Greece’s private investor deal is ‘one step away’ at more than 70%+ haircut

*Finance Minister Evangelos Venizelos on Tuesday*

They’re still debating the “private investor involvement” (PTI+) plan in Greece over how big a loss private investors will have to take “voluntarily” when Greece defaults. According to Finance Minister Evangelos Venizelos on Tuesday, a final deal is only just a “formal step away,” and private investors will lose more than 70% of their original investments. “We are talking about a greater PSI than originally foreseen in July. We are talking about a 50 percent cut on the nominal value, and a loss on the net present value (NPV) of more than 70 percent.” Venizelos says that no decision had yet been made on whether the European Central Bank will take any losses on its €50 billion in Greek bonds. Whatever deal is made, it must be completed by February 13, according to Venizelos. Kathimerini

Europe considers a huge new 1.5 trillion euro debt bubble

At every stage of the financial crisis that began in 2007, governments around the world have responded with huge new increases in public debt. Remember the debate of President Bush’s $60 billion stimulus bill? Now, with Europe on the ropes from the financial crisis, the Europeans are considering a huge new debt bubble — a €1.5 trillion bailout fund ($1.969 billion) that could be used to bail out various countries as they approach default. The money will be contributed from three sources: €500 billion from the European Financial Stability Facility (EFSF), which is a temporary backstop; €500 billion from the European Stability Mechanism (ESM), which is the shiny new backstop scheduled to be in place later this year; and €500 billion from the International Monetary Fund (IMF). However, the U.S. would not participate. Der Spiegel

Pakistan: more than 60 killed in fighting between military and Taliban

A continuing war between Pakistan’s military and the Pakistan Taliban has surged in the past few days in the mountainous regions of the Kurram tribal area, the tribal region that’s closest to Kabul in Afghanistan. A battle started a week ago when government troops seized a crucial mountaintop, killing six soldiers and 20 insurgents, according to a government spokesman. The militants counterattacked on Tuesday, resulting in the deaths of 10 troops and 30 insurgents. The military launched an offensive in Kurram in July 2011 and declared victory about a month later, but violence has continued. The military has launched a series of operations against the Pakistani Taliban in the past few years, and has often declared victory only to see fighting flare up again. AP

President Obama admits to drone strikes in Pakistan

On Monday, President Barack Obama said publicly, for the first time, that U.S. drone aircraft have struck Taliban and al-Qaeda targets in Pakistan’s Federally Administered Tribal Areas (FATA):

“a lot of these strikes have been in the FATA, and going after al Qaeda suspects who are up in very tough terrain on the border between Afghanistan and Pakistan. For us to be able to get them in another way would involve probably a lot more intrusive military actions than the one we’re already engaging in.

This is a targeted, focused effort at people who are on a list of active terrorists who are trying to go in and harm Americans, hit American facilities and bases, and so on.

[The drones have] not caused a huge number of civilian casualties, [and it’s] important for everybody to understand that this thing is kept on a very tight leash.”

Pakistan’s foreign ministry spokesman Abdul Basit made a brief statement in response:

“We are of the firm view that these are unlawful, counterproductive and hence unacceptable. Our view has always been very clear and position principled.”

The use of drone strikes by America, as well as Pakistan’s tacit cooperation with the use of drones, have been open secrets since the program was begin in 2004. AFP and Geo TV (Pakistan)

Russia says it will veto Arab League resolution on Syria

*U.N. Security Council*

Morocco, the only current Arab member of the U.N. Security Council, presented the Arab League resolution to end the “killing machine” of the Bashar al-Assad regime in Syria. Assad’s ally Russia has said repeatedly that they will veto such a resolution when it is presented. The Russians sell weapons to Syria and have their only Mideast naval base in Tartus in Syria, and they will not risk losing these things. Russians have been calling the resolution a path to civil war. In an interview on Australian television on Monday, Russia’s foreign minister Sergei Lavrov repeatedly referred to last year’s Security Council resolution that permitted a no-fly zone over Libya. Russia abstained on that resolution, and considers the result to have something of a disaster. Here are excerpts from the interview:

