Germany to arm Kurdish forces fighting Islamic State in Iraq

The German government has announced it will supply 70 million euros worth of high-end military equipment to Kurdish forces fighting Islamic State militants in Iraq. The move is a major shift in Germany's post-WWII ethos.

Deutsche Welle, 31 Aug 2014

The German government announced on Sunday evening it would send anti-tank missiles and machine guns to Kurdish fighters battling Islamic State (IS) extremists in northern Iraq.

The German Defense Ministry said the arms, as well as protective gear and communications equipment, would be enough to supply 4,000 Kurdish Peshmerga fighters.

The delivery will take place over three shipments to start at the end of September. It will include 8,000 German-made G36 assault rifles and ammunition, 30 MILAN anti-tank systems, and five heavily armored Dingo infantry vehicles.

Berlin will also send 50 million euros ($65.6 million) in humanitarian aid to the region.

German Defense Minister Ursula von der Leyen (above right) made the announcement in Berlin alongside Foreign Minister Frank-Walter Steinmeier (above left), who said Germany must help in the fight against the Islamic State (IS).

"The situation in Iraq is extremely critical," von der Leyen said, accusing IS of "merciless brutality."

The IS has made significant territorial gains in recent months as part of a quest to establish a "caliphate" in northern Iraq and Syria. Chancellor Angela Merkel recently labeled the group's actions as "genocide."

Major shift

The move breaks Germany's long-standing reluctance to join military operations overseas, in part due to the military aggression from the Nazis last century and the consequent deep sense of pacifism in the country.

"This is the most difficult decision that I have had to make in my career," said German Economics Minister Sigmar Gabriel, who is also the vice chancellor Merkel's ruling coalition.

Merkel has repeatedly ruled out sending ground troops to Iraq.

Lawmakers in Germany's parliament, the Bundestag, are set to vote on the government's decision on Monday. Merkel's conservative Christian Democrat-led political bloc and its left-leaning Social Democrat (SPD) coalition partner, led by Gabriel, plan to back the move.

Germany has to help those displaced by the advance of the IS in the region.

jr/hc (dpa, AFP)

Related Articles:

Merkel: weapons to Iraq are a 'chance' to stop terrorists
Merkel speaks of 'genocide' by 'IS,' as Germany readies arms

Speculations on the Reval, Ascension and the Removal of the Dark – Part 1/2 (Golden Age of Gaia, Steve Beckow, August 9, 2014)

"... ISIS/ISIL

Let me begin by repeating a part of a reading I had with Archangel Michael on July 11, 2014:

S: What is holding up the Reval now?

AAM: ISIS.

S: ISIS! Are they real?

AAM: Yes, they are real.

S: Is it not a CIA creation?

AAM: No. It is a grassroots organization. It is disgruntled ex-military.

S: Oh. Will they be able to hold it up for a long time?

AAM: No. Their goal is to create stability but it is stability at the price of great pain.

S: Yes, indeed.

AAM: There is no conscience. They believe that they act for Allah and to establish a Muslim state. But they are doing so through great violence.

Now this is part of what the Mother referred to as great chaos coming to the forefront. Will they be able to hold it up indefinitely? No. But the difficulty is that, with this Revaluation, if they were given even more money, that they would use it to buy very dangerous weapons.

S: Right. Does that mean that they’ll be able to hold it up indefinitely?

AAM: No. Not necessarily. [Next statement removed by request.]

S: But it won’t be in July.

AAM: It is more likely to be closer to September.

S: Any progress with the Dragons?

AAM: Oh, yes. There has been a great deal of progress with the Dragons. They are primed and ready to go but they are also not willing to allow a terrorist organization, regardless of their mission and purpose, as human as that is, to take that money and harm human beings.” (1)

Keep in mind what he said as we now turn to look at a news story that concerns ISIS or ISIL (they’re the same). ..."

Continue to read .. 

IMF board confident in Lagarde despite investigation

The executive board of the International Monetary Fund has expressed its support for Managing Director Christine Lagarde. This came after a French court placed Lagarde under formal investigation in a corruption case.

Deutsche Welle, 30 Aug 2014

A statement released by the 24-member panel on Friday said that it continued to have confidence in Lagarde despite the judicial proceedings in France.

"The Executive Board has been briefed on recent developments related to this matter, and continues to express its confidence in the managing director's ability to effectively carry out her duties," the statement said.

