* Rice: I’ll leave no stone unturned in pursuit of ME peace Though the clock is ticking on the Bush administration and Israel is in political turmoil, US Secretary of State Condoleezza Rice pledged to push for a peace deal.

* G8 backs financial reform summit The leaders of the G8 major industrialised nations have agreed to hold a summit with other states to discuss global financial reform.

* ‘AqsaTube’ glorifies terrorism online Hamas has launched an Internet site called AqsaTube, a file-sharing resource enabling users to upload videos.

* Israeli biofuel project could spell end of Mideast oil power It will take dedicated visionaries to help stop America’s addiction to foreign oil and diminish the huge market power wielded by Mideast oil producers.

* German official was at anti-Israel rally German Ambassador to Iran Herbert Honsowitz violated EU guidelines by allowing a military attaché to attend an anti-Israel military parade in Teheran late last month.

* Group of 12 to reflect on future of Europe EU leaders are on Thursday (16 October) set to approve a 12-member group headed by former Spanish Prime Minister Felipe Gonzalez.

* Syria to open embassy in Beirut after historic decree Syria and Lebanon are establishing diplomatic relations for the first time, putting ties between the neighbours on a more equal footing.

* In response to Acre riots, PFLP threatens to kill Lieberman The Popular Front for the Liberation of Palestine (PFLP) on Tuesday threatened to kill Israel Beiteinu chairman Avigdor Lieberman.

By: Robert Maginnis – Human Events

America’s senior uniformed military leader has called for increased political engagement with Afghan tribal leaders (read the Taliban enemy) which is consistent with America’s strategic goal of promoting democratic solutions. But negotiating a political role for the Taliban holds as much promise as the failed democratic experiments with Hamas in Gaza and Hezbollah in Lebanon.

Admiral Mike Mullen, the chairman of the Joint Chiefs of Staff, said that “Trends across the board [in Afghanistan] are not going in the right direction” and “I would anticipate next year would be a tougher year.” He bases that bleak assessment on the yet to be published National Intelligence Estimate which casts doubt that the Afghan government can stem the rise in Taliban influence.

That assessment which was leaked to the New York Times has evidently influenced the US to seek a new Afghan strategy which Mullen describes as a “move forward.” That strategy would engage the Taliban in talks which could lead to a political role for the group in the Afghan government while reducing combat operations and focusing more on training tribal militias as well as government forces.

The focus on training tribal militias is similar to what US forces tried with Iraq’s Sunni Awakening Councils. Although not directly applicable because Afghanistan’s jihadists are native Taliban rather than foreigners, the idea is to pull away enough support from the Taliban to divide the movement. Therefore, if enough enemy joins the political process there might be an opportunity to justify the West’s withdrawal.

This strategy has significant support. British commander in Afghanistan Brigadier Mark Carleton-Smith believes that part of the Afghan solution must include talks with the Taliban who are willing to work with the Afghan government. That view is shared by Kai Eide, the top United Nations envoy to Afghanistan, as well as US Secretary of Defense Robert Gates and perhaps the new combatant commander for the region, General David Petraeus.

Not surprisingly, talks between the Taliban and Afghanistan officials have already taken place. Last month, Saudi King Abdullah hosted a meeting between 11 Taliban leaders and two Afghan government representatives in Mecca. There is scant information from those secret talks other than a report that the next meeting will be in two months and one of the preconditions for the talks was the Taliban’s promise to sever its ties with al Qaeda, terror leader Osama bin Ladin’s group.

The motivation for the talks appears to be overcoming war stagnation. The Afghan government and its allies believe the Taliban cannot be defeated militarily and the Taliban believes it can’t win a war against the US-led coalition. That’s why the Saudi initiative has gained support even though it is naïve to believe the Taliban are even remotely ready to become a democratic partner.

The notion that welcoming your enemy into government will turn him into a responsible democratic partner is an old liberal idea that has repeatedly failed. Two recent Mideast democratic experiments with Islamic terrorist organizations illustrate the futility of the strategy.

