EU import duties on Israeli goods from the settlements may now be imposed, making them less competitive.

Jewish settlements in the West Bank are illegal under international law.

The EU has agreements with both Israel and the Palestinians that end customs duties.

Israeli companies based around settlements manufacture a host of products including confectionery, wine, cosmetics and computer equipment.

Some of the companies employ Palestinian workers, who are restricted from working in Israel.

Palestinians have long argued that Israeli goods made in settlements should not receive trade privileges, as settlements are not part of Israel.

Pro-Palestinian campaigners have also regularly protested that European supermarkets stock goods with Israeli labels on farm products from the West Bank.

German dispute

The ruling on Thursday by the EU court in Luxembourg stems from a case brought by the German drinks company Brita.

It imports products from an Israeli company based in Mishor Adumin in the West Bank and was refused preferential trade treatment by the German customs authorities.

On appeal, a German court asked the European Court of Justice for its decision.

European Court of Justice rulings are binding on member states. The decision reflects what has been the general policy of the EU on the issue.

In December the UK government said that food labels would distinguish between goods from Palestinians in the occupied territories and produce from Israeli settlements.

Israel has yet to formally comment on the court ruling.

“The European Union takes the view that products obtained in locations which have been placed under Israeli administration since 1967 do not qualify for the preferential treatment provided for under [the EC-Israel Agreement],” the judges said.

“As it is, despite a specific request from the German authorities, the Israeli authorities did not reply to the question whether the products had been manufactured in Israeli-occupied settlements in Palestinian territory.

“The Court notes in this respect that, under the EC-Israel Agreement, the Israeli authorities are obliged to provide sufficient information to enable the real origin of products to be determined.”

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Subsequently, CBS (whose parent company, Viacom, is the same as MTV’s) announced a temporary halt to production of the highly rated sitcom “Two and a Half Men” until Sheen is ready to return to work.

“CBS, Warner Bros. Television and [Executive Producer] Chuck Lorre support Charlie Sheen in his decision today to begin voluntary inpatient care at a treatment center,” the statement reads. “We wish him nothing but the best as he deals with this personal matter.”

The 44-year-old actor, best known for roles in films like “Platoon” (1986) and “Wall Street” (1987), made headlines about two months ago when he was charged with felony menacing and misdemeanor charges of third-degree assault and criminal mischief after an argument with his wife, Brooke Mueller, at their Aspen, Colorado, home.

A representative for Mueller told The Associated Press that the 29-year-old is in rehab herself, also for undisclosed reasons. TMZ reported that she’s receiving specialized rehab-style treatment at a private home in Los Angeles, where the couple’s 11-month-old twin boys are staying with her, nannies and a counselor.

This is not the actor’s first stay in a rehabilitation facility. Sheen voluntarily checked himself into drug and alcohol rehab for “exhaustion” in 1990. Eight years later, he was back in rehab after heavy drug and alcohol use put him in the hospital.

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“I am praying for his family during this time of distress and for his safe return,” Cameron says in a statement. “Andrew, if you’re reading this, please call me.”

Koenig, 41, who starred as Boner on the show, never returned to his Los Angeles home as scheduled on Feb. 14 after a trip to Canada. His father described him as sounding “despondent” the last time they spoke.

Cameron, who played Koenig’s neighbor Mike on the hit ’80s show, says, “Mike and Boner could always work things out when they put their minds to it. I’m praying for you, pal. Hope to hear from you soon.”
See what other readers have to say about this story – or leave a comment of your own

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New York (CNN) — The solutions to America’s long-term budget deficits are surprisingly simple, but they’re politically unthinkable in today’s Washington, says analyst Fareed Zakaria.

America’s failure to deal with its growing budget deficit is hurting its image internationally, according to Zakaria. President Obama proposed a $3.8 trillion budget Monday, projecting a deficit of more than $1.5 trillion this year and nearly $1.3 trillion for the 2011 budget year.

Zakaria, author and host of CNN’s “Fareed Zakaria: GPS,” spoke to CNN Wednesday.

CNN: So the president released his budget this week, projecting deficits almost as far as the eye can see. What do you make of it?