The board declined further comment on the case against Lagarde.

"As we have said before, it would not be appropriate to comment on a case that has been and is currently before the French judiciary," the statement added.

A court in Paris placed Lagarde under formal investigation earlier in the week on allegations of "negligence" in a case dating back to 2008, when she was France's finance minister.

Lagarde described the prosecutor's case against her as being "completely without merit" after facing questions from magistrates in Paris on Wednesday. In a statement, Lagarde said that after three years of investigation the court had found no evidence of wrongdoing and that the only allegation against her was "that I was not sufficiently vigilant."

She also said she intended to appeal the court decision and that she was returning to Washington to get on with her duties at the IMF.

2008 arbitration ruling

The allegation of negligence is related to an arbitration ruling in 2008 in which French businessman Bernard Tapie was awarded 400 million euros ($537 million). This came after Tapie had sued the partly state-owned bank Credit Lyonnais for its handling of the sale of his majority stake in Adidas in the mid-1990s. Lagarde had referred the dispute to an arbitration panel, which ruled in favor of Tapie.

Under French law, being placed under formal investigation is approximately equivalent to facing a preliminary charge, and judges can later decide whether to issue a formal charge and send the case to trial or drop the case.

pfd/crh (AFP, AP)

UEFA's Platini will not challenge Blatter for FIFA presidency

UEFA president Michel Platini has said he will not challenge FIFA president Sepp Blatter for the football world body's top position. However, Platini did call on Blatter to step down when his term ends in 2015.

Deutsche Welle, 28 Aug 2014

French football legend Michel Platini said Thursday he would concentrate on a new term as head of Europe's governing body instead of challenging Blatter for FIFA's presidency.

"This is not the time, it is not my time. Not yet," Platini, 59, told reporters.

"I thought long and hard, but never managed to convince myself during these months of reflection that I had to go to FIFA for these elections. It's as simple as that. Once again, I have chosen to follow my heart. I have chosen football. I have chosen passion."

German Football Association (DFB) president Wolfgang Niersbach said he found Platini's decision "understandable."

"The alternative would have been an exhausting, long election campaign which would have caused a lot of agitation in the football world," Niersbach added.

Good for football?

Platini's decision means Blatter, 78, will likely secure a fifth four-year term at the helm of FIFA in an election that is due to take place next May. Platini did say, however, that he told Blatter personally that he thinks FIFA "needs a breath of fresh air" and that he should step down.

"My debate was UEFA or FIFA. I still have respect for Blatter but he should give up his place," he said.

Blatter announced in June that he would run for another term despite initially planning to step down in 2015. The news was met by harsh opposition from European football chiefs.

Blatter's announcement also came amid corruption allegations against the organization, most recently over Qatar's nomination as 2022 hosts.

The only candidate to face Blatter so far is former FIFA deputy secretary general, Jerome Champagne. However, he has acknowledged that he has little chance of beating Blatter.

hc/tj (AFP, dpa)

Merkel speaks of 'genocide' by 'IS,' as Germany readies arms

Chancellor Angela Merkel has said that the actions of the "Islamic State" in Iraq can be called "genocide." The German government is about to break its own rules on sending weapons to conflict zones in response.

Deutsche Welle, 27 Aug 2014

In an interview with her Christian Democrats' online video channel, CDU.tv, Chancellor Angela Merkel on Wednesday found unusually strong words to describe the actions of the self-proclaimed "Islamic State" (IS) group in Iraq.

Angela Merkel said that the "awful" treatment of minority groups and non-Sunni Muslims by "IS" was such that, "one can speak of a genocide."

Merkel said that was why "above all else we have first offered humanitarian aid" for the north of Iraq, before gradually leading towards one of the main points of debate in Berlin in recent weeks: the sending of military equipment - and probably some weaponry as well - to a conflict zone. Ordinarily, the German government opposes this as a point of principle, but Berlin is set to make an exception in northern Iraq.

German aid deliveries to the Kurdish
region of Iraq began last month

"Considering the atrocities, the barbarism happening there, I think that it is justified for us to say that - to a limited extent - we will also help with weapons deliveries," Merkel said on her Christian Democrats' CDU.tv online channel. "What exactly? That will be decided in the coming days, and the Bundestag [the lower house of German parliament] will debate this at the beginning of next week."

