Bharat Rakshak

Political crises in the Middle East and North Africa since 2011 have either produced extreme violence or caused countries to dissolve into civil war. The territorial settlement that followed the defeat of the Ottomans in 1918 is collapsing, but there is no clear sign of what will replace it, other than conflicts which nobody knows how to end.

Bad though this is, the world has got used to instability in the Middle East and North Africa, almost as if it were a natural phenomenon like earthquakes in Japan or hurricanes in the Caribbean. Seven wars are being fought in Muslim countries between Pakistan and north-east Nigeria. In Europe, on the contrary, 70 years of almost continuous peace since 1945 have convinced its people that this is the natural order of things which will continue despite hiccups in atypical places such as Greece and Ukraine.

But peace in Europe has been very much the exception over the past 1,500 years and there is no God-given guarantee it will continue. The golden age of European integration may have ended as long ago as 2008 when the financial crash began to divide eurozone members into winners and losers. In the same year, the easy dominance of the Western powers established after the collapse of the Soviet Union in 1991 began to look less absolute when Russia invaded Georgia.

The justification for European integration goes back much earlier, to the period after the Second World War. Moves towards European unity always involved more than the creation of an economic mutual benefit society promoting liberal capitalism and democracy. Since its distant beginnings in the Franco-German Coal and Steel Community of 1950, the greatest success of pan-European institutions has been to contain and satisfy an over-mighty Germany through institutions and mechanisms working to its advantage as well as that of other European states.

It is a formula that has worked so well for so long that Europeans, including the Germans, have forgotten that the stabilisation of Europe after two calamitous world wars was never inevitable. The European Union (EU) succeeded because it transmuted German superiority in terms of wealth and power – the great European problem of the first half of the 20th century – into a more benign and acceptable form. Germany could exercise its greater political and military strength, but also operate through a more integrated Europe in which all benefited.

It is this balance of interests that is changing. The Greek crisis ushers in a new and unstable balance of power in Europe. Germany is again exercising power unilaterally by imposing deeply resented terms of capitulation on Greece. Wolfgang Schauble, the German finance minister, even suggested that Greece might temporarily leave the eurozone.

The eurozone has immediately become a less attractive entity for many of its members. If the Germans give total priority to their own interests then so will others. Nationalism will revive as state policy and as a sensible way of interacting with the world. The ability of European leaders to cope effectively with fissured and potentially unstable parts of the continent, such as the Balkans and Ukraine, is reduced. The factors that fuelled the struggles for power in Europe between 1914 and 1945 will begin to seem relevant once again.

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Such apocalyptic visions of the future have seldom proved out of place in the Middle East. On the contrary, I have found when writing about the region that, if one’s predictions of disaster turn out to be exaggerated in the short term, they turn out to have been grossly understated when calamity finally strikes. In 2011, I did not expect Iraq, Syria and Libya to have a happy future, but I never foresaw the mass slaughter that ensued or the rise of a power as monstrous as Isis.

Parallels between Europe and the Middle East are never exact, but familiarity with the turmoil in the latter does open one’s mind to the terrifying speed with which states and societies can collapse into division and violence. After 70 years of peace, this is something that European politicians and officials lack experience of dealing with. Speaking to such people – usually intelligent, well-meaning and at some levels well-informed – about the problems of the Middle East, I sense their instincts and background are all against believing that things can be as bad as I describe.

It is this dangerous tunnel vision, which can be worse than stupidity, that has turned the Greek crisis into something closer to a catastrophe. A striking feature of events in Greece over the last seven years is that there has been little violence. But the Greeks now find that their views, peacefully expressed in a general election in January and a referendum in July, are treated with contempt by Germany and its allies. EU leaders ignore the danger that some Greeks, having exhausted democratic means of dissent and with no legal alternative but tame surrender, will decide that the bomb and the gun are the only way to have an impact. Given that foreign tutelage means nothing but misery, it is bound to be resisted in one way or another.

David Cameron in Libya after Gaddafi's fall (Getty) David Cameron in Libya after Gaddafi's fall (Getty)
Already, the Greek crisis has tarnished the EU’s image as a community that brings peace and prosperity. It is becoming a weaker and less stabilising force in the Balkans because the lure of EU membership is less attractive than before. Equally, enthusiasm for helping Ukraine in its confrontation with Russia has ebbed fast and is much less forthright.

Germany is not alone in acting as sorcerer’s apprentice and stirring up demons better left in peace. Remember how in 2011, David Cameron and Nicolas Sarkozy made a self-congratulatory visit to Benghazi after taking a leading role in overthrowing Muammar Gaddafi. It is worth looking at video of a beaming Cameron on that triumphal day, evidently without an inkling that, by displacing Gaddafi, Nato had delivered Libyans to warlords and gunmen.

