Monthly Archives: February 2014

Paul Krugman joins the heated debate over the Trans-Pacific Partnership trade negotiations with a column on Friday that argues the economic case just isn’t compelling enough for President Obama to be expending political capital on such a divisive issue in an election year.

But Krugman seems to be missing a big part of what President Obama is after with his ambitious second-term trade agenda. Helpfully two Obama confidantes – Vice-president Joe Biden and former chief of staff Rahm “Rahmbo” Emanuel – have broken cover this week to offer what many analysts have long argued is the real justification for US trade policy these days: the strategic imperative. Read more

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Crimea and a cash shortage take centre stage in Ukraine
Viktor Yanukovich has fled the scene of last week’s brutal crackdown on protests, but Ukraine still faces real danger from separatist tensions that could spiral into violence and the threat of financial meltdown. Ben Hall is joined over the phone by Neil Buckley, Eastern Europe editor, in Kiev, and Kathrin Hille, Moscow bureau chief, to discuss Russia’s sabre-rattling, pro-Russian sentiment in Crimea and whether western capitals can come up with a financial lifeline for Ukraine.

Credit Suisse executives testified before the US Senate Permanent Subcommittee on Investigations in what was at times a contentious hearing over allegations of tax evasion.

A scathing report from the subcommittee on Tuesday said that Credit Suisse made false claims in US visa applications, conducted business with clients in secret elevators and shredded documents to help more than 22,000 American customers avoid US taxes.

Credit Suisse chief executive Brady Dougan disputes the report’s claims, saying the bank conducted an expansive internal investigation, shut down client relationships and required US customers to prove tax compliance.


Is America really prepared to withdraw all its troops from Afghanistan at the end of the year? Even the European nations that also have troops in Afghanistan are none too sure. On the one hand, it is assumed in European capitals that the White House statement on Tuesday – saying that the US military had been instructed to prepare for a full withdrawal from Afghanistan – is partly bluff. It is well known that the Americans are getting on very badly with President Hamid Karzai, and want to put pressure on him. On the other, some of America’s Nato allies fear that the US might be using the argument with Karzai, as an excuse to scale back a post-2014 military commitment that they were already uncomfortable with. Read more

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♦ On the trail of Ukraine’s missing Viktor Yanukovich . Rumours swirled that Ukraine’s deposed president was hiding out in Crimea, a pro-Moscow stronghold with easy water access to Russia via the Black Sea.

♦ Gideon Rachman says Ukraine’s fate must be decided by its people.

♦ Hawks on Capitol Hill are pushing for a tougher line on Ukraine from Barack Obama, a president they regard as a passive player at a grand historical moment.

♦ Janan Ganesh says UK prime minister David Cameron has overestimated Angela Merkel’s capacity to deliver change, even if she wanted it.

♦ An alliance of leftwing and regional parties aims to present an alternative to India’s two main parties in May’s general election. Read more

By Gideon Rachman
Amid the tragedy, euphoria and confusion in Ukraine, the risks of renewed confrontation between Russia and the west are rising. An east-west struggle over the fate of Ukraine would be a tragedy for the country – increasing the risks of civil war and partition. But while a brutal arm-wrestling match between the Kremlin and the west – with Ukraine as the prize – is a distinct possibility, it is absolutely not in the interests of Russia or the west. On the contrary, the Russians, Europeans and Americans have a common interest in preserving Ukraine as a unified country that avoids civil war and bankruptcy.

“We could turn Venezuela into Ukraine!” a student protester shouted in Caracas this weekend. It is striking how similar the situations are in the two countries, despite the significant differences.

There have been many tragic deaths in both countries – although about 100 people have died in Ukraine, versus “only” around ten in Venezuela. This difference is one reason why the troubles in Venezuela has not yet captured the same attention as the protests in Ukraine.

Just because Venezuela lacks Ukraine’s immediate geo-political heft – there are no borders in question in Venezuela; Europe’s energy security is not under threat; nor is the reach of Russia’s power or Vladimir Putin’s reputation – does not mean it lacks wider significance.

Caracas provides important economic assistance to Havana, without which Cuba’s economy would sink. Communist Cuba therefore has a vested interest in what happens in Venezuela, just as Russia does in Ukraine – a situation ripe for Cold War style comparisons. Read more

  • Economix does its take on the Transpacific Partnership and free trade.
  • The Archdiocese of Newark doesn’t have enough money to keep a school open, but it does have funds to build a palatial vacation home.
  • Roy Isacowitz criticises Benjamin Netanyahu’s definition of boycott supporters as anti-semites.
  • Delphine Minoui sees in Egypt a current, real-life version of “Rhinoceros,” the 1959 play by Eugène Ionesco.
  • Soviet cuisine is making a comeback.
  • David Gardner on how efforts to pressure the Assad regime in Syria have backfired.
  • The suspension of Nigeria’s central bank governor, Lamido Sanusi, is likely to cost the country dearly.
  • The trial of Wu Guijun, who was accused of disrupting public order during a labour protest in Guangdong, could mark the end of a period of relative tolerance enjoyed by China’s worker movement.

