Monthly Archives: November 2013

The Americans and Europeans designed this interim agreement with American and European – not Israeli or Saudi – goals in mind. None of these governments wants an Iran armed with nuclear weapons, but there has always been much more at stake in these talks than that. That’s why one government’s good deal can still become another government’s nightmare. Read more

In the west, a gap is growing between political and financial hope and the new economic reality. That gap will have to close. As it does so, some will lose out Read more

The setting was as bizarre as it was stunningly beautiful – a luxurious seven star resort and spa built on the edge of the Empty Quarter – one of the largest deserts in the world where sand dunes are as high as mountains, falconry is a reactionary sport, dune buggies whizz you around the three-mile-long estate and the seafood is fresh from Gulf waters just two hours away. Read more

The latest IFOP poll gives François Hollande an approval rating of 20%, the lowest for any president since the poll began in 1958. Even François Mitterrand’s lowest rating was 22%. Another poll, by YouGov, puts him down at 15%, only 3 per cent of voters expressing a strongly positive view. It will take more than an impromptu visit to a football match for Hollande to raise his game. Read more

Significant reforms are needed to fix the country’s problems. The coalition should take the opportunity of recent splits in several parties to force an agreement on a detailed series of measures that could turn around the economy, making it competitive again. Read more

Janet Yellen’s confirmation hearing last week reaffirmed that the Federal Reserve remains risk markets’ best friend – and not by choice but by necessity.

This is music to the ears of investors conditioned to position their portfolios to gain from steadfast central bank liquidity support, especially in the US. But with Wall Street having already reflected this in asset prices, and with the benefits for Main Street continuing to disappoint, investors may well need an increasingly differentiated approach if they are to continue to benefit from the “central bank put”.  Read more

If the US president could be as crafty as Rouhani, and embrace the Iranian president’s nuclear plan, he could gain a big geopolitical victory: peace between Israel and Palestine Read more

A sustained engagement strategy in Myanmar, a multifaceted approach to institution-building, high-level and effective dialogue with China, a collective vigilance with respect to North Korean diplomacy, and a successful conclusion of a trade round in Asia can have remarkably positive consequences elsewhere, notably on the tougher and more demanding contours of the Middle East Read more

The champagne (or, under the circumstances, the apple juice) was chilled. The relevant foreign ministers beckoned. It looked as if all was ready to allow the signing of an interim or limited agreement that would freeze elements of Iran’s nuclear program in exchange for a partial relaxation of much of the rest of the world’s economic sanctions. But then things unraveled. Is it time for a new approach, where all parties ditch interim negotiations and jump straight to final-status negotiatiobns? Read more

Was the outcome of the Third Plenum “unprecedented”, as one member of the standing committee expressed beforehand? Or at least “comprehensively deepening reforms”, as characterised officially? After four days of silence when the only indication that something important was happening was the increased security, the final communique offers both encouragement and uncertainty.

The communique was comprehensive in the tradition of previous statements. Present were both the obligatory homage to the past leadership is there (“the magnificent banner of Socialism with Chinese characteristics”, “Deng Xiaoping Theory”, “the important Three Represents thought”) and the affirmation of the dominant role of the Party. It also managed to mention all the issues without offending any constituency: “establishment of an innovative economy, governing the country according to the law and accelerate the perfection of cultural management.” Read more

It is a sign of the desperate, deplorable times in Pakistan that while the leader of the Pakistani Taliban, recently killed by a US drone, is hailed as a martyr and victim of American perfidy, a true heroine for this age has just had her book banned in Pakistani schools. Read more

The European Central Bank responded correctly to recent news of very low eurozone inflation by loosening policy further. The big question now is whether its decision – reducing the main financing rate from 0.5 to 0.25 per cent – will have a big enough impact to move inflation from less than 1 per cent a year back close to the ECB’s target of 2 per cent. The answer to this question lies in the foreign exchange markets.

A lower short-term interest rate will certainly not, by itself, raise inflation through increased spending by businesses and households. The primary route from a lower ECB interest rate to higher inflation would be through the exchange rate of the euro. The strength of the euro over the past year has depressed import prices and forced eurozone companies to keep prices down to be competitive at home and abroad. Read more

A year ago, the prospect of a US-Iranian nuclear settlement seemed very distant. Now, top negotiators from Iran, the US and other major powers are convening in Geneva, and may be on the verge of concluding a deal this week over Iran’s nuclear programme. All signs point to a seriousness of purpose and a determination to get to an agreement. While the differences dividing Iran and the US are significant, the more difficult negotiations may well be the one each side faces at home. Read more

In response to changing Japanese attitudes to security in an increasingly unstable region, the US has two options. It can stand back and let the country change, with little regard for the historical role it has played in ensuring Japan’s security. Or it can stay close to Tokyo, advising on how to chart an uncertain course towards the status of what some Japanese strategists longingly describe as a “normal” country. Read more

The ECB’s recent announcement that it will start a comprehensive assessment of the eurozone banking system is good news. It will provide a uniform evaluation of 130 credit institutions, which should contribute to reducing the uncertainty about the overall health of the eurozone financial system and thus reduce its fragmentation. Read more

Polio has returned to the Middle East in a devastating form as a result of war, terrorism, a collapse of services and a refugee crisis right across the region. Moreover, the strain that is already infecting Syrian children has probably arisen from Pakistan, which is witnessing the same symptoms of war and refugees.

At least 10 children have tested positive for polio in Syria’s eastern Deir ez-Zour province with another 12 suffering from paralysis symptoms, according to the World Health Organisation, which fears a major regional outbreak of the disease is already under way due to the collapse of health services, not just in Syria but also in neighbouring Iraq and even parts of Lebanon and Jordan where local health facilities are overwhelmed by refugees. Read more