Monthly Archives: July 2013

Graffiti outside the ECB’s future headquarters. (Getty)

Could the European Central Bank be learning a thing or two about managing the message? Ahead of Thursday’s interest rate-setting meeting, when policymakers will want to do nothing more than say “we’re holding steady”, it looks like the bank may come up with an eye-catching announcement to give everyone something to write about.

That something is the long-running and vexed question of why the bank that loves to tell you how transparent it is (well, at certain times, once you’ve cleared security and as long as you understand no quotes should be used from this conversation) keeps the minutes of its governing council meetings secret for 30 years. The practice makes it an outlier – the Federal Reserve, Bank of England and Bank of Japan all publish minutes of their monetary policy meetings within a month of the meeting that they cover.

 Read more


Israeli and Palestinian negotiators met for two days of talks in Washington this week to discuss restarting the peace talks that collapsed in 2008. US secretary of state John Kerry said that Israeli and Palestinian negotiators have set themselves a goal of reaching a “final status” agreement within nine months.

We’ve put together a potted history of the peace process and writing on the talks to show why an agreement to talk, incremental though it sounds, is still a big deal. Read more

By Catherine Contiguglia
♦ The deal reached between China and the European Union on solar panel dumping may have stopped a potential trade war, but for EU Trade Commissioner Karel de Gucht, it was one more incident where his free trade crusade was dampened by the fragmented bloc he represents.
♦ Chinese telecommunications giant Huawei is funnelling billions of dollars into building the backbone of necessary communications networks throughout Africa, but has some worried that its domination of the sector creates the potential for widespread espionage.
♦ Despite multiple innovations in male contraceptives, progress towards their approval for widespread use has stagnated due to difficult barriers, particularly the lack of incentive for pharmaceutical companies to invest in a product with so many cultural and societal implications.
♦ Larry Summers should go ahead and book his summer vacation, John Cassidy writes, arguing that despite White House support, Summers has not made a great enough effort to appease Obama’s supporters by distancing himself from financial deregulation.
♦ Bradley Manning has been called many things, but a look at his background shows a conflicted young man struggling with his gender identity and personal values as a soldier in the U.S. Army. Read more

By Catherine Contiguglia

♦ Civil activism in China is becoming a force the Chinese government can no longer ignore as activists increasingly unite to rally with broader demands, largely through the growing platform of social media.
♦ Following the initial applause for getting Israel and Palestine to the negotiating table for the first time in four years, US secretary of state John Kerry is facing deep scepticism about the two-day talks in Washington D.C.
♦ Borzou Daragahi argues that in the wake of Mohamed Morsi’s ouster in Egypt, Islamists should investigate their own role in contributing to the tensions in the years leading up to the coup.
Alexei Navalny is hitting the streets “western-style” to revamp his mayoral campaign in Moscow six weeks before the vote.
♦ France’s culture minister Aurélie Filippetti has survived a tough first year in office, representing her party by bringing “extravagant” French culture to the level of the people, while still fighting for France’s “cultural exception.”  Read more

♦ Michael Pettis, a finance professor at Peking University, argues that a slowdown in China’s economy will not lead to social unrest, provided median household income continues to grow at 6-7 per cent.
♦ The killings in Egypt over the weekend have highlighted the resurgence of the country’s shadowy ministry of interior.
♦A private group in Mumbai is hiring teachers with rather unusual backgrounds, but its engaging teaching methods are helping students to succeed.
♦ Paul Krugman thinks urban sprawl might be preventing social mobility in US cities.
♦ The BBC gives the lay of the land in Zimbabwe ahead of the elections. Read more

♦ Lawrence Summers made dismissive remarks about the effectiveness of quantitative easing back in April, while a senate letter by a group of Democrats backing Janet Yellen for the next Fed chair is circulating. The Washington Post’s Wonk blog asks, who would make the better chair, Yellen or Summers?
♦Pope Francis is walking the walk in Latin America, inspiring the masses, and many should be feeling uncomfortable about this, argues John-Paul Rathbone.
♦ When Wen Jiabao defined Bo Xilai as a man who wanted to repudiate China’s effort to reform its economy, open to the world and allow its citizens to experience modernity, he was getting his revenge on a family that had opposed him and his mentor Hu Yaobang.
♦ Medieval Irish chronicles might be able to expand our understanding of climate change.
♦ Abbe Smith, a professor of law and the director of the Criminal Defense & Prisoner Advocacy Clinic at Georgetown University, examines why lawyers choose to defend someone like Dzhokhar Tsarnaev or George Zimmerman.

 Read more

♦ Zimbabwe’s state TV service faces its first rival – which is competing with it from South Africa.
♦ China can stop the world’s tallest skyscraper from being built, but it can’t stop the curse of the skyscraper.
♦ David Pilling explains why multinationals operating in China are likely to find the going gets tougher.
♦ China is pushing ahead with dams on the Mekong River, but politicians and dam builders have done little to assuage the worries of local communities.
♦ Western countries including the US and UK may be asked to accept tens of thousands of Syrian refugees because the exodus from the civil war is overwhelming countries in the region.
♦ Have the millions of elderly people being kept alive via feeding tubes become a symbol of an ageing Japan?

