In Bolstering Euro, EU Should Concentrate on Banks, Not on National Bail-Outs (3/04)

Ahead of two summit meetings this month to bolster EU economic governance and strengthen confidence in the euro, attention has focused mainly on greater fiscal discipline by member states. An alternative insight – that the most immediate danger lies in under-capitalized banks in many eurozone countries – comes from U.S. economist Barry Eichengreen, a professor at University of California, Berkeley, who has followed the single currency closely for a long time.
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“No Fly Zone” Over Libya Is Premature Talk, But Preparations Are Timely Now (3/03)

A flurry of calls for a “no fly zone” in Libya is premature.  The idea, however appealing as a measure to deprive the Libyan leader of airpower against civilian rebels, immediately encountered objections from Western military commanders, starting with those in the U.S.

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Libya's Impact on EU? A Key Issue Is Refugees Now -- and Migration Later (3/03)

The most tangible international action so far in the Libyan crisis has taken the form of EU nations’ evacuation flights to lift civilians out of the strife zone and border refuges. These flights have come mainly from the UK and France, and are now supplemented by U.S. military aircraft ordered to this mission by President Obama on March 3.

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EU Balks on Energy Efficiency Amid Trans-Atlantic Priority on Growth (3/01)

The zeal for ever-tougher controls on carbon emissions seems to be seeping away in Europe, too – a trend measuring a dramatic U.S. shift away from cap-and-trade and carbon ceilings under the Obama administration.

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Gaddafi Targeted by Security Council as War Criminal (2/28) MORE NEWS (3/04)

A potentially consequential side-effect of Libya’s repression of civilian protesters is that the events there have been referred by the U.N. Security Council to the International Criminal Court for possible prosecution of Colonel Gaddafi as a war criminal, for ordering the murder of civilians and other crimes against humanity.

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The ICC has started a formal investigation  into possible crimes against humanity in Libya that will focus on the role of the country’s leader, Col. Gaddafi and  several of his sons and members of his inner circle, the New York Times reported March 3.

Luis Moreno-Ocampo, the chief prosecutor, told the newspaper that judging by the information he had received, many more insiders from the Libyan government had defected than was publicly known. “The system appears to be breaking down,” he said.

Mr. Moreno-Ocampo said he hoped that at this stage his actions could have a deterrent effect. He said he was putting senior officials in Libya — “individuals with formal or de facto authority” — on notice that they could be held responsible if forces under their command committed crimes.

Issuing an arrest warrant would probably take several months, but the prosecutor says “how an arrest order is implemented is a different challenge that will have to be addressed in due course. Right now, we must investigate the crimes, and reach those responsible.”

PREVIOUS STORY RESUMES HERE...

It would still be a largely hypothetical possibility that Gaddafi might someday end up at The Hague for trial and possible conviction as a war criminal.

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Italian Draghi is New Frontrunner to Head European Central Bank (2/25)

In discussions about the next head of the European Central Bank, speculation is now focusing on Mario Draghi, Governor of the Italian Central Bank. Here is a New York Times profile of him. It is still early days in selecting a successor to Jean-Claude Trichet, who will step down next fall. But the process heated up recently when the heir-apparent, Axel Weber, suddenly resigned last month from his post as president of the Bundesbank and board member of ECB Governing Council. Explaining his unexpected step down, Weber said that he had found himself at odds – publicly -- with other ECB governors because of his hard-line stance against more stimulus measures (including ECB programs to buy the bonds of troubled eurozone countries.)  Draghi also takes a tough stance against inflation as a member of the ECB governing board. But his banking career (including a stint at Goldman Sachs) makes him something of an outsider to the banking establishment in Germany.

 

NEW (2/28)

The succession issue at the ECB has become urgent as a possible factor in early March at crucial EU meetings on financial reform, according to this FT columnist. He favors Draghi as the only "qualified" candidate for the job, and urges Berlin to back Draghi to show that the ECB job -- the most important policy-making position in the eurozone -- is "European" and not just "Germanic."

 

Libya is Bigger Issue for EU than for U.S.

The revolt in Libya differs radically from the recent regime changes in neighboring Egypt and Tunisia, especially in its violence but also in its transatlantic ramifications and challenges. Fundamentally, Washington has always treated the Libyan leader Moammar Gaddafi as a terrorist – potentially useful, but basically what Ronald Reagan called “a mad dog.” In the last decade, Washington has succeeded in its anti-terrorist agenda with Libya (at the price of ignoring human rights for Libyans themselves). As a result, the U.S. is free of entangling ties with Tripoli.

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New "Fiscal Hawks" in Congress and a Budgetary Sacred Cow: the Pentagon

Here is a smart summary (by Dan Morgan) of the state of play as new "fiscal hawks" in Congress approach cutting into the sacred cow of the Pentagon budget.

http://www.thefiscaltimes.com/Articles/2011/02/18/Obama-Punts-Republicans-Bunt-on-Defense-Budget.aspx

Of course, any cuts the House proposes (including a just-passed end to the $1 billion+ alternative engine for the F-35 Joint Strike Fighter)  will still have to be approved by the Senate and the President before they take effect. But this is a new breeze in Washington.