Cameron has never paid any political price for his role in destabilising Libya, despite the fact that the Tunisian who murdered 30 British tourists at Sousse was trained in an Isis camp there. Likewise, few make a connection between Nato’s actions in Libya in 2011 and the flood of migrants from North and West Africa, some formerly holding well-paid jobs on Libyan construction sites, who now risk and often lose their lives sailing for Europe in overcrowded boats and rubber rafts from Libyan beaches.

The real significance of the Greek crisis for Europe is about political power rather than economic relations. The Duke of Wellington said that “a great country can have no such thing as a small war”. The United States learned the truth of this maxim in Iraq after its invasion of 2003, and its influence in the world has never recovered. What the Duke said of wars is equally true of political crises. Whatever the fate of the Greeks, Germany and the eurozone leaders have done themselves lasting political damage in pursuit of a minor economic objective.

Farmers block the A6 motorway with tractors, farm trailers and tyres at the northern entrance to Lyon, one of the key arteries to southern regions.
Monday 27 July 2015 02.47 BST

French farmers blocked roads from Spain and Germany on Sunday to stop foreign products entering the country, the latest protest against a fall in food prices that has brought them to the brink of bankruptcy.

Farmers in the north-eastern Alsace region used tractors to obstruct six routes from Germany in a bid to stop trucks crossing the Rhine carrying agricultural goods, in a blockage that is expected to last until at least Monday afternoon.

“We let the cars and everything that comes from France pass,” Franck Sander, president of the local branch of the powerful FDSEA union said, adding that more than a thousand agricultural workers were taking part in the roadblocks.

A dozen trucks have been forced to turn back at the border since the blockage started at about 10pm (8pm GMT) on Sunday night, according to a union official.

French tobacconists dump four tonnes of carrots on street in cigarette protest

Meanwhile, about 100 farmers ransacked dozens of trucks from Spain on a highway in the south-western Haute-Garonne region, threatening to unload any meat or fruit destined for the French market.

They used 10 tractors to block the A645 motorway, not far from the Spanish border, causing traffic jams that stretched up to four kilometres (2.5 miles), Guillaume Darrouy, secretary general of the Young Farmers of Haute-Garonne, told AFP.

The action comes after a week that has seen farmers block cities, roads and tourist sites across France in protest at falling food prices, which they blame on foreign competition, as well as supermarkets and distributors.

Farmers have dumped manure in cities, blocked access roads and motorways and hindered tourists from reaching Mont St-Michel in northern France, one of the country’s most visited sites.

chaos as Channel tunnel shuts amid French ferry workers strike

Fearful of France’s powerful agricultural lobby, the government on Wednesday unveiled an emergency package worth €600m ($660m) in tax relief and loan guarantees, but the aid has done little to stop the unrest.

“The measures announced by the government ... none of them deal with the distortion of competition” with farmers from other countries, said Sander, saying French farmers face higher labour costs and quality standards.

A combination of factors, including changing dietary habits, slowing Chinese demand and a Russian embargo on western products over Ukraine, has pushed down prices for staples like beef, pork and milk.
Paris has estimated that about 10% of farms in France – approximately 22,000 operations – are on the brink of bankruptcy with a combined debt of €1bn.

Europe's Greatest Cover-Up Could Mean The Death Of The Euro
By Harry Dent of Economy & Markets
Thursday, July 23, 2015

It’s kind of like selling goods to consumers with very bad credit and then being surprised when they don’t pay.

But before I get into that, we all know Greece owes Germany, the ECB, and the IMF a lot of money.

Last week I explained that if they went the "Grexit" route, 75% of Greece’s government debt would’ve been wiped clean. That’s $90 billion to Germany alone and about $250 billion to the rest of the euro zone. It would have hurt, but there’s no avoiding pain at this point, and now it’s only going to be worse.

But there is another level of debt almost no one is talking about.

In fact, we have a harder time getting good information on it because the EU has increasingly hidden it.

However, this debt gets at the heart of why Germany and some of the strongest opponents to a Grexit were so desperate to keep Greece in the euro zone.

This not-much-talked-about debt are the TARGET2 loans Greece (and other euro zone importers) owes the rest of them.

It’s a fancy way of saying "past due accounts receivables." Another way of saying this: “The check’s in the mail." Or: “We’ll pay you when we can."

Fat chance.

The idea is that when German or other euro zone companies sell goods to Greek companies, the Greek companies hand off their payment obligations to the Greece central bank. That central bank then owes Germany’s central bank, which then pays the German companies who sold the goods in the first place.

The problem is that the southern European countries – PIIGS, or Portugal, Italy, Greece, and Spain plus Ireland – import a ton. When Germany sells to Greece, Greece’s central banks collects the money, but doesn’t pay the German central banks. These are called TARGET2 loans.

They’re not really "loans" in the sense that they are involuntary. The German central bank knows that if it pushes too hard for these payments on time, exports will slow or discontinue without such credit extension. It’s either extend credit to these subprime borrowers or lose the sales!

