Global News Journal

Europe can’t put out the blaze

If the world thought that Europe’s finance ministers were running in to put out the blaze spreading through Athens and Rome this week, it might come as a surprise to learn they still don’t agree on the size of the fire or how to deal with it.

Any training course will tell you that if a small fire isn’t tackled quickly, it could make things a lot worse. The Greek crisis is like a small electrical fire that has grown into a dangerous inferno now threatening to gut Italy.

But ministers meeting in Brussels have clearly not been on any fire extinguisher training courses lately — they don’t know their water from their foam and their dry powder. In fact, they appear to be pouring oil on the fire.

Belgium’s Finance Minister Didier Reynders says it is best to try to smother the blaze with a small cloth soaked in a chemical called a financial transaction tax, while Sweden’s Anders Borg and Austria’s Maria Fekter say they can’t spare any of their CO2 extinguishers.

“Italy can achieve a lot from its own doing,” Fekter told reporters who were watching the fire grow closer. Borg, Fekter and others are sure the Italians in the burning building down the street will be able to sort things out themselves.

Spain’s Elena Salgado is meanwhile clearly upset that the smoke from that fire is billowing into her garden, but France’s Francois Baroin says there was no need to reach for a fire hose: “Tout va bien” (Everything’s going well), he said, wiping his brow from the heat. A combustible mix of hot air and faulty wiring seem to be one assessment of the causes of the euro zone flames, which no one is really willing to consider. But as the sound of emergency sirens grows louder, it may be time to remove the safety pin from the extinguisher marked “European Central Bank” — it may be the only way to remove all the oxygen feeding the fire.

Half time at the euro zone cup final

Covering a summit of European leaders is a bit like covering a soccer match with no ticket for the stadium and no live TV broadcast to watch. The only way you have an idea of the scoreline is from the groans and cheers from inside the ground.

With EU leaders meeting on Brussels on Sunday and again on Wednesday to try to resolve the region’s debt crisis, the emergency back-to-back summits look like a game of two halves.

A European Commission spokeswoman said as much on Monday, trying to explain why there had been no major announcements so far on solving the debt crisis: leaders had gone in for half time.

So who is playing whom? “Euro zone versus financial markets” would seem to fit the bill, although mostly it feels it is France against Germany, with European Council President Herman Van Rompuy the referee, and French President Nicolas Sarkozy getting caught out by Germany’s off-side trap every time.

Even from outside the stadium, you can hear the adulation from the Finnish and Dutch fans when they see coach Angela Merkel on the touchline, although some Greeks are angry she won’t pay for more first aid for their injured players.

The euro team has become infamous for own goals of late and the pressure is on to avoid regulation.

So at the second half on Wednesday, the euro squad will come back out onto the field to an impatient crowd and needing to win 3-0 to be certain of victory.

Waiting for Europe’s “appropriate response”

Will the euro zone finally act decisively?

Investors are hoping for something big from European leaders at the EU summit on Oct. 23 and of the Group of 20 on Nov. 3. But they also know the 17 nations of the euro have a habit of offering delayed, half-hearted rescues that have cost them credibility.

So there’s been a lot of “urging” and “warning” in Brussels lately — politicians and central bankers have all been demanding Europe act as international alarm grows that its sovereign debt problems may drag the world into recession. “Further delays are only aggravating the situation,” said European Central Bank President Jean-Claude Trichet on Tuesday in his last appearance at the European Parliament, before he hands over the post to Mario Draghi on Nov. 1.

A day earlier, Germany’s Deputy Finance Minister, Joerg Asmussen, at the parliament to promote his candidacy to join the ECB‘s board, made his call, saying “cooperation has to be increased,” across the euro members, divided as to who should pay to rescue the heavily indebted nations of southern Europe. “I want to see a solution for debt sustainability for Greece,” Asmussen said. So do so many others, especially Greek Prime Minister George Papandreou, who in Brussels on Thursday said it was a “crucial element to make the necessary decisions concerning Greece.”

