TOP NEWS: Nat’l Security / Foreign Affairs: June 28, 2012
Excerpts and more top stories below
EUROZONE: Euro-Zone Confidence Weakens
Paul Hannon, Wall Street Journal – Businesses and consumers in the 17 countries that use the euro became more pessimistic about their prospects in June as the currency area’s fiscal and banking crisis deepened, with confidence weakening significantly in France, Germany and the Netherlands. That suggests that the failure to contain the long-running crisis is now threatening growth in Northern Europe, previously regarded as the euro zone’s relatively strong core.
Pew Research Center – Following a year of tensions between their country and the United States, Pakistanis continue to hold highly unfavorable views of the U.S. and offer bleak assessments of the relationship between the two nations.
GERMANY/EURO: Germans back euro by small majority, poll finds
Quentin Peel, Financial Times – If a referendum were to be held in Germany tomorrow on membership of the euro, those in favour of retaining the common currency would have a very narrow majority over those wanting to bring back the Deutschmark.
EUROZONE: The political test facing the euro
Financial Times Editorial – The eurozone’s rescue fund has the legal power to buy bonds. It needs more economic power – by concentrating open-market purchases on bonds issued from now on, and by obtaining a banking licence. Above all it needs the political go-ahead.
EUROZONE: A Weaker Euro Could Rescue Europe
Martin Feldstein, Wall Street Journal Opinion – The only way to prevent the dissolution of the euro zone might be a sharp decline in the value of the euro relative to the dollar and to other currencies. European politicians’ dreams of political union and permanent fiscal transfers are not realistic solutions to the multiple problems of the euro zone’s peripheral countries [...]
Michael J. Koplow and Steven A. Cook, Foreign Affairs – While Ankara encourages openness with one hand, it clamps down on it with the other [...] Since the AKP era began, the world has watched closely to see if Turkey would embrace, or abuse, democracy. What is becoming clear is that Erdogan’s strategy is to do both, simultaneously.
EUROZONE: Will Angela Merkel Save Europe’s Banks?
Bloomberg Editorial – If an agreement in principle on banking union could be reached quickly, Europe could move ahead with the kind of stress tests needed to draw a line under banks’ losses, recapitalize and move on. Problem is, Merkel agrees to only the supervisory part of the banking plan. She rejects any form of risk-sharing [...] No currency union consisting of economies and cultures as different as, say, Germany and Spain can work unless its members agree to share the risks of financial and economic shocks. Refusing to do so is tantamount to rejecting the euro.
Ellen Barry, Nick Cumming-Bruce and Rick Gladstone, NY Times – Russia’s foreign minister, Sergey V. Lavrov, said on Thursday that Syria needed a period of political transition but reiterated Moscow’s resistance to any plan being imposed by the international community [...] The conflict in Syria is threatening to plunge it and its neighboring countries into a sectarian conflagration. The outcome will partly depend on whether the United States and Russia can bridge their differences over Syria.
CHINA/AFRICA: Beijing, a Boon for Africa
Dambisa Moyo, NY Times Opinion – Since China began seriously investing in Africa in 2005, it has been routinely cast as a stealthy imperialist with a voracious appetite for commodities and no qualms about exploiting Africans to get them [...] Despite all the scaremongering, China’s motives for investing in Africa are actually quite pure [...] Moreover, the evidence does not support a claim that Africans themselves feel exploited.
TURKEY/SYRIA: Turkey Deploys Antiaircraft Units Along Syrian Border
Sebnem Arsu, Alan Cowell and Rod Nordland, NYTimes – Turkish warplane was shot down in disputed circumstances off the Syrian coast, with the Turkish government saying the plane was over international waters while officials in Damascus said it was rapidly approaching the Syrian coast when it was hit by shore batteries with a range of less than two miles.
Nick Miroff and William Booth, Washington Post – Voters here have their lives on the line in Mexico’s presidential election Sunday [...] The vote, many say, is the worst kind of choice, between candidates and parties they don’t especially like or trust. In the most violent quarter of Mexico, it is a vote based less on hope and more on fear.
Anthony Faiola, WP – European leaders convened here Thursday for a two-day summit, with 27 nations scrambling to bridge deep differences over how to combat the region’s 21 / 2-year-old debt crisis.
EUROZONE: European Bank Union ‘Premature’
Elisa Martinuzzi and Liam Vaughan, Bloomberg – A European banking union is no fix for the region’s lenders, trading at a fraction of the book value of their assets, without closer fiscal integration and a solution to the sovereign debt crisis, investors say.
Simon Rabinovitch, Financial Times – China plans to create a special zone to experiment with currency convertibility in Shenzhen, the city where it introduced key economic reforms three decades ago [...] Analysts say the experiment could prove as critical to eventually dismantling capital controls as Deng Xiaoping’s reforms were to opening China to the world.
Robert McNally, Financial Times – As Iran’s defiance continues and Israel’s patience drains away, the time has come to increase pressure on Tehran. The US and allies should implement a quarantine-and-release strategy that severs Iran’s oil exports and offsets the loss of supply with higher Saudi production and strategic stock draws.
Mark Mcdonald, NY Times – “You know my situation but you don’t know the situation of the huge number of the disabled in China, or the women who are bullied and abused, or the orphans in China. You probably don’t know much about them or just about a few of them.”
SOUTH KOREA/JAPAN: South Korea to Sign Military Pact With Japan
Choe Sang-Hun, NY Times – The treaty comes at a time the United States is urging its two Asian allies to put their historical memories behind and strengthen their military ties, the weakest link in the trilateral alliance, so the three can deal more efficiently with the threats from North Korea.
INDIA/MYANMAR: Can India Push Burma on the Road to Liberty?
Chandrahas Choudhury, Bloomberg – Last month, Prime Minister Manmohan Singh became the first Indian head of state in 25 years to make a visit to Myanmar (formerly Burma), the eastern neighbor that has for 50 years been ruled by a repressive military junta. The visit was both a welcome gesture of reconnection and a reminder of a wasted half-century in relations between two newly independent states [...] But let’s not assume that realpolitik and self-interest are the only principles on which foreign policy or political action must be pursued.
Richard Behar, Forbes – With its massive, multi-billion dollar loan portfolio, muddled objectives and failure to contain corruption, a decade of reform efforts have done little to fix the World Bank.