Biden appeals to G20 protesters

Joe Biden (right) asked protesters to give G20 leaders a fair hearing

US Vice-President Joe Biden has called for G20 protesters to give governments a chance to tackle the economic crisis.

At a G20 warm-up meeting in Chile, Mr Biden said heads of state would agree proposals to remedy the crisis at next week’s meeting in London.

As they spoke, tens of thousands of protesters marched in the UK capital and in Germany, France and Italy.

US billionaire George Soros told the news the G20 meeting was “make or break” for the world economy.

“Unless they do something for developing world there will be serious collapse in that part of the world,” Mr Soros said.

Massive security operation

At a news conference in Vina del Mar, Mr Biden said he hoped the protesters would give the politicians a chance.

“Hopefully we can make it clear to them that we’re going to walk away from this G20 meeting with some concrete proposals,” he said.

British Prime Minister Gordon Brown said he understood why people were demonstrating in the UK.

“We will respond to [the protest] at the G20 with measures that will help create jobs, stimulate business and get the economy moving,” he said.

But Brazil’s President Luiz Inacio Lula da Silva told the Chile meeting that everyone was suffering from the recklessness of those who had turned the world economy into “a gigantic casino”.

“We are rejecting blind faith in the markets,” he said.

In London on Saturday, demonstrators demanding action on poverty, jobs and climate change called on G20 leaders to pursue a new kind of global justice.

Police estimated 35,000 marchers took part in the event.

A series of rallies are planned for Wednesday and Thursday by a variety of coalitions and groups campaigning on a range of issues from poverty, inequality and jobs, to war, climate change and capitalism.

There have been reports that banks and other financial institutions could be targeted in violent protests.

British officials have put a huge security operation in place.

‘We won’t pay’

Before the London summit, Mr Brown has been visiting a number of countries trying to rally support for his economic plans.

In Chile on Friday he said people should not be “cynical” about what could be achieved at the summit, saying he was optimistic about the likely outcome.

But in an interview, German Chancellor Angela Merkel dampened expectations of a significant breakthrough.

She said one meeting would not be enough to solve the economic crisis and finish building a new structure for global markets.

In Berlin, thousands of protesters took to the streets on Saturday with a message to the G20 leaders: “We won’t pay for your crisis.”

Another march took place in the city of Frankfurt. The demonstrations attracted as many as 20,000 people.

In the Italian capital, Rome, several thousand protesters took to the streets.

In Paris, around 400 demonstrators dumped sand outside the stock exchange to mock supposed island tax havens.

Merkel proposes UN economic body

Mrs Merkel leads one of the world’s most important economies German Chancellor Angela Merkel has proposed the creation of a United Nations Economic Council modelled on the UN Security Council. In a speech to the World Economic Forum in Davos, Switzerland, she called for the adoption of a post-crisis global economic charter. The charter would be based on sustainable economics and the Economic Council would oversee markets. It is an idea that Mrs Merkel has advocated previously. “All of these issues… need to be enshrined in a charter for the global economic order,” she said. “This may even lead to a UN Economic Council, just as the Security Council was created after World War II.” The idea of creating a UN Economic Council was proposed by Mrs Merkel when she met French President Nicolas Sarkozy in Paris earlier this month.

US markets wary over rescue deal

The markets remain nervous

US shares have fallen sharply with investors cautious over whether the House of Representatives will back the revised bank rescue plan.

The House is due to discuss the scheme later, with a vote expected on Friday. The bill successfully passed through the US Senate on Wednesday.

On Wall Street, the Dow Jones index was down 263 points or 2.4% at 10,571, a slide dragging European shares lower.

The falls came as France said it would host a summit on the financial crisis.

The UK’s FTSE 100 closed was down 1.8% to 4,870.3 points while Germany’s Dax index shed 2.5% and France’s Cac 40 lost 2.3%.

Sentiment was further hit by glum economic data – showing that the number of people filing for new unemployment benefit claims rose to a seven-year high, while factory orders had seen a steeper-than-expected drop in August.

European talks

The office of French President Nicolas Sarkozy said the special meeting on Saturday would discuss a co-ordinated response to the financial turmoil amongst European members of the G8 ahead of a meeting of world finance leaders in Washington next week.

UK Prime Minister Gordon Brown is due to attend, together with German Chancellor Angela Merkel, Italian Prime Minister Silvio Berlusconi and European Central Bank President Jean-Claude Trichet.