The European Roundtable of Industrialists, a business lobby of multinationals ranging from French car maker Renault to Spain’s Telefonica, has also come through Brussels to make its point. The group’s head, Leif Johansson, who is also chairman of Swedish phone maker Ericsson, warned that if European leaders fail to act, businesses could see a repeat of the liquidity freeze that followed the collapse of U.S. investment bank Lehman Brothers.

“The worst element of the 2008/2009 crisis was when liquidity froze,” he said. “The worst scenario we have right now is that that could happen again … and there is a real downside risk.” 

The Oct. 23 summit is being billed as a make-or-break event where Germany and France, the main powers in the euro zone, must come up with the solutions investors want. A meeting last Sunday between German Chancellor Angela Merkel and French President Nicholas Sarkozy, and their promise of a comprehensive strategy, suggests there will be a serious attempt to put forward a framework to try to resolve the crisis.

UN tells Mbeki he got it wrong on Ivory Coast

This week U.N. Secretary-General Ban Ki-moon‘s chief of staff, Vijay Nambiar, defended the United Nations’ record on Ivory Coast.  In a highly unusual public rebuttal, Nambiar told former South African President and African Union mediator for the Ivory Coast conflict, Thabo Mbeki, that it was he – not the international community — who got it wrong in the world’s top cocoa producer.

In April, Ivory Coast’s long-time President Laurent Gbagbo was ousted from power by forces loyal to his rival Alassane Ouattara, who won the second round of a U.N.-certified election in November 2010, with the aid of French and U.N. troops. According to Mbeki — who has also attempted to mediate in conflicts in Sudan and Zimbabwe – there never should have been an election last fall in the country that was once the economic powerhouse of West Africa.

Mbeki wrote in an article published by Foreign Policy magazine at the end of April: “The objective reality is that the Ivorian presidential elections should not have been held when they were held. It was perfectly foreseeable that they would further entrench the very conflict it was suggested they would end.”

Ivory Coast was split in two by the 2002-3 civil war and the failure to disarm the northern rebels meant the country held an election last year with two rival armies in place, leading to a new outbreak of hostilities when Gbagbo rejected the internationally-accepted election results.

The solution to the conflict, Mbeki wrote, was not to insist that Ouattara take office as president, as the United Nations, France and others did at the time, but a political solution that would have satisfied everybody in the francophone nation. “The African Union understood that a lasting solution of the Ivorian crisis necessitated a negotiated agreement between the two belligerent Ivorian factions, focused on the interdependent issues of democracy, peace, national reconciliation and unity.”

The United Nations took nearly four months to come up with a public response to Mbeki. It finally appeared this week in an article in Foreign Policy by Nambiar entitled “Dear President Mbeki: The United Nations Helped Save the Ivory Coast.” In his rebuttal, Nambiar vehemently rejects the idea that that the world should have pushed Ouattara to negotiate a power-sharing deal with election-loser Gbagbo.

UNsensational? Five more years of Ban Ki-moon

It’s hard to find a delegate to the United Nations who despises U.N. Secretary-General Ban Ki-moon. But it’s even harder to find someone who thinks he has the gravitas and charisma of his Nobel Peace Prize-winning predecessor Kofi Annan, who invoked the wrath of the previous U.S. administration when he called the 2003 invasion of Iraq “illegal.” As one senior Western official, who declined to be identified, said about Ban: “It’s not as if he’s lightning in a bottle, but we can live with him.”

The former South Korean foreign minister is in the final year of his first five-year term and is widely expected to run for another stint as the supreme U.N. official. The formal re-election process is likely to commence in the coming months. In the meantime, Ban is visiting the capitals of key U.N. member states to gauge his chances of keeping his job. Those chances, U.N. diplomats say, are excellent. So far, no country has nominated any candidate to oppose him. “I’d put my money on Ban Ki-moon getting a second term,” said a Security Council diplomat.