It’s such a huge issue because these economically weaker nations aren’t competitive exporters. They can’t afford these outrageous trade deficits they’re wracking up! They have run increasing trade deficits ever since the euro was created. The currency lets them borrow at a cheaper rate. And the stronger exporting countries are willing to extend credit to keep their gravy train going.

Under this backwards arrangement, Greece owes Germany 100 billion euros, or roughly $109 billion. The broader euro zone – almost totally the PIIGS – owes it 531 billion. That’s almost $580 billion.

This is the most contentious example, but the Netherlands, Luxembourg and Finland are extending credit to these weaker central banks too – though nowhere near the extent of Germany, which holds around 75% of these TARGET2 loans.

The following chart shows the TARGET2 balances across the euro zone. Blue is the extended credit from the four major net exporters. Red is what the five net importers owe them.

TARGET 2 Balances Exporters and Importers

Before I even get into this, just take the chart at face value. Look at all that credit. It’s disgusting. We didn’t have this kind of foolishness prior to 2008. Now we live in an age where credit is king. Real value is supposed to be king. Cash is supposed to be king. Not credit. This nonsense has got to stop.

The edge of this graph shows the current balance for all TARGET2 loans: 709 billion euros ($774 billion). It actually peaked at 1.06 TRILLION euros in late 2012. Come on!

This gets at why Germany wasn’t in a hurry to let Greece leave the euro zone. And in fact, why it finally insisted they stay.

In government debt, Greece owes Germany 90 billion euros.

If Greece had exited, Germany would have had to write-off that amount overtime. The short-term affects for Germany would have been manageable.

But in addition to the government debt, Greece owes Germany another 100 billion in TARGET 2 loans. That would’ve been written off immediately. That’s much more painful and embarrassing to voters near term – which is the realm politicians live in.

That means Germany could see 190 billion euros – or $200 billion – in default if Greece exited. That’s much more than any other country by far.

To put this in more perspective, Germany’s GDP is about 2.9 trillion euros. 46% of that, or 1.3 trillion euros, is from exports. About 63% of that, or around 840 billion, goes to the euro zone. Exports are paramount to its aging economy that would otherwise already be slowing dramatically longer term!

That means the 531 billion in TARGET2 balances from the euro zone equals 63% of its exports, which means the payments are eight months late.

Any accountant worth his salt would lose his mind if account receivables were just three months late!

This is one of Europe’s dirtiest secrets.

To keep exports going to countries that can’t afford it, the central banks of the exporting nations have to extend high credit to the central banks of the weaker importing nations.

That way the stronger countries import more than they frankly should and the weaker nations live well beyond their means. This is the very imbalance that the euro has created since its inception in 1999.

Talk about denial.
Talk about not addressing the underlying problem.
Talk about kicking the can down the road!

This system won’t last. The euro won’t last. Watch out below in the months and years ahead when it finally cracks, or at best is restructured into a strong and weak version of the currency.

As bad as things will get in the U.S., there’s one bright spot: Thank god we’re not Europe. We will still be the best house in a very bad neighborhood ahead.

“The English, to this day, argue that they liberated Greece and saved it from communism,” he says. “But that is the basic problem. They never liberated Greece. Greece had been liberated by the resistance, groups across the spectrum, not just EAM, on 12 October. I was there, on the streets – people were everywhere shouting: ‘Freedom!’ we cried, Laokratia! – ‘Power to the People!’”[/quote]

XcptL Long feature,must read.

Britain’s logic was brutal and perfidious: Prime minister Winston Churchill considered the influence of the Communist Party within the resistance movement he had backed throughout the war – the National Liberation Front, EAM – to have grown stronger than he had calculated, sufficient to jeopardise his plan to return the Greek king to power and keep Communism at bay. So he switched allegiances to back the supporters of Hitler against his own erstwhile allies.

This was the day, those 70 years ago this week, when the British army, still at war with Germany, opened fire upon – and gave locals who had collaborated with the Nazis the guns to fire upon – a civilian crowd demonstrating in support of the partisans with whom Britain had been allied for three years.

The crowd carried Greek, American, British and Soviet flags, and chanted: “Viva Churchill, Viva Roosevelt, Viva Stalin’” in endorsement of the wartime alliance.

Twenty-eight civilians, mostly young boys and girls, were killed and hundreds injured. “We had all thought it would be a demonstration like any other,” Patríkios recalls. “Business as usual. Nobody expected a bloodbath.”

Before the war, Greece was ruled by a royalist dictatorship whose emblem of a fascist axe and crown well expressed its dichotomy once war began: the dictator, General Ioannis Metaxas, had been trained as an army officer in Imperial Germany, while Greek King George II – an uncle of Prince Philip, Duke of Edinburgh – was attached to Britain. The Greek left, meanwhile, had been reinforced by a huge influx of politicised refugees and liberal intellectuals from Asia Minor, who crammed into the slums of Pireaus and working-class Athens.