There were great hopes that once the Israelis pulled out of the Gaza Strip in 2005 that the Palestinian people would elect a government that would bring peace. Unfortunately, the Palestinian terror group Hamas won at the ballot box over its “moderate” opponent, FATA. Now, “Hamas … is stronger than ever before,” said Avi Issacharov, a reporter with the Middle East newspaper Haaretz, and the Palestinian people are worse off.

Hamas used the democratic process to consolidate its control and to advance its radical Islamic agenda. Since taking charge Hamas has used tunnels from Gaza to Egypt to bring in weapons and commercial goods and to provide safe passage for militants to leave the territory for training in Iran and Syria. It has diverted limited fuel supplies away from legitimate commerce to its political allies, crushed dissent and harassed reporters. Today, most Gaza residents, 80 percent, are living on international handouts while violence against Israel escalates.

Hezbollah, the Lebanon-based “Party of God,” has taken a similar a track. It is an extension of Tehran’s Islamic Revolution which was formed in the early 1980s to challenge the secular Arabist movements and to provide Tehran a tool with which to challenge American interests in the Mideast. It has relied on violence as a tactic to advance its causes such as the 2006 war with Israel and has received funding from Tehran to buy much of Southern Lebanon in order to expand its influence.

Recently, Hezbollah used its “democratic” political influence to seize national power. In July, Lebanon’s first full-fledged government since 2006 was created with a veto proof Hezbollah minority. The group’s general secretary, Hassan Nasrallah, claims, “We don’t want to have control over Lebanon” but he forced the new government to accept his terms by threatening military action. Now, Hezbollah is incrementally taking over Lebanon, chasing away dissenters and threatening Israeli and Mideast stability.

Hamas and Hezbollah used the democratic process to advance their radical Islamic views and to consolidate control over their countries. Let there be no doubt that the Taliban would do the same in Afghanistan.

Beyond the fact that terror groups make disastrous democratic partners, the Saudi-hosted talks are doomed because they don’t include the real Taliban power brokers.

The Long War Journal, an established publication that reports and provides analysis on the Global War on Terror, claims that there is no indication that Taliban leader Mullah Mohammad Omar, that organization’s real power broker, has cut ties with al Qaeda as Saudi sources indicate. In fact, the Taliban “leaders” who joined the discussions in Mecca were not representing the Taliban’s Shura Majlis (executive council). They were “outsiders,” claims Omar.

Omar issued two press releases days after the Saudi conference distancing his group from the talks. Omar’s press release states, “The Shura Council of the Islamic Emirate of Afghanistan considers such baseless rumors as part of the failed efforts by our enemies to create distrust and doubts among Afghans….” “No official member of the Taliban – now or in the past – has ever negotiated with the US or its puppet Afghan government,” Omar said. Further, Omar emphasized that “Our struggle is to implement the rules of Allah in Afghanistan by eradicating the enemies.”

That doesn’t sound like a guy ready to sit down and talk peace or to join a democratic political process. What appears to be happening is the Saudis and their Western allies want peace at any cost and are willing to sit down with anyone claiming to represent the Taliban.

So what can be done?

Declaring victory and abandoning Afghanistan is a tempting “solution” if it were not for the likely fallout. Quitting Afghanistan now could result in a Tehran-dominated Mideast – a key Saudi concern, the possible disintegration of Pakistan into a radical nuclear armed Islamic state, and Afghanistan could fall back into Omar’s hands from which his ally al Qaeda would continue planning and executing operations against Western “infidels.”

Several things must be done to avoid these catastrophic outcomes. “We’ve got to impact … the poppy issue,” Mullen said because $100 million in annual drug profits fuel the Taliban’s insurgency. Pakistan and the western coalition must join forces to shutdown the Taliban’s cross-border operations. And Tehran’s support for the Taliban must be cut-off by military means if necessary.

Finally, we must tread very carefully when considering whether to welcome the Taliban into Afghanistan’s democratic process. The Taliban must first earn that opportunity by providing significant proof like total demilitarization of its forces. Otherwise, the Taliban will doom Afghanistan to repeat the lessons learned from Hamas in Gaza and Hezbollah in Lebanon.

By: Herb Keinon – The Jerusalem Post

With the global financial hurricane still raging, it is clear to all that everyone and everything is going to get wet. The real question is how wet.

