The fiscal cliff may or may not have been averted. But even if the House passes the deal that was hurriedly brokered by Joe Biden and Mitch McConnell on Monday and passed the Senate at 2am yesterday it would merely set up a larger showdown two months from now. Read more
Predictions that the world would end today proved misplaced but Jamil Anderlini has shone a light on the crackdown on a Chinese doomsday cult – Eastern Lightning.
Roula Khalaf writes in a Global Insight how the shifting balance in Syria presents a new opportunity to end the conflict, while the New York Times reports on the impact of President Bashar al-Assad’s use of cluster bombs. Read more
The aftermath of the Connecticut school shooting
The massacre of 27 people, including 20 children, at an elementary school in Newtown, has changed America’s discussion about gun control, but will it lead to legislative change? Ben Fenton, from the FT’s live news desk talks to US correspondent Ed Crooks and Richard McGregor, Washington bureau chief, about the steps President Obama can take to curb investment in the gun industry and why citizens so zealously guard the second amendment, which gives Americans the right to bear arms.
Barack Obama and Chuck Hagel in Jordan in 2008. (Salah Malkawi/Getty)
The shadow boxing over the potential nomination of Chuck Hagel to be the next Pentagon boss intensified on Thursday when allies of the former Republican Senator leapt to his defence.
Mr Hagel has emerged as the clear frontrunner to take over from Leon Panetta as secretary of defence but has come under attack in recent days for comments he made several years ago about the “Jewish lobby”.
Amid a drip-feed of criticisms and insinuations about Mr Hagel, nine former senior diplomats released a public letter on Thursday describing him as an “impeccable choice” for the Pentagon. “Time and again he chose to take the path of standing up for our nation over political expediency,” they wrote.
Given that Mr Hagel has been criticised by one pro-Israel group for views that they say “border on anti-Semitism”, one of the interesting features of the letter is that five of the signatories are former ambassadors to Israel – Daniel Kurtzer, Thomas Pickering, Sam Lewis, William Harrop and Edward Djerejian. “He has invariably demonstrated strong support for Israel and for a two state solution,” they write. Read more
They say leading the IMF is like commanding the Red Army (top-down, hierarchical, fiercely cohesive) and running the World Bank like chairing a university social studies faculty (bureaucratic, fractious, ideologically riven). Heading up the WTO these days must be like operating a stable where all the horses are dead, dying or struggling to stand up.
The WTO’s negotiating function has all but seized up. The Doha round has crashed. The fate of plans for a plurilateral deal on services is unclear – and opposition from some emerging markets might force the agreement to be negotiated outwith the WTO. Brazil has made valiant attempts to get the WTO to address currency misalignments, but China has predictably squashed them. Read more
By Gideon Rachman
Everybody agrees that economic and political power is moving east. Barack Obama has constructed a whole new foreign policy around this theory – the “pivot to Asia”. But, as I assemble my annual list of the five most important events of the year, it is striking how events in Europe and the Middle East still dominate.
The victory of the LDP and Shinzo Abe in the Japanese elections completes a cycle in Japanese politics. The Democratic Party of Japan, which has crashed to defeat, came to power in 2009 intent on a rapprochement with China. That does not seem to have worked out – to put in mildly. Now Shinzo Abe, a nationalist who wants to re-write Japan’s pacifist post-war constitution, is to be prime minister. Read more
There is little doubt that the period since November has seen many setbacks for Assad, not the least of which has been the growing co-ordinatiuon – and international recognition – of the opposition. But some senior military and political figures in the Middle East and in Britain remain cautious. Read more
It was always my impression that spies generally try to keep out of the papers, and out of the law courts. Judged by those standards, MI6 is not doing a very good job – and neither is the CIA. Read more
Welcome to a live blog of events in Brussels as European leaders meet for a second day to discuss how far and fast to push integration of fiscal and economic systems in the 27-country bloc. Ben Fenton in London is watching.
14.46: And that seems an appropriately grim note on which to end live-blog coverage of the EU council summit, a meeting of which few had high expectations and yet most observers seem still to have come away disappointed.
Until next time.
14.34: Courtesy of Reuters, we have a jolly Christmas message from Chancellor Merkel:
“One reason I am careful with my forecasts is the adjustment process, the changes that we are going through are very difficult and painful.”
“Next year, and the ECB president said this, we will have very low growth rates, we will see negative growth in some countries, and we can expect very high unemployment levels to continue.”
“On the one hand we have accomplished a lot. But we also have tough times ahead of us that can’t be solved with one big step. There has been lots of talk about the one step, whether it be a debt haircut, euro bonds or some other measure that will solve everything. That won’t be the case.”
It may not be official. But it seems a fair bet that John Kerry will be the next US secretary of state. Susan Rice’s decision to withdraw her name from consideration – a supremely wise one given how much poison is in the air – leaves the Massachusetts senator somewhere close to being a slam dunk for the job. Read more
The looming political showdown in Italy
Italian prime minister Mario Monti has said he’ll resign, making elections likely to occur next February. But who is likely to win, or even who will run, remains unclear. Both Mr Monti and Silvio Berlusconi are possible candidates. Guy Dinmore, FT bureau chief in Rome, Tony Barber, Europe editor, and Ferdinando Giugliano, leader writer, join Gideon Rachman.
Welcome to our live coverage of the eurozone crisis. We’ll bring you all the developments. By Tom Burgis and Ben Fenton in London with contributions from FT correspondents across the world. All times are GMT.
17.37: As the EU’s political leaders get down to talks, we are closing down the live blog for today, but it will be up again bright and early tomorrow to pick up on whatever is decided overnight. Meanwhile, elsewhere on FT.com you’ll be able to find coverage of the summit kept fresh by our sleep-deprived Brussels team.
17.29 More bleak news for the UK’s Triple A credit rating, via FT markets editor Chris Adams:
17.24 More twists and turns in this tale of what said what to whom about the Italian elections at the centre-right EPP’s pre-summit meeting today (see 15.49 and 17.06).
Antonio Tajani, the Italian EU commissioner and a Berlusconi ally, is quoted by Italian news agency Adnkronos as saying that none of the leaders of the EPP “expressly asked Monti to be a candidate”.
“Everyone spoke well of Monti but no one wants to interfere.”
Susan Rice – a successor to Hillary Clinton? (Getty)
North Korea’s rocket launch has injected itself into American politics in an unexpected way: it has become a real-life test of the diplomatic skills of Susan Rice, the US ambassador to the UN.
Ms Rice was a strong favourite to become the next secretary of state until she became the main target for Republican anger over the way the Obama administration handled the September attack on the consulate in Benghazi, Libya. But unlike the Benghazi attack, where her role was simply to appear on a few Sunday political talk shows, the North Korean rocket is a central part of Ms Rice’s job at the UN. And the pressure is now on to see if she can manoeuvre the UN into taking a much tougher line on North Korea. Read more