Video: Obama talks economy at DNC
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Fareed Zakaria: The real problem is not the current deficits that the president has projected. These deficits are to a large extent inescapable because of the financial emergency we find ourselves in, the rescue of the financial system, the stimulus package to jump-start the American economy. But it’s worth understanding why this gets us to 10 percent of GDP, the worst deficit since World War II.

And it is because, as the president points out, the budget was broken in the first place. It was broken by three decisions made during the Bush administration.

The first was to have massive tax cuts, which was a decision made in the wake of the Clinton surpluses.

The second decision was to have a massive new entitlement program — prescription drugs for the elderly — which took the fastest growing part of the American population and joined it to the fastest-rising costs in American health care, which is prescription drugs. It was therefore a marriage made in budgetary hell.

And the third, of course, was to have two wars that were going to be funded without any tax increases, the first time in modern American history that that decision was made. … A partial exception was Vietnam, which produced an economic catastrophe in the 1970s.

And then you add to it the fact that we were in a financial and economic crisis and needed to spend money to get out of it, and you have the current budget problem.

CNN: Right now the United States has a triple-A credit rating and the dollar is the reserve currency for the world. Do you think America’s financial stability is threatened in the short term?

Zakaria: Not in the short term. These are understandable choices America has to make. The entire industrialized world is facing very similar budget deficits. We have probably five years to try to bring our budget into some kind of manageable situation. And if we can’t do it within five years, it suggests two things. One is that the trends at that point become so deep that fixing them at that point becomes very difficult. And the second thing is that it becomes a signal to the world that we really cannot get control of our budget. And at that point, I do think that America’s reputation, its credibility, its ability to borrow vast amounts of money all will come into jeopardy.

CNN: Do you think that President Obama should have taken more dramatic steps to curtail spending?

Zakaria: If he were to cut spending at this point, the economy would quite likely go into a second recession, a double-dip, and then frankly everything collapses. If you don’t have growth, you have no prospect of getting out of this budgetary situation. … But he must in a year begin really to address the serious issues that make up the budget crisis that we have.

The most significant one is health care costs. … Obama’s health care plan, while it has some cost control measures, is mostly about expansion and adding to the costs. … There has to be a much, much more serious focus on costs.

The second is a number of sacred cows in the federal budget which are very large but which frankly make no sense. We have a $250 billion a year hole in the federal budget because employers are given a tax deduction for health care plans. This is actually bad for health care, because it is one of the factors that contributes to these out of control costs, because it’s an invitation to have inflation in the system.

CNN: Are there other large “sacred” budget items?

Zakaria: Another is the deduction of mortgage interest, which is taken in America as some kind of great measure that has enabled Americans to own homes, whereas we have the same rate of home ownership as Britain and Canada, neither of which have interest deductions for their home mortgages.

What it is really is a subsidy for homeowners to take on debt. … We take on more debt than people in other countries and we can see that has been part of the distortion of the market that has produced the financial crisis that we’ve just gone through.

That deduction is a hundred billion dollars. When you hear people talking about freezing this or that federal program, there you’re talking about hundreds of millions of dollars, occasionally a billion dollars. But the real big money is in all these middle class entitlements that are regarded as sacred cows.

And the third part is taxes. You’re not going to bring the budget into balance unless you talk about tax increases. The only real question is what kind of tax increases. If we were to have a modest value added tax, the kind we have in Europe, it would probably raise $150-$250 billion a year. It would discourage excessive consumption, it would encourage savings. …

CNN: So if the solutions are so simple, why aren’t they happening?

Zakaria: If you take those three things — health care, middle class entitlements and taxes — we have effectively solved America’s budget crisis. So the good news here is that we have a $14 trillion economy.

There’s more than enough money to have a very substantial federal budget, moderate taxes (we are still at the low end of the industrialized world in terms of taxes as a percentage of GDP). So it really is worth thinking about how strange it is, that a fairly sensible set of discreet measures could put us back into a situation where we would be the envy of the world in terms of our fiscal condition.

The steps I outlined are economically simple and sensible and yet they’re political dynamite.

If we were to raise the retirement age on Social Security, modestly and on a sliding scale so that it was phased in. If we were to trim the benefits very slightly … the program would be solvent for the next 75 years. And yet think about it. That simple commonsensical fix is politically absolutely impossible in Washington today.

