EU gets new Commission, but little to cheer yet

There was more a sense of relief than joy when the European Union finally got its new executive on Tuesday. These are difficult times for the EU and there is little to celebrate.

The new European Commission is taking office in a tough economic climate, with the 16-country euro zone facing its hardest test since the single currency came into being 11 years ago.

The EU’s image has taken a battering in the past few months, first as the 27-country bloc struggled to secure the approval of the Czech Republic to complete ratification of the Lisbon treaty, a charter intended to reform its institutions and make decision-making easier, and then after it chose two low-key leaders as its first full-time president and foreign policy chief.

U.S. President Barack Obama caused EU leaders further embarrassment by deciding not to attend an EU-US summit in Madrid in May, and the EU failed to force through its more radical ideas at the Copenhagen climate talks in December. An additional problem is media criticism of foreign policy chief Catherine Ashton, who has been under fire over the EU’s perceived slow response to the Haiti earthquake.

Cometh the hour, cometh Van Rompuy?

Three months ago, Herman van Rompuy might have struggled to be recognised on the streets of his native Belgium, let alone Paris or London. The bookish former prime minister, a fan of camping holidays and Haiku poetry, was nothing if not low-key; a studious consensus builder in the world of Belgian politics.

Three months on and Van Rompuy, 62, may not outwardly have changed much, but his title and the expectations surrounding him certainly have. In November he was chosen to be the first permanent president of the European Council, the body that represents the EU’s 27 leaders, and on Thursday he will host those heads of state and government at an economic summit in Brussels — the first such gathering he has chaired.

With Greece under extreme pressure with its mounting deficit and debt problems, and Portugal, Spain and Italy threatening to go the same way, the summit comes at a critical time. It is perhaps the most serious test of Europe’s monetary union since the euro single currency was introduced 11 years ago.

“Cometh the hour, cometh the man”, some might say, even if one wonders whether Van Rompuy would have been the first name on most European leaders’ lips at such a pressing time.  But Van Rompuy it is, and he has his work cut out if he is going to seize the moment and tackle one of the EU’s biggest problems.

from Pakistan: Now or Never?:

On India-Pakistan thaw and the changing Afghan dynamics

There is a time and a place for everything and back in the days of the Obama election campaign the idea that progress on the Kashmir dispute between India and Pakistan could help turn around the flagging military campaign in Afghanistan looked plausible. The argument, much touted by Washington think-tankers, was that Pakistan would not turn against Afghan Taliban militants on its western border as long as it believed it might need to use them to counter India's growing influence in Afghanistan, and as long as it felt the need to keep the bulk of its army on its eastern border with India.

Even in the middle of last year, when Pakistan and India made an ultimately unsuccessful attempt to revive peace talks which had been frozen since the attack on Mumbai at the end of 2008, the possibility of a "grand bargain" from Kashmir to Kabul still carried some resonance.

But time has moved on, so it is a little bit strange to see these arguments resurfacing now after India proposed to resume talks with Pakistan.  (See Newsweek's "Kashmir is the key to peace in Afghanistan" or the op-ed by David Ignatius in the Washington Post)

As I wrote in this analysis, a thaw in relations between India and Pakistan would be too little, too late to achieve results in time for Washington's 2011 deadline for drawing down troops in Afghanistan. Real progress on Kashmir would require them to get back to a roadmap for peace sketched out between India and Pakistan in 2007 under former president Pervez Musharraf. But Pakistan, whose vulnerability to attacks by Islamist militants has been demonstrated in a spate of gun and bomb attacks over the past year, probably no longer has the political space to offer the kind of concessions Musharraf made to get there without risking a backlash at home. And while the roadmap provided a framework for further negotiations on Kashmir, a lot of ground had yet to be covered to translate that into a real agreement; even if indeed it would ever have worked.

The view from Iqaluit: mostly white

When we told Reuters editors we’d be adding plenty of color to the stories we’re putting together from a G7 finance meeting in the Canadian Arctic this weekend, there was a split second of bemused silence on the line. “I suppose that color is mostly white,” said one wag. And that just about sums up Iqaluit, which is clearly the remotest and most inaccessible place where the Group of Seven finance ministers and central bankers have ever met.

Iqaluit, for the geographically challenged, is a town of some 6,000 people about three hours flight from either Ottawa or Montreal. (Greenland might be closer but you would have to get to Greenland first.)  At this time of year, the snow is everywhere — gray-white on the roads, blue-white in the shadows and a sort of yellow-white when the watery sun hits it full on. The temperature is a balmy -15C today (0F), although there’s a wind that bites right through you, and it’s chilly enough that you really don’t want to take your gloves off for more than one picture before your fingers start to freeze.

“It’s cold,” was all Bank of Japan Governor Masaaki Shirakawa told reporters when he arrived at his hotel, wearing a thick winter coat and a fur-lined hat. “I’m sure everyone will be feeling very alert and sharp because of this beautiful and cold weather,” IMF official John Lipsky added.

