By Guest Blogger Giacomo Tagiuri
In the final days of the US election campaign, my home country of Italy has stepped into a cameo role. It is, to be sure, the role of a villain. Republican candidate Mitt Romney has invoked Italy as the kind of bad example that America should do everything possible to avoid. Even so, as an Italian accustomed to a diminishing presence in the international debate, I have been amused and even a little proud.
By Alexa van Sickle, Assistant Editor
Klaus Regling, head of the European Union’s bailout fund, says the EU is moving in the right direction after its debt crisis, but that Greece’s future in the eurozone depends on its progress in meeting the terms of its bailout.
Speaking at the fifth IISS Fullerton lecture in Singapore, Regling, the CEO of the European Financial Stability Facility (EFSF), was cautiously optimistic about the future of the euro and of the EU. Regling said structural reforms and action taken by EU governments to address the sovereign debt crisis were beginning to show signs of success: ‘Ireland shows now a current account surplus after sizable deficits in earlier years, Spain is getting very close to a current account balance [and] Greece and Portugal have reduced their current account deficits by two thirds,’ he said. Read the rest of this entry »
By Dr Sanjaya Baru, Director for Geo-economics and Strategy
German Chancellor Angela Merkel’s second visit to China in a year comes against the backdrop of dire forecasts of a difficult September for the eurozone. Mindful of such concerns and persistent pessimism in global financial markets, Merkel is now taking bold political initiatives at home and overseas. Indeed, her China trip should be seen as an effort to assert leadership across the eurozone.
At home, Merkel recently sent out a clear message to her critics that Germany must pay a price for eurozone leadership. She cautioned her colleagues against loose talk about a ‘Grexit’ – Greece’s exit from the eurozone – and assured visiting Greek Prime Minister Antonis Samaras that Germany remained committed to his country’s membership of the eurozone.
While it required courage to take such a tough stance, doing so helped to bolster her position at home and throughout the eurozone. There is now no doubt that Merkel is willing to commit Germany to the cause of preserving both the European Union and the eurozone, and that she will work to achieve that goal. If she succeeds, she will emerge as the first great European leader of the twenty-first century. Read the rest of this entry »
European Commission President Jose Manuel Barroso – who defiantly told the G20 meeting yesterday that American capitalism was to blame for the eurozone crisis – wouldn’t agree. However, as talks continue to form a government in Greece and Spain has been forced to delay an audit of banks amid fears that a bailout could top €100 billion, our Director for Geo-economics and Strategy Sanjaya Baru argues in his column this week for the Indian Express that ‘at the core of the financial crisis in Europe there is a leadership crisis’.
The EU has struggled to articulate ‘an idea of Europe’ and so to offer continent-wide solutions to continent wide problems, Baru says. ‘The challenge for the EU is to find its Ambedkar’ he suggests, referring to B.R. Ambdekar, the jurist and social reformer who spearheaded the drafting of the Indian Constitution.
The bête noire of the global non-proliferation regime, North Korea has defeated every effort to rein in its pursuit of nuclear weapons, ballistic missiles, chemical weapons and illicit arms trade, argues Mark Fitzpatrick, director of the IISS non-proliferation programme, in a new paper for the EU-Non Proliferation Consortium.
Neither sanctions, incentives nor ‘strategic patience’ have succeeded in bringing about anything more than a temporary stall in the development of these weapon systems. There appears to be no prospect that North Korea would barter its nuclear arsenal for diplomatic or economic gain.
Having fewer stakes in North East Asia than the actors in the Six-Party Talks process, the European Union has played, at most, a supporting role, providing aid when incentives were called for and applying sanctions when that was in the script, while consistently promoting human rights.
Yet, suggests Fitzpatrick, if North Korea moves under new leadership towards market reforms, in order to overcome its poverty trap, there may be opportunities for a greater EU role. Whether in conjunction with the EU’s closer relations with South Korea or through finally establishing a delegation office in the North Korean capital, Pyongyang, a more direct application of European soft power would better position the EU to assist the Korean Peninsula in future crises and to benefit from any positive turn of events.
IISS Strategic Dossier: North Korean Security Challenges
By Jens Wardenaer, Research Analyst and Editorial Assistant
Relations have been frosty between Oslo and Beijing since October 2010, when the Norwegian Nobel Committee awarded a jailed Chinese dissident, Liu Xiaobo, that year’s Nobel Peace Prize. Is the two countries’ row now spilling over into the Arctic, a strategic region in which China has a growing interest?