Exceptional measures

"We should be helping with certain supplies, according to our capabilities, so they can fight and prevent ISIS from taking over the whole region and creating a caliphate," said German Foreign Minister Frank-Walter Steinmeier at a news conference during a visit to Prague on Wednesday.

"The German government has not reached a decision yet today but I believe that a decision should be made on Sunday on concretely what should be supplied," the German minister added. On Monday, parliament will debate the government decision, at the request of the opposition Green and Left parties, both avid opponents of weapons exports. Some members of Merkel's ruling coalition have also voiced concerns, mainly concerning the possibility of weapons ending up in the wrong hands.

Foreign Minister Steinmeier and Defense
 Minister von der Leyen will be part of the
team deciding what to send

The parliamentary debate would be primarily symbolic; all German arms exports must be approved by a special government panel, but not parliament. Domestic news agency dpa reported on Wednesday that the coaliltion was considering allowing a symbolic vote - sure to pass with ease - on the break from normal German policy.

Germany's decision to provide military aid to the Kurds has been seen by much of the German public to undermine the country's post-war ethos of not sending arms to conflict zones. In a poll conducted by German opinion poll company Forsa last week, 63 percent of Germans said they were against arming the Kurds.

Ethnic cleansing

Over recent months, IS has established control over territory it calls a "caliphate" across extensive areas of northern Iraq and Syria, where they have been accused of carrying out ethnic cleansing.

“They are systematically targeting men, women and children based on their ethnic, religious or sectarian affiliation and are ruthlessly carrying out widespread ethnic and religious cleansing in the areas under their control. Such persecution would amount to crimes against humanity,” said UN High Commissioner for Human Rights Navi Pillay on Sunday.

Several other countries have already provided the Kurdish forces with arms to fight against IS, including Canada, France and the United Kingdom. According to the president of the Iraqi Kurdistan Region, Massud Barsani, Iran was amongst the first countries to provide military aid.

ksb/msh (dpa, Reuters)

Related Articles:

'Recapture' of Mosul Dam from Isis a major step forward, says Obama

Speculations on the Reval, Ascension and the Removal of the Dark – Part 1/2 (Golden Age of Gaia, Steve Beckow, August 9, 2014)

"... ISIS/ISIL

Let me begin by repeating a part of a reading I had with Archangel Michael on July 11, 2014:

S: What is holding up the Reval now?

AAM: ISIS.

S: ISIS! Are they real?

AAM: Yes, they are real.

S: Is it not a CIA creation?

AAM: No. It is a grassroots organization. It is disgruntled ex-military.

S: Oh. Will they be able to hold it up for a long time?

AAM: No. Their goal is to create stability but it is stability at the price of great pain.

S: Yes, indeed.

AAM: There is no conscience. They believe that they act for Allah and to establish a Muslim state. But they are doing so through great violence.

Now this is part of what the Mother referred to as great chaos coming to the forefront. Will they be able to hold it up indefinitely? No. But the difficulty is that, with this Revaluation, if they were given even more money, that they would use it to buy very dangerous weapons.

S: Right. Does that mean that they’ll be able to hold it up indefinitely?

AAM: No. Not necessarily. [Next statement removed by request.]

S: But it won’t be in July.

AAM: It is more likely to be closer to September.

S: Any progress with the Dragons?

AAM: Oh, yes. There has been a great deal of progress with the Dragons. They are primed and ready to go but they are also not willing to allow a terrorist organization, regardless of their mission and purpose, as human as that is, to take that money and harm human beings.” (1)

Keep in mind what he said as we now turn to look at a news story that concerns ISIS or ISIL (they’re the same). ..."

Continue to read .. 

About 1,400 Rotherham children 'sexually exploited over 16-year period'

Report claims police and council agencies failed victims, some of whom were threatened with guns and gang-raped

• Rotherham abuse report: details and reaction - live coverage

theguardian.com, Press Association, Tuesday 26 August 2014

The report said around 1,400 child victims had been systematically failed by police
and agencies in Rotherham. Photograph: Alfonso Cacciola/Getty Images

About 1,400 children were sexually exploited in Rotherham over a 16-year period, according to a report that concluded "it is hard to describe the appalling nature of the abuse that child victims suffered".

The uncompromising report on events in the South Yorkshire town between 1997 and 2013 said in more than a third of these cases the youngsters were already known to child protection agencies.

Warning also of "blatant" collective failures by the council's leadership, the report by Professor Alexis Jay prompted the resignation of the council's Labour leader.

