Opinion

Ian Bremmer

It’s Groundhog Day for saving the euro zone

Ian Bremmer
May 29, 2012 21:00 UTC

It’s almost June. So why is the euro zone story just about the same as it was in January? It’s a little like the movie Groundhog Day – every day seems to be a repeat of the last, and the story remains the same. But remember: That movie ended. And every day wasn’t the same. Bill Murray made incremental changes – painful ones – until he figured his way out. That’s what the euro zone is doing right now.

Despite all of the elections, the pain, the protests and the German Sturm und Drang, the fundamental basis of the crisis, and the situation, remains the same. Yet this isn’t as bad as it sounds. The actors in the euro zone are very much playing the long game. They’re using the markets both to punish deviations from the outcome they see as the best possible one and to engineer that outcome and help them shape the policies they think will end the crisis for good.

Despite the protests, the overall commitment to the euro zone remains as strong among all of the key players – Berlin and the peripheries – as it was before. That’s hugely important, reflecting that the overall tenor of the conversation has not shifted toward the disintegration of the euro zone, or any individual exits. Indeed, after the long, dragged-out process that’s happened in the markets these last months, the Germans are finally showing the willingness to compromise that we have long expected. They are very gradually moving toward the idea of the ECB increasing the money supply, accepting some inflation, softening the fiscal compact in the zone – moving forward on a whole host of issues, in fact. But with all that movement, they aren’t giving up on the fundamental premise of keeping the euro zone fiscally stable over the long term and recommitting every member nation to budgetary responsibility. That’s why it’s taken so long to get from there to here.

Indeed, Angela Merkel is not just talking austerity, she’s talking growth. The whole continent is obviously happy to hear it, but she really hasn’t changed her message that the zone must spend within its means – she’s simply layered the growth message on top of it.

In short, it looks like the euro zone continues to be on the right path. It’s a rocky path, fraught with challenges, and it may not be a particularly fun one, but let’s not forget the size of the hole that the euro zone nations dug for themselves – trillions in unfunded liabilities, if things were to continue on the gilded path of the late 1990s and 2000s. No matter what, this was never going to be an easy fix.

An unstable world doesn’t necessarily mean a declining America

Ian Bremmer
May 9, 2012 20:15 UTC

Who says America is in decline?

Not me. But, if you listened to a recent Rush Limbaugh show, you might’ve heard him dismiss my new book, Every Nation for Itself, as a “declinist” tract that says America’s time as leader of the world is “over.” Nothing could be further from the truth. There’s an inordinate amount of concern out there that writers who are trying to understand the seismic shifts the world has undergone in recent years are in fact doomsayers – wonks who are convinced the U.S. is no longer a superpower and has lost its swagger. On the other side of this false dichotomy is the camp that tries to pretend all the upheaval of recent years has changed absolutely nothing about America’s objective standing on the world stage.

The split is playing out right now, in fact, in the presidential campaign, with the GOP accusing President Obama of being a declinist, while Obama counters that he is merely being a realist and that the Romney camp doesn’t understand the complexities of foreign affairs in the world today. Here’s the thing – not only is that irrelevant, but the very way the debate is being framed for the public is misleading, at best.

Here’s a simple way to think of it: If you’re camping and suddenly find yourself being chased by a bear in the woods, you really don’t need to outrun the bear – you need to outrun the other guys who are in the woods with you. And so far, the U.S. is doing a fine job staying ahead of the pack.

Who’s in charge of the world? No one

Ian Bremmer
Apr 30, 2012 16:09 UTC

This is an excerpt from Every Nation for Itself: Winners and Losers in a G-Zero World, published this week by Portfolio.

Is the U.S. really in decline? Can China become a superpower? Can Europe rebuild? How fast can the rest rise? These are interesting issues, but today’s world faces a more urgent and important question: While we’re figuring all that out, who will lead? Unfortunately, the answer is no one. In this G-Zero era, no one is driving the bus.

The United States and its European allies can no longer drive the global political and economic agenda. The scramble to produce a coordinated and effective multinational response to the 2008 financial crisis made that clear, but the growing leverage of emerging states like China, India, Brazil, Russia and others was apparent years before U.S. financial institutions began melting down and the Eurozone descended into crisis.

What does G-Zero mean for the world?

Reuters Staff
Apr 27, 2012 17:38 UTC
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A generation ago, the United States, Europe and Japan were the world’s powerhouses. Now, according to Eurasia Group’s Ian Bremmer, we’re living in a world where everyone – and anyone – can set the agenda. So, what does G-Zero mean for the world?

Make no entangling foreign frenemies

Ian Bremmer
Apr 16, 2012 18:09 UTC

It’s often said that kinship runs deeper than friendship. Lately, when it comes to chumminess among world leaders and their colleagues in neighboring countries, friendship has trumped citizenship.

Until recently, it was rare to find leaders willing to forge friendships with candidates across borders or to find would-be leaders campaigning inside foreign countries. There are good reasons for that: Candidates who cross these lines can find it harder to win elections or to govern once the electoral test is passed. Their foreign friends can pay a price for backing the wrong horse and for forfeiting a bit of diplomatic leverage once they find themselves sitting across the bargaining table from the man or woman they campaigned against. Consider three current examples.

Angela Merkel and Nicolas Sarkozy

German Chancellor Angela Merkel’s support for the re-election bid of French President Nicolas Sarkozy is especially startling. It’s hardly surprising that Merkel wants Sarkozy to win. The two leaders have forged a durable personal relationship as they navigated their way through Europe’s ongoing crisis of confidence. The French and German leaders deserve considerable praise for their well-coordinated bid to bolster the euro zone.

from The Great Debate:

The Muslim Brotherhood’s dangerous missteps

David F. Gordon and Hani Sabra
Apr 11, 2012 19:00 UTC

Why Syria’s Assad is still in power

Ian Bremmer
Apr 4, 2012 16:23 UTC

We can’t afford to throw him out.

