The Great Debate UK
So we’ve got the fresh Greek elections we expected and markets, despite the inevitability that we would get here, have reacted with some alarm. European stocks have shed around 1 percent, and the harbour of German Bunds is pushing their futures price up in early trade. The Greeks will try to form a caretaker government today to see them through to elections expected on June 17.
The key question is whether the mainstream parties can mount a convincing campaign second time around, playing on the glaring contradiction in SYRIZA’s position (no to bailout, yes to the euro) and essentially turning the vote into a referendum on euro membership, which the overwhelming majority of Greeks still support. Don’t count on that. SYRIZA remains ahead in the polls.
To be able to pull it off, PASOK and New Democracy will need some help from Europe. There have already been hints from Brussels that if a pro-bailout government is formed, Athens could be given some leeway on its debt-cutting terms. But equally other voices are saying there is no more room for manoeuvre.
France's Francois Hollande used his presidential debut to frame help for Greece within his push for a European growth strategy last night, saying he hoped that could also foster a return to prosperity there. He and Germany's Angela Merkel are due in the United States for a G8 summit at the end of the week where doubtless they will come under heavy pressure to make sure Greece doesn’t bomb out of the euro zone or, if it does, that the effect is contained. Easier said than done. Given a Greek euro exit would probably require rapid concerted reaction from the EU, IMF (to shore up Spain?) and the world’s big central banks (remember the global monetary policy response after the collapse of Lehmans?), planning for that could well be bubbling below the surface at the G8.
IMF chief Christine Lagarde said last night that it was important to be technically prepared for the possibility of Greece leaving the euro zone while Finland’s prime minister said Greek euro exit would not cause the financial mayhem seen in 2008.
from The Great Debate:
The crisis in Syria and the confrontation with Iran over its nuclear program have highlighted the renewed importance of one of the oldest and most enduring relationships of the United States: its alliance with Turkey. The U.S.-Turkey partnership was forged during the Korean conflict and the Cold War, and Washington and Ankara stood shoulder-to-shoulder to confront the Soviet challenge. Now, the two countries have an opportunity to work together to help shape the Middle East, ensure the stability of Iraq, contain Iranian ambitions, end the Assad regime in Syria and ensure reliable energy supplies to Europe.
In the past decade, Turkey has become the 17th-largest economy in the world and undertaken far-reaching political reforms. It has gone from being a cautious actor in international affairs to being an influential player in its neighborhood and beyond. In a new Council on Foreign Relations report, a bipartisan panel we chaired makes the case that the two countries should define a new partnership of close coordination in confronting today’s challenges.
Any Americans believing that their country is being bought up by the Chinese might want to pay heed to a new report from the Vale Columbia Center on Sustainable International Investment. It says that China is a minimal player in terms of foreign direct investment in the United States and that Washington should in fact be doing a lot more to get it to gear up its buying.
To start with, look at the magic number. In 2010, the last year for which numbers are available, only 0.25 percent of FDI into the Untied States came from China. Switzerland, Britain, Japan, France, Germany, Luxembourg, the Netherlands, Canada were all far bigger. In the U.S. Department of Commerce's report on the year, China, numbers were so small they were lumped into a category simply called "others".
from The Great Debate:
The ubiquity of digital gadgets and sensors, the pervasiveness of networks and the benefits of sharing very personal information through social media have led some to argue that privacy as a social norm is changing and becoming an outmoded concept. In this three-part series Don Tapscott questions this view, arguing that we each need a personal privacy strategy.
Since I co-authored a book on privacy and the Internet 15 years ago I’ve been writing about how to manage the various threats to the security and control of our personal information. But today I find myself in a completely unexpected discussion. A growing number of people argue that the notion of having a private life in which we carefully restrict what information we share with others may not be a good idea. Instead, sharing our intimate, personal information with others would benefit us individually and as a society.
