The U.S. Embargo Against Cuba: A Celebration to Lament Washington’s Sterile Havana Strategy.

This past February marked the 50th anniversary of Washington’s embargo against Cuba. The birthday, which went uncelebrated here and in the Caribbean, was a grim reminder of the persistence of one of Washington’s most egregious foreign policy blunders. Enacted less than a year after President Kennedy’s ill-fated attempt to unseat Fidel Castro’s fledgling communist government at [...]

photo: Ilker Ender / flickr.com photo: Ilker Ender / flickr.com

Myanmar: by-elections. A curtain raiser.

“This is a very dangerous attitude to think that any politician is too high up to be involved in the basis of parliamentary democracy. I think we all have to start with at least a sense of humility” – Aung San Suu Kyi in defence of her decision to contest said that it is in [...]

photo: Stefan Munder / flickr.com photo: Stefan Munder / flickr.com

Putin and Ukraine: The Calm Before the Storm.

Relations between Moscow and Kyiv have been unexpectedly rocky in recent years. However, as Russia entered its latest election cycle, the Kremlin’s attention drifted away from Ukraine. While there was little doubt that Vladimir Putin would return to power, the president-to-be had to contend with the sudden awakening of parts of the Russian electorate. Now [...]

photo: Firdaus Omar / flickr.com photo: Firdaus Omar / flickr.com

Yanukovych’s Two Years in Power.

Two years ago, on February 25, Viktor Yanukovych was inaugurated as the fourth president of Ukraine, as the nation of 46 million was struggling with both authoritarian and, many believe, colonial legacies. Earlier that month, he had narrowly won the second round of the elections, 49 to 46 percent, against the incumbent prime minister, Yulia Tymoshenko. In real figures, however, he got almost half a million [...]

photo: Kancelaria Prezesa Rady Ministrów / flickr.com photo: Kancelaria Prezesa Rady Ministrów / flickr.com

With Chávez’s Illness, Is the Left All Right in Venezuela?

When Venezuelan President Hugo Chávez spent a long absence from his country in Cuba earlier last year, opponents and sympathizers alike wondered about his future as his nation’s undisputed commander in chief. But mounting speculations about the exact nature and implications of his ailment proliferated. Later, it began to circulate that Chávez was suffering from [...]

photo: Fotos Gov/Ba / flickr.com photo: Fotos Gov/Ba / flickr.com

An old Putin for new times – the Russian prime minister’s electoral agenda.

Posted by Jadwiga Rogoża on February 28th, 2012
photo: Jedimentat44 / flickr.com

The Russian prime minister, Vladimir Putin, the clear front-runner in the upcoming presidential elections, has been presenting his electoral agenda in the press and in public speeches in recent weeks. He offered a vision of the state analogous to the model seen in his second term in office as president: a strong government, state domination in the economy and social affairs, and technological modernisation initiated by state-controlled entities.

The key position in the Russian state will be taken by a politician whose vision of the state and the politico-economic agenda have remained unchanged regardless of the evolution Russia has seen over the past few years, especially in the social sphere. His agenda is lacking modernisation stimuli that would boost the development of the Russian economy, and its competitiveness on global markets may continue to fall. Moreover, Putin does not offer anything to the increasing group of citizens who are interested in adjusting the state model to make it more liberal. Putin intends to rely on his traditional electorate, who are interested in stability, but he will be unable to keep the generous social promises he has made to them. This may lead to a further erosion of public support for Putin and make socio-political instability more likely in Russia.

Russia according to Putin’s vision: a strong, sovereign state

Since mid-December, Putin has been publishing weekly articles in the Russian press, thus presenting his electoral agenda concerning politics, social affairs, the economy, and security. These texts reveal a vision of the state which is not a liberal one, even on the level of rhetoric. Judging from Putin’s declarations, he is planning to continue the policy he adopted during his second term as president, when economic reforms were put on hold, and instead the process of acquiring property by the elite linked to Putin gained momentum. The state according to Vladimir Putin should be strong, centralised and resistant to external interference and Western political and economic solutions. He is arguing that building democracy is a slow process, and Russian society must become mature enough for it. One of Putin’s priorities is to maintain political stability, the alternative of which is the model of ‘oligarchy and anarchy’ as was seen in Russia in the 1990s. Putin’s proposals of a democratic nature (for example, that parliament should consider citizen’s initiatives which are backed with 100,000 signatures on the Internet) are of marginal significance in his agenda and – even if put into effect – will not change the balance of powers in the system of government.

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Why the Czechs did not sign up to the fiscal treaty.