Take, for instance, the Israeli economy. No doubt we will all be affected by Wall Street’s storm, as will nearly every country in the world. No doubt a deep recession is around the bend, and we will feel it – maybe less than folks in the US, certainly less than those in Iceland, but feel it we will.

In Jerusalem, however, where concerns are primarily existential and not merely economic, another question is asked: How will all this impact on the Arab-Israeli conflict, and what will it do to the diplomatic process?

And even though we are in the midst of the tempest and it is too early to predict all the consequences, it is obvious that the financial crisis will have an impact on international relations, on the balance of power, on new alliances. Some have said we are now witnessing the seminal event of the young century, and that the ripple effects will be felt far and wide.

First of all, the crisis is already having an impact on the diplomatic process by having an impact on the domestic political process, both in Israel and in the US.

In Israel, the global financial meltdown will make it easier for new Kadima chairwoman Tzipi Livni to form a government. Granted, Shas and, to a lesser degree, the Labor Party are kicking and howling on their way into a Kadima-led government, but in the final analysis, they will both likely join, using as an explanation to their respective voters the need to “act responsibly” and ensure a stable government at this economically volatile time.

The crisis is also having a dramatic impact on the US presidential election, with Barack Obama opening a 9-percent lead over John McCain in the polls, a gap the pundits explain is due primarily to the economic situation. And the conventional wisdom is that an Obama administration would take a much more activist approach to the Israeli-Palestinian conflict than a McCain administration.

Well, at least on paper. In reality, an Obama government is likely to be so tied down dealing with the economic crisis that even if the new president and his team of veteran Oslo Accord hands would like to dive right into the Middle East conflict, the attention both of the administration and of the American public will be otherwise engaged. With banks collapsing, stocks falling, and the real estate market a shambles, it seems unlikely an Obama team – or, for that matter, a McCain team if things should reverse themselves in the next four weeks – will have a lot of attention or energy left for the Middle East conflict.

And they would not be alone. If Livni does indeed succeed in putting together a government, its top priorities will no longer be the Palestinian track, or even the Syrian track, but rather the economic track.

The disappearance of trillions of dollars worldwide will also make it difficult for the international community to pay for an Israeli-Palestinian, or Israeli-Syrian, agreement, even if they miraculously appear. Who would pay for the tens of billions of dollars worth of new early warning systems Israel would have to set up following deep withdrawals from the West Bank and Jordan Valley, or a complete withdrawal – as the Syrians are demanding – from the Golan Heights?

Who would pay compensation to Palestinian refugees if an agreement were reached that would deny them a “right of return” to pre-1967 Israel, but would recognize their right to compensation? Who would pay for the Palestinian security services or fund the infrastructure if a Palestinian state were agreed upon?

The US? After this month, forget about it.

Europe, the oft-looked-to Middle East payer? Hard to believe that, considering their devastated economies, Europe will be anywhere nearly as generous to the Palestinians in the future as they have been in the past.

The Persian Gulf states? Even in the best of times, it was difficult to get those countries to do more than pledge money to the the Palestinian Authority. But now, with oil revenue at nearly half what it was a few months ago and the stock markets in the Arab countries slipping badly along with the rest of the world’s markets, don’t expect them to step up and fill in the gaps for the Palestinians.

In addition, with the governments of the world now preoccupied with their own economies and the resulting domestic fallout, the importance of solving the Israeli-Palestinian issues right now will likely fade. That fading interest could have negative consequences of its own, because the Palestinians will struggle to make sure their issue does not recede, that it stays front-and-center on the agenda. And if history is any indication, the way the Palestinians keep their cause on the international radar screen is not through letters to the editor or civil disobedience, but through terrorism and other violence.

And that’s how falling stocks on the Frankfurt Stock Exchange could lead to falling rockets on Sderot.

* US, allies planning Iran sanctions without UN support The United States and its allies are discussing economic sanctions on Iran without the United Nations’ support.

* Europe spends trillions in historic bank rescue EU states on Monday (13 October) outlined the details of a historic state bail-out of Europe’s financial sector.