Investors are still concerned about the efficiency of this rescue plan and how it can help the global economy Aric Au, Phillip Securities

But with just two days to go before the talks start, EU members are deeply divided, correspondent said.

France and Holland favor a European response to help banks hit by the credit crisis while Germany and Luxembourg believe a joint rescue plan is not necessary.

European leaders have denied speculation that they wanted to establish a unified 300bn euro ($418.4bn; £236bn) banking rescue deal along the same lines as the US plan.

The rescue idea was said to be being proposed by France, but Mr Sarkozy insisted that there were no such plans.

“I deny both the amount and the principle [of such a plan],” he said.

‘Essential’

In the US, a number of changes had to be made to the $700bn (£380bn) bail-out plan in order to help win approval in the Senate.

These include raising the government’s guarantee on savings from $100,000 to $250,000, tax breaks to help small businesses, expansion of child tax credit, and help for victims of recent hurricanes.

President George W Bush said that the package was “essential to the financial security of every American”.

However, economists said doubts remained about how effective the package would be.

“Investors are still concerned about the efficiency of this rescue plan and how it can help the global economy,” said Aric Au of Phillip Securities in Hong Kong.

McCain and Obama

US presidential hopefuls John McCain and Barack Obama, who both returned from the campaign trail for last night’s Senate debate, voted in favor of the rescue plan.

Senate majority leader Harry Reid, a Democrat, said he was happy with the result and praised both presidential candidates for voting.

“I think it shows that when we work together we can accomplish good things,” he said.

Mitch McConnell, leader of Republican senators, was also in jubilant mood.

“This was a measure that was much needed, to unfreeze the credit markets and get America’s economy working again,” he said.

German FM to run for chancellor

Opinion polls indicate the SPD are lagging far behind their CDU rivals

Germany’s Social Democrats (SPD) have chosen Foreign Minister Frank-Walter Steinmeier as candidate for chancellor in next year’s federal election.

The choice means he will run against the current chancellor, Angela Merkel, of the Christian Democrats (CDU).

Mr Steinmeier is the foreign minister and vice-chancellor in the “grand coalition” of the SPD and CDU in Ms Merkel’s government.

Polls indicate the SPD is far behind the CDU in voter opinion.

The SPD has lost support in recent years to the Left Party, made up of defectors from the SPD and communists from the former East Germany.

In a party shake-up, former SPD chairman Franz Muentefering was chosen by party officials to resume the role after Kurt Beck announced his resignation.

“The party needs strong leadership and a strong centre and I believe that today’s decision sets the course for this,” Mr Steinmeier said after the party’s meeting.

He served as chief of staff in Gerhard Schroeder’s ruling coalition with the Greens from 1998-2005.

After the 2005 elections left neither the CDU nor the SPD with enough votes to form a government, he became foreign minister in the coalition the two parties formed.

Georgia facing reality of defeat

Institute for War and Peace Reporting
When Russian troops eventually pull out of Georgian towns such as Gori and Zugdidi, ordinary Georgians will heave a sigh of relief.

Russia’s military has emerged a clear victor in the latest conflict

But that will also be the moment that they take on board the fact that the two territories at the heart of the conflict with Moscow, South Ossetia and Abkhazia, although formally still regarded internationally as Georgian territory, are now essentially lost to them.

The people who will suffer most in the long term from this conflict are more than 20,000 ethnic Georgians from a mosaic of villages in South Ossetia who have now mostly fled.

Relatively few Georgians left during or after the small-scale 1990-92 conflict over South Ossetia and despite intermittent skirmishes and incidents, neighborly contacts continued.

Reporters who have passed through many of the villages in the last few days say they are now in ruins.

The Russian authorities and their South Ossetian allies are now saying that they will not allow the Georgians back any time soon.

A Russian foreign ministry statement on August 18 said, “It is clear that some time – and not a short period of time – must pass in order to heal the wounds and to restore confidence. Only after this, the conditions will be created for discussing practical aspects related to the problems of refugees.”

Hundreds of South Ossetians also lost their homes in the Georgian military assault of 7-8 August and, it appears, in the ensuing Russian counter-attack – but they have the small consolation of knowing they can start rebuilding them.