Roger Stone, the leader, said: "Having considered the report, I believe it is only right that I, as leader, take responsibility on behalf of the council for the historic failings that are described so clearly in the report and it is my intention to do so.

"For this reason, I have today agreed with my Labour group colleagues that I will be stepping down as leader with immediate effect."

Despite Stone's resignation, chief executive Martin Kimber said no council officers will face disciplinary action.

Jay said she found examples of "children who had been doused in petrol and threatened with being set alight, threatened with guns, made to witness violent rapes and threatened they would be next if they told anyone".

Jay said: "They were raped by multiple perpetrators, trafficked to other towns and cities in the north of England, abducted, beaten and intimidated." She said she found girls as young as 11 had been raped by large numbers of men.

The report said failures of the political and officer leadership of Rotherham council over the first 12 years she looked at were blatant, as the seriousness of the problem was underplayed by senior managers and was not seen as a priority by South Yorkshire police. Jay said police "regarded many child victims with contempt".

These failures occured despite three reports between 2002 and 2006 "which could not have been clearer in the description of the situation in Rotherham".

She said the first of these reports was "effectively suppressed" because senior officers did not believe the data. The other two were ignored, she added.

The report said: "By far the majority of perpetrators were described as Asian by victims." But, she said, councillors seemed to think is was a one-off problem they hoped would go away and "several staff described their nervousness about identifying the ethnic origins of perpetrators for fear of being thought racist".

She added: "Others remembered clear direction from their managers not to do so."

The spotlight first fell on Rotherham in 2010 when five men, described by a judge as sexual predators, were given lengthy jail terms after they were found guilty of grooming teenage girls for sex. The prosecution was the first of a series of high-profile cases in the past four years that have revealed the exploitation of young girls in towns and cities including Rochdale, Derby and Oxford.

Following the 2010 case, the Times claimed that details from 200 restricted-access documents showed how police and child protection agencies in the South Yorkshire town had extensive knowledge of these activities for a decade, yet a string of offences went unprosecuted.

The allegations led to a range of official investigations, including one by the home affairs select committee.

Last year, the South Yorkshire police and crime commissioner, Shaun Wright, said there had been "a failure of management" at South Yorkshire police as he responded to a report into the force on this issue by Her Majesty's Inspectorate of Constabulary (HMIC).

The report concluded: "No one knows the true scale of the child sexual exploitation (CSE) in Rotherham over the years. Our conservative estimate is that approximately 1,400 children were sexually exploited over the full inquiry period, from 1997 to 2013."

In response, Rotherham council, which commissioned the report, said it accepted the findings, including the statement that failures "almost without exception" were attributed to senior managers in child protection services, elected councillors and senior police officers.

It accepted that failures were not down to "frontline social or youth workers who are acknowledged in the report as repeatedly raising serious concerns about the nature and extent of this kind of child abuse".

The council's chief executive, Kimber, said: "The report does not make comfortable reading in its account of the horrific experiences of some young people in the past and I would like to reiterate our sincere apology to those who were let down when they needed help."

"The report confirms that our services have improved significantly over the last five years and are stronger today than ever before.

"This is important because it allows me to reassure young people and families that, should anyone raise concerns, we will take them seriously and provide them with the support they need.

"However, that must not overshadow – and certainly does not excuse – the finding that for a significant amount of time the council and its partners could and should have done more to protect young people from what must be one of the most horrific forms of abuse imaginable."

Related Article:

Rotherham abuse report: Shaun Wright quits Labour but not PCC role

Former papal diplomat could face trial outside Vatican

A former Polish archbishop and diplomat has appealed against his defrocking after a Vatican tribunal convicted him of pedophilia. Jozef Wesolowski faces further criminal proceedings in Vatican City and possibly beyond.

Deutsche Welle, 26 Aug 2014

The Vatican announced Monday the former archbishop 66-year-old Jozef Wesolowski, who had served as the Vatican's diplomat for the Dominican Republic and former Holy See ambassador, had appealed against his defrocking.

In June, he was reduced to the status of a layman after being stripped of his diplomatic title and defrocked after being found guilty of child sex abuse and deemed unfit to be a priest by a Vatican tribunal. He was the most senior Vatican figure to be punished for such a crime. His was the harshest penalty the Vatican tribunal could rule against a cleric under canon law.

