Euro crisis: No plan, only promises for Greece. Yesterday’s EU summit in Brussels did not reassure markets. The NY Times’ Stephen Castle reports:
European leaders promised Thursday to safeguard their common currency, the euro, by aiding Greece during its debt crisis. But they offered no immediate assistance to the Greek government and remained silent on how they would respond if investors remain jittery about Greece and other nations with weak economies that use the euro. Germany blocked discussion of specific bailout mechanisms, forcing the leaders of the 27 countries in the European Union to turn their attention instead to prodding Greece to get its finances under control, promising stringent monitoring of Greece’s tough austerity program.
Reuters has that market reaction:
“The market was disappointed as optimism (for a bailout) had been building over the past few days,” said Ian Stannard, a senior currency strategist at BNP Paribas. “The plan is lacking in details which is leaving the euro under pressure.” (…) “They are obviously still discussing and no real deal has been struck,” said Marco Valli, senior euro zone analyst at Unicredit. “Detail will be needed to convince markets a plan really exists and this isn’t just a superficial accord with no substance.”
The Economist calls the result of the summit a “half-hearted effort”: “Vague European promises of ’solidarity’ with Greece may not be enough”.
The Washington Post has a comment from CER’s Simon Tilford:
“What they’ve basically done is say they will help Greece if it meets the terms of the plan to cut its deficit, but if it managed to do that, Greece wouldn’t need any help,” said Simon Tilford, chief economist at the Center for European Reform. “I certainly think they will come up with something more substantial. But today demonstrates that we may need a full-blown crisis in Greece before they are prepared to put money on the table.”
And a comment from a German lawmaker:
“You don’t help an alcoholic by handing him another bottle,” said Frank Schaeffler, a lawmaker from the Free Democratic Party, part of Merkel’s ruling coalition. “We should not get nervous now only because a few Greeks are taking to the streets. If we start helping out Greece today, Spain may be next in line, and so on.”
Danger for the world economy now comes from governments, the Economist says:
Last year it was banks; this year it is countries. The economic crisis, which seemed to have eased off in the latter part of 2009, is once again in full swing as the threat of sovereign default looms.
European Parliament rejects Swift deal, US talks of “serious setback” for counter-terrorism efforts. The EU Observer reports:
The European Parliament on Thursday (11 February) rejected a bank data deal with the US that would have allowed American investigators to track European transactions in the search for terrorist funding. The US qualified the vote as a ” serious setback” to EU-US counter-terrorism co-operation. (…) EU lawmakers called for a better deal, which should include tougher data protection measures, despite warnings from Washington, the European Commission and the Spanish EU presidency that the rejection of the interim agreement would lead to a “security gap” for US and European citizens alike. (…) On the commission side, officials received the news with “regret.” “Following today’s vote in the European Parliament, we will have now to reflect together with our US partners on the possible negotiation of a new agreement,” home affairs commissioner Cecilia Malmstrom said in a statement.
Read also the NY Times report: here.
Green movement in Iran weakened — “regime change” seems to be off the table. “Opposition rallies were dwarfed by the huge turnout to hear President Mahmoud Ahmedinajad address the official celebrations”, the BBC reports.
In the Independent, Geneive Abdo comments:
Events in Iran yesterday showed the determination of both the regime and the opposition, but should also provide a lesson for Western governments: unless the outside world aids the opposition, the regime could continue to rule indefinitely through brutal force without an inch of reform to the system. The regime was able to show its strength, which seemed greater than in the past; millions of supporters came out to cheer for President Mahmoud Ahmadinejad’s government. Sure, they were bused in and paid bribes for their support. Nonetheless, it is clear that the regime has a solid constituency, which is often underestimated by the West. Dissidents in the Green movement – undeterred by gunfire and tear gas – also proved they are in it for the long haul, even though their numbers seem to have dwindled compared with past protests.
At Foreign Policy, Marc Lynch warns against false expectations of a sudden regime change in Iran:
I’ve been watching Arab regimes survive in the face of popular dissatisfaction for decades, and have seen all too clearly that while Middle Eastern regimes aren’t good at much, they’re pretty darned good at staying in power.
He recommends “negotiations and sanctions”:
The sanctions would likely work better if they remain carefully targeted and tightly linked to negotiating strategy (i.e. the White House approach) rather than being primarily expressive and driven by domestic politics (i.e. the Senate’s version). Engagement should be combined with a consistent message of U.S. support for public freedoms and human rights, which could raise the international and domestic costs of the regime’s repression without tarnishing the opposition movement by association. The overall focus should be on ways to build the conditions under which a negotiation strategy can work — no easy task, but the best option available. In general, we’d all do better if we could focus public discourse less on hopes for regime change and war, and more on the less sexy but more helpful question of how to make a negotiations strategy work.