Both dictator and king were fervently anti-communist, and Metaxas banned the Communist Party, KKE, interning and torturing its members, supporters and anyone who did not accept “the national ideology” in camps and prisons, or sending them into internal exile. Once war started, Metaxas refused to accept Mussolini’s ultimatum to surrender and pledged his loyalty to the Anglo-Greek alliance. The Greeks fought valiantly and defeated the Italians, but could not resist the Wehrmacht. By the end of April 1941, the Axis forces imposed a harsh occupation of the country. The Greeks – at first spontaneously, later in organised groups – resisted.

But, noted the British Special Operations Executive (SOE): “The right wing and monarchists were slower than their opponents in deciding to resist the occupation, and were therefore of little use.”

Britain’s natural allies were therefore EAM – an alliance of left wing and agrarian parties of which the KKE was dominant, but by no means the entirety – and its partisan military arm, ELAS.

There is no overstating the horror of occupation. Professor Mark Mazower’s book Inside Hitler’s Greece describes hideous bloccos or “round-ups” – whereby crowds would be corralled into the streets so that masked informers could point out ELAS supporters to the Gestapo and Security Battalions – which had been established by the collaborationist government to assist the Nazis – for execution. Stripping and violation of women was a common means to secure “confessions”. Mass executions took place “on the German model”: in public, for purposes of intimidation; bodies would be left hanging from trees, guarded by Security Battalion collaborators to prevent their removal. In response, ELAS mounted daily counterattacks on the Germans and their quislings. The partisan movement was born in Athens but based in the villages, so that Greece was progressively liberated from the countryside. The SOE played its part, famous in military annals for the role of Brigadier Eddie Myers and “Monty” Woodhouse in blowing up the Gorgopotomas viaduct in 1942 and other operations with the partisans – andartes in Greek.

By autumn 1944, Greece had been devastated by occupation and famine. Half a million people had died – 7% of the population. ELAS had, however, liberated dozens of villages and become a proto-government, administering parts of the country while the official state withered away. But after German withdrawal, ELAS kept its 50,000 armed partisans outside the capital, and in May 1944 agreed to the arrival of British troops, and to place its men under the officer commanding, Lt Gen Ronald Scobie.

ramana wrote:Philip, Harry Dent is a very perceptive market watcher.
He was key person bringing out the demographics/population changes impact.

JE Menon wrote:^^Not sure but I think the point he's making is that if Greek exits, that $100 bn would have to be written off. Not so light on the economy, that kind of sum.

Greece’s biggest creditor Germany has made a huge profit on the country’s debt crisis over the last 5 years as it saved through lower interest payments on funds borrowed amid investor "flights to safety."

Each time investors got bad news about Greece, they rushed to the ‘safe haven’ of Germany, with the interest rates on German government bonds falling, according to the study from the private, non-profit Leibniz Institute of Economic Research, Agence France-Presse reported Monday.

The estimated €100 billion Germany had saved since 2010 accounted for over three percent of its GDP, the report said.

"These savings exceed the costs of the crisis - even if Greece were to default on its entire debt," the study said.

The bonds of countries such as the United States, France and the Netherlands had benefited "to a much smaller extent."

READ MORE: 'Grexit’ better option for Athens’ debt relief- German finance minister

Germany’s Finance Minister Wolfgang Schaeuble who has always been against writing off the Greek debt pointed to his own government's balanced budget.

The balanced budget, however, was possible mainly as a result of Germany's interest savings through the Greek crisis, the study claimed.

Schauble has repeatedly said the Greek debt of €316 billion cannot be restructured within the eurozone. He claimed Grexit [Greece’s exit from the Eurozone-Ed] might be a solution for the country’s debt ‘haircut.’

READ MORE: Athens, creditors close to final accord on €86bn bailout – media
While Greek and EU officials say Athens and the creditors are close to the final agreement on the third €86 billion rescue, Berlin continues hindering the process. Last week, the creditors urged for more reforms from Athens, arguing that another two-or three-week bridging loan was better than hurriedly striking a three-year deal. Germany’s proposed option of a €5-billion bridging loan to give negotiators more time is still on the table.

The multibillion deal is expected to be reached by the August 20 deadline, when Greece has a €3.2-billion debt repayment due to the European Central Bank (ECB).

ramana wrote:Philip, Harry Dent is a very perceptive market watcher.
He was key person bringing out the demographics/population changes impact.

Berlusconi's world of sleaze: The astonishing lifestyle that brought down Italy's former PM
Liking sleazy sex was embarrassing. But trying to cover up the presence of an underage sex worker at his 'bunga bunga' parties was deadly serious. Michael Day, author of a new book on Berlusconi, explains how Italy's ex-PM lost the plot
Michael Day Author Biography

Thursday 20 August 2015

On the night of 27 May 2010, a 17-year-old exotic nightclub dancer, nome d'arte Ruby the Heart Stealer, left police custody in Milan after the then prime minister Silvio Berlusconi had called surprised officials to say that Ruby, née Karima El Mahroug, should be released because she was none other than the granddaughter of the Egyptian president. "If she's the granddaughter of Mubarak, then I'm Queen Nefertiti," scoffed Milan's juvenile-crime magistrate Annamaria Fiorillo. But before she was able to take charge, the belly-dancing runaway, held for suspected theft, was released into the care of one of the premier's associates. The magistrate's interest was understandably piqued and the probe that became the Rubygate affair began.

