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.