World Politics News   Articles for World Politics Course

The UN Security Council unanimously endorsed the nuclear agreement between Iran and the P5+1.  The act means that the first step toward lifting the sanctions against Iran has been taken.  If the IAEA verifies that Iran has taken the necessary steps, all UN sanctions will be lifted.  Those sanctions are different from the ones placed by the US Congress which need Congressional approval in order to end.  Some in Congress are angry that the Security Council has taken action before the Congress had a chance to approve the agreement.  The UN sanctions were, in fact, more serious than the Congressional sanctions since the US sanctions only affected US trade with Iran which was non-existent after 1979.  The UN sanctions involved other countries which had a much more substantial economic relations with Iran and were therefore more powerful.   And the UN certainly does not need US approval to take action.

The Cuban Embassy in Washington raised the Cuban flag for the first time in 54 years as the US and Cuba re-established diplomatic relations.   There are still a number of issues that divide the two countries, but the same is true for a very large number of countries with who the US has diplomatic relations.  The step is long overdue and the US and Cuba have a very large number of common interests.  Let us hope that both countries have the wisdom to recognize them.

Many in Europe are beginning to raise questions about who the euro serves:  Europe or Germany?  Germany has benefited tremendously due to the fact that the euro is valued less than what a German Deutchsmark would be valued under current circumstances.   The undervaluation of the euro gives Germany a huge advantage in exports.  That advantage makes a real difference in the unemployment rates in Germany and in Europe as a whole.

The Greek outcome also raises questions about how Germany regards other countries in the Union.

Spiegel conducted an interview with the German Finance Minister, Wolfgang Schäuble.  Schäuble offers a very specific and precise defense of the bailout deal offered to Greece–his answers are not at all defensive.  When asked about the charges made against Germany because of its exercise of power, he simply says:

“There is no German dominance. Germany is in a good position economically, that is undeniable. But in contrast to France and Great Britain, Germany is not a member of the United Nations Security Council. For that reason alone, you cannot talk about being in a position of political supremacy. Still, the balance in Europe has shifted since the fall of the Iron Curtain. Baltic countries, Slovakia and Slovenia also now speak up when they don’t like the positions taken by others.”

His self-assuredness is palpable in the interview, perhaps no small part of the explanation for the feelings of domination expressed by some within Europe.

The Westgate Shopping Mall in Nairobi, Kenya, reopened after being refurbished from the damage inflicted by al Shabab extremists in September 2013.  The attack was a devastating blow to Kenya, and was in response to Kenyan efforts to limit the influence of the extremists in East Africa.   The situation between Kenya and the extremists, who are based in Somalia, has festered for many years, and the attacks have continued.  The reopening of the mall is an important psychological  step forward for Kenyan.

Boko Haram targeted a market, a mosque and prayer ground as families celebrated Eid al-Fitr as Ramadan ended.   According to reports, three young women–one as young as ten-years–had bombs strapped under their gowns which might have been remotely detonated.  President Buhari has taken strong steps to try to arrest the violence in Nigeria, but the brazenness of the attacks is indicative of the difficulties he faces.  Buhari is getting ready to fly to Washington, DC to meet with US President Obama to ask for US assistance in addressing Boko Haram’s violence.

The German success in holding the line on the Greek bailout has been popular in Germany, but there has been a backlash against Germany in other European countries.  The complete capitulation of Greece to the terms of the deal has raised concerns that Germany is wielding its economic power at the expense of smaller and weaker powers.   Such a backlash was to be expected, but it is unclear how the German people will react to the negative response–in some very curious ways, the outcome of the negotiations raises fears of the German past.

The evidence is mounting that 2015 will be the hottest year ever recorded–by a wide margin.  Last June was the hottest June ever recorded on the planet, and a very strong el Niño is building in the Eastern Pacific.  Fortunately, a strong el Niño usually means that the West Coast of the US will have higher rainfall in the winter months, so perhaps the US Southwest will get some relief from the drought.

Jürgen Habermas is one of the world’s leading public intellectuals: a philosopher, sociologist, and critical theorist.  He was interviewed by The Guardian about the Greek bailout deal.  His critique is representative of the left-wing’s critique of neoliberalism and is biting, frank, and an excellent example of political reasoning.

The Obama Administration moved quickly to reassure its Arab allies that the US was committed to their defense against Iranian provocations.  The effort was an attempt to lessen anxieties, particularly among the Saudis, that the Iranian nuclear agreement would embolden the Iranians to exploit the agreement. The gesture is important, but I suspect that the Saudis continue to feel betrayed.

Burundi’s President Pierre Nkurunziza is running for a third term which is prohibited by the nation’s constitution.  His decision to run again has led to outbreaks of violence in the country, and the UN Security Council has been advised by several human rights organizations that it must take effective action to prevent mass atrocities prior to the election which is scheduled for 21 July.   There are diplomatic efforts to persuade Nkurunziza not to run, but it is unlikely that he will change his mind.

