UPI Hears:

By MARTIN WALKER, Chief UPI International Correspondent  |  Oct. 22, 2003 at 3:41 PM
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Israel nervous about Saudi war games

Israel is getting nervous about the massive air and naval exercise being held by Saudi Arabia near its borders.

The exercises in the northwestern part of the kingdom and along the Red Sea near the Israeli border are being run from the King Faisal Air Base at Tabuk, near the Jordanian border and just 120 miles from Israel. That's the airbase at which the Saudis promised not to base their U.S.-supplied F-15 warplanes.

But controlled by the Saudi's E-3A AWACS aircraft, the exercise includes the F-15s as well as fast attack naval craft and air defense command. The exercise, which began last week and will continue for at last another 10 days with further maneuvers all along the kingdom's northern border, is the biggest the Saudis have staged in years.

Will the euro beat the dollar in Russia?

Russian President Vladimir Putin caused a storm when he indicated Russia might follow Saddam Hussein and use euros not dollars in pricing gas and oil exports.

Putin replied casually "why not" to a journalist's question whether Russia might take that step.(Were Saddam still in power to enjoy the proceeds, this would have resulted in an extra $2 billion a year on the currency exchange.)

Now Deputy Prime Minister Viktor Khristenko says Russia is prepared to honor the euro in energy export contracts, since half of Russia's oil and oil-product exports and more than a half of gas exports go to the European Union.

Don't expect a flood of euro deals, Khristenko warns -- Russians use the hard currency they earn to buy imports, many of them priced in dollars.

Europe, Russian to get wired

There's a little known agreement signed recently between the European Union and Russia to fully integrate their respective electricity grids by 2007.

Anatoly Chubais, head of Russia's national power monopoly, Unified Energy Systems, reached the deal with the EU's top energy and transportation official, Francois Lamoureux, who said the objective was "complete synchronization of the grids to form a common electricity market and ensure the safety of energy supplies."

Chubais added that UES, which has already synchronized the grids of all 14 of Russia's neighbors, is now studying how to do the same with Europe. The pricing of the system will be complex, since two-thirds of Russia's electricity comes from natural gas, which is sold in Russia at a fraction of the price demanded in Europe.

EU members battle over agencies

European Union members seem to be squabbling over who gets parts of the expanding bureaucracy, including the food safety and border security agencies.

First there's a standoff between Italy and Finland over the location of the European Union's new food and consumer safety agency, after Italian premier Silvio Berlusconi's famous sneer that the Finns "don't even know what prosciutto is."

And now comes another battle for the plum of hosting a new EU agency with lots of well-paid bureaucrats. This time it's the $140 million border control agency.

Finland has been suggested (mainly as compensation for giving Berlusconi his food agency) though most border problems are along the Mediterranean coast, and Italy or Greece would make more sense.

The French and Belgians are cunningly suggesting Prague, since this would leave the Central European city out of the running for the long-term French plan of a separate EU military headquarters that excludes the Americans. And it is to be located in France.

Spanish Socialist snubs U.S. flag

Spain's Socialist Party leader showed his displeasure with his country's support of the Iraqi war by snubbing the U.S. flag during Hispanidad Day festivities.

Spain has sent 1,300 troops to Iraq, but Prime Minister Jose Maria Aznar's support for the Bush administration remains hugely unpopular. Opinion polls recorded more than 85 percent of Spaniards against the war.

Opposition Socialist Party leader Jose Luis Rodriguez Zapatero took advantage of the recent "el Dia de Hispanidad" celebrations -- which coincides with Columbus Day in the United States -- to demonstrate his opposition with a flamboyant gesture. Zapatero defiantly remained seated while a U.S. naval unit carried Old Glory past a reviewing stand in an armed forces parade, while members of Aznar's Popular Party stood and cheered.

King Juan Carlos, who was reviewing the parade, stood to salute the American flag. Zapatero did manage to applaud when the Spanish flag was carried past.

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