International politics

Thursday

David Blackburn

The guilty men’s misplaced loyalties

Here’s Peter Oborne in mid-season form on Newsnight last night, drawing on the book he previewed in his essential cover piece in last week’s issue of the Spectator, The Guilty Men. The spokesman from the European Commission makes a statement that exposes Brussels’ current helplessness, but his comment about the post-war era reveals what many pro-Europeans on the continent feel: the EU’s greatest achievement is to have secured peace and prosperity across a continent that had been at war for most of the previous 1,000 years; wars that obviously assumed terrible dimensions in the 20th Century. The spokesman also refers to the EU’s perceived second greatest achievement: the most complete welfare settlement in

Sunday

David Blackburn

Leadership at last?

Most of today’s papers carry reports of a deal to relieve the European sovereign debt crisis. The details are varied, but it seems that 50 per cent of Greek debt will written off and the currency will be allowed to remain within the single currency. This means that banks that are exposed to Greek debt will incur potentially ruinous losses. The EFSF mechanism will probably be extended to cover those losses and guard against contagion. Estimates vary, but it seems the fund will have to increase to somewhere around 2 trillion euros if the mounting crises in Italy and Spain are to be contained. Britain’s exposure remains unclear at this

Saturday

Clarissa Tan

Obama’s new best buddy – Warren Buffett

The politics of ‘get the rich’ is going global and even the rich are joining in. While few countries have adopted the equivalent of Britain’s 50p tax, many are baring their teeth at the very well-off. In America, this is now being done by an unlikely alliance between Barack Obama and Warren Buffet. The billionaire investor is allowing his name to be appended to Barack Obama’s new tax-the-rich-more policy, which apparently follows the ‘Buffett Rule’. The Buffett Rule, which draws its basic principle from an op-ed Buffett wrote for the New York Times, is this: people making more than $1 million a year should pay a tax rate that’s at

David Blackburn

Medvedev clears the way for Putin

President Dmitri Medvedev has named his successor: one Vladimir Putin. Reports from Moscow say that Medvedev will step aside and support the man he succeeded in elections next March. This turn of events is not particularly surprising and Putin is a certain victor: as Pavel Stroilov revealed on Coffee House last week, Putin has been practicing that singularly Russian art of eliminating the opposition. Stroilov also warned Western governments against falling into Putin’s embrace. Russia is forecast to grow very quickly in the next 30-odd years, retaining its spot in the G7 according to PwC’s recent research paper, The World in 2050. Developed countries will covet those burgeoning resources; but,

David Blackburn

Osborne’s dire warning

This morning’s headlines are apocalyptic: “Global economy on the brink”, “Six weeks to save the Euro”, “Collective action needed now”. The unifying theme is the lack of leadership in the Eurozone: someone must grasp the nettle, say external politicians and commentators. Meanwhile, Charles Moore points out, with typical understatement, that Europe is leaderless by nature: no one is in charge and that is its tragedy. Moore doesn’t mention the European President, who could, conceivably, offer direction and insist on fiscal discipline; but Herbert Van Rompuy is yet to meet that challenge. You wonder if someone of Tony Blair’s international standing might have succeeded where Van Rompuy has so far failed. Perhaps, but Europe’s

Thursday

James Forsyth

Mullen adds to the tension between the US and Pakistan

US-Pakistani relations will deteriorate even further following today’s claims by Admiral Mike Mullen, the outgoing chairman of the Joint Chiefs of Staff, that the Pakistani ISI aided and abetted the attack on the US embassy in Kabul. Mullen told a Senate panel that, “With ISI support, Haqqani operatives planned and conducted a truck bomb attack, as well as the assault on our embassy.” This charge was part of broader criticism of what Washington sees as Pakistan’s strategy of exporting its internal problems. Mullen summed up his concerns thus: “In choosing to use violent extremism as an instrument of policy, the government of Pakistan – and most especially the Pakistani Army