SERGEI LAVROV: Russia would not support anything which would be actually imposed on Syrians. …

The international community unfortunately did take sides in Libya and we would never allow the Security Council to authorise anything similar to what happened in Libya. Yes, we condemn strongly the use of force by government forces against civilians, but we can condemn in the same strong way the activities of the armed extremist groups who attack government positions, who attack administration in various provinces of Syria. …

It’s impossible to … when you say that government forces must leave towns, but at the same time you watch BBC, you watch CNN and you see that parts of those towns are taken by the armed opposition, are you realistically expecting that any government in this situation would leave the city and leave it to the armed groups? I don’t think so. …

Lavrov compares the Arab League to the African Union:

We would not pre-judge the outcome, whether this would involve the president of Syria living, or whether there would be some other solution, we went through this in Libya when the African Union – the organization of 50-some countries, to which Libya belongs – introduced a plan under which the fate of Gaddafi would’ve been decided at the end of the negotiating process as part of the overall package.

It was rejected because some countries outside the African Union said no, no, no, Gaddafi must go before anything else happens, and then we had what we did. The African Union was humiliated, because to throw away an initiative which was aimed at peacefully resolving the crisis just because somebody had some very personal animosities was a mistake, and if we’re going to repeat this in Syria, well, we cannot help it if some people insist on doing something bad. …

EMMA ALBERICI: I guess the UN wants to apply more pressure. Perhaps an arms embargo.

SERGEI LAVROV: The arms embargo? You know that the arms embargo was introduced on Libya, you know? And after that, people were bragging that arms were supplied openly. The French Minister of Defence said that yes we were sending arms to the rebels.

You know the hypocrisy is not something which the Security Council should be engaged in. …

Lavrov was asked about arms sales to Syria:

EMMA ALBERICI: Is Russia still selling arms to the Syrian regime?

SERGEI LAVROV: Yes, of course. We sell in some contracts and it must be implemented like treaties. The deliveries were done this year.

EMMA ALBERICI: You’re arming one side of the fight?

SERGEI LAVROV: No, we are arming the constitutional government, which we don’t approve of what it is doing, using force against demonstrators, but the arms …

EMMA ALBERICI: But you are picking sides?

SERGEI LAVROV: No, no, no, we’re not picking sides. We are implementing our commercial contractual obligations. The arms we are selling to Syria, they are not used against demonstrators. Those are arms to protect Syria and to ensure Syrian defence. …

SERGEI LAVROV: I know that Britain and the United States and others ship arms in the Middle East, 10 or maybe 100 times more than the Russian does

EMMA ALBERICI: You say they’re hypocrites?

SERGEI LAVROV: I said hypocrisy is not something the Security Council should be engaged in. Look, you said 18 minutes, right? …

Lavrov warns that the resolution could lead to a regional war:

SERGEI LAVROV: I’m concerned about another thing. I am concerned at what is going on in Syria, what is going on in the region. Some people take in the context of isolating Iran. And if this happens, I mean if this logic prevails, then unfortunately, we will be witnessing a much bigger drama.

What is going on is an attempt to change the balance in the Muslim world. And the rift between Sunni and Shia is absolutely evident. And it is of direct relevance to what is going on in Syria, to what is going on around Iran, to what is going on in Iraq.

Don’t forget about the Kurds, the Kurds in Syria, Kurds in Iraq, Kurds in Turkey.

The people who are obsessed with removing regimes in the region, they should be really thinking about the broader picture. And I’m afraid that if this vigour to change regimes persists, we are going to witness a very bad situation much, much, much broader than just Syria, Libya, Egypt or any other single country.

The unending and worsening violence in Syria is extremely embarrassing to Russia. Some analysts suggest that Russia might abstain on the resolution, in order to register its opposition, while allowing it to pass. However, abstaining from the vote on the draft resolution might be seen as tacitly supporting not only military intervention in Syria — which recently bought around $550m in Russian arms — but also Assad’s removal. Then they might lose their base at Tartus. Al-Jazeera and Australian Broadcasting – Lateline