CNN: Why do you think that is?

Zakaria: Because we have a political structure in Washington today, that if one side proposes any solution to these problems, the other side does not ask itself: How can we have a compromise that solves this problem?

Instead they think: How can we demagogue this issue to fundraise, to win votes, to scare people, to polarize the political climate and gain advantage from it? It’s almost that the entire strategy now is how can we take any proposal that anyone makes and turn it into a fundraising opportunity for our extreme wing.

And if you do that, you’re never going to actually solve the problems of the country because every proposal can be demagogued.

CNN: You just came back from Davos. What’s the view of world leaders of this American budget problem?

Zakaria: There is great unease not just about the numbers … the real unease is about the sense that Washington is no longer working, that you cannot count on the United States to be able to make hard decisions, to sort its own internal affairs out. One European CEO said to me, what worries us more than anything else is that problems you’re facing now are the same problems you were facing 10 or 15 years ago.

They don’t seem to go away. In other words, we keep kicking the can down the road.

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After starting his design career by working in his father’s clothing business, Dolce moved on to study fashion design. He became an assistant designer in a Milan workshop in 1980, where he met Gabbana. It was a fateful meeting and in 1982, with a small investment, they opened their own studio in Milan.

Starting out as freelancers, their first breakthrough in came in 1985 when they were chosen to display their work at the Milano Collezioni event. The bold and sexual nature of their designs made an immediate impression and cemented the Dolce & Gabbana name in fashion circles. The following year they introduced their first “ready to wear” women’s line. Drawing inspiration from the Italian film industry and blending their own Mediterranean spirit with English eccentricity, they were directed more towards making women look sexy then setting trends.

Since Palestinians in Gaza buried their loved ones – more than 1,400 people, almost 400 of them children – there has been little healing and virtually no reconstruction.

According to international aid agencies, only 41 trucks of building supplies have been allowed into Gaza during the year.

Promises of billions made at a donors’ conference in Egypt last March attended by luminaries of the so-called “international community” and the Middle East peace process industry are unfulfilled, and the Israeli siege, supported by the US, the European Union, Arab states, and tacitly by the Palestinian Authority (PA) in Ramallah, continues.

Policy of destruction

Amid the endless, horrifying statistics a few stand out: Of Gaza’s 640 schools, 18 were completely destroyed and 280 damaged in Israeli attacks. Two-hundred-and-fifty students and 15 teachers were killed.

Of 122 health facilities assessed by the World Health Organization, 48 per cent were damaged or destroyed.
Ninety per cent of households in Gaza still experience power cuts for 4 to 8 hours per day due to Israeli attacks on the power grid and degradation caused by the blockade.

Forty-six per cent of Gaza’s once productive agricultural land is out of use due to Israeli damage to farms and Israeli-declared free fire zones. Gaza’s exports of more than 130,000 tonnes per year of tomatoes, flowers, strawberries and other fruit have fallen to zero.

That “much of Gaza still lies in ruins,” a coalition of international aid agencies stated recently, “is not an accident; it is a matter of policy”.
This policy has been clear all along and it has nothing to do with Israeli “security”.

Destroying resistance

From June 19, 2008, to November 4, 2008, calm prevailed between Israel and Gaza, as Hamas adhered strictly – as even Israel has acknowledged – to a negotiated ceasefire.

That ceasefire collapsed when Israel launched a surprise attack on Gaza killing six people, after which Hamas and other resistance factions retaliated.

Even so, Palestinian factions were still willing to renew the ceasefire, but it was Israel that refused, choosing instead to launch a premeditated, systematic attack on the foundations of civilised life in the Gaza Strip.

 
Author says the war aimed to erode support for Hamas but failed to do so [GALLO/GETTY] 
Operation Cast Lead, as Israel dubbed it, was an attempt to destroy once and for all Palestinian resistance in general, and Hamas in particular, which had won the 2006 election and survived the blockade and numerous US-sponsored attempts to undermine and overthrow it in cooperation with US-backed Palestinian militias.

Like the murderous sanctions on Iraq throughout the 1990s, the blockade of Gaza was calculated to deprive civilians of basic necessities, rights and dignity in the hope that their suffering might force their leadership to surrender or collapse.

