International politics

Tuesday

Daniel Korski

The euro’s death rattle

The end might be nigh for the euro. The currency has hit an all-time low against the Swiss franc, as individual eurozone government bond yields vaulted higher due to mounting concerns about the region’s debt crisis. To spell out what this means: in Spain, 12 billion euros of interest payments will accrue for every 100 point bond rise in Germany. That is more than Spain’s annual public investment in infrastructure (8.6 billion) and its entire defence budget (7.6 billion). At the same time, Greece is heading towards disorderly default or some form of devaluation. Or both. And now Italy looks vulnerable. Well, I say that the end is nigh but,

Daniel Korski

Karzai’s brother shot dead

The half-brother of Afghan President Hamid Karzai has just been murdered outside his fortified compound in Kandahar. Ahmed Wali Karzai was the political kingpin in Kandahar province, formally serving as head of the provincial council. I am told by officials that he was killed by one of his bodyguards at a checkpoint; the killer was then shot dead by other bodyguards. A senior FCO official has said that David Cameron would want to give his condolences on a “personal basis” to President Karzai for his loss. That said, many people in the British government will not be all that unhappy with the demise of Wali Karzai – or “AWK”, as

Daniel Korski

Where next for the US and Pakistan?

The US-Pakistani relationship is fast deteriorating. In May, I argued that unless President Asif Ali Zardari took decisive action against the ISI, the country’s military would continue to undermine relations with the West. Last week, the New York Times reached the same conclusion, calling for the removal of Lieutenant-General Ahmed Shuja Pasha. As President Zardari did nothing — probably fearing a military coup if he did act — the situation has merely been aggravated. What’s more, Secretary of State Hillary Clinton has warned that the US could suspend military aid to Pakistan unless it took unspecified steps to help find and fight terrorists. And the White House has since confirmed

Sunday

Daniel Korski

Coffee House Interview: Andrew Mitchell

The government has stuck to its guns on overseas aid, promising to donate 0.7 per cent of our national income to other countries. In the Chancellor’s words, the government will not balance the books on backs of the world’s poorest people. In fact, as the criticism of the policy was at its highest the Prime Minster hosted a development summit in London and pledged £814m to help vaccinate children around the world against preventable diseases like pneumonia. On this issue, David Cameron does not seem for turning — however many letters he receives from the Defence Secretary.   But Liam Fox is not alone. A slew of recent polls show

Friday

James Forsyth

Is Strauss-Kahn back in the race for the Élysée?

The news that the case against Dominique Strauss-Kahn is in danger of collapsing is almost as surprising as the initial news of his arrest on suspicion of raping a chamber maid. There had been a general assumption in New York, Washington and Paris that the case against the former IMF president was clear-cut and that his political ambitions were over. It is unclear how quickly the case will now be resolved. But there is sure to be pressure in France to delay the nominating deadline for the Socialist Primary beyond the 13th of July to allow Strauss-Kahn to run if he is cleared. The question is whether the various revelations

Thursday

James Forsyth

Hague has been vindicated on the euro

The Foreign Secretary finds himself in the rather unique position today of trying to deal with the consequences of a crisis that he largely predicted. In May 1998, William Hague gave a speech warning that the single currency would lead to social unrest as governments tried to cope with one size fits all interest rates. It is a reminder of how much Hague was swimming against the tide of bien-pensant opinion that Michael Heseltine claimed this prediction was so extreme as to drive the Tories off the centre ground. But what is, perhaps, more interesting than Hague’s vindicated view that the euro, in a crisis, would be the ‘economic equivalent

Daniel Korski

Will Britain recognise Palestine?

Will Britain recognise Palestine as a state if, as planned, the matter comes to a vote at the UN General Assembly in September? Right now, the government says it has not decided. But if France were to push, the likelihood is that William Hague will order British diplomats either to accept or abstain from the vote. The strategic rationale for a Yes vote is obvious: at a time when Britain is waging war in Libya and rallying support against Syria and Iran, it would be disadvantageous to be seen by Middle Easterners as blocking Palestinian aspirations. And having accepted the case for Palestinian statehood in principle why not support it

Wednesday

Daniel Korski

Can Cameronism be Europeanised?