The 15-nation Security Council nominates the secretary-general, though the choice has to be confirmed by the 192-nation General Assembly. Despite the veneer of democracy, it is the five veto-wielding permanent council members — Britain, China, France, Russia and the United States — who choose the top U.N. bureaucrat in New York. And none of the five has any serious objections to a second and final term for Ban, diplomats say.

Some people say that running the United Nations is the toughest job on earth. With little real power, he spends his time mediating and negotiating behind closed doors, getting blamed for member states’ failures and receiving no credit for his off-camera successes. National lobbyists push and pull him in all directions. The five permanent Security Council members, known as the “P5″, regularly insist that he acquiesce to their demands, often pressuring him to reserve a healthy portion of top U.N. jobs for their nationals or preferential treatment for themselves or their allies. Journalists harangue the secretary-general to disclose the details of sensitive negotiations, which he usually tries to keep secret under the label of “quiet diplomacy.” Human rights groups routinely skewer him for not being tough enough on the rulers of despotic countries, which are, after all, member states like all the others and don’t take kindly to criticism.

Ban has been no exception. He has been publicly clobbered for not congratulating jailed Chinese dissident Liu Xiaobo for winning the 2010 Nobel Peace Prize or raising his detention with President Hu Jintao during a recent visit to China. He was hung out to dry for not being tough enough on Sri Lanka’s government and Sudanese President Omar Hassan al-Bashir, who was indicted by the International Criminal Court for genocide in Sudan’s western Darfur region. Arab and other delegations from the developing world accuse Ban of being a U.S. lackey, noting how often his statements on the Israeli-Palestinian conflict and other issues echo those of the U.S. State Department or White House.

As much as Ban has sought to please his P5 kingmakers, he has managed to run afoul of each of them in the past. In 2008 Russia accused him of siding with the United States, France and Britain in supporting the secession of Kosovo from Serbia, which Moscow fiercely opposed. U.N. officials said at the time that Russia even threatened to block his second term over Kosovo (Ban made it up to them later). Both China and Russia complained that Ban had voiced public support for Egyptian demonstrators calling for the ouster of President Hosni Mubarak, who resigned last week. The United States, Britain and France were annoyed with Ban in 2009 for departing from past practice and not referring to the Georgian breakaway region of Abkhazia as part of Georgia. The Georgian ambassador accused Ban of succumbing to pressure from Russia, which fought a brief war against the former Soviet republic of Georgia in 2008. Ban denied the charge.

Ban’s unwavering stance against Ivory Coast’s incumbent leader Laurent Gbagbo, who refused to recognize U.N. certified election results from November 2010 that say he lost to rival Alassane Ouattara, surprised many U.N. watchers who are more accustomed to seeing him sitting on the fence on tough issues. Philippe Bolopion of Human Rights Watch, who has been one of the secretary-general’s toughest critics, welcomed Ban’s “swift and unequivocal reaction” to Gbagbo, who ordered U.N. peacekeepers out of the world’s top cocoa producer. So far the secretary-general has refused to withdraw his blue helmets and the deadlock continues.

from FaithWorld:

Will Pew Muslim birth rate study finally silence the “Eurabia” claim?

(Photo: Muslims who could not fit into a small Paris mosque pray in the street, a practice the French far-right has compared to the Nazi occupation, December 17, 2010/Charles Platiau)

One of the most wrong-headed arguments in the debate about Muslims in Europe is the shrill "Eurabia" claim that high birth rates and immigration will make Muslims the majority on the continent within a few decades. Based on sleight-of-hand statistics, this scaremongering (as The Economist called it back in 2006) paints a picture of a triumphant Islam dominating a Europe that has lost its Christian roots and is blind to its looming cultural demise.