El Mahroug was not born in the upper echelons of Egyptian society, but to a poor family in Morocco. When she was nine, they moved to Messina, in Sicily. At 14, she fled what she said was an unhappy home, where she suffered beatings from her strictly Islamic father. After she'd run away, her existence seemed to be a depressing and unrelenting participation in the flesh trade. But by the time she'd worked her charms on Italy's most powerful man, she would be a very rich woman indeed.

After leaving home, a pattern of short stays with strangers followed until September 2009, when, still only 16, she participated in a beauty contest near Messina. In the jury was none other than Berlusconi's "talent spotter", the newsreader Emilio Fede, who said he was moved by her story and longed to help her. And not long after that, she moved to Milan. Many reports say she was already selling sex then; she certainly never appeared short of cash. And when she was mugged in the Corso Buenos Aires district in 2010, officers who recovered her stolen handbag reported it contained the equivalent of $3,200 (probably a handout from the prime minister). However, it was an accusation of theft against El Mahroug that brought the whole squalid theatre of the "bunga bunga" parties into the open.

Katia Pasquino, a young woman who'd put El Mahroug up for a few weeks, claimed the young Moroccan had stolen €3,000 ($2,100) from her apartment. And at around 6pm on 27 May, two weeks after the alleged theft, she spotted her by chance and called the police. El Mahroug finished up at the city's main police station, where arresting officer Ermes Cafaro received instructions from Fiorillo to take her to a safe unit for juveniles. But then, out of the blue at 11.49pm, Berlusconi, who was in Paris, called. The prime minister spoke to the duty officer, told him about the Egyptian President, and said he would send around one of his associates, Nicole Minetti, to collect her. (He called her his "ministerial adviser" – a title he'd made up on the spot.)

Minetti had been a go-go dancer, but retrained as a hygienist – the mogul had spotted her talents while she was tending his gums – and she was his chief madam. Appropriately, she was accompanied at the jailbreak by a Brazilian prostitute, Michelle Conceicao, who then took El Mahroug for safekeeping to a dingy flat in Milan's canal district. A week later, the police were called again when the young Moroccan needed hospital treatment after a fight with her hostess.

A dancer at a bunga bunga party A dancer at a bunga bunga party (Getty)
Milan's magistrates were becoming ever more curious about the young runaway and, above all, her links to the prime minister. (It couldn't have helped that the seedy, bankrupt impresario Lele Mora, who'd often benefited from Berlusconi's generosity, offered to adopt her.) Why were Berlusconi and his minions showing such a keen interest in this 17-year-old belly dancer? The answer wasn't long in coming. In fact, the merda hit the fan just a few months later, at the end of October, with a tide of eye-popping newspaper reports. And by May 2011, Berlusconi found himself on trial at Milan's Palace of Justice, not for the usual white-collar crimes – but this time charged with paying for sex with a minor and abuse of office for having attempted to cover it up.

Magistrates estimate El Mahroug pocketed hundreds of thousands of dollars, possibly millions, in jewels and cash from Berlusconi. He has always denied the charges and insists any evenings that El Mahroug attended were in fact "elegant" dinners. Participants say they weren't even edible. Whichever, this time Berlusconi must have known he really was in big trouble. Investigators were already hot on the trail, thanks to a series of illuminating interviews with El Mahroug over the summer of 2010, when she told prosecutors that the prime minister regularly held X-rated soirées at his principal home, Villa San Martino, in Arcore, just outside Milan. She also introduced them to the exotic phrase "bunga bunga", which they learnt referred to a sort of extreme lap-dancing competition with added groping, in which the lucky winner or winners got to sleep with Berlusconi.

Interviewed in August, she described what she said was her first dinner at Arcore, on 14 February 2010, when Fede sent a limo for her: "That evening Berlusconi explained to me that bunga bunga consisted of a harem that he copied from his friend Gaddafi [the former Libyan dictator], in which the girls take their clothes off and have to provide physical pleasures."

El Mahroug was never going to be the most reliable witness. But police wire taps confirmed the existence of bunga bunga. And other young female participants furnished astonished magistrates with the salacious details – such as nude girls dancing around a giant phallus while chanting Berlusconi's self-aggrandising theme tune, "Meno Male Che Silvio C'e" ("Thank Goodness for Silvio").