 

"Post-Islamic Revolution" -- Events in Egypt Analyzed by French Expert on Political Islam (02/17)

Events in Egypt confirm the recent movement in the Arab world away from belief in a theocratic Islamic state, according to Olivier Roy, an authority on political Islam. His most recent book on the subject – the ground-breaking “Holy Ignorance: When Culture and Religion Part Ways” – is available in English from the Columbia University Press. In a just-published article, he offers a magisterial analysis of developments in Egypt's Muslim Brotherhood and also a larger view of the real political forces at work in the contemporary Arab and Muslim societies in the Middle East emerging without ties to jihadism or admiration for repressive Islamist regimes such as Iran and Salafism, the fundamentalist version of Islam derived Wahabism and present in radical movements in Arab countries. His perceptive insights capturing the trends at work in Egypt (and elsewhere) in a new generation of Arabs appeared in Le Monde newspaper in an article translated here by Georgio Comninos of the European Institute.

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Change in Egypt? U.S. and EU Ready to Accept -- with Obama Appearing More Forward-Leaning (01/31)

Caught off guard by the political explosion in Egypt, the U.S. and the EU have been cautious in taking a public stance as they seek to balance their commitment to promoting democratic politics and fears of fueling unpredictable change with unforeseeable consequences.

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Hungary brings defense of controversial new media law to U.S. audience (01/20)

Amid the strident furor about media freedom in Europe, Budapest has also started actively defending itself in the U.S. against charges that new Hungarian press laws will restrict reporting and could portend anti-democratic moves on a broader scale.

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Informative snapshot of EU financial authorities starting business on Jan. 1

Sweeping changes in the EU's financial regulatory architecture went into effect on January 1. Many details, including key personnel appointments, remain to be implemented in the coming months, but the new institutional framework is set. An authoritative and clearly presented outline of this complex new system is available on this page from the website of Clifford Chance, a global law firm based in London (that works extensively on EU matters).

 

--European Affairs

 

Sudan referendum underscores Western acceptance of partition in extreme cases

The Sudan’s likely break-up and the emergence of a new nation in the southern part of the country is the latest example of partition enjoying the backing of both the EU and the U.S., a theme discussed in European Affairs last month.

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British defense cuts pose challenges for U.S. – and also for the rest of the EU

Could cuts in defense spending across the EU establish a collective capability to act autonomously or join the U.S. future military operations? Or will reduced troop and equipment levels across Europe leave the U.S. in a situation where it will have to act alone in expeditionary missions – a situation that many analysts say would jeopardize NATO’s collective future?

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A best-case outcome for Euro crisis?

Europe’s financial troubles will probably lead the EU and the eurozone to a stronger fiscal system – but only after a bumpy ride this year, according to Simon Johnson, a U.S- based economist who has been prescient about the crisis. In his view, the eurozone can weather an intensifying financial whirlwind at the cost of three crucial conditions:

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Despite speculation, EU not set to defy U.S. by lifting arms embargo on China

Reports of renewed efforts by France and some other member states to modify the EU’s boycott on weapons sales to China have been met with firm denials in Brussels that any change is imminent in the European stance. “The timing is wrong: it would make little difference to Beijing at this point, but it could do real damage in Washington at a moment when Europe might be able to score its biggest-ever transatlantic military sale in the EADS airborne refueling tanker,” according to a European expert. Any shift in favor of the Chinese military would probably arouse a strong anti-European backlash in the new Congress, he said.

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China Said to be Helping EU Finance Debt and Ease Euro Crisis

Chinese officials have reportedly assured EU leaders that Beijing will be continuing (and perhaps step up) its rate of buying the government bonds of fiscally beleaguered member states of the euro.  Chinese support will be a powerful asset for these countries and the EU as a whole as they try to cope with markets’ attack on peripheral member states with large sovereign debt exposure. The previously undisclosed pledge was reported in the Financial Times.

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"Net Neutrality" Refined by Regulators in EU and U.S. to Provide Concessions to Broadband Carriers

(Dec. 8)   Key regulators of broadband internet service on both sides of the Atlantic seem set to adopt rules that will allow the “carriers” (such as phone companies) to “amend” notions about the prevailing doctrine of “net neutrality.”  The touchstone of “net neutrality” is the impermissibility of discriminating among users and providers. But increasingly, particularly in wireless broadband, some discrimination is starting to be countenanced to ensure that large carriers, who provide the “pipes” for the internet, continue investment in the infrastructure to permit wide access to high-speed Internet. 

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Swiss “Deportation Referendum” for Foreigners Convicted of Crimes Fuels Populist Surge in Europe

In its latest controversial referendum, Swiss voters have approved a measure put forward by a far rightwing political party to automatically deport foreigners convicted of crimes ranging from murder to welfare fraud.

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Can Berlusconi, His Image Battered, Survive and Impose Much Needed Austerity Budget?

(Dec. 3)  Rome - -  Italy's government faces a precarious test in the form of a confidence vote in parliament later this month -- a symptom of worsening  political instability that is serious not only for the Italian economy but also for the economic stability of the EU.  The Italian parliament is in the process of considering a new austerity budget, crucial for the future of the Italian economy.  If the government falls -- and the austerity budget fails or is postponed -- it will be another domino in an already dire series of fiscal crises affecting the eurozone. 

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