Monthly Archives: May 2012

Image via brookings.edu When Barack Obama entered office four years ago, many of the inmates of the Brookings Institution – Washington’s most venerable think-tank – moved across town to work for the new administration.

On the foreign policy side, the ex-Brookings people who joined Obama included Ivo Daalder (ambassador to Nato), Philip Gordon (assistant secretary of state for Europe), Jim Steinberg (deputy secretary of state, via the University of Texas) Jeff Bader (head of Asia at the NSC) and Jeremy Shapiro (policy planning at the State Department).

So a Brookings study of the Obama administration’s foreign policy is – to some extent – an inside job. The three Brookings-based authors of “Bending History: Barack Obama’s Foreign Policy” know their subject intimately. This has both merits and problems. On the plus side, Bending History is easily the most comprehensive and balanced study to date of Obama’s record as a foreign-policy president. On the minus side, the authors (Martin Indyk, Kenneth Lieberthal and Michael O’Hanlon) have a slight tendency to pull their punches. Still, given that so much political debate in Washington is now partisan shrieking, an excess of civility is a pardonable sin. Read more

Should Argentina, with its cavalier approach to economic policy, still have a place in the G20?

The debate is starting to generate heat, if not yet light. On May 11, Richard Lugar, the most senior Republican member of the US Senate foreign relations committee, introduced a non-binding “sense of Congress” resolution that calls on the US to suspend Argentina given its “outlaw behaviour”. This behaviour includes, most recently, Buenos Aires’ nationalisation of Spanish oil company Repsol’s stake in YPF, manipulation of inflation statistics, refusal to submit to an IMF review, and failure to comply with dozens of World Bank international settlement disputes. Read more

Ecstasy and agony: UK PM David Cameron, US President Barack Obama, German Chancellor Angela Merkel, European Commission President José Manuel Barroso and French President François Hollande watching the European Champions League final between Chelsea and Bayern Munich. Photo PA

Angela Merkel has not had a good weekend. She was close to being isolated at the Group of Eight summit. Barack Obama, François Hollande and David Cameron all ratcheted up the pressure on Germany to go for “growth” in Europe. This the Germans suspect, with some reason, is code for pouring more German money into southern Europe, tolerating higher inflation and monkeying around with European Central Bank independence.

Then Bayern Munich lost, at home, to Chelsea in the final of the Champions League. German officials had campaigned for a big-screen television to be put up at the Camp David summit, so the chancellor could watch the game. In the event the Bavarians lost, after dominating the whole match – and Ms Merkel was photographed looking like she was sucking on a lemon, while next to her Mr Cameron punched the air, and Mr Obama grinned inanely. Read more

Dr Jan Fidrmuc, Department of Economics and Finance and Centre for Economic Development and Institutions, Brunel University

Anti-austerity protestors take to the streets in central Athens earlier this year. Getty Images

Anti-austerity protestors take to the streets in central Athens earlier this year. Getty Images

Following the rejection of EU imposed austerity measures by the overwhelming majority of Greek voters, eurozone finance ministers have once again come to Brussels to try and save the single currency in what is being described as a ‘crucial 48 hours’.

Two thirds of the Greek electorate voted for parties opposed to the austerity measures required by the European Commission, ECB and IMF as a precondition of a further bailout; despite the outgoing government pledging to adhere to these measures.

Without compromise either by the Greeks accepting austerity measures or the EU offering concessions on the proposed package, another election is inevitable. In this case the bailout package will be suspended, Greece will default on its debt and an exit from the eurozone may follow. None of this will offer much respite for the struggling Greek economy.

In the past the EU offered concessions to voters having rejected EU treaties, however this time there is little political will, and not only in Germany, to offer sweeteners to the Greeks to help them swallow the bitter pill of fiscal adjustment.

Why then are the Greeks fighting against the support from the EU? And should the rest of the EU let them resist or should they be offered a sweeter deal after all?