Last week, likely GOP presidential nominee Mitt Romney caused a tempest in a teapot when he told CNN that he thought the top U.S. geopolitical foe is Russia. President Obama’s White House seized on the comment, rebutting that al Qaeda is actually our top foe abroad. But if we look at the way American foreign policy has been enacted since the beginnings of the global crisis, it’s clear that America’s biggest opponent on the world stage is really itself.

Take what’s going on in Syria as the most recent example. That country’s leader, Bashar al-Assad, continues to tease the world’s diplomats by claiming to want peace for his people, yet he cracks down with unfettered abandon on their protests against his oppressive regime. Having just agreed to yet another peace plan, a troop withdrawal by Apr. 10, it’s clear he’ll find some way around his latest bargain, as he always has. What’s even more shocking is that the peace deal, negotiated by Kofi Annan, did not even call for Assad to leave power, which to outside eyes seems like a precondition for any sort of success. And the absence of the demand that Assad go is squarely due to the U.S.’s refusal to back it up with the sort of severe consequences it used to dole out: military strikes, preemptive wars and overwhelming use of force. For the U.S., at least for now, those days are over. And Washington won’t make foreign policy promises it can’t or doesn’t intend to keep.

After all, consider the fall of Gaddafi in Libya. Here was a decades-long enemy of the U.S. whose people rose up against him in a huge insurgency. His people lived in a backward state while he enriched himself with billions of stolen dollars. To borrow a phrase, the case for his deposal was a slam-dunk. Yet even this most climactic act of the Arab Spring did not draw out a single ground-troop commitment from the Obama administration. The U.S., in fact, only ran about 10 percent of the total NATO bombing runs over Libya – not exactly the type of campaign the U.S. military is used to making against brutal dictators with bad reputations who antagonize it.

The hope and beauty of a North Korean stalemate

Ian Bremmer
Mar 30, 2012 15:40 UTC

President Obama’s recent trip to South Korea may have gained attention for his “open mic” slipup with outgoing Russian President Medvedev over missile defense, but that’s just a media distraction from the importance of Obama’s visit to the Korean peninsula. After Kim Jong Il’s death in December, the U.S. took an early lead in negotiations with North Korea doing so because Obama and his team thought it could be an easy diplomatic win. With the promise of aid and food, the U.S. could let new leader Kim Jong-un quietly drop the consistently belligerent stance the country has taken in what passes for its foreign policy.

It’s now clear that easy win is not going to happen. Despite Kim’s titular status, we still don’t really know who is in charge in North Korea. While there have been no major coups, protests, or blowups, there have been plenty of smaller events, like military executions due to insubordination, that point to a high likelihood of purges happening in the regime. Now factor in that North Korea has gotten decidedly more, rather than less, militant on the nuclear arms front. Its announcement of a satellite test is a thinly veiled attempt to launch a long-range ICBM. The global community is perceiving it as such with South Korea threatening to shoot the missile down. The vitriol coming out of the North Korean propaganda machine is as hardline and aggressive as we’ve seen in many years.

Several months into the Kim Jong-un regime, there’s little cause for optimism. There’s much cause to be on heightened alert, though, because other than belligerent press releases, the new regime has not shown any ability to deliver on its promises. The South Koreans recently held live-fire exercises on five islands near the disputed Yellow Sea boundary with North Korea; their angry neighbors, despite loudly promising a response, did nothing. As much as we can be glad there was no international incident as a result, it’s not a good sign if the reason the North Koreans didn’t follow through on their threats was that the Kim Jong-un regime was unable to control the military well enough to direct it to do so. The regime change, in other words, has not yet stabilized.

Video: Syria is moving toward full-blown civil war

Reuters Staff
Mar 24, 2012 14:08 UTC
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The world’s great powers don’t have enough incentive to intervene in Syria, Eurasia Group President Ian Bremmer tells Chrystia Freeland.

Chinese capitalism is just another knockoff

Ian Bremmer
Mar 21, 2012 19:12 UTC

Is China’s system of capitalism better than that of the United States? That depends — do pigs fly? While I have no question in my mind that the U.S. is still the paragon of success when it comes to the capitalist system, lately a strange coalition of think-tankers, investors and politicians have been advancing the idea that China is eating our lunch when it comes to deploying capitalism.

More specifically, this bunch claims that China’s unique brand of centrally planned capitalism is working better than the U.S.’s overregulated, bloated, inefficient and slow-growing economy. They say that our capitalism has been so bogged down by our developed-nation cost structure that we’ll never again be a competitive center of investment for the great global pools of money in search of a safe investment out of which to make a parking spot.

Baloney.

China has indeed grown by leaps and bounds over the past decade. That’s a huge credit to a country that has modernized and industrialized on a previously unseen scale. And because of its 1.3 billion citizens, China has quite a bit of growth (read: catching up) still to come. China’s style of governance leaves the country light on regulation. However, it’s also light on rule of law, transparency, freedom of speech and several other key features that make the U.S. economy go ’round. Just because the Chinese government can move a village and build a road without holding a single hearing doesn’t mean the free market has taken hold. Indeed, it shows the opposite: China’s economy is largely state-planned, state-owned and state-run. The government uses capitalism only as a tool to reach its ends, not as a true expression of a free market.

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