The Egyptian-born British writer Bat Ye'or popularised the term with her 2005 book "Eurabia: The Euro-Arab Axis" and this argument has become the background music to much exaggerated talk about Muslims in Europe. Some examples from recent weeks can be found here, here and here.

A good example is the video "Muslim Demographics," an anonymous diatribe on YouTube that has racked up 12,680,220 views since being posted in March 2009. Among its many dramatic but unsupported claims are that France would become an "Islamic republic" by 2048 since the average French woman had 1.8 children while French Muslim women had 8.1 children -- a wildly exaggerated number that it made no serious effort to document. It also predicted that Germany would turn into a "Muslim state" by 2050 and that "in only 15 years" the Dutch population would be half Muslim. "Some studies show that, at Islam's current rate of growth, in five to seven years, it will be the dominant religion of the world," the video declares as it urges viewers to "share the Gospel message in a changing world."

The BBC produced its own video entitled "Welcome to Eurabia?" that gave a point-by-point rebuttal of the video's claims. Watching "Muslim Demographics" and "Welcome to Eurabia?" back-to-back provides a useful lesson in the dark art of twisting statistics. The image at left, shows a fictional flag of "Eurabia" created by Oren Neu Dag.

Articles defending the "Eurabia" claim have often been so shrill that they essentially discredited themselves as serious arguments. But it could be difficult to find a solid statistics that gave an overall view of what was actually happening. The Pew Forum on Religion and Public Life has stepped up with an impressive study entitled "The Future of the Global Muslim Population" (here's the press release, report and graphics here). As we summarised it in our report Muslim birth rate falls, slower population growth:

from Summit Notebook:

Does Germany need Europe?

Jim O'Neill, the new Goldman Sachs Asset Management chairman who is famous for coining the term BRICs for the world's new emerging economic giants, reckons he knows why Germany might not be rushing to bail out all the euro zone debt that is under pressure. Europe is not as important to Berlin as it was.

Speaking at the Reuters 2011 Investment Outlook Summit being held in London and New York, O'Neill pointed out that in the not very distant future Germany will have more trade with China than it does with France.

"It's a different global environment. That's why maybe Germany (ties)  itself to a rules-based game with the rest of Europe because economically it doesn't mean so much to them now. What goes on in China is more important than what goes on in France and that's puts a different economic (spin) on the situation for the Germans."

O' Neill also drew parallels between the current situation which sees Germany being asked to stump up for ill-disciplined  southern euro zone economies and the problems faced in 1990 when West Germany had to do something similar for East Germany.

"Fast forward 20 years and this time (they are saying) it's not even our own  people. I think the Germans will stay pro-European ,  but it's  a different  set of circumstances."

The idea that Germany and others will eventually sort out the euro zone debt problem because of a desire for political unity underlies much of the long-term expectations for euro zone survival. But it is a new world, in many ways.

from FaithWorld:

Sarkozy says Muslims should not feel singled out by full veil ban

A veiled woman in Nantes, western France, on April 26, 2010/Stephane Mahe

France attempted the arguably impossible on Wednesday by presenting a bill to ban Muslim face veils and asking Muslims not to feel it was singling them out in the process.

President Nicolas Sarkozy made a brave effort of it at the cabinet meeting that approved the government's draft "burqa ban" that we reported on here.  Justice Minister Michèle Alliot-Marie, who Sarkozy's UMP party always seems to call on when things get tough, did her best in an interview (here in French) that got the part about Mecca wrong. There will be more of this in the months ahead as the bill moves through the National Assembly and Senate.

It's hard not to single out Muslims when they're the only ones who wear full face veils. The bill avoids mentioning them as such, saying only that the ban applies to "concealment of the face in public." But nobody's fooled, a fact Sarkozy acknowledged in his comments to the cabinet: "This is a decision one doesn't take lightly. It's a serious decision because nobody should feel hurt or stigmatised. I'm thinking in particular of our Muslim compatriots, who have their place in the republic and should feel respected. Laïcité means respect for all beliefs, for all religions.