Seeing the dewy-eyed kids at the post-election celebrations in Paris, I couldn’t help thinking how crazy it all was. The youngsters were plainly convinced they had a president to take their country forward into the new dawn - after all, he campaigned under the slogan “Le changement, c’est maintenant”. In reality, Francois Hollande’s programme is unambiguously regressive, with its stop-the-world-we-want-to-get-off determination to go in the opposite direction to every other country, its refusal to countenance any erosion of the country’s ruinously expensive welfare state and its complacent confidence that there is nothing to stop France carrying on as before. What better place to greet the return of the Ancien Régime than the Place de la Bastille?
Of course, the new President promises that he is going to balance the budget in 2017 with the familiar prayer of tax-and-spend governments the world over: “Oh Lord, make me solvent! – but not yet…” Now, even allowing for the fact that France’s deficit is only 5 percent of GDP, it still means he is going to keep on borrowing until the national debt is more or less as large as GDP. (Remember: a balanced budget means no need for more loans, so the national debt is constant. To start paying off its debts, a country needs a surplus, something France has not managed for more than forty years).
Throughout history it has always been difficult to take something away from someone once you have given it to them. Europe is finding that it is extremely difficult to reign in public finances once they start to go out of control. Democracies don’t like to vote for austerity, which is why Sarkozy lost the Presidency in France, why a radical left party came second in the Greek elections and why the Conservatives got a drubbing at last week’s local elections in the UK.
This tells us something about democracy in the western world. Governments have to manage the public finances directly – they have to sell the debt, do the sums and present budgets. However, the people who vote them into (and out of) power are the public, who rightly in most cases, believe they have worked hard, paid taxes and deserve the services and retirement promises made to them.
from The Great Debate:
American media coverage of Vladimir Putin, who today began his third term as Russia's president and 13th year as its leader, has so demonized him that the result may be to endanger U.S. national security.
For nearly 10 years, mainstream press reporting, editorials and op-ed articles have increasingly portrayed Putin as a czar-like "autocrat," or alternatively a "KGB thug," who imposed a "rollback of democratic reforms" under way in Russia when he succeeded Boris Yeltsin as president in 2000. He installed instead a "venal regime" that has permitted "corruptionism," encouraged the assassination of a "growing number" of journalists and carried out the "killing of political opponents." Not infrequently, Putin is compared to Saddam Hussein and even Stalin.
President Putin recently noted that Russia has emerged from the global financial crisis in a stronger position than before, and that average wages will increase by 60% by the year 2020. Traditionally, many people think of Russia as a provider of natural resources, and increasingly as a safe pair of hands for mega-events, such as the upcoming Sochi 2014 Winter Olympic Games, the Formula 1 Grand Prix from 2014, and the 2018 FIFA World Cup. Today the Russian economy is the sixth largest in the world, with an output which may potentially exceed US$ 2 trillion in 2012. Russia’s gross domestic product (GDP) expanded by 4.2 per cent in 2011, making the country the third fastest growing economy after China and India.
from The Great Debate:
This is the second in a series of responses to Ian Bremmer’s excerpt of Every Nation for Itself: Winners and Losers in a G-Zero World. The first response can be read here.
It’s said that predictions are risky business, especially those about the future. No one knows that better than Ian Bremmer, who in addition to his multiple books has created one of the more successful risk analysis organizations. Being in the business of highlighting risks, he has for the past few years focused on the breakdown of the world order most of us grew up with, whether a 20th century world of great-power struggles or an early 21st century world of American economic and military preponderance. Now, says Bremmer, those systems are finished and in their stead we have... nothing.
from The Great Debate:
The headlines screaming from London tell the story: Murdoch “unfit” to run News Corp. The Commons committee that summoned the 81-year-old media magnate to explain how his newspapers came to hack the phones of everyone from Prince William to Paul McCartney has given its damning verdict.
Rupert Murdoch “turned a blind eye and exhibited willful blindness to what was going on in his companies” and his instinct “was to cover up rather than seek out wrongdoing and discipline the perpetrators.” The bottom line? “Rupert Murdoch is not a fit person to exercise the stewardship of a major international company.” So much for Murdoch’s attempt to pose as an affable old codger with too much on his mind to notice the lawbreaking done in his name. So much for, “This is the most humble day of my life.”