Russian leverage

The prospect is also now much bleaker for the 240,000 or so ethnic Georgians who were registered as displaced from the 1992-3 conflict in Abkhazia.

Refugees have flooded into Georgia’s capital from areas near South Ossetia

Their hopes of return were predicated on a successful peace agreement which now looks more elusive than ever.

Around 50,000 Georgians live in Abkhazia’s southernmost Gali district under an Abkhaz administration.

So far they have managed to stay in their homes, but their future is also more precarious.

It is not just a matter of Georgian control. It will also be harder now to maintain an international presence in the two disputed regions.

The final point in the six-point ceasefire plan reads: “Pending an international mechanism [in South Ossetia], Russian peacekeeping forces will implement additional security measures.”

That effectively puts an end to the former Joint Peacekeeping Forces, which had a Georgian contingent.

It also gives Moscow even more leverage than before over the shape of any security arrangements for the region.

Moscow is already insisting it can have the only real security presence there.

“We are of course not against international peacekeepers… but the problem is that the Abkhaz and the Ossetians do not trust anyone except Russian peacekeepers,” Russian president Dmitry Medvedev told German chancellor Angela Merkel.

Unattainable dream

The Organization for Security and Cooperation in Europe (OSCE), the only international organization with a mandate in South Ossetia, wants to dispatch an additional 100 monitors to South Ossetia.

Abkhaz fighters were backed by Russian forces against the Georgians

But Russia has dragged its feet, saying it wanted to agree the terms of their deployment in more detail and the OSCE has so far agreed to send just 20 more monitors.

The OSCE had just nine military monitors on the ground in South Ossetia when fighting started there on 7-8 August.

The European Union, with French Foreign Minister Bernard Kouchner taking the lead, also says it want to provide peacekeepers, but Mr Kouchner’s Swedish counterpart, Carl Bildt, admitted this might not work.

“There are no signs of the Russians letting in anyone else,” he said.

In Abkhazia, the United Nations has a small contingent of around 130 unarmed monitors, who were bystanders in the recent crisis.

When the Abkhaz, with Russian support, wanted to capture the mountainous Upper Kodori Gorge district from the Georgians, they merely gave the UN monitors there a 24-hour warning to leave.

The EU has approved small aid programmes for both Abkhazia and South Ossetia in the last few years, but they have looked relatively modest when compared to the vast amount of Russian money coming into both regions.

Abkhazia is bigger and more diverse than South Ossetia with a lively media and many non-governmental organizations.

Many Abkhaz intellectuals dreamed of having some kind of independence free of both Georgia and Russia and with links across the Black Sea to the EU but that now looks unattainable.

‘Double standards’

Internationally mediated peace talks over both disputes had stalled and there is little chance of them resuming properly any time soon.

Faced with a tightening Russian grip, Western leaders can only fall back on expressing support for Georgia’s right to these territories.

US President George W Bush made this commitment on 16 August, saying: “Georgia’s borders should command the same respect as every other nation’s. There’s no room for debate on this matter.”

This becomes a moral argument, with the Russians answering that after supporting Kosovo’s unilateral secession from Serbia, the West is guilty of “double standards” in the Caucasus.

Caught in the middle of these international wrangles are the current and former populations of both Abkhazia and South Ossetia – Abkhaz, Ossetians and other nationalities such as Armenians on the one hand, and the displaced Georgians on the other.

They often get along fine when they have a chance to engage in low-level meetings arranged by foreign organisations or across market stalls.

Now, unfortunately, they are being wrenched apart further than ever by conflict.

Thomas de Waal is Caucasus Editor at the Institute for War and Peace Reporting in London.

Russian troops ‘start withdrawal’

Moscow’s troops continue to operate deep inside the Caucasus republic

The Russian commander of front line forces in Georgia has told that a gradual withdrawal of Russian forces from Georgia is under way.

Maj Gen Vyacheslav Borisov said he had given the order for Russian soldiers to be replaced by peacekeepers.

Russian forces in position 35km (22 miles) from the Georgian capital, Tbilisi, on the road to Gori, close to South Ossetia.

Russia said it did not have a timetable for a full withdrawal from Gori.

Russia still controls almost all of the main arterial highway running east-west through Georgia, and the main towns along the route.

Russia’s claimed redeployment comes a day after Moscow signed a French-brokered peace plan to end the crisis.