 Read more

Greece in political limbo

With Greece in political limbo ahead of a new election in June, what is the the economic and political future of that country and the eurozone? How feasible is for Greece to leave the euro, and how are other European countries managing the increasingly anti-bailout mood in Athens? Read more

REUTERS/Kai Pfaffenbach

REUTERS/Kai Pfaffenbach

Today we’re looking at Greece. Yup, again. But over the last week, the possibility that the Mediterranean country of 11 million people might actually leave the eurozone – a scenario long considered taboo – has become increasingly plausible. European policymakers and central bankers have gone from repeated assurances that a ‘Grexit’ would never, EVER happen, to a gradual admission that, yes, it’s possible. And if that’s the case, then the threat of contagion to the larger eurozone economies of Spain and Italy – and thus the broader single currency project – is magnified. Much will rest on the outcome of fresh elections in Greece on June 17. In the meantime: Read more

I just came across this revamped version of what purports to be North Korea’s official website. Even if it is not, and is just a fan site, it is a credit to what is described on the homepage as a genuine workers’ state in which “all the people are completely liberated from exploitation and oppression”.

I’ve never been to North Korea (visa still pending) but, from what I can make out from this site, it sounds like a pretty wonderful place. It is apparently the only country where “the workers, peasants, soldiers and intellectuals are the true masters of their destiny” and in a “unique position to defend their interests”. Read more

By Gideon Rachman

“Weak.” “Apologist.” Those two words are repeated endlessly in the Republican party’s attack on Barack Obama, as it tries to persuade voters that the US president is not worthy of another term as commander-in-chief.

This advertisement for the Prague marathon – which I photographed in the airport, this weekend – strikes me as having an unfortunate slogan. I know that Czechs are not terribly happy with the their government. But a nation that is still worried about national sovereignty, after rule from Berlin and Moscow, might be a little more careful about how it words invitations to tourists.

The eurozone crisis is back with a vengeance. In a Bloomberg poll published on Thursday, 57% of 1,253 Bloomberg subscribers said they believed at least one country would abandon the euro by year-end. No prizes for guessing which country they might be thinking of.

Greece’s political landscape shifted drastically after support for its two biggest parties collapsed in the general election, propelling the far left Syriza party into the spotlight. Spain, meanwhile, is set to miss its budget deficit target for this year and the next. The government also had to part-nationalise the troubled Bankia.

We rounded up the best reads on Spain for you last week. Now we take a look at one of the other countries currently at the centre of the crisis – Greece – and give you the top analysis and comment from the FT and elsewhere. Read more

Growth vs austerity in the eurozone

The growth vs austerity debate has been a focal point of eurozone politics over the past weeks. With voters in France and Greece appearing to reject austerity in this weekend’s elections, are we beginning to see a shift in policy from austerity towards spurring growth? Ralph Atkins, Hugh Carnegy, Chris Giles and Ben Hall join Shawn Donnan to discuss.

The defeat of Senator Richard Lugar in a Republican Party primary in Indiana is a further depressing sign of the death of centrism in the GOP. Lugar was a classic old-style, bipartisan Republican: solidly conservative in his outlook, but also willing to work across party lines on issues of national interest, such as arms control. He also has two other characteristics that are going out of fashion among Republicans: he has a deep knowledge of international affairs and he believes in international law. Neither characteristic turned out to be a plus, when running for the Republican nomination, against a Tea Party candidate.

On the other hand, one should be honest. Lugar is now in his eighties. His great period was in the 1980s and 1990s, when he played a key role in formulating US policy, as the cold war came to a climax – and then a close. As this piece by Jacob Heilbrunn makes clear, it was probably time for him to retire. But it’s a real shame that there are no new Lugars on the horizon.

The endless guessing game about whether Israel is planning to bomb Iran’s nuclear facilities in the coming months continues. Now we have two pieces of fresh evidence – but they seem to point in opposite directions. First, there is the outbreak of dissent amongst top Israeli securocrats – several of whom have gone on the record, to say that an attack on Iran would be a v.bad idea. On the other hand, Netanyahu has just formed a government of national unity - which includes three former chiefs of the defence staff. Read more

General Óscar Naranjo is known as the world’s “best policeman”, or at least that is what the Canadian mounties have called Colombia’s top cop. Gen Naranjo, profiled here by the FT, is also looking for a job.