Posted by David Král on February 26th, 2012
photo: Adam Jones / flickr.com

The EU summit on the 30th January 2012 endorsed the treaty on stability, co-ordination and governance in the economic and monetary union and produced one rather unexpected twist: the  Prime Minister of the Czech Republic, Petr Nečas, refused to sign up to the treaty. This has left the country – at least for the time being – outside the fiscal compact, along with the UK. But, unlike the UK, which signalled its disagreement in December 2011, (after it used the threat of a veto as a bargaining tool to exempt the City of London from EU financial regulations) the Czech position is not based on substantive arguments. Regardless of the immediate consequnces this will have, repercusions are likely both on the domestic scene as well as on the standing of the country within the Union.

Prime Minister Nečas defended his refusal to sign up to the treaty with three main arguments. First, he cited the complications of the ratification procedure. He recalled that his country is likely to hold a referendum on the issue, and that President Klaus signall that he would not complete the ratification process. Both these arguments are flawed. In the Czech constitution there is no obligation to call a referendum when the country accedes to a treaty that transfers competences to the EU, unlike in other EU countries,  such as Ireland. In fact, there is no general framework act on having a referendum, so Parliament would have to approve a constitutional act authorising it, as happened in the case of EU accession. The fact that Nečas is personally in favour of a referendum is rather awkward in itself: he represents the party that has been the most consistantly opposed to direct democracy as exercised through referenda. Thus, his call for a referendum is a relinquishment of responsibility to take a firm decision; in this case saying a resolute ‘No’. Under current circumstances, it is unlikely that the Czech would vote yes, because support for the euro, fiscal co-ordination or bailout packages for countries in dire financial straits is at a record low. And with no strong pro-European voice in Czech politics  at the moment, this is unlikly to change.

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Britain on the edge of Europe.

Posted by Charles Grant on February 21st, 2012
photo: Maurice / flickr.com

The outcome of the Brussels summit on December 8th and 9th is a disaster for the UK and also threatens the integrity of the single market. For more than 50 years, a fundamental principle of Britain’s foreign policy has been to be present when EU bodies take decisions, so that it can influence the outcome. David Cameron, the prime minister, has abandoned that policy. Britain will not take part in a new fiscal compact that most other EU countries will join.

France and Germany have persuaded the other eurozone countries that treaty changes are needed to enshrine stricter budget policies and closer economic policy co-ordination. The new procedures would apply only to countries in the euro. Most member-states wanted to enact those reforms through amending the existing EU treaties. That would ensure that countries in the euro, and those outside, would be subject to a single set of rules and institutions.

But Britain blocked that deal, pushing France, Germany and most other member-states to proceed with a new treaty, to sit alongside the EU treaties. The new treaty may face difficulties: the Irish may hold a referendum on it and could easily vote no. But Paris and Berlin are determined to press ahead with the fiscal compact and if the Irish vote against it they are likely to find themselves excluded.

Cameron blocked a treaty for all 27 because he could not obtain agreement on a protocol to protect the City of London. This protocol demanded a switch from majority voting to unanimous decision-making on a number of issues that matter for the City, including the extension of the powers of EU regulatory authorities, and rules that prevent national governments from imposing stricter requirements on bank capital.

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Greece: How to Slow the Nosedive.

Posted by Dimitri Papadimitriou on February 14th, 2012
photo: Tilemahos_E / flickr.com

The latest negotiations between Greece and its lenders have ended, at least momentarily. Athens has agreed to endure ever-more painful pension, spending, and wage cuts, with monthly minimum salaries dropping 20 percent. The powerful leaders of ‘the troika’ — the International Monetary Fund, the European Union, and the European Central Bank — have charted the direction of Greek public policy for years to come: substantial austerity measures, including the lay-offs of thousands of workers.

Within those confines, how can Greek competitiveness be rebuilt? The overwhelming, key, and most urgent imperative should be to raise employment levels. Here’s why:

  • The long-term effects of extreme unemployment on an economy have been well documented. The loss of output is permanent. Workers’ skills deteriorate and become outdated, making the labor pool unattractive to potential employers.
  • “Informal” work — the ‘shadow’ sector — swells at the expense of the nation’s formal economy, and in Greece, the grey-market is not just a statistical ding. It’s widely estimated to compose (as is also the case in Italy) more than one quarter of the GNP.
  • Inequality increases. In Greece, Ireland, Portugal and Spain the recent rise is estimated to be as much as 10 percent. Dangerous ideological shifts accelerate, too.
  • Social cohesion disintegrates rapidly. Poverty, homelessness, and crime go up, along with poor health, depression, suicide rates and countless personal tragedies.

Greece now stands directly in the path of this onrushing apocalypse express. Between spring 2009 and mid 2011, its unemployment rose a heart-stopping 91.8 percent. The overall unemployment rate is now 20 percent; among youths, it’s close to 40 percent, and expected to keep climbing. The damaged lives include 20,000 homeless, living in makeshift shelters during a miserably severe European winter, and an upswing in suicides and poverty.