In many respects things may seem more dire than a year ago.

Barack Obama, the US president, whom many hoped would change the vicious anti-Palestinian policies of his predecessor, George Bush, has instead entrenched them as even the pretense of a serious peace effort has vanished.

According to media reports, the US Army Corps of Engineers is assisting Egypt in building an underground wall on its border with Gaza to block the tunnels which act as a lifeline for the besieged territory [resources and efforts that ought to go into rebuilding still hurricane-devastated New Orleans], and American weapons continue to flow to West Bank militias engaged in a US- and Israeli-sponsored civil war against Hamas and anyone else who might resist Israeli occupation and colonisation.

Shifting public opinion

These facts are inescapable and bleak.

However, to focus on them alone would be to miss a much more dynamic situation that suggests Israel’s power and impunity are not as invulnerable as they appear from this snapshot.

A year after Israel’s attack and after more than two-and-a-half years of blockade, the Palestinian people in Gaza have not surrendered. Instead they have offered the world lessons in steadfastness and dignity, even at an appalling, unimaginable cost.

It is true that the European Union leaders who came to occupied Jerusalem last January to publicly embrace Ehud Olmert, the then Israeli prime minister, – while white phosphorus seared the flesh of Gazan children and bodies lay under the rubble – still cower before their respective Israel lobbies, as do American and Canadian politicians.
But the shift in public opinion is palpable as Israel’s own actions transform it into a pariah whose driving forces are not the liberal democratic values with which it claims to identify, but ultra-nationalism, racism, religious fanaticism, settler-colonialism and a Jewish supremacist order maintained by frequent massacres.

The universalist cause of justice and liberation for Palestinians is gaining adherents and momentum especially among the young.

I witnessed it, for example, among Malaysian students I met at a Palestine solidarity conference held by the Union of NGOs of The Islamic World in Istanbul last May.

And again in November, as hundreds of student organisers from across the US and Canada converged to plan their participation in the global Palestinian-led campaign of boycott, divestment and sanctions modeled on the successful struggle against South African apartheid in the 1980s.

‘Bankrupt’ state

This week, thousands of people from dozens of countries are attempting to reach Gaza to break the siege and march alongside Palestinians who have been organising inside the territory.

Each of the individuals traveling with the Gaza Freedom March, Viva Palestina, or other delegations represents perhaps hundreds of others who could not make the journey in person, and who are marking the event with demonstrations and commemorations, visits to their elected officials, and media campaigns.

Against this flowering of activism, Zionism is struggling to rejuvenate its dwindling base of support.

Multi-million dollar programmes aimed at recruiting and Zionising young American Jews are struggling to compete against organisations like the International Jewish Anti-Zionist Network, which run not on money but principled commitment to human equality.

Increasingly, we see that Israel’s hasbara [propaganda] efforts have no positive message, offer no plausible case for maintaining a status quo of unspeakable repression and violence, and rely instead on racist demonisation and dehumanisation of Arabs and Muslims to justify Israel’s actions and even its very existence.

Faced with growing global recognition and support for the courageous non-violent struggle against continued land theft in the West Bank, Israel is escalating its violence and kidnapping of leaders of the movement in Bil’in and other villages [Muhammad Othman, Jamal Juma and Abdallah Abu Rahmeh are among the leaders of this movement recently arrested].

Travel fears

In acting this way, Israel increasingly resembles a bankrupt failed state, not a regime confident about its legitimacy and longevity.

And despite the failed peace process industry’s efforts to ridicule, suppress and marginalise it, there is a growing debate among Palestinians and even among Israelis about a shared future in Palestine/Israel based on equality and decolonisation, rather than ethno-national segregation and forced repartition.

Last, but certainly not least, in the shadow of the Goldstone report, Israeli leaders travel around the world fearing arrest for their crimes.

For now, they can rely on the impunity that high-level international complicity and their inertial power and influence still afford them.

But the question for the real international community – made up of people and movements – is whether we want to continue to see the still very incomplete system of international law and justice painstakingly built since the horrors of the Second World War and the Nazi holocaust dismantled and corrupted all for the sake of one rogue state.

What we have done in solidarity with the Palestinian people in Gaza and the rest of Palestine is not yet enough. But our movement is growing, it cannot be stopped, and we will reach our destination.