In 1997 New Labour was not just a domestic programme; it was a foreign policy too. Known as the “Neue Mitte” in Germany, Blair’s Third Way soon attracted such converts as the German chancellor, the French prime minister and the Danish leader. In the end, it produced few results for Britain, failing – much as Harold Wilson did in the 1970s – to curry favour for the UK through party political links with other leaders. But for a few years, much as New Labour looked across the Atlantic to the Democratic Party, so Europe’s Social Democrats looked across The Channel. International recognition for his deficit reduction plan notwithstanding, David Cameron

Peter Hoskin

What will emerge from the ashes in Afghanistan?

On Monday, James drew attention to Dexter Filkins’ stark assessment of the situation in Afghanstan and of the strength of the Taliban. Today, the attack on a hotel in Kabul gives that assessment a fresh and tragic resonance. What we seem to be witnessing is the Taliban, or at least elements of them, flaunting their murderous intent as the West prepares to leave the country. From the assassination of General Daud to this Mumbai-style raid, their methods are becoming more ambitious, more headline-grabbing. Around ten innocents are said to have been killed this time around, along with six to seven of the Islamist militiamen. Every death, of course, raises doubts

Tuesday

David Blackburn

Lagarde three giant steps closer as Russia, China and the US back her IMF bid

The 24 members of the IMF board are meeting to see if they can agree that Christine Lagarde should be the organisation’s next leader without a formal vote. Lagarde has already gained formidable backing. 40 per cent of the membership had indicated its support before today’s meetings, while her closest competitor, Mexican Augustin Carstens, had mustered just 12 per cent of the IMF’s votes. The remaining 48 per cent is now concentrating behind Lagarde’s candidacy. Her popularity extends beyond Europe into the vital emerging markets.  Russian Finance Minister Alexei Kudrin gave his signature today, saying that he hopes she will ‘secure reform of the IMF in the interests of developing

Daniel Korski

Egypt votes – on Facebook

While analysts and diplomats are wondering who will win the forthcoming Egyptian presidential election, the military junta (the Supreme Council for the Armed Forces, or SCAF) that runs the country has organised a poll on their Facebook page. More than 200,000 people seem to have taken part. And even accounting for the obvious deficiencies (e.g. the bias towards an unrepresentative, internet-savvy, and liberal electorate) and bearing in mind the near-certainty of fraud given that the SCAF’s FB site is run by military intelligence, the results are interesting nonetheless. Topping the poll is, not unexpectedly, Mohammed El Baradei, the former head of the IAEA, whose internet-connected supporters have put him on

Monday

James Forsyth

Afghanistan: The worries mount as the West prepares to drawdown

Dexter Filkins is one of the great war correspondents of the post 9/11 world. So it is particularly sobering to read his assessment of the Afghan situation as the West prepares to drawdown. Filkins reports that: “According to American officers, the level of violence in Afghanistan this year is fifteen per cent higher than it was at this time last year. The insurgents, far from being degraded, appear to be as resilient as ever. And their sanctuaries in Pakistan, where the Taliban leadership resides mostly unmolested, remain more or less intact.” Compounding this problem is that the levels of corruption in the Afghan government are continuing to alienate the population.

Daniel Korski

The danger of unbalanced trade with China

The Chinese premier seems to like cars; the Chinese in general seem to like cars. China has bought MG in Britain and Volvo in Sweden, to which it has just added Saab. If the Chinese can make European car companies viable, then what’s the problem? Theoretically nothing: trade will help the Chinese and Europeans alike. But, as Robert Peston made clear in his questioning of Wen Jiabao, trade remains unbalanced. For example, European companies are excluded from public procurement contracts in China. It is also worth noting that China’s purchase of Spanish and Greek bonds over the past year, coupled with their promise to buy from Hungary, have made it

Saturday

Daniel Korski

How many refugees are actually coming to Europe?