As joblessness continues to snowball — and if the odds-makers in the credit markets are right, expect an avalanche — the unemployed themselves can involuntarily become a powerful force that prevents economic growth.

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The Greek parliament passes a new austerity package.

Posted by globalopinion on February 13th, 2012
photo: Jess & Peter / flickr.com

In early Monday morning, February 13th, 2012, the Greek parliament passed a new 3.3 billion euro austerity package into law.

199 lawmakers in the 300-seat parliament voted in favour of the package and 74 against. 43 deputies from the main political parties, the socialists PASOK party and the conservative New Democracy party voted against the legislation (22 and 21 politicians, respectively). They were immediately expelled after the vote.

A passage of the legislation has cleared the way for a release of a new 130 billion euro bail out loan from the EU/IMF, Greece’s second since 2010. However, a final decision on the new bail out rescue package is not expected until March 2012.

Unfortunately, there is still no clarity regarding a degree, to which Greece’s private creditors will participate in the new bail out package. The private creditors will have to write off up to 70% of their claims.

Without the new funds, Greece will not be able to meet a big 14.4 billion euro bond payment due on March 20th, 2012 (see globalopinion.pl ‘Greece – the weakest member of the Euro zone’).

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Britain and the EU.

Posted by globalopinion on February 12th, 2012
photo: World Economic Forum / flickr.com

On Friday, December 9th, 2011, at the EU summit in Brussels, the British Prime Minister David Cameron refused to sign up to a new treaty, aimed at solving the Euro zone crisis. He did it on the ground that the EU partners failed to offer safeguards for the UK-based financial services. He had a reason to do that. Financial industry located in the City of London (London’s financial district), is the biggest exporter, taxpayer and provider of well-paid jobs in Britain.

On December 12th, 2011, Mr Cameron explained his veto to the British Parliament. The Lib Dem deputy Prime Minister, Nick Clegg, who had criticized David Cameron over the veto, accusing him of endangering the interests of the British economy and falling to play a diplomatic game effectively, was notably absent.

The ‘fiscal compact’  is a pact for a stricter budgetary discipline. It was drafted at the EU summit in Brussels, which took place on December 8th – 9th, 2011 (see globalopinion.pl ‘The latest EU’s attempts to bring the euro crisis to an end’ 29/01/2012). It says that each country that signs up will have to write into a constitution a debt-brake rule to keep a budget roughly in balance – a structural deficit of no more than 0.5%. Automatic fines will be applied, when things start to go out of kilter. The pact states that the European Court of Justice (ECJ) can impose fines up to 0.1% of a country’s GDP, if the rules are broken.

On Monday, January 30th, the first EU summit in 2012 took place in Brussels. 25 out of the 27 member states of the EU signed up to the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union, a treaty of stricter fiscal discipline. Only Britain and the Czech Republic refused to sign up. However, the treaty will enter into force on January 1st, 2013, provided that twelve Euro zone countries have ratified it.

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Greece – the weakest member of the Euro zone.

Posted by globalopinion on February 11th, 2012
photo: faustinomartin / flickr.com

On Thursday, February 9th, 2012, the Greek political leaders supporting the Prime Minister Lucas Papademos’s government of national unity agreed a new 3.3 billion euro programme of spending cuts. On Friday, February 10th, the Greek unions launched a 48-hour strike. Protesters clashed with the police on the streets of central Athens. Scores of youth in hoods used sledge hammers to smash up paving stones, before hurling them at the riot police.

A new package of austerity measures would probably go before the Greek parliament for a crucial vote on Sunday, February 12th, 2012. Among the agreed measures are a 20% reduction in the minimum wage as part of an effort to increase competitiveness of the Greek economy and cuts in the public sector workforce. According to the programme, 15 000 public sector workers will be laid off by the end of 2012 and the total number of public sector jobs will be reduced by 150 000 by the end of 2015. There will be further cuts in pensions as well.  Wages are to be frozen until a soaring unemployment rate will come down to 10%.

The Greece’s international creditors (the troika of international lenders, the EU/IMF/ECB) have said that all the mentioned above measures must be approved, before Greece receives a new 130 billion euro bail-out loan/package, promised in October 2011 (see globalopinion.pl ‘A new package to save Greece, but the Euro zone debt crisis remains unresolved’ 05/11/2011).

The Prime Minister Lucas Papademos told the Greek lawmakers that they must approve the latest programme of austerity measures or the country would suffer a disorderly default and an eventual exit from the Euro zone. On March 20th, 2012, Greece faces a 14.4 billion euro bond redemption. If Athens doesn’t obtain a new bail out aid/loan package, then it will default.

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