Ali Abunimah is co-founder of  The Electronic Intifada and author of One Country, A Bold Proposal to End the Israeli-Palestinian Impasse. He will be among more than 1,300 people from 42 countries traveling to Gaza with the Gaza Freedom March this week.

The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial policy.

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In an interview with The Washington Post last week, Obama said, “There is no doubt that energy legislation is going to be tough, but I feel very confident about making an argument to the American people that we should be a leader in clean energy technology — that that will be one of the key engines that drives economic growth for decades to come.”

White House spokesman Ben LaBolt said the fact that “countries like China and India set carbon-intensity targets for the first time in history” should bolster the administration’s legislative effort.

Since taking office in January, Obama and his deputies have regarded international climate talks as a way to get the sort of commitments from major emerging economies that would allow them to sell a cap-and-trade bill to skeptical lawmakers back home. As part of last week’s accord, the four biggest greenhouse gas emitters in the developing world — China, India, Brazil and South Africa — agreed to list voluntary climate targets as part of an international registry and to allow third-party countries to scrutinize whether the four are making the emission cuts they say they are.

“That was the strategy all along,” said Mark Helmke, a senior adviser to Sen. Richard G. Lugar (R-Ind.), whose vote could be critical to passing a climate bill. “In that context, it was a home run.”

But it is unclear whether that achievement — which came at the expense of getting more ambitious overall climate targets and a clear deadline for a legally binding treating next year — will translate into passage of the bill the administration is seeking.

GOP support will be crucial
Sen. Lisa Murkowski (Alaska), the top Republican on the Senate Committee on Energy and Natural Resources and another swing vote, called language in the Copenhagen deal allowing for verification of developing countries’ carbon cuts “a very small step forward.”

“Right now, the big question is whether the Senate, as a whole, can sit down and craft real bipartisan legislation that protects both the economy and the environment,” Murkowski added. “We need to find ways to move forward in a bipartisan effort that makes sense for America, regardless of whether the rest of the world follows through or not.”

In the wake of the health-care debate, winning Republican support for such a bill is crucial, even if it might mean adding provisions favored by the nuclear and oil industries, or scaling back the legislation’s scope.

“I don’t think the Senate has an appetite for another such epic, polarized legislative war this session,” said Sen. Joseph I. Lieberman (I-Conn.), who met with Sens. John F. Kerry (D-Mass.) and Lindsey O. Graham (R-S.C.) on Wednesday to strategize on how to enlist support for a compromise climate bill they are writing.

It’s a task that becomes more difficult in an election year, when most Republicans and conservative thinkers are eager to attack a policy that will probably raise energy prices in the near term.

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The 82-year-old pope was unhurt after his fall, said a Vatican spokesman, the Rev. Ciro Benedettini.

Earlier, in Bethlehem, thousands of pilgrims from around the world descended on the traditional birthplace of Jesus, for the most upbeat Christmas celebrations the Palestinian town has seen in years.

While the Holy Land’s top Roman Catholic clergyman reminded followers that peace remains elusive, while the threat of sectarian violence in the Islamic world and the lava spilling from a volcano in the Philippines clouded the celebrations for other Christian communities across the globe.

At the Vatican, witness video obtained by The Associated Press showed a woman dressed in a red hooded sweat shirt vaulting over the wooden barriers that cordoned off the basilica’s main aisle and rushing toward the pope before being swarmed by bodyguards. She grabbed the pope’s vestments as she was taken down, with Benedict seemingly falling on top of her.

The commotion happened as the pope’s procession was making its way toward the main altar and shocked gasps rang out through the public that packed the basilica. The procession came to a halt and security rushed to the trouble spot.

Benedettini said the woman who pushed the pope appeared to be mentally unstable and had been arrested by Vatican police. He said she also knocked down Cardinal Roger Etchegaray, who was taken to hospital for a check up.

“During the procession an unstable person jumped a barrier and knocked down the Holy Father,” Benedettini told The Associated Press by telephone. “(The pope) quickly got up and continued the procession.”

In Bethlehem, residents celebrated their town’s annual day in the spotlight along with pilgrims and tourists. Visitors milled around Manger Square, mingling with clergymen, camera crews and locals hawking food and trinkets.