Little hope for Arab-Israeli peace. Roger Cohen gives a summary of past efforts:
For over a century now, Zionism and Arab nationalism have failed to find an accommodation in the Holy Land. Both movements attempted to fill the space left by collapsed empire, and it has been left to the quasi-empire, the United States, to try to coax them to peaceful coexistence. The attempt has failed. (…) The conflict gnaws at U.S. security, eats away at whatever remote possibility of a two-state solution is left, clouds Israel’s future, scatters Palestinians and devours every attempt to bridge the West and Islam.
Obama didn’t bring change:
President Barack Obama came to office more than a year ago promising new thinking, outreach to the Muslim world, and relentless focus on Israel-Palestine. But nice speeches have given way to sullen stalemate. I am told Obama and the Israeli prime minister, Benjamin Netanyahu, have a zero-chemistry relationship.
War of communication. In Afghanistan, information has become the new front line, the BBC reports:
At the very heart of Nato and the Pentagon, the disciples of the new art of “strategic communications” know that perceptions matter. Nato’s top commander in Afghanistan, Gen Stanley McChrystal, made this point explicitly in a recent interview. “This is all a war of perceptions. This is not a physical war in terms of how many people you kill or how much ground you capture, how many bridges you blow up. This is all in the minds of the participants.”
US-Russia: Limits of “reset”. In the Moscow Times, Peter Rutland reminds us of the
fundamental differences between the strategic perspectives of Moscow and Washington. Neither side wants to acknowledge these differences since it would involve each recognizing the limits of their respective powers. The United States refuses to grant Russia what Medvedev rather bluntly called its “zone of privileged interests” in the post-Soviet states. Russia, for its part, will not accept U.S. military bases or support for color revolutions in Russia’s backyard.
Ukraine: What went wrong after the Orange Revolution? asks the Economist. Short answer: “Rather than curing the fractious pathologies of Ukrainian politics, Mr Yushchenko succumbed to them, failing to build the institutions that underpin democracy”
Ashton must engage with Ukraine. The Economist’s Edward Lucas calls on Catherine Ashton to use the EU’s soft power in Ukraine:
European leaders missed the chance presented by the orange revolution (though to be fair, Mr Yushchenko and other Ukrainian politicians botched their opportunities even more badly). The European Union’s leaders also failed to make much of the recent election. Ukraine is a long way from Spain, which holds the rotating EU presidency. Catherine Ashton, the EU’s nominal foreign-policy chief, seems distracted, to put it mildly. The EU is treating Ukraine like Turkey—too big, too poor, and destined to wait indefinitely for membership. Yet Ukraine is perhaps the one place where Lady Ashton and her new External Action Service could make a real difference. Ukraine badly needs attention, and unlike America or China it is not a place over which other EU leaders will be jostling for influence. Done properly, the gains from renewed EU involvement could be huge.
The European policy so far has been engagement with Ukraine’s political class. This has proved expensive, and mostly fruitless. Attention should now move to the citizenry. Imagine the effect if the EU opened 50 “Europe Houses” in the main towns and cities of Ukraine.
In the tense Ukrainian region of Crimea, a big EU presence would make it harder for Russia to hide its mischief-making (that should be a lesson from Georgia, where the EU’s absence was a lethal element in the run up to the 2008 war). More generally, the new policy will focus the EU’s biggest asset: its soft power. The EU’s military capability is meagre; its ability to stand up to Russian divide-and-rule tactics in energy security is feeble. But the EU does have something that the Kremlin doesn’t: attractiveness. Projecting that into Ukraine will give Lady Ashton and her staff something worthwhile to do. It could even work.
Why we need hard power. The ECFR’s Nick Witney reviews Britain’s defence review:
So where, one must ask, does this decade of extraordinary change leave British defence policy? Does anyone any longer really believe that the professionalism and sacrifice of our young service personnel in Afghanistan actually enhances the security of British citizens back home – or that NATO strategy amounts now to anything more than sidling towards the exit? The policy of heroic interventionism has run its course. Yet, as the green paper comes close to admitting, the reality is that the UK, perched at the western tip of the Eurasian land-mass, is today a remarkably safe place. War in Europe is no longer conceivable. Russia, difficult neighbour though it may be, is no sort of conventional military threat. Only jihadist terrorism poses a direct risk – but we now know that the idea of rooting it out by military means is self-defeating.
