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Posts Tagged ‘Europe’

American and European financies are in a real bind.

American and European financies are in a real bind.

With America’s latest market crash, the debt debate seems so ‘last week’ (hey, it was last week!), there is still much to learn from the tumultuous process. Niall Ferguson attempts to provide an outside perspective on the whole debt limit battle. It’s a pretty important outside perspective too; China:

Viewed from Beijing, it looked very different. Indeed, it’s hard to imagine what more we could have done to vindicate the Chinese Communist Party’s position that Western democracy is a form of institutionalized chaos to be avoided by all sane Asians….

The antics of American legislators take on a new significance when you realize how our leading creditor interprets them. As Beijing sees it, the last three months have furnished ample evidence that—regardless of what the American rating agencies may say—the United States is no longer creditworthy. Even if Congress has pulled back from the brink of outright default, many in China view the debt deal as at best a temporary fix. As the Xinhua News Agency put it, the 11th-hour deal has “failed to defuse Washington’s debt bomb for good, only delaying an immediate detonation by making the fuse an inch longer.” Meanwhile, the unspoken intention of the Federal Reserve is to debase the dollar through “quantitative easing,” which translates into Mandarin as “printing money.”

We all know that China is not just a spectator in America’s budget battles, but a key constituency. Ferguson details China’s skin in our game:

According to official figures, mainland China holds $1.1 trillion in U.S.-government debt instruments. But it’s an open secret that the Chinese authorities also like to buy Treasuries via intermediaries in London, Hong Kong, and elsewhere. Add the U.K. and Hong Kong figures and the total is closer to $1.6 trillion—about 17 percent of the federal debt in public hands. And if you include nongovernmental securities held in China’s international reserves, the U.S. debt to China rises to more than $2 trillion.

In that math one can see a rising power. In this math, provided by Robert Samuelson, can be seen a troubled, possibly falling power:

Europe represents about one-fifth of the world economy and buys about a quarter of American exports. While Europe’s debt crisis was confined to a few small countries, they could be rescued; other European countries supplied loans to substitute for the credit denied by private lending markets. In 2010, Greek, Irish and Portuguese government debt totaled about 640 billion euros (about $910 billion), less than 7 percent of the 9.8 trillion euros of debt of all members of the European Union.

With Spain, Italy and possibly France now under financial assault, the situation changes dramatically. There are more debtor nations and more debt at risk. In 2010, Italy’s debt was 1.8 trillion euros; Spain’s 639 billion euros; and France’s 1.6 trillion euros. But there are fewer countries that can support a rescue; and some of them have heavy debts. Even Germany’s ratio of debt-to-gross domestic product (GDP), a measure of debt in relation to its economy, was a hefty 83 percent last year, similar to France’s. (The big difference between France and Germany is that Germany’s economy is growing faster.)

The United States and most of Europe’s finances are hemorrhaging and both are showing rather pathetic attempts to get their houses in order. Unless their trajectories change quickly, they, particularly Europe, may be forced to answer a final question, posed by Samuelson, in the affirmative:

Would China contemplate bailing out Europe? If it did, there would be a stunning transfer of geopolitical power and prestige to China.

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21
Jun

Thank Goodness for Europe!

   Posted by: Pat    in Uncategorized   Print Print

I have been critical of some of the post-modern tendencies in the foreign policy of many of Europe’s leading states, and rightfully so. As much as many of us would wish, many of the world’s most intractable problems cannot be solved by aid, diplomacy, or institutionalism alone. A willingness to use a balance of tools is needed in most cases. That being said, the progress of that the states and people of Europe have made in the past 60 odd years is a remarkable achievement in global security and peace. An achievement that none of us should take for granted. A peaceful, democratic Europe seems especially fortunate when one looks at world facing increasing challenges (China’s rise, North Korean bombast, Iranian nukes, flotillas from hell, Brazil and Turkey alliances becoming muddled, international terrorism, financial crises, etc.) to worldwide stability. So let’s be thankful that Europe is at peace (if not financially, at least security-wise).

I googled 'Europe at peace' and this is what showed up. So I present to you the visualization of Europe at Peace!

Here’s well-regarded IR scholar and soft power advocate Professor Joseph S. Nye on why Europe and the EU are an influential and positive force in the world:

Europe does face severe demographic problems, but size of population is not highly correlated with power, and predictions of Europe’s downfall have a long history of failing to materialize. In the 1980s, analysts spoke of Euro-sclerosis and a crippling malaise, but in the ensuing decades Europe showed impressive growth and institutional development….

The American political scientist Andrew Moravcsik makes the similar argument that European nations, singly and collectively, are the only states other than the US that are able to “exert global influence across the full spectrum from ‘hard’ to ‘soft’ power. Insofar as the term retains any meaning, the world is bipolar, and is likely to remain so over the foreseeable future.”