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The deal Ukraine’s embattled president Viktor Yanukovitch claimed he had reached this morning with the country’s opposition leaders has now been signed. The political turmoil is taking its toll on investor confidence, with a bond issue cancelled as S&P downgraded the country to CCC.

This live blog will be following developments in the Ukraine as the day progresses. Contributions from Roman Olearchyk and Neil Buckley in Kiev and Peter Spiegel in Brussels. Anchored by Claire Jones and Lindsay Whipp in London.  

Can Renzi break Italian deadlock?
In Italy, the government of Enrico Letta has fallen and the country is set to have its youngest Prime Minister ever. Matteo Renzi promises to be a radical reformer. In this week’s podcast Guy Dinmore, Rachel Sanderson and Ferdinando Giugliano join Gideon Rachman to discuss whether Mr Renzi can break the political and economic deadlock that seems to be paralysing the country and what the stakes are for Europe


Whenever any centre-left leader comes to power in Europe, there are always questions over who he or she will be compared to. Take François Hollande: only days after his election to the Elysée, commentators were already wondering whether he might be France’s Gerhard Schröder. The hope was that he could reform France’s labour market from the left, just as the former chancellor did in Germany in the early 2000s.

Matteo Renzi, who is set to become Italy’s youngest ever prime minister, is bound to draw such comparisons. When Time magazine chose to feature the then 34-year old mayor of Florence on its front page in February 2009, the US weekly asked whether he might be Italy’s Barack Obama. In an interview to the Italian daily Il Foglio, Mr Renzi compared himself to Tony Blair, saying he wanted to transform the Italian left just as Britain’s three-times prime minister did with the Labour party. The media-savvy Mr Blair certainly remembered Mr Renzi’s aspirations when he called on Europe’s leaders to “get fully behind” Italy’s new leader. Read more

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Anti-government protesters in Independence Square (Getty)

Tomorrow, the EU will hold an emergency meeting to discuss the violence in Ukraine. It seems inevitable it will impose targeted sanctions aimed at the Ukrainian leadership, to signal disgust at the violence used against demonstrators. Up until now, the EU has resisted imposing sanctions because it was still hoping to achieve a negotiated solution with President Viktor Yanukovich. It now seems likely that the Ukrainian president will be deemed a political pariah.

The need for an urgent reaction is understandable. But, beyond that, it is not yet evident that the crisis in Ukraine will do anything to clarify the EU and the US’s strategic goals in Ukraine. Until that happens, policy is likely to be ad hoc and reactive. The difficulty is that western leaders have several goals – some of which are contradictory. They need to decide which of them are most important, and also which of them are achievable. Read more

  • An efficiency push in Spain may mean the end of siestas and midnight dinners.
  • A crucial pillar of India’s democratic edifice – the right to free expression – is being rapidly eroded, with ominous implications.
  • German art collector Cornelius Gurlitt is in talk with six claimants seeking artworks stolen from their families by the Nazis.
  • North Korea could be using some ominous-looking chest packs to threaten radiological war.
  • Immigration in Scotland: the issue worries Scots less than other Britons, but that could change

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By Gideon Rachman
Some years ago, I made a futile attempt to persuade a Chinese diplomat that Taiwan should be allowed to declare independence – if that is what its people want. “If Scotland voted to be a separate nation,” I argued, “England would not stop it.” The diplomat smiled sceptically, like a man recognising a particularly crude falsehood. “I know that’s not true,” he said. “England would never accept Scottish independence. It would invade.”

José Manuel Barroso, the president of the European Commission, caused quite a kerfuffle in London at the weekend when he said on one of Britain’s most-watch political chat shows that Scotland would find it “extremely difficult, if not impossible” to rejoin the EU if it were to succeed from the United Kingdom.

But for those who have been following the debate closely, Barroso’s position had been telegraphed long before – in fact, it has been the stated European Commission view for nearly a decade. Read more

  • Glenn Greenwald has lunch with the FT and discusses his abrasive manner and new online venture.
  • Rahm Emanuel has reinvented Chicago’s political machine: the FT’s Edward Luce looks at whether he’s now aiming for the White House.
  • A divide has opened up among Britain’s high earners: the über-middle, made up of doctors and London finance workers, emerge as big winners, while millions of “cling-on” professions struggle to sustain a middle class lifestyle.
  • Students from as far afield as Mongolia, Guinea and Namibia are heading to study in northern Cyprus, where universities have become the leading sector of the economy.
  • Nicholas Shaxson talks about his work on tax havens and compares the dominance of the financial sector in London to the resource curse on countries in Africa.
  • Jihadi life is no longer the lap of luxury with the odd battle thrown in.
  • The Egyptian government’s heavy-handed crackdown on opposition is widening the generation gap.
  • A different generation game is being played in Tunisia, where there is a battle to keep young people occupied and away from extremism.

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