People protest against Silvio Berlusconi in Rome People protest against Silvio Berlusconi in Rome (Getty)
Some guests – the ones who liked the sound of the cash and a job on TV, but didn't really know what they were letting themselves in for – left in a hurry. One described Berlusconi's Arcore villa as a "whorehouse". But it was a whorehouse with a difference: there was usually only one customer. As news of the investigation leaked to the papers, Milan's chief prosecutor called in Berlusconi's old foe, magistrate Ilda Boccassini, the anti-Mafia specialist, to lead the case. Small and olive-skinned, with fiery red hair and a temper to match, the 65-year-old prosecutor is famous for her methodical approach and has a reputation for toughness that led some Italian crime reporters to dub her "The Terminator". In the Rubygate case, she pushed for wire taps on everything and everyone possible, insisted the investigation remain hush-hush for as long as possible – and swiftly established one of the principal lies told by Ruby. The young woman said she'd been to Arcore on just three occasions; in fact, she had slept there 15 times, beginning around February 2010.

With sufficient evidence that felonies had been committed, magistrates began bugging the phones of key protagonists, and the deliriously absurd and tawdry details continued to flow freely into the newspapers. Of the scores of young women who had partied at Arcore, a large group came to be known as the Olgettine – after their place of abode, Via Olgettina in the Milano 2 development. (Berlusconi was housing his harem in the apartments that had made his name and his fortune.) The gossip magazine Oggi listed 130 young ladies, including El Mahroug, who were on call to satisfy the mogul's lust and ego.

The events around El Mahroug's arrest and her interviews with the authorities must have set alarm bells ringing for Berlusconi, but he was having too much fun to stop. On 22 August, Fede brought to Arcore two new and beautiful young women, Ambra Battilana and Chiara Danese, whom he had wooed with promises of jobs as meteorine (the girls who presented the weather reports on his TG4 news show). And the account they gave to magistrates of their evening at the mogul's mansion provided some of the most eye-opening and probably most credible witness statements:

Ambra: Berlusconi kept looking at Chiara and me. He dedicated songs in French and Italian to us. But the worst was yet to come. Fifteen minutes after we'd sat down, some of the girls uncovered their breasts, offering them to Berlusconi so he could kiss them. They also touched the prime minister's intimate parts and made him touch theirs. While this was happening, the girls were still singing "Thank Goodness for Silvio" and calling the prime minister "Papi", and Berlusconi called all of us "my little girls".

The former Italian Prime Minister speaks to supporters at a rally outside his house in Rome in 2013 The former Italian Prime Minister speaks to supporters at a rally outside his house in Rome in 2013 (Getty)
Chiara: After the umpteenth obscene joke, Berlusconi brings in a statue, it's in a kind of case, and from it emerges a little man with a huge penis. Berlusconi begins passing it around the girls, and he asks them to kiss the penis… The girls, visibly happy, start to approach the prime minister, they make him kiss their breasts and they touch him… At a certain point, the prime minister, visibly content, asks: "Are you ready for bunga bunga?" The girls shout together: "Yessss!!!"

[Berlusconi took the startled guests for a tour of his pleasure dome; the young women noticed that the walls were adorned with placards reading "Long live Silvio" before they entered the disco room, equipped, as any reasonably upgraded 17th-century villa would be, with a pole-dancing platform. Berlusconi, the perfect host, remained close behind Ambra and Chiara, patting their buttocks.]

Building up their courage to leave, Battilana and Danese said to Fede: "We really want to go."

Read more: Berlusconi prostitute 'wants to make film about tryst'
Berlusconi given three years in prison for bribing a senator
Berlusconi faces more questions over 'Ruby the Heart Stealer'
Berlusconi bows out of politics - but promises to appoint 'heir'
Berlusconi's new Instagram page is every teenage girl's dream profile
Berlusconi plans asset sale as he eyes up another return to power

He gave it to them straight: "If you want to go, fine. But don't think you'll be a meteorina or Miss Italia." They left anyway. And before long the world heard how the Arcore soirées proceeded after the bunga bunga stage – not that it was difficult to guess. Interviews spoke of young guests vomiting, and women arguing and fighting to win Berlusconi's lucrative affections. Prosecutors recorded one female guest describing the after-effects of an orgy: "There were 20-year-old girls there who were worn out, dead."

Inevitably, Berlusconi claimed that left-wing investigators were orchestrating a plot against him. His supporters accused prosecutors and the prime minister's critics of interfering in his private life and moralising when they had no right. But Berlusconi must have known that revelations about his dissolute private life meant his two-decade war with magistrates was entering dark new territory. And, unlike the tax fraud and bribery allegations against him, this case didn't involve complex, decades-old accounting trails spread over several continents. It was recent, clamorous – and there was no chance of the charges being killed by the statute of limitations.

El Mahroug denied from the outset, and continues to deny, that she ever had sex with the prime minister. But she would present the defence with a particular problem if called to the stand. The mogul's lawyers wanted the court to believe the young woman's declaration that she and Berlusconi had never had sex. At the same time, the defence wanted the court to disbelieve El Mahroug's description of rampant sexual activity at the bunga bunga parties because, due to a key legal technicality, the prosecution could win a conviction on the sex-with-a-minor charge simply by showing that El Mahroug had been present and in the thick of things at the tycoon's bacchanalia.