By Alexander Nicoll, Director of Editorial
Step by step, the eurozone debt crisis is being dealt with. During the market hysteria of the second half of 2011, the very survival of the euro as a common currency seemed to be in doubt. That is not being questioned today. The €130bn bailout deal reached in all-night talks by Greece, its fellow eurozone members, the International Monetary Fund and private creditors is one more step towards stability.
For months, it seemed that governments were fumbling in the face of the crisis that was engulfing them. If Italy and Spain had been forced to join Greece, Ireland and Portugal in needing rescue finance, then the consequences for the euro and Europe would have been severe. But, as the IISS wrote in a recent Strategic Comment, a combination of measures has eased the tensions: changes of government in Greece, Italy and Spain; a ‘fiscal compact’ agreed by 25 European Union members, holding the promise of greater harmony in economic policies; and the European Central Bank’s injection of unlimited three-year finance into the banking system.
Guest post by James Acton, Senior Associate, Nuclear Policy Program, Carnegie Endowment for International Peace
Coming just a couple of weeks after the Obama administration announced its intention to work with the European Union on developing a space code of conduct, the special session of the EU Non-Proliferation and Disarmament Conference on space and missile proliferation was highly topical.
To ensure freedom of access to space – not least in the face of the increasing problem of space debris - the need for enhanced space governance is widely recognised. However, there is a debate about whether the EU’s draft of a non-binding code of conduct or a formal treaty-based approach would be preferable. Sergio Marchisio, chair of the European Centre for Space Law, discussed legal aspects of the draft code and argued that the EU should be willing to discuss the Russian and Chinese proposal for a treaty in spite of its significant definitional problems. Götz Neuneck, Deputy Director of the University of Hamburg’s Institute for Peace Research and Security, welcomed the draft code as an important step forward but argued that it lacked key arms-control characteristics. He urged the EU to engage emerging space powers, to include ballistic missile defence in discussions about space security, and to study joint monitoring and surveillance. An EU official, however, cautioned against overloading the draft code.
By Dr Dana Allin, Senior Fellow for US Foreign Policy and Transatlantic Affairs; Editor of Survival
Survival, in my arguably biased view, has offered excellent coverage of the eurozone crisis. Two mainstays of that coverage joined me today for a panel at the IISS London headquarters. The first was Erik Jones, Professor of European Studies at the SAIS Bologna Center of the Johns Hopkins University, founding director of the new Bologna Institute for Policy Research, and a Contributing editor of Survival, whose latest piece on the subject, ‘Italy’s Sovereign Debt Crisis‘, is in the current issue. The second was Alexander Nicoll, IISS Director of Editorial, and a former Financial Times journalist, wrote a piece in the previous issue called ‘Fiscal Union by Force‘. Both speakers argued that Europe’s leaders, while hardly solving the underlying crisis, have done enough to keep the euro limping along. In providing massive liquidity to European banks in particular, the European Central Bank under Mario Draghi has accomplished by the back door at least part of what the eurozone needs in the way of a lender of last resort. None of this is sufficient to restore EU self-confidence and dispel the spectre of a Japanese-style lost decade. But it may head off a kind of sovereign-debt apocalypse. The full discussion is well worth watching.
By Dina Esfandiary, Research Analyst and Project Coordinator, Non-Proliferation and Disarmament Programme
The final session of the EU Non-Proliferation Conference, to be held this week in Brussels, will discuss the most pressing problem in the non-proliferation arena at the moment: the Iranian nuclear issue. Three experts will lead a discussion examining the current situation and future policy options for the EU.
This comes just as a team of IAEA experts ended a much-anticipated trip to Iran, which followed the agency’s most damning report to date, in November. ‘Intensive discussions’, characterised as fruitful, were held over three days and the IAEA has announced another visit ‘in the very near future’.
But crucially, the delegation did not visit any nuclear sites. Despite Iranian rhetoric of openness and willingness for a dialogue to take place, including Foreign Minister Ali Akbar Salehi’s stated readiness to extend the experts’ trip if necessary, the Iranian government did not allow them to carry out the discussed visit of the Qom facility. Whether the IAEA was granted access to any of the individuals they sought to interview, such as Mohsen Fakhrizadeh, is doubtful, though that may have been promised for the next visit.