Conflict between Georgia and Russia erupted on 7 August when Georgia launched an assault to retake its Russian-backed separatist province of South Ossetia.

It led to a massive counter-offensive by Russia, with Russia moving deeper into Georgian territory.

The US has demanded Russian troops pull out, but Moscow says it will only withdraw from Georgian territory once extra security measures are in place.

International attention

French President Nicolas Sarkozy, who mediated the peace deal on behalf of the European Union, has warned Moscow that the ceasefire bars its forces from any “major urban area” in Georgia.

However, in a letter addressed to his Georgian counterpart, Mikhail Saakashvili, Mr Sarkozy said Russian troops did have the right to patrol “a few kilometres” beyond the conflict zone in South Ossetia.

But he underlined that clauses in the agreement permitting Russia to implement additional security measures “in no way limit or put in danger the freedom of movement and travel along the road and rail axes of Georgia” and could not be applied in any towns or cities.

PEACE PLAN No more use of force Stop all military actions for good Free access to humanitarian aid Georgian troops return to their places of permanent deployment Russian troops to return to pre-conflict positions International talks about future status of South Ossetia and Abkhazia

“I am particularly thinking of the city of Gori,” he said, which is the largest town close to the South Ossetia border.

There is a much reduced Russian military presence in the town compared with Saturday – though Russian soldiers still control the town’s key entry and exit points.

He says that even if Russian peacekeepers replace soldiers, local residents say it will not make much difference.

Meanwhile, US President George W Bush has reiterated his staunch support for ally Georgia.

The German Chancellor, Angela Merkel, is due to hold talks with Mr Saakashvili in Tbilisi later on Sunday.

Meanwhile, Human Rights Watch has called on the Russian authorities to immediately take steps to end attacks by South Ossetian militias on ethnic Georgians in Gori and to allow vital humanitarian aid to reach vulnerable civilians.

“The Russian military has effective control of the Gori region, making it responsible for the security and well-being of all people living there,” said Rachel Denber, HRW’s Europe deputy director.

Russian control

The BBC’s Richard Galpin, who has spent the past two days traveling from the Black Sea port of Poti to Tbilisi, says Georgian forces seem to be surrendering control of the highway to the Russians.

The UN puts the number of those displaced in the conflict at 118,000

In the western town of Senaki, our correspondent saw large numbers of Russian troops moving around on Saturday.

Further east in Zestafoni, he witnessed the panic of local residents as the word spread that the Russian army was approaching.

Cars sped away from roadblocks set up by the Georgian police, the drivers realizing their hopes of reaching Tbilisi had been dashed.

When the Russians arrived, they stayed only a few minutes after apparently being told there was no military base to take over.

Our correspondent says he then followed the Russian troops as they entered the central town of Khashuri, where they were given an escort by the local police.

He spoke to one Russian soldier who said he believed their final destination would be the Georgian capital, although the Kremlin flatly denied this. Another soldier said he expected to be in Georgia for a year.

Georgia has meanwhile accused pro-Russian Abkhaz separatist fighters of taking over 13 villages and a hydroelectric power plant. There has so far been no independent confirmation.

Security steps

Among the six points in the ceasefire deal, both sides agreed to pull back their forces to their positions before hostilities began on 7 August.

Diplomats have said that the UN Security Council is expected to vote later on Sunday on a draft resolution formalising the ceasefire agreement.

President Bush has said Mr Medvedev’s signing of the truce is “hopeful”, but that there can be no question that South Ossetia and Abkhazia will remain within Georgian borders, which are internationally recognised.

Reports suggest Mr Saakashvili only reluctantly agreed to another of the plan’s clauses – international talks about the future status of South Ossetia and Abkhazia.

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Russian tanks enter South Ossetia

Courtesy BBC

Footage reportedly shows Russian tanks entering South Ossetia

Russian tanks have entered Georgia’s breakaway region of South Ossetia, says Georgian President Mikhail Saakashvili.

Georgia has been fighting separatists with ties to Russia in order to regain control of the province, which has had de facto independence since the 1990s.

Georgia is reported to have said any involvement of Russian forces in the conflict will result in a state of war.

Amid international calls for restraint, Russia’s president promised to defend Russian citizens in South Ossetia.

Moscow’s defence ministry said more than 10 of its peacekeeping troops in South Ossetia had been killed and 30 wounded in the Georgian offensive. At least 15 civilians are also reported dead.

