By Stefan Wagstyl, the FT’s eastern Europe editor

Among the many would-be borrowers planning to raise money from the capital markets before the current rally fades is the Russian government.

Alexei Kudrin, finance minister, has been talking to bankers and fund managers in London about a proposed bond issue to help finance Moscow’s yawning public deficit. He will not want to be reminded that the last time the Russian authorities tapped the market was shortly before its 1998 default.

Nobody is suggesting that the same could happen again - given the careful way that Russia has managed its accounts in the last decade, stashing away surplus oil and gas export revenues for a rainy day. But those reserves are draining away fast - hence Mr Kudrin’s visit.

One key element has changed little since 1998 - the country’s dependence on oil and gas. Repeated promises to diversify the economy have gone nowhere. The current crisis has clearly not been bad enough for Russia to force any serious policy changes. And now that oil has recovered to around $80 a barrel, up from near $30 earlier this year, the pressures are easing rapidly.

In the short-term, that is good for Russia - and will help in getting the bond away. But in the long-term, it delays the development of a diversified modern economy able to repay its bondholders whatever the financial climate.

Gideon is away on book writing leave… but he has been back in touch about the following study from the European Council on Foreign Relations. He says it is “one of those rare things - a report on the transatlantic relationship that is actually worth reading.”

Here is an excerpt:

As EU leaders head to Washington for their transatlantic summit tomorrow, an unsentimental President Obama has already lost patience with Europe.  In a post-American world, the United States knows it needs effective partners.  At present, Europe lacks coherence and purpose. If Europe cannot step up, the US will look for other partners to do business with. Read the report here.

Related reading:

Summit-hungry Europeans flock to a bemused Washington FT Brussels blog
Obama - in depth news, comment and analysis, FT

By James Blitz, the FT’s defence and diplomatic editor

The collapse of the second round of the Afghan election will be viewed by some western governments as a fiasco, one that raises questions about how legitimate Hamid Karzai really is as the country’s leader and partner to the US. But many in Nato will also be relieved today that the long Afghan election saga has finally come to an end. Clearly, there are huge questions about Mr Karzai’s standing after the election debacle, the allegations of voter fraud and the evident US frustration with his leadership. But the second round of the election, was always going to be a severe test for Afghanistan - with fears about yet more violence and fraud, and the spectre of a low turnout. Many will breathe a sigh of relief that another chapter in this electoral nightmare has been avoided. Continue reading "Afghanistan’s election: Relief the saga has ended"

By Geoff Dyer, the FT’s China bureau chief

China can do strange things to your politics. I know foreigners who purr about the efficiency of authoritarian bureaucracy and others who search Confucian texts for new political ideas. In my case, China has converted me to the importance of the European Union.

Sitting in Beijing, it is all too easy to feel that Europe is becoming irrelevant, as the US and a rising China stitch up the global agenda. The Chinese have become quite adept at playing one European government against another. When Beijing cancelled a summit with the EU last year to punish Nicolas Sarkozy for meeting the Dalai Lama, the response from other EU capitals was an awkward silence. The European Council on Foreign Relations claims Beijing treats the EU with “diplomatic contempt”. Continue reading "China has converted me to the importance of the EU"

That is because I’m disappearing for two months, to finish a book. (About international politics, amazingly enough). To ensure maximum concentration, I am abandoning not just the column - but also the blog. I will return to normal duties at the beginning of January.

In the meantime, a group of my colleagues have kindly agreed to take over my blogging duties. Over the next couple of months, this will become a group international affairs blog - drawing on the resources of the FT’s network of foreign correspondents. Among the people who have promised to blog at least once a week are Geoff Dyer, Roula Khalaf, James Blitz, Alan Beattie and Victor Mallet. (The last two will start around November 10th.) And other correspondents will chip in, every now and then. It promises to be really good - but, I hope, not too good, or I could be out of a job in 2010.

The British foreign secretary spoke to my colleague George Parker about Afghanistan, Russia and the prospect of president Blair. Continue reading "FT video: David Miliband interview"

For most of the past twenty years, high levels of unemployment in Europe have been a source of shame and concern for European policymakers. Conversely, the Americans have revelled in the extraordinary job-creating US economy. Whenever Europeans defended their welfare states, or poined to inequality in the US, the Americans had a ready riposte - at least our people are at work.

But, without exciting much comment, things have now changed. American unemployment is alarmingly high - 9.8% according to the tables at the back of The Economist. By comparision, Britain is 7.9%, Germany 8.2%, the Netherlands 5.1%, Denmark 3.7%. The euro-zone as a whole is at 9.6%, just below the States - but the average is dragged up by Spain’s outstandingly poor performance, with unemployment of 18.9%.

Now it could be that America’s bad unemployment figures are just the flip side of its famous “flexible labour markets”. Lots of jobs are created in good times, and lots of jobs are lost in recessions. And, if that is “all” it is, I don’t think it will necessarily change the debate about the relative merits of the US and European economic models. But if America really is staging a “jobless recovery - as some pundits have begun to call it - that will have broader implications for international politics and “globalisation”.

Related reading:

Ralph Atkins: Eurozone feels benefit of short-time work schemes

For those of you who have not yet made it to p.24 of the second section (UK edition) of today’s FT, may I bring your attention to what seems to the single most amusing/interesting fact in today’s paper.

Paul Betts in his European View notes that, during the French EU presidency, France hosted a three day “Union of the Mediterranean summit” that cost 16.6m euros. He goes on - “On the occasion of that summit, a shower was specially installed in the Grand Palais in Paris at a cost of €245,000 for the personal use of the president. Mr Sarkozy never used it.”