 Read more

Ordos, Inner Mongolia (Getty)

Not content with banning lavish banquets and overseas junkets in its efforts to shore up declining moral standards within its own ranks, China’s communist party has moved to stop the building of any more monumental offices.

As the FT’s Simon Rabinovitch points out:

Whether the latest ban has a similarly negative impact on the property market will depend on how it is interpreted by state-owned companies. Chinese corporate executives have felt pressure to comply with Mr Xi’s earlier austerity policies even though government officials, not companies, were his targets.

Beijing has previously tried to stop local governments from building massive new offices, but only with limited success. Even in poorer parts of China, cities and villages have built monolithic offices, replicas of the US Capitol building and faux-European palaces.

But just how excessive are these party palaces? We’ve got a few of them here for your gawping pleasure. Read more

Residents gather at the site of an explosion in Beirut's southern suburbs, stronghold of Hizbollah, July 9, 2013. AFP/Getty

Hizbollah has brushed off the European Union’s decision on Monday to blacklist its “military wing” as a terrorist organisation. Well, it would, wouldn’t it.

The Shia paramilitary group issued the mandatory rhetorical broadside. “It looks as if the decision was written by American hands and with Israeli ink”, it said, to which “the EU only had to add its signature”.

In fact, as Hizbollah would surely know, it takes a great deal more than that for the EU’s 28 member-states to reach a consensus on anything at all. Read more

♦ China’s growth still contributes more to global demand than that of any other economy The FT looks at how rebalancing will generate winners and losers in different sectors.
♦ Turkey’s decision to raise its overnight lending rate for the first time in nearly two years underscores the dilemma facing developing economies as the end to US monetary easing draws near: focus on inflation or growth?
♦ Inflation has defied all predictions in the US during the past five years and it is making life complicated for the Federal Reserve.
♦ Haïdara Aïssata Cissé, the only woman standing for president in Mali’s upcoming elections, is an outsider, but she has improved her chances by going on walkabouts.
♦ Shaun Walker at Foreign Policy thinks Russian President Vladimir Putin should be worried about Alexei Navalny, especially as people start to compare him to Mandela and Lenin. Read more

♦ The FT’s David Gardner argues that Hizbollah has become a state above the state in Lebanon: “The group has a strategy towards Lebanese institutions: fill them, keep them empty, or make them unworkable.”
♦ By lengthening the storage time for aluminium, Goldman Sachs adds millions a year to its coffers and increases the prices paid by manufacturers and consumers.
♦ The government practice of tapping undersea cables has continued since the 1970s – the Atlantic looks at how it works.
♦ After decades of blistering construction, China could overtake the US as the world’s wealthiest nation in terms of built assets as early as next year.
♦ US Gen Martin Dempsey, chairman of the joint chiefs of staff, told the Senate Armed Services committee that there are few good options in Syria – and explained why, analysing the cost of each option. Read more

♦ Many in Japan are hoping that Shinzo Abe’s pragmatism will win out over his ideology.
♦ Rotimi Amaechi, the governor of Rivers state in Nigeria, has accused President Goodluck Jonathan of condoning “impunity and authoritarianism” in an effort to ensure re-election in 2015.
♦ A generation of Muslim Americans has come of age in the shadow of 9/11, amid a climate that ranges from low-level paranoia to verbal abuse and vandalism. In response, some embrace their faith more fervently, others live in self-imposed isolation.
♦ Western states in the US may break temperature records again this year, but what does this mean for farmers and agriculture?
♦ Israel’s government views the EU plan to label products made in settlements as symptomatic of a greater threat to the legitimacy of the Jewish state.
♦ The Israeli-Palestinian peace process is back and Foreign Policy has a handy guide to the buzzwords that are going to be flying around.
♦ A young conscientious objector has proved tricky for Israel’s army – he would serve if it wasn’t for the Israeli occupation. Read more

(Getty Images)

The mark of a truly skilled politician is to make any possible source of weakness or fallibility look exogenous. Angela Merkel can do it with her eyes closed.

Faced with hard questions about what her government knew and when about US surveillance operations that may have harvested the private data of millions of Germans, the chancellor walked into her last press conference before the parliamentary summer break and managed to sound solicitous about getting to the bottom of the issue – which, of course, had nothing to do with her.

No matter that the opposition Social Democratic party are doing their best to turn widespread public concern about mass surveillance into questions about Ms Merkel’s leadership ahead of the September 22 general election. No matter the accusations that Germany’s own spooks were actively colluding with the US National Security Agency. And no matter that, thus far, the US appears to have done next to nothing to soothe German nerves.

 Read more

Detroit filing for chapter 9 bankruptcy might have come as a shock to outsiders and anyone glancing at the city’s slick official website, but people who know the home of Motown well say there has been a certain inevitability to its demise.