* France’s War with Jihadis France’s war with the jihadis is more intense than most Americans or even most Europeans would imagine.

* Israel seals off West Bank ahead of Sukkot holiday The holiday of Sukkot, celebrated for seven days, is part of the Jewish high holiday season, which usually falls in the autumn and began this year on September 29 with Rosh Hashana.

* Iraq’s Kurds meet Turkish delegation in Baghdad Iraq’s senior Kurdish leader met with Turkish officials Tuesday in Baghdad, a news agency reported, the first direct talks between the two sides in four years.

* Syria to open embassy in Beirut Syria’s President Bashar al-Assad has issued a decree to set up diplomatic ties with Lebanon and open an embassy.

* Ban confronted Ahmadinejad on speech UN Secretary General Ban Ki-Moon has said that he personally confronted Iranian President Mahmoud Ahmadinejad over his address to the UN General Assembly last month.

* Former global leaders in Iran to support Khatami Iran’s reformist ex-president Mohammad Khatami is hosting former UN chief Kofi Annan and other high-level European dignitaries this week.

* EU ministers keep Russian partnership on hold Despite pressure from some EU capitals, the union’s foreign ministers stopped short of resuming talks on a new EU-Russia partnership treaty.

* Iraqi officials to probe attacks on Christians Iraq’s government pledged on Tuesday to send senior officials to northern Iraq to tackle violence against Christians which has led thousands to flee their homes fearing for their lives.

* Markets surge after crisis talks US shares have risen strongly in early trading as investors welcome fresh efforts by global leaders to end the recent financial turmoil.

* Time is Running Out For Solution Time is running out for a peaceful resolution to the Israeli-Palestinian conflict leading to a two-state solution.

* Week-Long Sukkot Holiday Begins Monday Night The seven-plus-one Sukkot holiday, which begins Monday night, features temporary dwellings, Four Species, and much rejoicing.

* Palestinians ready for reconciliation Palestinian Authority President Mahmoud Abbas said Sunday the rift between Fatah and arch-rival Hamas must end.

* The failing markets’ impact on diplomacy With the global financial hurricane still raging, it is clear to all that everyone and everything is going to get wet.

* Barak: Set up task force on settler violence Defense Minister Ehud Barak has ordered his deputy, Matan Vilna’i, to establish an inter-agency task force to coordinate efforts to stop the current wave of settler violence.

* Paulson calls for global cooperation on financial crisis US Treasury Secretary Henry Paulson called for coordinated, international steps to deal with the global financial crisis.

* Hinduism vs. Christianity in India India, the world’s most populous democracy and officially a secular nation, is today haunted by a stark assault on one of its fundamental freedoms.

* Iraq: Businessman killed as attacks on Christians continue Gunmen killed a Christian businessman and wounded his nephew in a drive-by shooting in Mosul.

* Restored Synagogue Reopens in Old City’s Muslim Quarter Following years of archaeological digs in the area, the Ohel Yitzhak (Tent of Isaac) synagogue was rededicated on Sunday.

* G7 nations pledge to fight crisis Finance ministers from leading industrialised nations have pledged action to tackle the financial crisis.

* Berlusconi Says Leaders May Close World’s Markets Italian Prime Minister Silvio Berlusconi said political leaders are discussing the idea of closing the world’s financial markets.

* Haider death stuns friends and foes The last time I saw Joerg Haider, just under two weeks ago, he was being serenaded to Queen’s hit ‘We are the Champions’.

* Haniyeh: American Empire is collapsing America’s opponents in the Middle East are gloating at the financial meltdown in the United States.

* IAF jets scrambled to northern border Thirty-five years after the Yom Kippur War erupted, the Israel Air Force scrambled fighter jets to the border with Lebanon after a suspicious aircraft was detected approaching Israeli airspace.

* N Korea taken off US terror list Washington has removed North Korea from its list of countries sponsoring terrorism.

* Iraqi PM discusses US pact with Muqtada al-Sadr Iraq’s prime minister met with Grand Ayatollah Ali al-Sistani on Friday and indicated the country’s most influential Shi’ite cleric, Muqtada al-Sadr, would not try to block a long-term US security deal.