"But we are an old nation united around a certain idea of personal dignity, particularly women's dignity, and of life together. It's the fruit of centuries of efforts. The full veil that fully conceals the face violates these values that are so fundamental for us, so essential to the republican contract. Dignity cannot be divided and in the public sphere, where we meet each other, where we are with others, citizenship should be lived with uncovered faces. So  ultimately there can be no other solution than a ban in all public places."

To critics who say the ban would victimise women who want to wear the veil, Alliot-Marie - seen at left leaving the cabinet meeting (photo: Jacky Naegelen) said: "As we see it, these women are victims. It would be ideal if these sanctions didn't have to be imposed on them."

Searching for silver in Greece’s storm clouds

Greece and the euro zone are still very much in the midst of a debt and deficit storm, with not just Athens but possibly Portugal and Spain at risk of being swept up in the maelstrom.

But that hasn’t stopped economists and political analysts looking for a silver lining in this unprecedented meltdown.

One positive is the impact the uncertainty is having on the euro, which has weakened sharply against the dollar and the British pound this year. That may not be very good for those in the United States or Britain holding euro-denominated assets, but it’s good for European exporters, whose goods become relatively less expensive for importers.

As Jennifer McKeown, a senior economist with Capital Economics, pointed out in a research note on Thursday, euro zone export orders are sharply up (by some counts they are now the highest in 10 years), while in April, euro zone manufacturing expanded at its fastest rate since November 2006, according to Markit.

That’s clearly a positive for the euro zone. The EU is the world’s largest trading bloc by value and exports are a key component of growth, particularly for the major economies such as Germany, France and Italy. Accountancy firm Ernst & Young said in a recent report that it expected net trade to contribute 0.7 percentage points to euro zone growth in 2010 — thereby accounting for three-quarters of the rise in overall GDP.

It is therefore perhaps not so surprising that economic and business sentiment in the euro zone rose strongly in April, despite the chaos in Greece and the volatility in financial markets across the region. 

But there is also a broader positive shakeout that could ensue from this crisis. It may take several years — at best — but economists and political analysts think it will force profound structural adjustments in several EU economies, including Greece, Portugal, Spain and possibly Italy.

Lapland’s part in EU foreign policy

Last weekend, Finland’s foreign minister gathered six of his colleagues and the EU’s foreign affairs chief, Catherine Ashton, in the frozen far reaches of Lapland for two days of talks on the future of European foreign policy.

As informal ministerial gatherings go, it was a rather jolly (if cold) affair, complete with a ‘family photo’ taken with a pair of nervous reindeer, a chance to see the northern lights and activities such as skiing, sledging and snow-mobiling. Some of the ministers even brought along their families.

But as well as a relaxing weekend staying in luxurious cabins 250 km inside the Arctic Circle in the village of Saariselka, what exactly is the point?

Alexander Stubb, Finland’s young and energetic foreign minister, well know for doing triathlons and for his near-permanent grin, says such retreats help foreign ministers get to know each other better and allow them to discuss critical issues without outside pressure. First, they don’t have to worry about reaching hard-headed decisions, and equally they don’t have advisers whispering in their ears or minute-takers holding them to their every word. It’s an open-ended chat among colleagues about topics close to their heart.

France’s foreign minister, Bernard Kouchner, and his Italian counterpart, Franco Frattini, certainly backed up that impression as they relaxed in jeans and open-necked shirts and chatted openly with a handful of journalists  also invited along. They went snow-mobiling and celebrated Frattini’s 53rd birthday. 

In terms of discussions, the participants — who also included the foreign ministers of Sweden, Spain, Turkey and Estonia — covered everything from the EU’s role in the world to sanctions on Iran, developments in the Middle East and the setting up of a European diplomatic corps. Over dinner of reindeer steaks and Lapland cloudberries, they sought to put the world to right.

But at the back of their minds, they were also worrying about their own futures.