The unassuming Jesuit-schooled 56-year old, who has shaped and led Colombia’s pretty successful two-decade-long fight against organised crime, said last month that he would step down in July as head of Colombia’s 160,000-strong police force. After leading the institution for five years it was time, he said, for somebody else to take charge. Read more

By Gideon Rachman

In rural France on Sunday night, the newly-elected French president took to the stage and announced that he would lead the battle in Europe against austerity. On the other side of the continent, Greek voters were calling his bluff. By overwhelmingly opting for parties that want to either repudiate or renegotiate Greece’s bailout deal, they have handed François Hollande a painful dilemma. Will he stand with the Greek people against austerity? Or will he stand with the German government and the International Monetary Fund, in insisting that the Greek bailout cannot be renegotiated?

Welcome to our rolling coverage of the reaction to elections in France and Greece on a big day for Europe.

By Tom Burgis, John Aglionby and Esther Bintliff in London with contributions from FT correspondents around the world. All times are London time.

This post should update automatically every few minutes, although it might take longer on mobile devices.

16.52 That’s the lot of the live blog today. See FT.com for more news and analysis through the night.

We’ll leave you with a quick summary and some reading. Today:

  • Markets reacted warily at first to the French and Greece results, although equities and bonds recovered through the day. The euro stayed weaker though
  • Angela Merkel promised François Hollande a warm welcome in Berlin but said the eurozone’s fiscal pact was not up for re-negotiation. She also urged Greece to stick to the cuts programme agreed with lenders
  • Greece’s political leaders wrangled over a possible coalition government after voters administered a thumping to the two biggest parties, leading to predictions of a fresh election and a potential move to tinker with the terms of the country’s €174bn bail-out
  • Spain reversed course and said it plans to pump public cash into troubled lender Bankia
  • Leftists from Dublin to Stockholm hailed the victory of a Socialist in France, with many seeking to use Hollande’s triumph to push for more pro-growth policies to temper European austerity

 Read more

Francois Hollande’s victory speech tonight was pretty well-judged. I thought it was shrewd to hit the reconciliation button early – and to persist with his tribute to Sarkozy, even against the background of catcalls. His voice was pleasantly hoarse, after the campaign. He didn’t bang on for too long – and his promise to dedicate himself to “justice et jeunesse” (justice and the young) was alliterative and inoffensive.

Clearly, he is keen to play up his down-to-earth qualities after the bling accusations flung at Sarko. I noticed Hollande travelled through the streets of Tulle in a regular grey Renault – it didn’t even look like a Renault Espace. I guess the French will like this normal bloke business for a while, and then may get fed up with it. The French president is meant to be a big monarchical, isn’t he? Read more

Egyptians protest against the military rule in Cairo's Tahrir square. Getty Images

Egyptians protest against the military rule in Cairo's Tahrir square. Getty Images

Supporters of Egypt’s Muslim Brotherhood gathered in Tahrir square today for an anti-military protest following the killing of 11 people in a sit-in near the defence ministry.

Of course they were joined by other young revolutionaries, who never miss an opportunity to vent their anger at the ruling military council and clashes ensued. All of Egypt is enraged at the killings of the protesters by shadowy thugs who time and again attack peaceful rallies, but whose identity no one seems able to identify. Read more

AP Photo/Patrick Kovarik, Pool

AP Photo/Patrick Kovarik, Pool

By Tony Barber in Paris

The temperature of France’s presidential election debate shot up on Thursday night when Nicolas Sarkozy snapped at François Hollande that he was “a little slanderer”. Up to that point, Sarkozy had contented himself with the rather more tame accusation that Hollande was telling lies. But “a little slanderer” – that stood out.

Otherwise, the really striking feature of the debate, I thought, was how little the two candidates had to say about international affairs. Read more

Chen Guangcheng and the rule of law in China

Gideon Rachman is joined by Geoff Dyer, Kathrin Hille and James Kynge to discuss the consequences of the case of Chen Guangcheng, the blind legal activist who has left the US embassy in Beijing following a deal between the US and China.