Christmas in Bethlehem has its incongruous elements – the troops of Palestinian boy scouts who wear kilts and play bagpipes in one of the town’s holiday traditions, for example, or the inflatable Santa Clauses hanging from church pillars and storefronts looking out of place and overdressed in this Middle Eastern town with not a snowflake in sight.

Jeffrey Lynch, 36, a sanitation worker from New York City, was taking a tour through the Church of the Nativity, the fourth-century Crusader era structure built atop the grottos that mark the spot believed to be the birthplace of Jesus.

“It’s a miracle being here on Christmas Eve. It’s a lifetime opportunity. I wish everybody could be here,” he said.

But the Holy Land’s top Roman Catholic cleric, Latin Patriarch Fouad Twal, reminded listeners in a holiday address that peace remains out of reach. “The wish that we most want, we most hope for, is not coming. We want peace,” Twal said after he passed into Bethlehem in a traditional holiday procession from nearby Jerusalem.

Some Christians in other far-flung parts of the world also saw gloom edge out the holiday cheer.

Baghdad’s small remaining Christian minority was to celebrate midnight Mass in daylight for security reasons, and churches were under heavy guard. A bombing this week targeting a 1,200-year-old church in Mosul killed two passers-by, underscoring Iraqi Christians’ concerns.

A marble palace once occupied by Saddam Hussein housed an impromptu Christmas celebration for US soldiers and others far from home.

“I have mixed emotions,” said Lt. Col Timothy Bedsole, 52, an Army chaplain from Alabama who was marking his second Christmas in Iraq since the 2003 invasion. “It’s a very happy time for us as Christians and a very sad time to be away from our families.”

Few were celebrating at a tent camp 220 miles southwest of Islamabad, Pakistan, erected to house Christians left homeless by a rampage of looting and arson by Muslims in August.

The Christians say they have received cell phone text messages warning them to expect a “special Christmas present.” They’re terrified their tents will be torched or their church services bombed.

“Last year I celebrated Christmas full of joy,” said Irfan Masih, cradling his young son among the canvas shelters and open ditches of the camp. But now “the fear that we may again be attacked is in our hearts.”

Far to the east, in the shadow of the erupting Mayon volcano in the Philippines, thousands of families were spending Christmas Eve in shelters as the volcano belched out 20 gray ash columns Thursday, some of them a mile (1.5 kilometers) high.

Government workers and volunteers tried to keep some 47,000 displaced residents entertained with games, movies and concerts, a heavy burden during the Christmas season in this majority Roman Catholic country.

Noodles, fruit and corned beef were distributed at the shelters for Christmas Eve dinner. Children in one evacuation center gleefully lined up for ice cream.

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Serbian President Boris Tadic, whose victory last year in a tight runoff election was seen as crucial to the country’s further integration with Europe, submitted the application on a trip to Sweden, the country that currently holds the E.U. presidency. “This is indeed a great day for Serbia. This day represents a crossroads,” Tadic said. “Today we are entering a stage which is very difficult, which demands deep and painful reforms.” Swedish Prime Minster Fredrik Reinfeldt described the move as “a new beginning for Serbia,” but warned, “the road to membership is long and demanding.”
(See pictures of riots in Belgrade.)

The bid comes days after citizens of Serbia, Montenegro and Macedonia won the right to travel without visas to E.U. countries for the first time since the bloody Balkan wars of the early 1990s — a move that some low-cost airlines had already anticipated by adding Belgrade and other airports to their routes. It also follows the E.U.’s decision earlier this month to unfreeze an interim trade and cooperation pact with Serbia — seen as a precursor to eventual E.U. membership.

Belgrade is already working closely with Brussels to make the necessary economic, legal and constitutional reforms to join the E.U. The government is also closely monitoring the European Commission’s “progress reports” on its efforts, the latest of which underlined privatization and fighting organized crime as priorities for the government. And E.U. officials were pleased with the austere 2010 budget approved by Serbian lawmakers Monday that meets the strict terms of a recent International Monetary Fund loan. Belgrade is also rethinking its military options after neighbors Albania and Croatia joined NATO earlier this year, meaning most of Serbia is now surrounded by the alliance that bombed it in 1999. Serbia has already joined NATO’s Partnership for Peace (PfP) program, a cooperation framework for NATO member aspirants.
(See the top news stories of the year.)