David Blackburn

Cameron’s foreign frustrations

David Cameron’s much trailed speech to the UN is tinged with frustration. He will say, “You can sign every human rights declaration in the world but if you stand by and watch people being slaughtered in their own country, when you could act then what are those signatures really worth? The UN has to show that we can be – not just united in condemnation, but – united in action acting in a way that lives up to the UNs founding principles and meets the needs of people everywhere.” That seems to be a fairly thinly veiled reference to the global community’s indifference to oppression in Syria. The lack of action

Daniel Korski

The new Israel and Palestine question

The halls of the UN are packed with presidents and foreign ministers. But for all the thousands of subjects under discussion, this year’s General Assembly will be remembered for one issue only: the Palestinian statehood application. Mahmoud Abbas has made clear he wants to proceed, despite the reality of a US veto. In the end, it may not come down a showdown. If an application is made to the UN Security Council, the issue will likely go to a sub-committee of the full UNSC and take quite some time before it comes to a vote, whatever the Palestinians may want. That is why the US prefers the option to a

Tuesday

David Blackburn

Italy in the firing line

Markets sank into negative territory this morning, following Standand&Poor’s downgrade of Italy’s credit rating. (Although they have since recovered.) The agency cut Italy’s rating from A+/A-1+ to A/A-1; it also kept its outlook as negative. The agency’s reasoning is hardly surprising: growth is negligible, debt is unsustainable and Silvio Berlusconi’s inert government appears incapable of arresting the crisis. Frail economics and supine politics, those twinned threats to prosperity, have struck again. The implications to the Eurozone, and the world economy, are obvious. An economist in Nomura’s Sydney office told Reuters, “It only adds to the contagion risk over Greece and has encouraged the flight to safety in markets here.” Over

Friday

David Blackburn

From the archives: The doomed euro

It was doomed from the start; that’s the prognosis of those who think that the single currency’s crisis is near terminal, such are its structural and political weaknesses. People warned that it could be thus when the Euro was first launched. Bruce Anderson was among them:  Had Mr Blair been braver, he could have been in on this week’s euro euphoria, Bruce Anderson, The Spectator, 9 January 1999 The combined political will of 11 nations – or at least of their political elites – assured an easy birth for the euro. But the euphoria should not deceive us. Most thoughtful politicians and commentators throughout Euroland will acknowledge that the present

James Forsyth James Forsyth

The deep Euro-crisis threatens political stability

It is hard to overstate how serious the crisis in the eurozone is or what it might do to the politics of Europe. The European project is putting in danger the very political stability in Europe that its supporters have always claimed to be its strategic and moral justification. I understand that American banks are now so nervous about the situation on the continent that they have effectively stopped new lending to European banks. The view in Westminster today is that the Greeks will avoid default for a little longer. But few can see them making it to Christmas. Indeed, the expectation seems to be a default sometime in October.

David Blackburn

Osborne: I know what it’s like to be in business

George Osborne spoke to Telegraph’s Festival of Business this morning and he gave a speech that was dominated by the issue of growth, or rather its absence. He reiterated the tax cuts and entrepreneurial relief measures first unveiled in March’s Budget. Osborne didn’t limit himself to his list of accomplishments. It was an empathetic speech. He related his memories of the “ups and downs” of his father’s business, the drapers Osborne&Little. He acknowledged the pressures of running your own enterprise in conjunction with a busy family life; a constant struggle that is exacerbated during hard times. “I know the kinds of pressure you are under,” he said. Osborne is frequently

Daniel Korski

The Israel Palestine question

After a hiatus, the Middle East Peace Process is about to return to the international stage. The Palestinians are pushing at the UN for recognition. Nobody knows yet what they will actually ask for: full statehood or just upgrading their UN status to “non-member”. But, whatever the language of the resolution, the issue will be contentious. By some estimates, 126 states are poised to back the Palestinian request, including France, India, Brazil, Spain. The US will not support a Palestinian move, nor is Germany likely to. Britain remains undecided, hoping to help the Palestinians draft a resolution that other Europeans can sign up to. It’s not clear what Britain and

David Blackburn

“It started in Germany…”

Bugger the Bundesbank — that seems to be ECB President Jean-Claude Trichet’s current raison d’être. The ECB, together with other global central banks, yesterday agreed to provide dollar funding to ease the mounting liquidity crisis in European banks, largely caused by American banks curtailing interbank lending in anticipation of another crisis. This unorthodox action runs contrary to the wishes of the German Bundesbank, adding to the pre-existing strain between the ECB and the German establishment over bond purchasing, tension that was epitomised by the resignation of Jurgen Stark last weekend. Obviously, central banks do not take this action every day and it is yet another indication that crisis is now impending.