* PM set for crisis talks in Paris Gordon Brown is to go to Paris on Sunday for talks with Nicolas Sarkozy on the global financial crisis.

* Official: 500 Christian families flee Iraq’s Mosul An upswing in insurgent attacks against Christians in Mosul has forced 500 families to flee in the last week and seek shelter at churches.

* OPEC to hold emergency meeting on oil prices OPEC said Thursday it will hold an extraordinary meeting Nov. 18 to discuss how the widening global financial crisis is affecting oil prices.

By: Dr. Jonathan Spyer – The Jerusalem Post

Stock markets across the Arab world experienced unprecedentedly sharp losses when trading began following the Id al-Fitr holiday earlier this week. The seven stock markets in the oil rich Gulf states shed around $150 billion of their capitalization in the course of the week.

A Saudi trader reacts as he looks at the stock market monitor in Riyadh, Saudi Arabia, this week.
Photo: AP

The market in Saudi Arabia sank by 7 percent. In Egypt, the key index fell by around 16%. One Saudi economist quoted by Agence France Presse described the latest developments as a “catastrophe.” For a number of reasons, the Arab world may well prove particularly vulnerable to the world economic downturn. This fact has political implications for the region, which are already being glimpsed and acted upon by various regional forces.

The first and most obvious reason why the Arab world is particularly vulnerable to the financial crisis is that a disproportionately large amount of Arab wealth is invested in global stock markets. Since the 1970s, the Arab world (or parts of it) has enjoyed a long windfall of oil wealth.

Oil wealth is the main source for Arab sovereign wealth funds. Arab sovereign wealth funds, with a combined value of more than $1 trillion, are important investors in what are now being exposed as some of the most vulnerable sectors of global finance.

The Kuwait Investment Authority, for example, placed a $2b. investment in Merrill Lynch last year. At the time, this must have seemed like a secure move. Merrill Lynch, of course, no longer exists.

But the extensive Arab involvement in global stock markets is itself a symptom of a larger malaise. The oil-rich Gulf countries have preferred to use their wealth to build luxurious lives for the lucky few.

Instead of investing in education, especially in cutting-edge fields such as information technology, and in industry, money has been gambled on the stock markets, or invested in glittering real-estate projects, built by foreign labor and using foreign know-how.

The result has been islands of luxury and conspicuous consumption, based on no solid national capital of knowledge and skills. This vulnerability is now being exacerbated by the recent decline in the price of oil – which has fallen nearly 40% in recent months.

This reality has implications not only for the thinly populated, oil-rich Gulf states. The population centers of the Arabic-speaking world, above all Egypt, are also unlikely to remain immune. Development in the Gulf has provided otherwise sparse job opportunities for some of the vast population of under-employed university graduates produced by Egypt.

Large numbers of unskilled and semi-skilled laborers have also found work in the Gulf. But if Gulf economies now draw in, this picture is likely to change. Furthermore, the open tap of foreign aid on which the Egyptian economy has been so reliant may begin to run dry – as the US and other Western economies enter hard times.

Since we are discussing the Middle East, it is appropriate to ask “who benefits” from the current worrying situation. Political commentator Rami Khouri, writing in the Beirut Daily Star, notes that “this is not a situation we can blame on anyone but ourselves.” Khouri hopes that the crisis will produce a sobering effect in the politics of the region.

But while it would be comforting to believe that the gravity of the crisis may lead to a sudden outbreak of political maturity, one would be unwise to bet on the prospect. The most notable political response to the financial crisis so far has come from Islamist political circles. The response has taken the form of unabashed glee at America’s discomfiture, along with attempts to cast the blame for the situation on that ever reliable stand-by – the Jew.

Thus, Al-Manar, Hizbullah’s media station, is currently holding an opinion survey of its viewers, asking them “Do you agree with those who see in the international financial crisis the beginning of the US Empire’s fall?”

Unsurprisingly, 84.5% of Al-Manar viewers polled have answered in the positive. The Al-Manar Web site is also running an article under the headline “Jewish Lobby in US to blame for world financial crisis.” The article details the statement by Hamas Spokesman Fawzi Barhoum in which he identified the “Jewish lobby” as the body responsible for the creation of the US financial and banking sector, and asserted that it should therefore take the blame for the current situation.