Doron Levin, who first reported from the city in 1984, in a blogpost for Fortune, blames generation after generation of elected officials who were blind to the long-term implications of their policies:

“[They] dithered and dissembled and argued, instead of undertaking tough measures to close fiscal gaps. In truth, the city’s financial liabilities were created by the very people who should have been resolving them: one administration after another promised wages, job guarantees and pensions to city workers that were simply unsustainable.”

 Read more

♦ Detroit became the largest US city to file for bankruptcy. Time magazine looks at the decay of the city. The Washington Post’s Ezra Klein points out Detroit is not alone.
♦ Sunday’s election for the upper house of Japan’s parliament is expected to give Prime Minister Shinzo Abe a stronger platform from which to shoot the “arrows” of his radical economic reforms, but some fear he may also strike a more nationalistic tone.
♦ Russian opposition leader Alexei Navalny was freed on bail Friday after being sentenced to five years in prison on embezzlement charges the day before. Our Charles Clover examines how his jailing tells you a lot about how political repression has evolved in Russia over the years. Masha Lipman looks at how the Putin government chose to eliminate their political opposition the hard way.
♦ The Guardian’s Patrick Kingsley examines the shooting of Muslim Brotherhood supporters outside the Republican Guards’ club in Cairo and finds that it was a coordinated assault on largely peaceful civilians.
♦ Marc Lynch at Foreign Policy argues that Washington should make a “much broader, more vigorous effort to engage publicly and privately across all Egyptian political groups and segments of the population” – but now is not the moment, with so much anti-American rhetoric swirling around.
♦ They were the irreplaceable loot from the art heist of the century. But to Olga Dogaru, a resident of a tiny Romanian village, burning them was the only way to save her son from prosecution. The problem is that he is the man charged with orchestrating the brazen theft last October of works worth hundreds of millions of dollars from the Kunsthal museum in Rotterdam. And the works were masterpieces by the likes of Picasso, Monet and Gauguin. Read more

There was something poignant about Alexei Navalny‘s speculation that he might get a suspended sentence on trumped-up charges of theft and embezzlement. The Kremlin does not do subtlety and it does not do mercy. Mr Navalny, who coined the phrase “party of crooks and thieves” to describe Vladimir Putin’s United Russia party, knows that better than most. And, in the event, the sentence announced today was five years in prison. More than enough to take Mr Navalny out of politics, and to send a clear message to anybody who dares to try to challenge Vladimir Putin. Read more

♦ Ben Bernanke and the markets appear to be friends again, which might make tapering easier.
♦ George Bizos, Nelson Mandela’s lawyer, recalls the good times they shared.
♦ Chris Giles argues that, “After almost a century of gradual social progress and narrowing of wealth and opportunity gaps, Britain is slowly recreating a rentier society, where a family’s property ownership matters more than anything else.
♦ Wolfgang Schäuble wants to leave a legacy in Europe, but his boss, Angela Merkel, is proving to be one of the obstacles between him and EU reform.
♦ Nasser al-Awlaki, a former minister of agriculture and fisheries in Yemen, is petitioning the US government to explain why they killed his grandson, a US citizen.
♦ Amy Davidson ponders what Trayvon Martin could have done to avoid getting into an altercation with George Zimmerman: “There is an echo, in what people say Martin should and shouldn’t have done, of what people say to women when bad things happen to them in dark places.”
♦ Mohamed Morsi hasn’t been seen since he was taken into custody – when do international circles start considering him a political prisoner?
♦ Bassem Youssef takes on the recent coup in Egypt: “Humanity has now become an isolated island among wild waves of discrimination and extremism.” Read more

Can Spain’s scandal-plagued government survive?
Spain’s prime minister, Mariano Rajoy, and his Popular Party are embroiled in a scandal that threatens to bring down the government. The flare-up in the long-rumbling scandal comes at a bad time for Spain, which continues to struggle to revive an economy where unemployment is around 20 per cent. Tobias Buck, Madrid bureau chief, and Tony Barber, Europe editor, join Gideon Rachman to discuss the crisis.

Ben Bernanke makes what is likely to be his final appearance before Congress this week. The Federal Reserve chief repeats the central bank’s intention to slow its $85bn a month in asset purchases later this year if the economy stays strong, but says that would not mean a weakening of Fed support for the US economy.

By James Politi in Washington. All times are BST


♦ Martin Wolf argues that world trade remains vulnerable to problems such as financial crises and inequality: “As we learnt in the first half of the 20th century, liberal trade and investment cannot be an island isolated from events.”
♦ Alexei Navalny’s campaign to become Moscow mayor could be derailed by the five cases pending against him – the verdict of the first comes this week.
♦ Despite a surprisingly sharp fall in the deficit, political divisions in the US over longer-term budget policy are as wide as ever.
♦ The last of the Russian “Night Witches” has died – Nadezhda Popova flew 852 missions, chasing German invaders back to Berlin in the dark, with no parachutes, guns, radios or radar.
♦ Peter Hessler looks at the winners and losers in Egypt’s ongoing revolution.  Read more