By Dr John Chipman, Director-General and Chief Executive of the IISS
We live in the age of ‘fast power’. Our sense of stability, and indeed the rise of insecurity, is dramatically affected by the speed with which events happen and the very many different agents of power with which governments and the private sector have to deal with. Power today is more plural than ever before and adequate responses to its malign use have also to be more various.
Governments, and the defence and foreign ministries that serve them, have to be readier to act at speed if they are to shape, rather than be shaped, by changing events. In the past, strategists asked if a country had ‘soft’ power, ‘hard’ power, or ‘smart’ power. Today they must assess the quality of a state or of an alliance’s ‘fast power’ if they are to make a proper appreciation of the capability to respond to threats and to change.
Today is the fiftieth anniversary of the Elysee Treaty – the document signed by Paris and Berlin in an attempt to turn two hostile neighbours and rivals into allies, and to ultimately lay the groundwork for the European Union. As IISS Chairman Francois Heisbourg points out in the Financial Times, it comes at a time of strain in the Franco-German partnership.
France’s Le Monde newspaper has already been very dismissive about the scheduled joint session of the French and German parliaments in Berlin’s Reichstag building today. Heisbourg writes that: ‘From the eurozone crisis to intervention in Libya and Mali, and the failed merger of EADS and BAE Systems, the differences and tensions between Paris and Berlin are palpable.’
He admits that shaping a joint strategic future takes time, but says that France and Germany have recently lost the will to overcome other national differences – a process aided by their shifting relative strength, the expansion of the EU, and the arrival of a new generation of leaders ‘who no longer carry the historical baggage of the founding fathers’.
Yet the factor that could now have the biggest impact on France and Germany’s partnership is a third player: Britain.
Read the article at the Financial Times (subscription required)
How do you reduce the high levels of youth unemployment in the Arab world? On average one-quarter of the eligible under-24s in the region remain jobless, a factor widely recognised as having contributed to the uprisings known as the Arab Spring. Many believe the Middle East faces further instability if the situation does not change soon.
An IISS-US panel this week discussed ways of creating more jobs for Arab youths in the post-revolutionary era. However, speakers said that new governments had often lacked the capacity to meet their young citizens’ high expectations, and frustrations remained. IISS senior fellow Alanoud Al-Sharekh added that the crisis in the eurozone was having a negative impact in some nearby North African countries.
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 »
By Dr Dana Allin, Senior Fellow for US Foreign Policy and Transatlantic Affairs; Editor of Survival
Last week was another bad one for the euro, with the eruption of a particular brand of pique that I’m frankly surprised we haven’t seen more of. At the G20 meeting in Mexico, Jose Manuel Barroso, president of the EU Commission, reacted badly to a Canadian journalist’s question about why North Americans should ‘risk their assets’ to support the Europeans. ‘Frankly’, replied Barroso, ‘we are not here to receive lessons in terms of democracy or in terms of how to handle the economy. This crisis was not originated in Europe … this crisis originated in North America and much of our financial sector was contaminated by, how can I put it, unorthodox practices from some sectors of the financial market.’
Barroso was right, of course, and he was also spectacularly wrong. He was right about the origins of the crisis, and he might have added something about long-running imbalances of American over-borrowing against Chinese over-saving that fed the housing bubble. But this would have raised the awkward parallel problem of chronic imbalances within the eurozone, such as those that fed Spain’s real-estate bubble. Except in the relatively minor case of Greece, government spending had little to do with it.
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.