Not to be outdone, the al-Qaida network has released a statement, contending that “The enemies of Islam are facing a crushing defeat, which is beginning to manifest itself in the expanding crisis their economy is experiencing.” Such elements identify the crisis as offering great opportunities for growth for their style of politics. They are probably right. Impoverishment, extreme uncertainty, the sense of things in flux are the fuel on which they run.

One should not over-labor historical comparisons, of course, but there are some that are instructive. The Wall Street Crash of 1929 is an imperfect but useful historical example for understanding what is happening now. In 1928, in a central European country, a small, very radical party was humiliated in parliamentary elections, winning only 2.6% of the vote. The same party, in the transformed circumstances following the crash, won 18.3% of the vote in 1930.

The country was Germany, the name of the party was the National Socialist German Workers Party, and the rest of the story is known. Who benefits, indeed.

By: Middle East Times

At last the world’s top finance officials, including those in China, have started thinking globally. This week’s coordinated interest rate cuts suggest that the central banks are at last working together. Governments, legislatures and cartels have yet to learn the same lesson.

DANGERS AND REWARDS — The Abu Dhabi Investment Authority and China’s CIC are facing losses on their investments in U.S. financial institutions, but they both have the patience and foresight to wait until those losses turn into healthy profits. (Illustration via Newscom)

Start with cartels. Iran and Venezuela are leading the demand for an emergency meeting of OPEC to cut production targets so that the oil price can rise from its current $84 a barrel back toward the $140 a barrel bonanza they enjoyed in the summer. Perhaps they do not understand that the high oil price has been a factor in the current nightmare, and that a new price increase could bring on the global depression that would hit everybody.

Then consider the legislatures. The West and its banks need money, and there is lots available. The Chinese have some $2 trillion. The Japanese have over $1.2 trillion. India, Taiwan and South Korea have another $1 trillion between them and the Arab states of the Gulf Cooperation Council probably account for another $2 trillion.

Naturally, what they do with their money is up to them, but it might be helpful if they had the option of making truly useful profits, doing well by doing good and buying into temporarily depressed Western assets. Indeed, they have already made the effort. The Abu Dhabi Investment Authority is facing a $3 billion loss on its investment in Citigroup, and China’s CIC is showing a loss on paper of over $1.25 billion in Morgan Stanley, although they both have the patience and foresight to wait until those losses turn into healthy profits.

This is not a matter of charity but of mutual benefit. Bahrain’s Investcorp has launched a $1 billion fund to buy up cheaply the toxic loans and mortgages that cannot find a market, knowing that there are gems buried in that dung heap. It will help the U.S. economy if someone buys them up, and help Investcorp’s investors when recovery comes and they show a profit.

The question is whether the U.S. Congress and the European and Japanese parliaments understand this and stop making cheap political capital out of the cry that foreigners are buying the family jewels. Too many economic illiterates like Ohio Congresswoman Marcy Kaptur have blustered “Will we sit back and let the [sovereign wealth funds] of the world fire at will, claiming our assets and extirpating our businesses?”

The ball is now in the court of Western governments and politicians. Can they coordinate their rescue policies as well as the central banks? Will they rout their own xenophobic populists and welcome foreign capital without offensive conditions? Are they ready to whatever it takes to save the system?

The British seem to be pointing the way, with their own $700 billion effort to re-capitalize their banks, and with their new minister for business, Peter Mandelson, suggesting that sovereign wealth funds should get a new name savior wealth funds. He’s right.

* Fear grips global stock markets Wall Street shares have fallen sharply in opening trading, with the Dow Jones index down 6% at 8,056 points.

* Turkey launches Kurdish rebel attacks in Iraq Turkish warplanes and artillery bombed and killed a large group of Kurdish rebels .

* Russian withdrawal ‘not complete’ France’s foreign minister says Russian forces’ withdrawal from Georgia is “not complete or perfect”.

* World Top Financiers Start Thinking Global At last the world’s top finance officials, including those in China, have started thinking globally.