It is hard to describe the amount of airtime and newsprint that has been allocated to the Iranian nuclear deal.  It is also very difficult to sort through the cascade of half-truths and deliberate omissions of fact that pervade much of the so-called discussion.  Over the next few days, I will likely work through some of these issues.  One of the persistent themes in the critique of the agreement is that the Arab world is united in its opposition to Iran, often conveyed in a manner that suggests that the Arab world and Israel are in agreement on Iran’s status in the Middle East.  There is an element of truth in the assertion, particularly if one substitutes Arab “elites” with the Arab “world.”  Public opinion polls, however, suggest that most Arabs think less about Iran than the pundits imagine.  And there is significantly less hostility towards Iran than is suggested.

Since the end of World War II, Japan’s constitution has not allowed Japan to maintain a military and to defend itself only if facing a direct attack.  Today, the lower house of the Japanese Parliament approved legislation that would change that rule, allowing the Japanese military to be deployed overseas and to aid another country if that country is attacked.  The measure is part of Prime Minister Abe’s desire to return Japan to the status of a “normal” country and to counter what Abe considers to be the Chinese threat to Japan.  The opposition parties protested vigorously, but the measure is considered likely to become law.  Whether the law is constitutional is a matter the Japanese courts will have to decide.

Many Greeks are protesting what is considered to be a done deal: the approval of the Greek parliament of the troika’s bailout deal.   Prime Minister Tsipras’s Syriza Party abandoned him in the vote, but the opposition parties voted to approve the deal.   The protests outside the Parliament Building turned violent, but even Tsipras has decided he has to implement the bailout deal.

The P5+1 and Iran announced that an agreement had been reached to assure Iranian adherence to the Non-Proliferation Treaty (NPT).  The announcement is a victory for those who believed that a diplomatic solution was possible, but there remain some who believe that the agreement is flawed.   The final agreement is very similar to the interim agreement achieved earlier this year, but the final details were the most important and most contentious.  These issues seem to have been resolved.  There are some objections to the agreement that are not genuinely rooted in the NPT, such as the insistence that Iran stop supporting groups such as Hezbollah and Hamas, and we have to hope that those objections are dealt with in a separate forum.  The Congress will have 60 days to approve the measure and it promises to be a difficult fight.

Peter Spiegel is reporting in the Financial Times that the IMF is thinking about breaking ranks with Germany and the ECB on the Greek debt deal.  Interestingly, the IMF believes that the current deal will not succeed unless a percentage of the Greek debt is actually cancelled (the position that the Greek government has been holding for some time).  According to Spiegel:

“But under its rules, the IMF is not allowed to participate in a bailout if a country’s debt is deemed unsustainable and there is no prospect of it returning to private bond markets for financing. The IMF has bent its rules to participate in previous Greek bailouts, but the appetite to do so has diminished.”

If true, then the IMF, Greece, and the US are united in believing that some of the Greek debt must be forgiven if economic growth is to return to Greece.  We will now see how Germany and the ECB respond to this challenge and whether any modifications to the bailout plan will be forthcoming.

It appears as if the troika has forced Greece into a humiliating capitulation.  ABC News has a succinct outline of the final package offered to the Greek government which will need to be approved by Wednesday (not much time for a fully democratic debate in the Parliament):

Immediate steps

By July 15, the radical left government of prime minister Alexis Tsipras must get parliamentary approval for four key pieces of legislation in order to “rebuild trust” with the eurozone, the document said.

Reforming Greece’s notoriously complex value added tax (VAT) system and increasing revenue by broadening the tax base.

Improving the “long-term sustainability” of the pension system.

Protecting the legal independence of Greece’s national statistics agency so that government fiscal data is reliable.

Creating an independent fiscal authority and a mechanism to automatically reduce spending if budget targets are missed.

Reforms

“Ambitious” reforms to Greece’s generous pension system, which has already suffered under previous bailouts.

Market reforms affecting Sunday shopping, sales periods, milk and bakeries and pharmacy ownership.

Privatise the electricity transmission network operator ADMIE.

Review and modernise collective bargaining, industrial action and collective dismissals.

Strengthen the financial sector.

Privatisation

Greece will park assets for privatisation worth up to 50 billion euros ($74 billion) in a special fund based in Athens. Some 25 billion euros of that will go towards recapitalising Greek banks left near-empty due to a limiting of emergency European Central Bank funds. It will also help reduce its debt mountain and go towards investment.

The asset fund will be set up in Greece under Greek government management but under the supervision of European institutions. Greece opposed initial plans to base the fund in Luxembourg.

Government

Greece must de-politicise the administration under EU monitoring – a measure critics say is designed to remove officials from Mr Tsipras’s leftist Syriza party from their positions.