Today’s picture, from Thomson Reuters technical guru Joe Lukach, is a very far-off shot of the adventure of the day — a dogsledding party led by Canada’s Finance Minister Jim Flaherty for some of his guests. We took this one from the press center. We’ll post some close-up shots when we get them.

‘Frankenstein’-food fears keep GMOs out of Europe

As the new European Union executive prepares to debate fresh policy proposals which might unblock the stalemate over approving genetically modified crops for feed, processing or cultivation, there are few signs that Europe’s fears over what some have termed “Frankenstein foods” are easing. 

On Friday Bulgaria’s ruling GERB party proposed a five-year moratorium on the production of genetically modified (GM) crops for scientific and commercial reasons following public outcry over a new legislation. 

Bulgaria follows in the footsteps of Austria, Germany, Hungary and France, all of whom have banned the commercial cultivation of the only GM crop (Monsanto’s MON 810 maize type) allowed to be grown in the European Union.  

Why, despite all the assurances from the scientific community and food safety authorities, do so many remain so adverse to GMOs?

Brussels’ MEPs ready to duke it out with bankers

Every new year brings resolutions, and the European Parliament is no exception.

Often derided as a multi-lingual talking shop, the institution is feeling newly invigorated by some fresh faces and by the European Union’s Lisbon reform treaty, which came into force late last year and gives the 736-member parliament more say in drafting laws and acting as a check on legislation.

Almost immediately, parliamentarians were letting their voice be heard, forcing Bulgaria to withdraw its nominee for the European Commission last month because she wasn’t seen to be up to the job. They also look ready to block an agreement between the EU and the United States on sharing data on bank transfers, and are really beginning to show their teeth when it comes to financial sector reform.

It’s one aspect of the latter move — reported exclusively by Reuters on Monday — which is set to cast MEPs in the role of banker-bashers-in-chief and could put them on a collision course with national governments.

Where gays do serve, openly, in the military

C.M. Sennott

In many corners of the world, the policy on gays in the military could be labeled this way: “Don’t Ask, Don’t Care.”

In the military establishments of more than 30 countries, including U.S. allies such as Israel, Canada and the United Kingdom, gays and lesbians are allowed to openly serve in their country’s military.

Does Greece really deserve such a market pummelling?

So there’s no question Greece has work to do to improve its bookkeeping.

Not only must it get spending in check,  but it needs to be a bit more honest about where its finances stand in the first place. After all, it’s not often an EU country says one month that its budget deficit is a little over three percent of GDP and admits a few weeks later that, oh dear, it’s actually nearer 13 percent.

Yet it’s hard not to have a little sympathy for Greece at the same time.

Its government bonds have been hammered and the price it has to pay to finance its debt has soared as financial markets have relentlessly taken it to task over the past six weeks for its profligacy.

from Front Row Washington:

Qat joins al Qaeda as Yemen threat

U.S. lawmakers, convening a meeting on Wednesday to discuss the threat posed by al Qaeda in Yemen, found themselves focused on another problem stalking the impoverished Arab country:  the mild drug qat, which permeates Yemeni society.

Rep.  Howard Berman, the chairman of the House Foreign Affairs Committee, launched the discussion of Yemen's drug problem in his opening remarks, noting that qat was "a narcotic plant that produces feelings of euphoria and stimulation, but ultimately undermines individual initiative -- sort of like being in Congress."

Berman noted that many people chew qat regularly  in Yemen -- pushed close to the top of the U.S. security watchlist after the Christmas Day bombing attempt on a U.S. airliner by a Nigerian with Yemeni links  --  and that cultivation of the drug consumes about 40 percent of Yemen's fast diminishing agricultural water supplies.

The focus on qat continued with Rep. Gary Ackerman, who mused that Yemen's drug habit might be undercutting its readiness to sign on to a more forceful campaign against al Qaeda militants within its borders.

China’s tougher than before

Kathleen E. McLaughlin

China’s irate reaction to the Obama administration’s approval of a $6.4 billion arms sale to Taiwan comes at a delicate time amid already growing tensions between the two global heavyweights.

The United States appears to be taking tougher stance on China than last year and Beijing is pushing back with confidence. In their latest quarrel, China lashed out at news of U.S. arms sales to Taiwan with a swift and strident reaction, raising red flags about the emerging power’s increasingly tense relationship with the United States. (In Taiwan, most back the deal.)

On Saturday, the Chinese Foreign Ministry summoned U.S. Ambassador John Huntsman in Beijing to express its “strong indignation” over the weapons sale, according to a ministry statement. Vice Foreign Minister He Yafei said the sale “will certainly damage China-U.S. relations, exert a very negative impact on bilateral exchanges and cooperation in many important areas and lead to consequences that neither side wishes to see.”