He now faces a separate criminal trial in Vatican City state courts - the first of its kind there - for sexual abuse and could face up to 12 years in prison. As he no longer has diplomatic immunity, Wesolowski could also face charges in the Dominican Republic, where there is a criminal investigation against him on allegations he paid boys for sexual acts, or in his native country of Poland.

He was recalled from his post as nuncio,or ambassador, to the Dominican Republic last summer after rumors broke that he had abused teenage boys.

Criminal proceedings against him will continue after his appeal is heard in a few weeks' time and "as soon as the canonical sentence becomes definitive," said Vatican spokesman Father Federico Lombardi.

The action against the Wesolowski "demonstrates the full and direct undertaking of the Holy See's responsibility even in such a serious and delicate case," Lombardi said. He added that Pope Francis was following the case very closely and that he took sexual abuse in the church very seriously.

Last year, Pope Francis called the abuse of children by priests an "ugly crime" and likened it to a "Satanic mass."

sb/se (dpa, Reuters)

French President Hollande faces dilemma over economic reforms

The French government has resigned after infighting in the cabinet about the country's economy. Analysts say the move is also a signal aimed at France's European partners.

Deutsche Welle, 25 Aug 2014

French President Francois Hollande instructed Prime Minister Manuel Valls to form a new government by Tuesday - "a team that supports the objectives he has set out for the country," Hollande's office said in a statement.

Earlier, Valls had offered Hollande the resignation of a cabinet that was increasingly mired in disagreement after only five months in office. Economy Minister Arnaud Montebourg in particular, to the left of the ruling Socialists, has repeatedly and fiercely criticized the government's economic policies.

Rebellious 'frondeur'

Apparently, Montebourg's interview with Le Monde newspaper on Sunday was the last straw. "Europe is threatened by a recession," he told the paper, pointing out that there was no growth in the eurozone economies in the second quarter. "We have to give priority to getting out of the crisis and relegate to second place the dogmatic reduction of deficits, which is driving us to austerity and a continued rise in unemployment," Montebourg said.

The French unemployment rate stands at more than 10 percent - twice as high as in Germany.

Montebourg also blamed the German government for the persistent crisis in France and other states that share the common currency. "Germany is trapped in an austerity policy that it imposed across Europe," Montebourg said. It is not in France's interest, he added, to "conform to the ideological principles of Germany's conservatives."

Montebourg is one of the ruling Socialist Party's numerous 'frondeurs' - rebellious members that favor state investment programs but are opposed to continued reforms and austerity plans.

Montebourg said he and two other left-wing ministers would not seek roles in a new cabinet that Valls is scheduled to announce on Tuesday.

Signal to the party

Simply dismissing Montebourg would not have been enough, according to Claire Demesmay of the Berlin-based German Council on Foreign Relations. The government's resignation is a "signal to the entire Parti Socialiste and all of France's leftist parties," the think tank's head of the Franco-German Relations Program told DW. "It's also aimed at showing the European partners who is the boss in the government, and that they should continue to take France seriously."

Montebourg's criticism prompted Valls to offer the government's resignation

Just last week, President Hollande reaffirmed his reform goals, pointing out that poor economic data are no reason to deviate from the reform course. "On the contrary, we need to go faster and further," he told Le Monde. Hollande added that any "zig-zag" would "make our policy incomprehensible and would not produce results."

But many observers accuse Hollande of pursuing said "zig-zag" course. Hollande's economic policy, the Responsibility Pact, is mainly about cutting state expenditures and tax breaks for companies, Claire Demesmay explains. "So far, there haven't been any real, painful structural reforms at all."

Structural reforms would affect the labor market. In addition to higher social costs compared to Germany, France has greater job security, more unemployment benefits - and a 35-hour work week.

Agenda 2020

A growing number of French are calling for reforms to promote economic growth similar to those introduced by former German Chancellor Gerhard Schröder about ten years ago: Germany's Agenda 2010. "We need an Agenda 2020," French economist Alain Minc told German weekly Wirtschaftswoche. Whether such reforms could be implemented in France with its traditionally combative unions remains dubious.

President Hollande, whose popularity has reached a record low, would like to be active on both fronts: he wants to continue his reform course, but he would also like to stimulate growth with state investment programs.

He faces a dilemma that is almost impossible to solve, Claire Demesmay says.

