By Gideon Rachman
At the beginning of the year, I gave a talk about “geopolitical risk” to a big conference of investors. I trotted briskly around the course: Russia, the Middle East, the South China Sea, the eurozone. Afterwards, I was having coffee with one of the other speakers, a celebrated private-equity investor, and asked him how much he thought about geopolitical risk.
The consensus, such as it is, on the eurozone crisis was neatly summed up on Monday by Hugo Dixon, author and editor at large of Reuters News: “The euro crisis is sleeping, not dead.”
What about the crisis in Greece? Over the past four to five years Europe, supported by the International Monetary Fund, has invested more time, effort and money in Greece than in any other struggling eurozone state. The aim is to reform a country so inefficiently governed, so riddled with corruption and so burdened with debt that it seemed, for certain spells in 2011 and 2012, to pose a threat to the eurozone’s survival.
So it seems reasonable to ask: if this time, effort and money have not changed Greece for the better, what has it all been for? Read more
As the televised brawls between Nick Clegg, the Liberal Democrat leader and deputy prime minister, and Nigel Farage, leader of the anti-EU Ukip party have recently shown, the quality of political discussion in Britain is rarely so low as when the topic in question is the European Union.
All the same, sanity and thoughtfulness on the EU issue can still be found in British public life. For this we should thank, among others, the House of Lords, the much misunderstood but invaluable upper house of parliament. Read more
♦ Farhan Bokhari speaks to those on the front line as the Taliban tightens its grip on Pakistan society.
♦ After annexing Crimea, Russia moves to carve up the spoils. Guy Chazan reports from Simferopol.
♦ Russia’s revanchism has to be stopped, even for Russia’s own sake, argues Martin Wolf.
♦ Putin’s well-trained, stealthy army is not like the feeble one that invaded Afghanistan, warns David Ignatius in The Washington Post.
Reuters’ Breaking Views asks whether the eurozone should heed Japan’s deflation lessons. Read more
Here is a startling prediction from the European Commission. In the absence of comprehensive economic reforms, living standards in the eurozone, relative to the US, will be lower in 2023 than they were in the mid-1960s.
This forecast, contained in the Commission’s latest quarterly report on the euro area economy, deserves to be displayed prominently on the wall of every president and prime minister’s office in Europe.
It is a sobering prediction for two reasons. First, it contrasts starkly with the comforting tales of economic recovery and financial market stability on which Europe’s leaders are congratulating themselves in these early weeks of 2014. Second, it raises profound questions about Europe’s relative weight in the world and, in particular, about its military alliance and economic partnership with the US. Read more
Critics of Germany’s actions in the eurozone debt and banking crisis often berate Angela Merkel, the Christian Democrat chancellor, for lacking a “vision” for Europe. Not me. I am with Helmut Schmidt, West Germany’s plain-spoken Social Democrat chancellor from 1974 to 1982, who once said that people who have visions should go and see a doctor.
What is the view of Mario Monti, the distinguished former European Union commissioner, who worked closely with Merkel during his 17-month spell as Italy’s prime minister from November 2011 until last April? Monti now chairs a committee on promoting a united Europe at the Berggruen Institute on Governance, a non-partisan think-tank headquartered in California. I contacted him earlier this week in Milan, and as usual his thoughts were perceptive and full of common sense (and quite long sentences). Read more