The Great Debate UK

from The Great Debate:

Sanctions finally find Russia’s Achilles heel

Russia's President Vladimir Putin gestures as he chairs a government meeting at the Novo-Ogaryovo state residence outside Moscow

Russian President Vladimir Putin and President Barack Obama were reportedly engaged in a heated telephone conversation last Thursday when Putin noted in passing that an aircraft had gone down in Ukraine. The tragic crash of the Malaysian airliner in rebel-held eastern Ukraine continues to dominate the headlines, but it is important to remember what agitated Putin and prompted the phone call in the first place -- sanctions.

Sanctions against Russia have been the centerpiece of the U.S. response to Putin’s interference in Ukraine. While they primarily have been directed against prominent friends of Putin and their businesses, the underlying target has been a weak Russian economy.  The sanctions have definitely found Russia’s Achilles’ heel, and with harsher sanctions looming in the aftermath of flight MA17, Putin is finding it increasingly difficult to craft an effective reply.

Obama had raised the ante for Russia the day before the Malaysian airliner disaster by unexpectedly announcing a new round of sanctions. The designated enterprises included several major Russian banks (Gazprombank, VEB), energy companies (Rosneft, Novatek) and arms manufacturers. They were not, however, the full sectoral sanctions that Putin dreads the most. These would essentially exclude Russia from the international financial system and restrict major technological transfers. Though key Russian banks and energy companies are now prohibited from receiving medium or long-term dollar financing, U.S. companies are not otherwise prohibited from conducting business with them.

But even by hinting as to what sectoral sanctions might look like, Obama has upset Russia’s economic calculations. Obama is often criticized for not backing up the “red lines” that he draws. But in Ukraine, Obama essentially has drawn a “gray line” -- demanding Russia take certain actions to end the crisis. No one knows when this gray line is crossed, however. So these new sanctions only heighten the uncertainty -- and risk -- of doing business in Russia.

from The Great Debate:

U.S. spying on Germany: Making enemies out of allies, and for what?

German Chancellor Merkel attends a session of Bundestag in Berlin

What were they thinking?

In the wake of last fall's revelation that the National Security Agency had wiretapped German Chancellor Angela Merkel's cell phone, the report of U.S. intelligence’s involvement in two other likely cases of spying on Germany is mind-boggling.

Now the story has taken a dramatic new turn, with Germany expelling the CIA chief of station in Berlin -- an almost unprecedented step by an ally. This unusual action reflects how seriously the Merkel government takes these spying allegations.

from The Great Debate:

No drama in Obama’s Ukraine policy

Many are asking: How can we stop Russian President Vladimir Putin from moving into Ukraine and seizing a large chunk of its territory in the east? The actions of forces that resemble the Russian special operations troops who created the conditions for annexation of Crimea suggest that other parts of Ukraine may also be in the Russian strongman's sights.

The fact is, however, we cannot stop Putin. Or, to be more precise, we should not try to stop him physically. Doing so would require military threats or troop deployments to Ukraine. The stakes do not warrant such a step. It is not worth risking World War Three over this.

from Ian Bremmer:

Who loses most in Ukraine?

 

As we march toward Sunday’s Crimean referendum, the result is predetermined. Crimea will vote Russia, and tensions will only escalate. At this juncture, it’s important to take a step back and ask who “lost” here. What could the United States have done differently? What about Russia? Was the outbreak of violence and explosive geopolitical confrontation inevitable? Where does it go from here?

If the United States’ primary goal has been to keep violence in Ukraine and tensions between outside powers to a minimum, it has made a series of significant missteps. The United States failed to offer real economic support to the Ukrainian government before events reached a crescendo. Former President Viktor Yanukovich didn't want to just work with the Russians; he was looking to strike a balance between Russia and the EU while skirting economic collapse. Europe pushed too hard, and the IMF wasn't going to step in in time. The lack of support from the West helped push Yanukovich far enough towards Russia that protests in Kiev reached a point of no return.

from The Great Debate:

The nuclear option for emerging markets

Last year, greenhouse gas emissions reached a record high of 39 billion tons. Emissions actually dropped in the United States and Europe, but substantial increases in China and India more than erased this bit of good news.

That is all the more reason to focus on innovative solutions that slow the growth in emissions from emerging markets.

from The Great Debate:

Addressing China’s ‘soft power deficit’

Xi Jinping (L) met with President Barack Obama in the Oval Office of the White House in Washington, Feb. 14, 2012.  REUTERS/Jason Reed

As Chinese President Xi Jinping prepares for his landmark summit with President Barack Obama in California Friday and Saturday, the critical mission of improving China’s image in the world could well be uppermost in his mind.

Is the U.S. picking on our banks?

By Kathleen Brooks. The opinions expressed are her own.

Standard Chartered is the latest UK-based bank that seems to be getting it in the neck from our friends across the water. Firstly, there was Barclays and the Libor scandal, then there was HSBC which was fined for allowing drug-trafficked money from Mexico to go through its system and now there is Standard Chartered which is charged with “wilfully misleading” the New York Department of Financial Services and clearing $250 billion of Iranian transactions through its U.S. operation.

Two can be a coincidence, but three in as many months? Since the news on Standard Chartered broke there has been a torrent of investors, politicians and even some in the media who have queried whether this is just an attempt by Washington to discredit London and re-establish New York as the world’s financial centre.

from MacroScope:

Is U.S. economic patriotism hurting?

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:

America still needs to engage the world

This is a response to Nader Mousavizadeh's latest Reuters column,  "A smaller America could be a stronger America."

By David Miliband
The opinions expressed are his own.

Nader’s statistics pointedly and appropriately speak to a dysfunctional political dynamic of short term promises without long term responsibilities in the U.S.  It is also striking (and worrying) that both sides of American political debate are determined to persuade voters that they won’t be too concerned by the rest of the world.

from Pakistan: Now or Never?:

The “sound and fury” of U.S.-Pakistan ties

rayjmonddavisphotoWith the release of CIA contractor Raymond Davis, the United States and Pakistan have put behind them one of the more public rows of their up-and-down relationship.  It was probably not the worst row -- remember the furore over a raid by U.S. ground troops in Angor Adda in Waziristan in 2008, itself preceded  by a deluge of leaks to the U.S. media about the alleged duplicity of Pakistan's Inter-Services Intelligence (ISI) agency in its dealings on Afghanistan.

But it was certainly one which by its very nature was guaranteed to get the most attention - an American who shot dead two Pakistanis in what he said was an act of self-defence, denied diplomatic immunity and ultimately released only after the payment of blood money. Adding to the drama were two intelligence agencies battling behind the scenes.

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