Thursday

Daniel Korski

Cameron’s Libyan gamble

It is conventional wisdom that David Cameron won’t get much of an electoral bounce from the Libya intervention, despite emerging as a bold and competent interventionist. People, the argument goes, are tired of warfare. A senior figure in Tony Blair’s No 10 told me yesterday that he did not think the PM would earn a lot of kudos, because with all the problems at home there is less tolerance for overseas adventurism. But this narrative overlooks a number of key points. First, the success of the operation has dealt with the charge that the government is less competent than it pretended to be. This was a serious charge, as the

David Blackburn

The last of England

Martin Vander Weyer’s column in the latest issue of the magazine is essential reading. It features five current stories from the business world. The Vickers report, Martin says, will merely offer the same poor service for consumers at a greater cost. Martin also notes, as he did two weeks ago, that American banks are winding down their lending to European counterparts in anticipation of a crash, and adds that American politicians are keen to paint Europe as the bogeyman for their financial ills, conveniently ignoring the failure of Obama’s hugely expensive stimulus. Martin also touches on unemployment and the Eurozone crisis. His final vignette is a parable for our troubled

David Blackburn

Sarko and Dave go to Tripoli

“This is your revolution,” said David Cameron to the mass of rapturous Libyans who welcomed both him and Nicolas Sarkozy in Tripoli this morning. Obviously this is a PR coup for the two leaders, who both face difficulties at home. But, although these were scenes of jubilation, both leaders were keen to say that the situation in Libya is still delicate. Gaddafi is still at large and there are reports that his supporters have drifted into the desert, where they are conducting a guerrilla campaign against rebel targets. This is of great concern to the National Transitional Council and its allies, who want to reopen Libya’s remote oil industry to

David Blackburn

Merkel & Sarkozy have only words

It was something of a mystery. Emergency conference calls about the future of the Eurozone were being made yesterday, but there was no news of those discussions. As it turned out, this was for the best of all possible reasons: there was no news to report. Angela Merkel and Nicolas Sarkozy announced no new measures to alleviate the sovereign debt crisis; rather, they merely declared “solidarity” with Greece and assured the markets that Greece would not be forced from the single currency. Their words seem to have assuaged the markets for the moment, but only the most brazen optimist would bet on the rally being long lived. Tests of confidence

Wednesday

Pavel Stroilov

Cameron mustn’t fall further into Putin’s trap

“Russian democracy has been buried under the ruins of New York’s twin towers”, famous KGB rebel Alexander Litvinenko wrote in 2002. The West, he warned, was making a grave mistake of going along with Putin’s dictatorship in exchange for his cooperation in the global war on terror. He would never be an honest partner, and would try to make the Western leaders complicit in his own crimes – from political assassinations to the genocide of Chechens. As a KGB officer, Putin would see every friendly summit-meeting as a potential opportunity to recruit another agent of influence. David Cameron, whose summit-meeting with Putin coincided with the sombre jubilee of 9/11, would

David Blackburn

Britain’s Palestinian statehood question

The Palestinians are seeking United Nations recognition as a state and a vote is apparently imminent. The Guardian’s Jonathan Freedland has a useful account of the diplomatic arithmetic and explains how the possible vote could be decided by European countries and by Britain in particular. ‘Barack Obama has already said the US will vote against any Palestinian move towards statehood at the UN general assembly now gathering in New York. Large swaths of Latin America, Africa, Asia and the Middle East plan to vote for it. Which leaves Europe as the diplomatic battleground. If the leading European powers side with the US, the Palestinian initiative will be seen as a