But despite Serbia’s newfound enthusiasm for the rest of Europe, officials caution against expecting any swift E.U. accession. Slovenia is only former Yugoslav republic that has managed to join the bloc; Serbia now joins Croatia, Macedonia, Montenegro, Albania, Turkey and Iceland in an ever-lengthening line of aspiring candidates. Almost all of the other applicants are further along the path to membership. And within the E.U., there is growing resistance toward adding new members, a sentiment known as “enlargement fatigue” following the recent accession of a dozen mainly eastern European countries.

Yet the biggest obstacle to Serbia’s membership is the past —specifically Belgrade’s inability to face up to the baleful legacy of the Balkan wars. The E.U. has made the capture of war fugitives Ratko Mladic and Goran Hadzic a precondition to even starting membership negotiations. The two men are believed to be hiding in the Serbian mountains under the tacit protection of key politicians. The Netherlands is particularly keen to see the arrest of Mladic, a Bosnian Serb general indicted by the International Criminal Tribunal for the former Yugoslavia (ICTY) on genocide charges for his alleged role in the slaughter of 8,000 Bosnian Muslims at Srebrenica in 1995. Serbia handed over former Bosnian Serb leader Radovan Karadzic to The Hague last year, and Tadic has said he is committed to meeting Serbia’s international obligations. But Mladic and Hadzic remain on the run and most Serbs reject the idea of handing them over to the ICTY.
(Read: “Karadzic a No-Show at His Bosnia War-Crimes Trial.”)

Another barrier to membership is Serbia’s continuing belligerence toward Kosovo, where about 10,000 people were killed and 850,000 driven from their homes during the war. Although NATO ousted Belgrade’s tanks from the territory in 1999, Serbia still refuses to accept the loss of its province. Indeed, Serbia’s condemnation of Kosovo’s declaration of independence last year even raised concerns about a possible new military intervention. “Serbia still needs to come to terms with the war crimes of the 1990s and go through the painful but essential process of breaking from the stranglehold of the nationalist ideologies that led to the wars,” says Alvaro de Vasconcelos, director of the Paris-based E.U. Institute for Security Studies (EUISS) think tank.
(See pictures of Mitrovica, a northern Kosovar town on the dividing line of Serbian-Albanian tension.)

But he says Serbia is much further along than it was even just a few years ago — a testament to recent efforts by the E.U. to reach out to the country. “It testifies to the effectiveness of European leverage and shows that the E.U.’s democratic inclusion process is working,” de Vasconcelos says. “It shows the soft power of the E.U., the power of attraction —that any European destiny is linked with democratization.”
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Mike Richter, a partner at the New York-based private equity firm Environmental Capital Partners, said the accord is weak and by no means gave investors the kind of certainty they sought. “But it has done some things,” he said. “It brought China into the fold.”

Competition among major polluters to find solutions that are good for their economies is driving the process well beyond outcomes achieved at the U.N. climate conference, Richter said.

“People understand the writing’s on the wall,” he said. “The opportunity to make incredible amounts of money by developing the next battery or a more efficient solar panel, there’s a huge payback.”

In negotiations that extended through Friday and into Saturday morning, President Obama and his aides worked with the leaders of China, India, Brazil and South Africa to forge a consensus around commitments for cutting emissions and international monitoring of that process.

Some in the business community hope that goes a long way in the Senate, where the degree to which China and India are willing to participate in any global climate plan is critical to winning support for capping U.S. emissions. Industrialized countries also pledged to deliver $30 billion to $100 billion to poor countries as long as they continue to work toward a treaty.

Richard Sandor, chairman and CEO of the Chicago Climate Exchange, said in an interview that progress made by negotiators in Copenhagen nudges forward efforts in individual countries to develop market-based programs to cut emissions, particularly in the United States.

“It achieved momentum,” he said of Copenhagen. “The fact that we had developed and developing countries sitting down together and reaching an accord is important.”