Time then for Britain to be more like Switzerland – to stay home, mind its own business, and reduce its defence spending to the sort of level that most of its European neighbours regard as adequate? In my view, no – but we need to be clear why not. I share the green paper’s declared belief in a ‘globally active’ UK. But the point is not ‘security’, or implausible military counters to ‘threats’ which are either remote, or intractable, or both. The point is power – the need to shore up our diminishing ability to influence to our own advantage the way the world works. Military prowess is only one of the dimensions of power; but it is a useful one, and one at which – much like our diplomatic capability – we happen to be well practised and rather good. We can no longer deploy it effectively by ourselves – but exploited through Europe, and indeed within Europe, it has real value. (…)
Britain’s ‘European partners’ need to be seen not just as ancillary capacity that may help defray the costs of a defence posture the UK can no longer afford by itself. They need to be seen as an essential power centre through which Britain may hope to retain a measure of influence in a world where the US is turning away from the Atlantic and ‘emerging powers’ – led by China – are increasingly calling the shots. The fact that Europe is so ‘herbivorous’, so slow to assert itself internationally, is a measure of how far Britain’s leadership is needed – and how easily Britain can rebuild political capital in Europe.
Ashton should not send election observers to Sudan, says Alain Délétroz, Vice President for Europe of the International Crisis Group:
The EU is wrong to be sending observers to Sudan’s sham elections. The EU’s challenge now is to retain some credibility. The decision by the EU’s foreign policy chief, Catherine Ashton, to send an EU observation mission to monitor Sudan’s elections in April this year is a triumph of hope over experience. Observers will not prevent the ruling National Congress Party from rigging the process, and, worse, their presence risks legitimising a regime headed by an indicted war criminal, Omar al-Bashir.
Ashton in trouble? Things are not going well for Catherine Ashton, says the Economist’s Charlemagne who met the High Representative for an interview:
Diplomats fret that she is not asserting her authority in the turf fights surrounding the new External Action Service (EAS), the diplomatic machine created by Lisbon. The European Commission president, José Manuel Barroso, is accused of chipping away at Lady Ashton’s dual status as a commissioner and representative of national governments. Mr Barroso wants the commission to control the EU’s development funds in places like Africa, it is reported, and a veto over top posts in the EAS.
This matters. There is a consensus among governments that the EAS cannot flourish unless it breaks free of the commission, a senior diplomat says; a “development mindset” prevails among commission officials who inhabit a universe of programmes and partnership agreements. Nation states live in a rougher world of realpolitik. Some argue the EAS was always ill-conceived. Diplomacy, says one top Eurocrat, is a world of “disinformation”. So how can Lady Ashton fly to Russia to “speak for Europe” when any number of European countries will be deep in Russian intrigues she knows nothing about?
Put these big questions to Lady Ashton, and she gives small answers. “I am not trying to be the equivalent of the UK foreign secretary for all of Europe,” she says. Ask whether Europe can achieve a common foreign policy, and she explains why it should, which is not the same thing. EU unity is “a huge challenge” but “a real opportunity”, she waffles. “It is harder to ignore us if we are able to be coherent and consistent in what we say.”
Ask what the EAS is for, and Lady Ashton lists things the EU already does, then suggests they need to be done better. For instance, helping the Palestinian Authority with governance and security. In Afghanistan training police and “backing up NATO”. In Africa doing development work or hunting pirates off Somalia. She is unimpressed by big symbols. She “remains to be convinced” that the EU needs its own military headquarters.
Some of this is sensible pragmatism. Today’s EU is in no mood for deep political integration. Europe’s best chance of making a difference around the world may well lie in the gaps that cannot be filled by big powers like America or bodies like NATO. Yet after the humiliation of the Copenhagen climate talks, at which the EU barely had a voice, even countries wary of integration would like Europe to become smarter at diplomatic strategy, once it has a common position. Even supporters of Lady Ashton worry that this is not her forte. “She is a quick learner,” says one well-placed official. “She is never going to be a great strategic thinker.”
Many complain her team lacks “grown-ups”. At their bleakest, diplomats worry that a huge job has fallen onto a mid-sized politician, who is now tailoring the job to fit. Is Lady Ashton the wrong woman for her job? Ask EU leaders: they picked her. She is a symptom of Europe’s shrinking ambitions, not the cause.
Read today on Global Europe: In expectation of better days. Poland’s priorities for EU foreign policy / Letter from Warsaw, by Paweł Świeboda, President of demosEUROPA, Centre for European Strategy, in Warsaw and a former Director of the European Union Department in Poland’s Ministry of Foreign Affairs.
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