‘Clear intrusion’

Georgia’s president said 150 Russian tanks and other vehicles had entered South Ossetia.

Georgian President Mikhail Saakashvili says he is willing to agree an immediate ceasefire

He told CNN: “Russia is fighting a war with us in our own territory.”

Mr Saakashvili, who has called on reservists to sign up for duty, said: “This is a clear intrusion on another country’s territory.

“We have Russian tanks on our territory, jets on our territory in broad daylight,” Reuters new agency quoted him as saying.

Later, Moscow’s foreign ministry told media that Russian tanks had reached the northern outskirts of the South Ossetian capital, Tskhinvali.

The Georgian interior ministry said Russian jets had killed three Georgian soldiers at an airbase outside the capital, Tbilisi, during a bombing raid on Friday, Reuters news agency reported.

I must protect the life and dignity of Russian citizens wherever they are. We will not allow their deaths to go unpunished Dmitry Medvedev Russian President In pictures: Unrest in Georgia Bitterness turns to conflict

Russia denied any of its fighters had entered its neighbour’s airspace.

Moscow’s defence ministry said reinforcements for Russian peacekeepers had been sent to South Ossetia “to help end bloodshed”.

Amid reports of Russian deaths, President Dmitry Medvedev said: “I must protect the life and dignity of Russian citizens wherever they are,” Interfax news agency reported.

“We will not allow their deaths to go unpunished. Those responsible will receive a deserved punishment.”

‘Ethnic cleansing’

Russian Foreign Minister Sergei Lavrov said Moscow was receiving reports that villages in South Ossetia were being ethnically cleansed.

Russian Foreign Minister Sergei Lavrov

Mr Lavrov added in televised remarks: “The number of refugees is growing. A humanitarian crisis is looming.”

Russia said it would cut all air links with Georgia from midnight on Friday.

Meanwhile Interfax quoted South Ossetian rebel leader Eduard Kokoity as saying there were “hundreds of dead civilians” in Tskhinvali.

Witnesses said the regional capital was devastated.

Lyudmila Ostayeva, 50, told AP news agency: “I saw bodies lying on the streets, around ruined buildings, in cars. It’s impossible to count them now. There is hardly a single building left undamaged.”

SOUTH OSSETIA TIMELINE 1991-92 S Ossetia fights war to break away from newly independent Georgia; Russia enforces truce 2004 Mikhail Saakashvili elected Georgian president, promising to recover lost territories 2006 S Ossetians vote for independence in unofficial referendum April 2008 Russia steps up ties with Abkhazia and South Ossetia July 2008 Russia admits flying jets over S Ossetia; Russia and Georgia accuse each other of military build-up 7 August 2008 After escalating Georgian-Ossetian clashes, sides agree to ceasefire 8 August 2008 Heavy fighting erupts overnight, Georgian forces close on Tskhinvali

US President George W Bush spoke with Russian Prime Minister Vladimir Putin about the crisis while they attended the Beijing Olympics.

Later, the US voiced support for Georgia’s territorial integrity and its state department said it would send an envoy to the region.

Nato said it was seriously concerned about the situation, while German Chancellor Angela Merkel called on all sides to show restraint.

The European security organisation, the OSCE, warned that the fighting risked escalating into a full-scale war.

Georgian Foreign Minister Ekaterine Tkeshelashvili told the BBC it wanted to ensure that any civilians who wanted to leave the conflict zone could do so safely.

International Red Cross spokeswoman Anna Nelson said it had received reports that hospitals in Tskhinvali were having trouble coping with the influx of casualties and ambulances were having trouble reaching the injured.

Georgian Prime Minister Lado Gurgenidze said Georgia had simply run out of patience with attacks by separatist militias in recent days and had had to move in to restore peace in South Ossetia.

Truce plea

Georgia accuses Russia of arming the separatists. Moscow denies the claim.

Russia earlier called an emergency meeting of the UN Security Council to respond to the crisis, but members failed to agree on a Russian statement calling on both sides to renounce the use of force.

The BBC’s James Rodgers in Moscow says Russia has always said it supports the territorial integrity of Georgia but also that it would defend its citizens. Many South Ossetians hold Russian passports.

Hundreds of fighters from Russia and Georgia’s other breakaway region of Abkhazia were reportedly heading to aid the separatist troops.