So the EU controls and approves the budgets of member states, even the most mighty ones. And France at least has representation in Brussels. And at least Brussels checks the budgets of all members. And the euro zone has many members so it is much less asymmetrical (in distribution of power and risk) than the pound currency union would be. On the other hand, iScotland will have NO representation in Westminster, and will have a currency union with one, ten times larger, very dominant neighbour.

What would the Scottish yes supporters say if in the future Westminster demanded that due to the pound currency union, iScotland has to make additional cuts to welfare, health care, pensions? I suspect they would say all those things which they are saying about Westminster now. And of course, it is ridiculous to even imagine that Westminster would reciprocally send the rUK's budget for approval to Holyrood. So, you see, such a currency union would be a one-way street, with Westminster ruling over iScotland. Yet, this is what the SNP want, and they claim that this is 'independence'.

With the escalating Ukrainian crisis towards the top of the agenda at this week’s NATO summit in Wales, a group of former American intelligence workers is urging the alliance to be careful before crafting a response. Sixty foreign leaders and dozens of diplomats and defense officials from around the globe will convene at the event this week and are expected to approve a plan that calls for assembling a 4,000-strong “spearhead” force to counter “Russia's aggressive behavior,” NATO Secretary-General Anders Fogh Rasmussen said on Monday, in the wake of the release of satellite images purported to show the advancement of at least 1,000 Russian troops and artillery into eastern Ukraine.  But on the eve of the first major NATO meeting since 2012, a coalition composed of seven former United States intelligence officers is asking the alliance to recall the 2003 invasion of Iraq before authorizing any military action.   According to the group, Veteran Intelligence Professionals for Sanity, the evidence produced by NATO from the Ukrainian-Russian border is on par with the “same dubious, politically ‘fixed’ kind used 12 years ago to ‘justify’ the US-led attack on Iraq.”   “We saw no credible evidence of weapons of mass destruction in Iraq then; we see no credible evidence of a Russian invasion now,” reads an excerpt from the memo signed by the VIPS steering group — a coalition composed of former National Security Agency analyst William Binney, retired CIA analyst Ray McGovern, retired US Army Colonel Ann Wright and others — published online over the weekend and addressed to German Chancellor Angela Merkel.   “Photos can be worth a thousand words; they can also deceive. We have considerable experience collecting, analyzing and reporting on all kinds of satellite and other imagery, as well as other kinds of intelligence. Suffice it to say that the images released by NATO on August 28 provide a very flimsy basis on which to charge Russia with invading Ukraine,” the group added.   Samantha Power, the US ambassador to the United Nations, begged to differ, however. Upon release of the satellite images last week, the UN group held an emergency meeting on Thursday, the likes of which Power said marked the twenty-fourth time the Security Council hosted a meeting “to try to rein in Russia’s aggressive acts in Ukraine.”    “Every single one of those sessions has sent a straight-forward, unified message: Russia, stop this conflict. Russia is not listening,” Power added. “We said it when Russia flagrantly violated international law in occupying Crimea. We said it after the shocking downing of Malaysian Airlines flight 17, which took the lives of innocent men, women, children and infants from 11 countries. And we say it today, as Russia’s soldiers, tanks, air defense and artillery support and fight alongside separatists as they open a new front in a crisis manufactured in and fueled by Russia.”   Power’s sentiments were countered by Russia’s UN representative, Vitaly Churkin, who said, “Russian volunteers in eastern parts of Ukraine” are involved in the conflict, but not the Kremlin.

The White House expressed support for Poroshenko's "efforts to achieve a peaceful resolution to the conflict", and pinned the blame for the conflict on Putin, condemning Russia's "flagrant violation of Ukraine's sovereignty".

Nato has ruled out intervening in Ukraine with troops or equipment and pressure from the West has come mainly through sanctions.

Poroshenko caught Nato officials off-guard with the disclosure. He did not name the country involved but only a relatively small number of countries, such as the US, Poland or even Britain, have both the necessary equipment and the sympathy for the Ukrainian cause.

Such weapons are desperately needed by Ukraine because it is confronting an estimated 100 tanks and it does not have the kind of anti-tank weapons that can be fired at distance.

The number of Russian troops were said by Ukraine to be in the thousands rather than just 1,000, suggesting an escalation rather than de-escalation. Such an assessment by Poroshenko casts serious doubts over the prospect of a deal in Minsk.

Nato, at the end of the two-day summit, is to issue a strongly-worded document condemning Russian actions in the Ukraine, declaring Moscow to be in breach of international agreements. There have been disagreements over the wording with the US, Britain and Poland seeking tough language and Germany seeking to water it down.

European Union ambassadors meeting in Brussels agreed that restrictions imposed on Russian state-owned banks will be extended to state-owned defence and energy firms. The US and Britain pushed for the sanctions to go ahead in spite of the ceasefire but other countries were more hesitant.