Karima El Mahroug speaks to the media outside a Milan courthouse Karima El Mahroug speaks to the media outside a Milan courthouse (Getty)
The prosecution, on the other hand, failed to find the smoking gun – or the DNA-stained dress – to demonstrate beyond doubt that Berlusconi had had sex with El Mahroug. Another question was whether the prosecution could show that Berlusconi knew she was under age. (Failure could mean an acquittal.) However, they had the mogul dead to rights on the abuse-of-office charge. Or so it seemed. The mogul's roller-coaster ride still had some surprises in store.

In October 2010 a comico-tragic video turned up on the website of Oggi magazine showing another "talent scout" and impresario – Lele Mora – in action. In the clip, scantily clad young women assemble at an address in Milan, before Mora drives them in his Mercedes to Arcore, straight through the gates of the then prime minister's residence, without so much as a word – let alone a security check – from police guarding the entrance. In addition to the legal and ethical questions over Berlusconi's lifestyle, this raised another and possibly more serious issue: what kind of risks was this leader of a G7 nation exposing himself and his country to?

What on earth was he doing? The phrase uttered on their separation by Berlusconi's wife Veronica Lario comes to mind: Berlusconi is not well. And it wasn't only his critics who began to say so. In April 2011, three months after he had actually been indicted for Rubygate, two allies were recorded discussing the Berlusconi's psychological state – and his fitness for running the country. Flavio Briatore, the Formula One racing tycoon, was on the phone to the right-wing Berlusconi ultra-loyalist and PDL parliamentarian Daniela Santanche. Briatore told her that Lele Mora had just informed him the prime minister's bunga bunga nights were still going strong.

As Piero Colaprico, La Repubblica's chronicler of the Rubygate affair, noted, Berlusconi at the time wasn't a superman: he was a 74-year-old survivor of prostate cancer who had a heart problem. Having handed out €12m (£8.5m) in cash to his party friends in the space of 12 months, he seemed less like Valentino and more like Europe's richest charity case. But the pathetic figure he cut wasn't the only thing weighing on his friends' minds. To everyone but the distracted and deluded leader of Italy, it was clear the economic collapse that began in the US in 2008 meant that a financial storm was coming, the like of which Italy – and the rest of Europe – had never seen. "If I were in his [Berlusconi's] position, I wouldn't be able to sleep at night," said Briatore.

"But not because of the whores. I wouldn't be able to sleep because of the state that Italy is in."

This is an edited extract from 'Being Berlusconi: The Rise & Fall from Cosa Nostra to Bunga Bunga' (Palgrave Macmillan), which is published on Monday

"I will shortly meet with the president of the republic and present my resignation and that of my government," Tsipras said in a live televised address to the nation.

"I want to submit to the Greek people everything I have done (since taking office in January) so that they can decide once more," Tsipras said.

The move leaves Greece in the hands of a caretaker government until the vote.

Tsipras's announcement came after debt-crippled Greece paid a huge debt to the ECB on Thursday, effectively starting its third mammoth bailout, expected to cost as much as 86 billion euros ($96 billion) over the next three years.

It is the latest gamble by the charismatic young premier, who successfully persuaded Greeks to reject tough reforms in a referendum last month, only to adopt them at a eurozone summit a week later.

The European Commission, one of the creditor institutions overseeing the new rescue package, earlier welcomed reports of a snap election in Greece, saying it would politically bolster the just launched bailout, the country's third in five years.

"Swift elections in Greece can be a way to broaden support for ESM stability support programme just signed by Prime Minister Tsipras on behalf of Greece," tweeted Martin Selmayr, chief of staff to commission head Jean-Claude Juncker, referring to the EU

Outgoing Prime Minister Alexis Tsipras signaled on Wednesday he would accept an easing of Greece's huge debt burden if he wins elections expected next month without any of the write-offs he has long demanded.

Tsipras, who hopes to return to power with an absolute majority, told Alpha TV that he favored longer repayment periods and lower interest rates on the debt, now that Greece has secured a new 86 billion euro ($98 billion) bailout.

But in the interview, he made no mention of writing off any debt - a campaign promise when he was elected in January that Germany, the biggest contributor to Greece's three bailouts since 2010, opposes.

With his radical left Syriza party split over the latest bailout, Tsipras heaped praise on his finance minister, Euclid Tsakalotos, and rejected the possibility that his ally may not even run in the election.

President Prokopis Pavlopoulos is expected to call the election on Friday, probably for Sept. 20, an official at the presidency told Reuters. This follows Tsipras's resignation last week when he lost his parliamentary majority due to a rebellion in Syriza ranks over the bailout's demands.

With Greece facing financial collapse and an exit from the euro zone, Tsipras caved in to the zone and IMF earlier this month by accepting their demands for yet more austerity and painful economic reforms - the very policies he had promised to reverse when he won power.