Sandor sees progress

Sandor runs the largest U.S.-based exchange for trading greenhouse gas contracts. Participation in the Chicago market is voluntary, but companies that sign up commit to annual emissions reductions. Companies in the agriculture, forestry and renewable energy sectors also participate through the registration of carbon offsets, or credits earned through projects designed to cut emissions. A subsidiary, the Chicago Climate Futures Exchange, trades futures and options contracts.

Sandor said he is encouraged by the emphasis in Copenhagen on the use of market mechanisms, including cap-and-trade programs that mandate emissions caps and allow companies to trade pollution permits on an open market. He said getting the United States, China, India and Brazil to the table in the final days of the summit, a general agreement among industrialized and developing countries to limit emissions, and serious discussions about financing mitigation for poor countries are notable steps ahead. “I think we made progress,” he said.

With big policy questions remaining about Capitol Hill’s response to the Copenhagen Accord, Sandor asserted that President Obama’s participation in the meetings and a post-summit comment by Sen. John Kerry (D-Mass.) that the accord is probably a net plus for the Senate should shift the delicate political dynamic in the United States and among major nations.

“The fact that we’re seeing those kinds of remarks out of Washington, D.C., is optimistic,” Sandor said. “All in all, the message that we were going to proceed was great for the world.”

Sandor, who attended the 1992 Earth Summit in Rio de Janeiro, which paved the way for the Kyoto Protocol, said Copenhagen achieved incremental steps, but uncertainty about the details of achieving emissions targets isn’t likely to scare off capital markets as long as there are legitimate clean energy projects to finance.

‘A realistic step’ taken

John Rowe, chairman and CEO of Chicago-based utility Exelon, which has the nation’s largest fleet of nuclear power plants, urged Senate passage of climate legislation next year. “We are pleased that the five major emitting countries — the United States, China, India, South Africa and Brazil — have agreed to take the first step by voluntarily agreeing to limit their greenhouse gas emissions,” he said in a written statement.

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Groups of vigilantes clashed with several of the mourners, and both groups threw stones and other objects at each other, witnesses and opposition Web sites reported. The reports could not be independently verified. Authorities denied foreign correspondents permission to travel to Qom, which is about 90 miles south of Tehran.

About 100 members of the pro-government Basij militia attacked the house of the late ayatollah and tore up a banner displaying his portrait, his son Saeed Montazeri said in a telephone interview from Qom.

“They attacked, they lost all control,” Montazeri said, calling from the house. “They started to throw stones at people and tore down the mourning banner of my father.”

Montazeri said that after the attack he saw several wounded people. “The huge crowds in the funeral kept them from taking over,” he said.

Opposition Web sites said that hundreds of thousands of people attended the funeral, which took place Monday morning. Several leading ayatollahs paid their respects to Montazeri, who was one of the highest-ranking Shiite clerics in the world but for years lived under house arrest for criticizing political leaders. Opposition leaders Mir Hossein Mousavi and Mehdi Karroubi visited Montazeri’s house, according to the opposition Web site Kaleme.

Montazeri’s body was carried in a shrouded glass coffin on top of a semi-trailer, which moved slowly through seas of weeping people toward the shrine of Hazrat-e Masoumeh, a female Shiite saint. There, the cleric was buried next to his son, who died in the Iran-Iraq war of the 1980s. Young women wearing green headbands, the color of the opposition, could be seen holding portraits of the late ayatollah.

“Many hip young people from Tehran, who usually have no interest in Montazeri, were there, crying,” one witness said. “It was very moving, and many people shouted slogans against the government.”

People shouted political slogans such as “Montazeri is not dead, the government is dead” and “Dictator, dictator, we will follow Montazeri’s path.” Government supporters, who were present in smaller numbers, shouted, “Hypocrites leave Qom.”
Montazeri’s death in his sleep of multiple organ failure Sunday dealt a blow to Iranian human rights and democracy advocates, who considered him their spiritual guide.

The death of the ayatollah, who was once designated to lead the Islamic Republic, comes during an already tense Shiite mourning period, called Muharram, which millions will observe by taking to the streets in the coming nights to mourn a revered Shiite saint.

After Grand Ayatollah Ali Sistani, an Iranian-born Shiite cleric residing in Najaf, Iraq, Montazeri was considered the highest Shiite authority in the world.

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