Moravcsik argues that the pessimistic prognosis is based on a 19th-century realist view in which “power is linked to the relative share of aggregate global resources and countries are engaged in constant zero-sum rivalry.” Moreover, as he points out, Europe is the world’s second military power, with 21 percent of the world’s military spending, compared to 5 percent for China, 3 percent for Russia, 2 percent for India, and 1.5 percent for Brazil.

Tens of thousands of troops from the EU’s member states have been deployed outside of their home countries in Sierra Leone, Congo, Ivory Coast, Chad, Lebanon, and Afghanistan. In terms of economic power, Europe has the world’s largest market, and represents 17 percent of world trade, compared to 12 percent for the US. Europe also dispenses half of the world’s foreign assistance, compared to 20 percent for the US.

But all this potential strength may be to no avail if Europeans do not solve the immediate problems stemming from the financial markets’ loss of confidence in the euro. All who admire the European experiment must hope that they succeed.

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'The name's Robert Gates, and I'm a damn fine Secretary of Defense'

In a speech to NATO officers at the National Defense University, US Secretary of State Robert Gates made this statement:

“The demilitarization of Europe — where large swaths of the general public and political class are averse to military force and the risks that go with it — has gone from a blessing in the 20th century to an impediment to achieving real security and lasting peace in the 21st.”

Gates went on to warn that the perception of European weakness could provide a “temptation to miscalculation and aggression” by hostile powers. These comments of course come on the heels of what appears to be a Dutch troop retreat from Afghanistan in the coming year. Gates went on to say that financial and man power shortcomings by many NATO members was “directly impacting operations” in Afghanistan. Also noted by Gates in his address, was the fact that only 5 of the 28 NATO members have reached the established target: 2 percent of gross domestic product for defense spending. Polls have shown a growing gulf between how Americans and Europeans see the world, and especially the use of force in international politics.

These are strong statements from a strong leader from NATO’s leading country and should not be taken lightly.

Looking from and IR theory standpoint, we have clear signs of realism and liberalism here. Realists would argue that of course the European states are bandwagoning and letting the United State foot the bill, both in lives and treasure. After all, it appears the Americans are willing to make the sacrifices in Afghanistan no matter the overall NATO commitment. Realists would also not be surprised to see Secretary Gates lament this situation. This current predicament also has strong IR liberal ties. To a certain extent, America’s European NATO partners live in a post-realist world, where international law, globalization of economic goods, technology, and ideas, and a greater emphasis on diplomacy are much more effective tools in fomenting world peace and stability. Of course, when one does not have a powerful military, promoting these facets, one’s you are strong in, just makes sense. As Robert Kagan has argued, the US wishes to live in this world with Europe, but is too busy facing a realist world with problems and actors that may require realist tools, such as the use of military force and deterrence. The US believes without the presence of such tools, as Gates states ‘achieving real security and lasting peace in the 21st’ may not be possible.

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17
Feb

Olivier Roy: Islam and the West – BFF’s?

   Posted by: Pat    in Middle East   Print Print

Olivier Roy. That’s right Olivier ‘flipping’ Roy was at UCSD’s Political Science Department today and I was able to sneak in. Actually, I was pretty much a ‘star’ guest, but who cares? Well, probably all the the people that saw me.

Mr. Roy, a Frenchman, is one of the most distinguished Western scholars of Islam. He has studied and worked for the United Nations and French foreign ministry in Tajikistan and Afghanistan and has written several influential books about political Islam. Unfortunately, his talk at UCSD was not very substantial. He just discussed certain aspects of Islam, its relations within Europe, and the intriguing topic of converts. He spent a considerable amount of time trying to discredit the Clash of Civilizations thesis, mainly by arguing that for it to exist there would need to be one Islam and one West, and each just don’t exist. Relations are more complicated. He provocatively argued that states should no longer speak of ‘Islam’ in foreign ministries, just individual states and regions. In other words, instead of Obama trying to reach out to all of the Muslim world, Roy believes he should just concentrate on small, individual parts of it, like Egypt, Iraq’s shia, or Hamas.

In any case, Roy has written and spoken some wise words when it comes to Islam and the West. I found this 2005 op-ed of his that describes the bankrupt nature of most Islamic extremists in one short page. And this Charlie Rose interview with Roy covers much ground. In it Roy even states that he supports the Iraq war as a way of spreading democracy throughout the region, BUT only if the US follows through with a long term commitment to its growth. I wanted to ask Mr. Roy if he thought President Obama was ready to carry that policy forth, all indications are otherwise, but alas I did not get the chance to ask him as my mouth was full of the delicious chocolate chip cookies USCD provided.

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