Tsipras has long argued Greece cannot repay all its debt and needs part of it canceled to return to long-term economic growth after a depression, a view shared by many mainstream economists and possibly even the International Monetary Fund.

But on Wednesday he appeared to change tack on debt write-offs, raising only the scenario of "an elongation of maturities and a lowering of the interest rates".

"We will have what economists call fiscal space to repay the debt. This would be the first step for us to return to the markets and regain their trust, if of course simultaneously we have managed to return to positive rates of growth," he said.

While Syriza wants an outright majority - something it narrowly missed in January - the strength of its support is unclear due to a lack of surveys by leading pollsters in the past month when much has changed. Last week, 25 out of Syriza's 149 lawmakers walked out to form a new anti-bailout party.


FINANCE MINISTER "WILL RUN"

The defection has done nothing to heal the rift in Syriza. Many of the 43 lawmakers who refused to back the bailout in parliament remain in the party, at least for the time being.

But more seriously, there are also misgivings among members of Syriza's mainstream "53+" faction, including lawmakers who reluctantly backed the bailout for the sake of the party and the nation.

These include Tsakalotos, the British-educated economist who clinched the deal, and former government spokesman Gabriel Sakellaridis, members of the faction said. "Neither Tsakalotos nor Sakellaridis have yet made clear whether they will run in the upcoming election," a member of the faction told Reuters.

Tsipras signaled he had won them over, saying both would run for Syriza. "Euclid Tsakalotos has done a marvelous job and it's true that if he wasn't for him, we wouldn't have achieved a deal," he said.

This warmth contrasted to the scorn he poured on his previous finance minister, Yanis Varoufakis, who became a cult figure among anti-austerity campaigners across Europe for attacking the euro zone establishment.

Tsipras recalled one session of particularly tough negotiations in June - just before he closed Greek banks for three weeks to save them from collapse - with IMF chief Christine Lagarde, European Central Bank head Mario Draghi and European Commission President Jean-Claude Juncker.

"Varoufakis was talking but nobody paid any attention to him. They had switched off, they didn't listen to what he was saying," said Tsipras. "He had lost his credibility."

Tsakalotos has won the trust of his fellow euro zone finance ministers despite his left-wing views. But he has yet to confirm his candidacy in the election.

Under the Greek political system, Tsakalotos could still serve in a future government even if he is not a member of parliament. But if he failed to run for Syriza, this would be a blow to Tsipras who needs the "53+" faction if he is to hold the party together, win the election and implement the bailout program.

President Pavlopoulos has asked a conservative and the leader of the new anti-bailout party to try to form a new government but the former has already failed and the latter is due to give up formally on Thursday.

The official at the presidency stressed that the timetable could still change, but Pavlopoulos intended to appoint a caretaker premier, Supreme Court judge Vassiliki Thanou, on Friday and call the election. Thanou would become Greece's first female prime minister, but only until a new government is formed.


(additional reporting by Angeliki Koutantou and Greg Roumeliotis; writing by David Stamp; editing by Gareth Jones and Philippa Fletcher)

The kingdom has faced criticism over its response to the crisis
Adam Withnall Author Biography

Friday 11 September 2015

Saudi Arabia has reportedly responded to the growing number of people fleeing the Middle East for western Europe – by offering to build 200 mosques in Germany.

Syria’s richer Gulf neighbours have been accused of not doing their fair share in the humanitarian crisis, with Bahrain, Kuwait, Qatar, Oman and the UAE also keeping their doors firmly shut to asylum-seekers.

According to the Frankfurter Allgemeine Zeitung, which quoted a report in the Lebanese newspaper Al Diyar, Saudi Arabia would build one mosque for every 100 refugees who entered Germany in extraordinary numbers last weekend.

It would be unfair to suggest that the Gulf Arab states have done nothing to help the estimated four million Syrians who have fled their country since the start of the conflict in 2011.

Just this week, the al Hayat newspaper reported that 500,000 Syrians had found homes in Saudi Arabia since the civil war began – as workers, not refugees.

There have also been significant contributions from rich individuals towards the upkeep of refugee camps round the Syrian border, estimated by the BBC to total around $900 million (£600 million).

But amid a history of competition between the Gulf states and Iranian-allied nations, there is a deep fear that allowing an influx of Syrian refugees could also let in Syrians loyal to Bashar al-Assad.

There also exists a more general concern about demographic change, leaving the states opposed to the idea of welcoming refugees. In the UAE, foreign nationals already outnumber citizens by more than five to one.

Back in Germany, Angela Merkel welcomed two refugee families at a home for asylum-seekers in the Berlin suburb of Spandau on Thursday.

She told reporters after the visit: “Their integration will certainly take place in part via the children, who will learn German very quickly in kindergarten. And I hope and believe that the great majority will want to learn our language very quickly.”

Whether she will welcome Saudi Arabia’s reported offer, which Al Diyar noted would “have to go through the federal authorities”, remains to be seen.