Time frame

The President has to show his superiority, and that he can do as he sees fit, she says. "On the other hand, he has to abide by EU rules, he doesn't have a choice in that matter."

The eurozone's Stability and Growth Pact stipulates that governments must keep their budget deficits within the limits of three percent of GDP. Both France and Italy have repeatedly signaled they need more time to adhere to the regulation. But Germany's Finance Minister Wolfgang Schäuble, for one, is opposed to changing that rule: "You don't have to change the rules, you have to comply with them," he argued after a meeting of European Finance Ministers in June.

A spokesman for the German government on Monday declined to comment on the French government's resignation. "At the moment, that's a domestic French problem," he said.

Sense of urgency

This past weekend, European Central Bank (ECB) President Mario Draghi raised hopes for states that would prefer to combat the crisis with more money rather than austerity programs.

Speaking at a global central banking conference in Jackson Hole, Wyoming, Draghi said he was prepared to respond with all "available" tools should inflation drop further.

In that respect, it would be helpful if fiscal policies played a greater role, the head of the ECB said. In other words: the governments should start spending more money.

Tax fraud drains potential from Romanian economy: analysts

Yahoo – AFP, Mihaela Rodina, 24 Aug 2014

Vendors arrange their fruits and vegetables to be sold at a marketplace in

Bucharest August 20, 2014 (AFP Photo/Daniel Mihailescu)

Bucharest (AFP) - Tax evasion is eating away at the heart of Romania and holding back the country, among the poorest in the European Union, in its efforts to catch up, analysts warn.

The estimates for the costs of the so-called black or undeclared economy are huge: about one quarter of economic activity and one quarter of people in work are believed to be beyond the reach of tax inspectors.

If all activity were taxed fully, national tax revenues would almost double.

Fruits and vegetables for sale at a

marketplace in Bucharest August 20,

2014 (AFP Photo/Daniel Mihaikescu)

Undeclared activity exists across the 28 members of the European Union at a cost of at least 1,000 billion euros ($1,333 billion) per year, the European parliament estimates.

In some EU countries, the shadow economy accounts for a significant slice of activity, but the European parliament said that Bulgaria and Romania were the most severely affected.

This is despite campaigns by EU authorities to encourage governments of new members in eastern Europe to crack down on corruption and tax evasion.

Bulgaria is the poorest member of the EU, and Romania comes second.

A recent report by the Council of Europe's anti-money laundering committee said that in Romania, the shadow economy accounted for 28.4 percent of gross domestic product in 2013.

That represented about 40 billion euros ($53 billion) a year of uncollected taxes in an economy in which tax revenue amounts to about 46 billion euros.

"Tax evasion is on the rise in Romania and it poses a threat to its national security," economist Ionut Dumitru, head of the country's fiscal council, told AFP.

The revenue shortfall translates into dilapidated hospitals, patients unable to get treatment or schools lacking basic facilities.

"With revenues accounting for less than 33 percent of GDP, compared to an EU average of 45 percent, Romania will never have an education system as good as Germany's for instance," Dumitru said.

"And sacrificing a nation's education and health means sacrificing its future."

Sophisticated fraud schemes

From the underpaid mason working on the black market to the prosperous businessman benefiting from fraud, tax avoidance is omnipresent, prompting authorities to toughen their stance.

View galleryFruits and vegetables for sale at a marketplace in …

Fruits and vegetables for sale at a marketplace in Bucharest August 20, 2014 (AFP Photo/Daniel Mihai …

In 2013 a special anti-fraud body (DGAF), tasked with clamping down on criminal rings, was set up within the tax agency.

In one of the most spectacular cases uncovered by the DGAF, a network of 30 Turkish, Jordanian and Romanian nationals cheated the government out of 24 million euros in value added sales tax (VAT) dodging.

The alleged fraudsters set up a complex chain of 58 dummy companies to cover up their fraudulent operations selling 100 million euros' worth of fruit and vegetables on the Romanian market.

Twelve of them were arrested.

"Another major case concerned a network of 22 Romanian and Chinese nationals who created 15 companies selling household appliances without paying VAT," DGAF vice-president Romeo Nicolae told AFP.

The loss was estimated at 12 million euros.

Alina Bica, head of the prosecutor's office dealing with organised crime and terrorism, said that fraud schemes were becoming increasingly sophisticated.

"Doctored bookkeeping, fictitious companies active for 30 or 40 days before disappearing, concealed revenues from illegal transactions ... white-collar criminals find new ways to cheat," she said.