* Israel Caught Between Islamist Crossfire: Lebanon Pays Price Both Israel and Hezbollah feel that another round of violence is inevitable.

* MEPs endorse exploitation of Arctic resources The European Union must push for an international treaty governing the Arctic if the rapidly melting and delicate region is to be saved.

* Hamas and Fatah to hold talks in Cairo Fatah and Hamas representatives are scheduled to meet in Cairo in the coming days in yet another bid to end their ongoing rivalry.

* Terror groups call for 3rd intifada The Islamic Jihad movement called on Friday for Palestinians to take to the streets in solidarity with the Arabs of Akko and Arabs in Israel.

* Analysis: Who in the Arab world benefits from crisis? Stock markets across the Arab world experienced unprecedently sharp losses when trading began following the Id al-Fitr holiday earlier this week.

* Iraqi PM discusses US pact with Shiite cleric Iraq’s most influential Shiite cleric indicated Friday he would not stand in the way a long-term U.S. security deal if it’s approved by the country’s democratic institutions.

By: Associated Newspapers, Ltd.

The Tories have issued a St George’s Day rallying cry against plans by Brussels to “wipe England off the map” and create a United Europe.

As Gordon Brown hoisted the English national flag over 10 Downing Street to celebrate St George’s Day, it was revealed that EU officials had revised a map wiping out the country and the Channel.

The change splits England into three and lumps those parts together with chunks of other countries to create “transnational regions”.

Flying the flag: The cross of St George over No 10 Downing Street today

It is claimed these zones – which have been allocated their own budgets – are intended to boost trade between EU nations.

But the Tories yesterday accused the Government of trying “to create a European superstate via the back door”.

Under the programme, known as INTER-REG, counties along England’s south coast form the “Manche Region” along with northern France.

Divide and rule: How the South-East has been paired up with regions across the Channel

The “Atlantic Region” takes in western England, along with Ireland, Wales and parts of Portugal, Spain, France and Scotland.

Meanwhile eastern England is part of the “North Sea Region”, which covers areas of Sweden, Denmark, Germany, Belgium, Norway and the Netherlands.

Gordon Brown: Celebrating Englishness

The UK Government is fully behind the project, even though the words “England” and “Britain” are left off official maps of each area and the Manche Region renames the English Channel “The Channel Sea”.

Each region, which will be given taxpayers’ money to promote trade links, cultural ties, transport policies and tourism, is to be run by a “managing authority” of unelected officials overseen by a director.

None will be based in the UK, with Manche ruled by the French, Atlantic by the Portuguese and North Sea by the Danes.

The regions have legal status and Manche has a budget of £261million between 2007 and 2013, Atlantic £127million and North Sea £219million.

Every project funded by a region must have a publicity campaign which ensures “there is provision for flying the EU flag at least one week every year”.

Eric Pickles, the Conservatives’ communities spokesman, said: “We already knew that Gordon Brown had hoisted the white flag of surrender to the European Constitution.

St George, played by historical interpreter Alan Larson, does his best at dispatching the Dragon at Scarborough Castle

“Now the Labour Government has been caught red-handed conspiring with European bureaucrats to create a European superstate via the back door.

“Gordon Brown literally wants to wipe England off the map.”

But a spokesman for the Department for Communities and Local Government insisted: “It has nothing to do with altering names on maps.

“It is about support for business, helping boost employment and turning around deprived areas… helping firms in Kent do business with people in Northern France or promoting joint tourism initiatives between different countries.”

A St George’s Day flag flies next to a statue of Sir Winston Churchill in London’s Parliament Square today

The move came as Gordon Brown ordered that all UK Government buildings with two flag poles should fly the cross of St George alongside the union banner.

It follows a review of flag flying practices. Number 10 will in future fly the Scottish and Welsh flags on their patron saints’ days.

Northern Ireland does not have an official national flag, and so the same practice will not apply on St Patrick’s Day.

“The Prime Minister’s view is that of course we should celebrate our Britishness, but celebrating our Britishness does not mean we cannot also celebrate our Englishness, Scottishness, Welshness or Northern Irishness,” said the spokesman.

The English flag last flew over Downing Street during the 2006 World Cup.