A human wave of refugees is supposedly setting off for Europe from North Africa. But what are the real figures? The first thing to note that refugees from North Africa come at a time when there has been a sharp decrease in the number of asylum applicants in the 27 EU member-states. Eurostat says that in 1992 there were 670,000 applications in the EU-15 and in 2001 there were 424,500 applications in the expanded EU-27. But according to the UN, the 27 EU member-states registered only 247,300 asylum claims in 2009 and 235,900 in 2010, a 5 per cent annual decrease. Within this group, the 15 ‘old’ EU member-states saw

Friday

Christopher Fildes

9 March 2002: What though the spicy breezes blow soft o’er Buenos Aires, incompetence messes it up

As the world braces itself for the inevitable Greek default, and investors look nervously at potentially exposed banks, perhaps it’s worth recalling Argentina’s implosion a decade ago. Here is what the Spectator made of it at the time: The missionary Bishop Heber wrote a hymn about Ceylon: ‘Where every prospect pleases And only man is vile.’ On being told that this was unfair to his converts, he corrected ‘Ceylon’ in the second edition to ‘Java’, but his point stands: there is no prospect, however pleasing, that is beyond the power of human and governmental incompetence to mess it up. We have seen the Heber factor at work in our own green and pleasant

David Blackburn

Cameron: no more bailouts

It’s another of those special Cameron victories in Europe: we’re in for a second Greek bailout, but not quite as much as we might have been. Britain will contribute a sum through the IMF; however, it will not be contributing to EU funds. Cameron has succeeded in ensuring that the European bailout will be conducted under the permanent European Financial Stability Facility (EFSF), to which only eurozone members are signatories. Although it should be noted that some Brussels experts doubt that the European Financial Stabilisation Mechanism (to which Britain has subscribed) could have been used in this instance, which further devalues the government’s victory. Anyway, attention now turns to Greece

Thursday

Daniel Korski

Apparently, Britain is less stable than a country in danger of collapse

If there is one global index it is best not to be on, it is the Fund for Peace’s annual Failed States Index. It ranks 177 countries using 12 social, economic, and political indicators of pressure on the state. This year, the FSI ranked Somalia as number one for the fourth consecutive year, citing widespread lawlessness, ineffective government, terrorism, conflict, crime, and pirate attacks against commercial vessels as reasons for the country’s billing. Finland, on the other hand, has displaced Norway at the bottom of the index. “Slight fluctuations in demographic and economic indicators, though minimal, lowered Norway’s scores, allowing Finland, with its continued stability, to slip in front of

Peter Hoskin

Obama draws down his forces

It is as Matt Cavanagh predicted in his article for Coffee House, a few weeks ago. Barack Obama has decided to pull 10,000 of the 30,000 American “surge” troops out of Afghanistan this year. The remaining 20,000 will be outtathere by next summer. “Drawdown,” is the word that the US President used in his address last night, and it is happening at quite a pace. He presented this approach as a victory, suggesting that America has already achieved most of its goals in the country, and that “the tide of war is receding”. But there were one or two revealing notes of concession. “We will not try to make Afghanistan

Wednesday

David Blackburn

World Service reprieve the latest step in FCO’s rehabilitation

The BBC World Service has been reprieved. An additional £2.2m will be spent to preserve the Arabic service, in line with some of the wishes of Foreign Affairs Select Committee Chairman Richard Ottaway and Lord Patten, the chairman of the BBC and occasional consigliere to David Cameron. I don’t share the Foreign Office’s sometime view that this is a ‘massive u-turn’, but it is a significant development. Opposition to cuts to the World Service budget came from across the House; but it originated from Tory backbenchers, who were very confident that they would secure a concession. The subsequent climb down suggests that Downing Street is prepared to consult with and

Daniel Korski

Euro-bondage

At a time when the Euro is looking so weak, it is a wonder that so many countries are still queuing up to join. Estonia has recently joined, while Hungary and Bulgaria are keen as mustard to join as well. Make no mistake, these countries want to join. They go to lengths to stay for two years in the European Exchange Rate Mechanism, while keeping inflation inline with the EU average. At a meeting this morning, the Hungarian foreign minister capped off his country¹s EU Presidency by declaring that Hungary is still focused on joining. But, even if these countries did not want to join the Euro, or felt perhaps