Bica added that 659 large-scale tax dodgers were put on trial in 2013, and frauds estimated to have cost more than 200 million euros were uncovered.

But sometimes tax evasion allegations tarnish the top of the law-enforcement system itself.

The former head of the tax agency Sorin Blejnar is facing trial in two cases for alleged complicity in tax evasion related to two criminal rings which defrauded the state of about 60 million euros.

One of the rings was headed by Radu and Diana Nemes, two Romanians who were extradited from the US in May this year.

The media said the couple owned a yacht, seven vehicles and hundreds of gold and silver coins which they left behind on their multi-million dollar property.

Working in the shadow economy

Tax dodging takes more mundane forms.

Experts say that undeclared labour accounts for two thirds of the shadow economy.

Fruits and vegetables for sale at a marketplace in Bucharest August 20, 2014

(AFP Photo/Daniel Mihailescu)

Mihai Iancu, 31, is a construction worker employed by a small company.

He earns about 380 euros ($504) a month, which is the average wage in Romania, but neither he nor his employer pays any labour taxes.

"I have no health insurance and if I am sacked I will get no unemployment benefit," he said.

Like him, about 1.45 million people, or 23 percent of Romania's workforce, were working in the shadow economy in 2012, the fiscal council said.

In construction, about 60 percent of employees are not declared.

Last year, in a bid to streamline its tax agency, Romania signed a deal with the World Bank on a 70-million euro loan which will be used mainly to set up an integrated IT system and on training tax inspectors.

Dumitru of the fiscal council said that Romania had to restore confidence to the tax system.

"When they see the deplorable state of social services people tend to say: why should I pay taxes when I get nothing in return."

Merkel calls for bilateral ceasefire between Ukraine and Russia

German Chancellor Angela Merkel has called for an agreed ceasefire from Russia and Ukraine at talks with Ukrainian President Petro Poroshenko in Kyiv. She said the territorial integrity of Ukraine was "essential."

Deutsche Welle, 23 Aug 2014

On her first visit to Ukraine since the crisis between Ukraine and Russia began early this year, Merkel called on Saturday for Moscow to engage in a peace plan with Kiev. She said success was not possible if only one side was interested in a diplomatic solution.

"There must be two sides to be successful. You cannot achieve peace on your own. I hope the talks with Russia will lead to success," said the German Chancellor.

"The plans are on the table...now actions must follow," said Merkel, adding that peace is possible in Ukraine but that a ceasefire, agreed with both sides, would be necessary.

Merkel, who has been spear heading efforts to resolve the crisis in Ukraine, said the lack of controls along the Ukraine-Russia border was the main obstacle standing in the way of a ceasefire between Ukraine forces and pro-Russian separatists.

"The significance of my visit is that the German government (believes) that the territorial integrity and well-being of Ukraine is essential," she added.

Poroshenko agreed that, "Ukraine along with our European partners and the whole world will do everything for this to happen but not at the expense of the sovereignty, territorial integrity and independence of Ukraine".

Western pressure

Germany has also been a major force behind the imposition of economic sanctions on Moscow, which many in the West suspect of supplying the rebels with weapons.

However, speaking in Kyiv on Saturday, Merkel said that although new sanctions are not the main consideration at the moment, they could not be ruled out if the situation deteriorates in the future.

Since the outbreak of the crisis over four months ago, Merkel has regularly put pressure on Putin to use his influence on the separatists to bring an end to the fighting.

Pro-Russian rebels have taken over considerable amounts of territory in the east, declaring some regions as "people's republics."

Convoy returns

The talks, which were held ahead of Ukraine's Independence Day, which falls on Sunday, came just a day after Russia drove an aid convoy into eastern Ukraine, prompting Ukrainian accusations of a direct invasion.

According to media reports, the 260 vehicles from the convoy have now returned to Russia.

Ukraine and Western countries said they suspected that the convoy could be used by Russia to smuggle supplies and reinforcements for rebel fighters, although Moscow has repeatedly denied this and insisted that the convoy was carrying humanitarian aid for civilians affected by the fighting.

Both Merkel and US President Barack Obama condemned Russia's actions in sending the convoy into Ukraine without governmental permission.

According to figures from the United Nations, more than 2,000 people have died in fighting since the crisis began.

kb/jr (dpa, AFP, Reuters)