Return of the Troika

Greek officials must “fully normalise working methods with the institutions, including necessary work on the ground in Athens”. This is code for a return of the Troika, the creditor institutions of the European Commission, European Central Bank and International Monetary Fund responsible for monitoring Greece’s two previous bailouts, whose officials were kicked out of Greece by Mr Tsipras after his election amid widespread loathing.

Consult with the Troika on “all draft legislation in relevant areas”.

Amend laws

Reverse laws brought in by the Syriza government since the election that run counter to Greece’s earlier bailout arrangements in 2010 and 2012, except for a key humanitarian law.

Bailout size

The third bailout fund for Greece could amount to between 82 billion and 86 billion euros. Eurozone leaders agreed to take note of “urgent financing needs” to meet debt payments of 7 billion euros by July 20 including a huge ECB loan and another 5 billion by mid-August.

Banks

Ten to 25 billion euros should be set aside for bank recapitalisation or liquidation.

Debt

In response to Greek pleas for a reduction in a mountain of debt worth nearly 180 per cent of its GDP, eurozone finance ministers are “ready to consider … possible additional measures” including longer grace and payment periods. This would be considered after a first review of a new Greek bailout program, possibly in October.

But any “haircuts” which would write off debt are ruled out.

International Monetary Fund

The International Monetary Fund, which was involved in the previous two Greek bailouts, must be involved in any new program “as a precondition”.

EU loans

The European Commission is ready to lend Greece 35 billion euros until 2020 to boost jobs and growth.

In short, Greece gives up almost all its sovereignty.  Indeed, the deal implicitly requires Greece to give up the most sacred aspect of sovereignty–territory–through the privatization clause.  Greece may be forced to sell some of its islands or some of its archaeological sites if there are private buyers.

But the most astounding aspect of the deal is that it will not solve the problem.  It will further immiserate Greece making it even less likely for it to repay its loans.   But its creditors will most likely make back a healthy profit on the loans they provided to the country.

Wolfgang Münchau wrote an essay for today’s Financial Times which is truly insightful.  In it, he argues:

“A few things that many of us took for granted, and that some of us believed in, ended in a single weekend. By forcing Alexis Tsipras into a humiliating defeat, Greece’s creditors have done a lot more than bring about regime change in Greece or endanger its relations with the eurozone. They have destroyed the eurozone as we know it and demolished the idea of a monetary union as a step towards a democratic political union.

“In doing so they reverted to the nationalist European power struggles of the 19th and early 20th century. They demoted the eurozone into a toxic fixed exchange-rate system, with a shared single currency, run in the interests of Germany, held together by the threat of absolute destitution for those who challenge the prevailing order. The best thing that can be said of the weekend is the brutal honesty of those perpetrating this regime change.”

He goes on to suggest that the euro has only benefited Germany, the Netherlands, and Austria:

“The implications for the rest of the eurozone are at least as troubling. We will soon be asking ourselves whether this new eurozone, in which the strong push around the weak, can be sustainable. Previously, the strongest argument against any forecasts of break-up has been the strong political commitment of all its members. If you ask Italians why they are in the eurozone, few have ever pointed to the economic benefits. They wanted to be part of the most ambitious project of European integration undertaken so far.”

I suspect that we have just witnessed the beginning of the end of the European experiment.

The Shanghai Co-operation Organisation is an alternative security organization created by the Russians to offer a counterbalance to Western power.  When it was created in 2001 its members included  China, Kazakhstan, Kyrgyzstan,Russia, Tajikistan, and Uzbekistan.  It has not been particularly active so far but today India and Pakistan have begun their accession to the group, undoubtedly enhancing the credibility of the organization as a genuine alternative security arrangement to NATO.  It is, however, difficult to imagine these countries reaching solid agreements on specific issues other than their desire to create a more multipolar world.

Finance Ministers of the 19 states in the eurozone spent the day today debating whether Greece should be lent money to repay its debts.  There was no agreement today, but the talks are expected to resume on Sunday and the fate of the European Union rests in the balance.  The issue apparently is whether the Greek government can be trusted to keep its promises of reform.  The hard line reflects five years of negotiations that have essentially accomplished nothing.

Greek Prime Minister Tsipras has submitted another proposal to the troika to prevent a Greek default.  It is remarkably close to the proposal that Greek voters rejected in the referendum, although there are some changes.  Bloomberg summarizes the differences between the June and the July proposals.  Whether the new proposal is viewed as a capitulation or as a concession to reality will be something for the Greek people to decide.  The key omission is that there does not seem to be any provision for writing off some of the debt.  I continue to be amazed that serious people continue to believe that the entire debt is repayable without some outside stimulus.

The onus is now actually on Germany, and, more specifically,  Chancellor Merkel.  Writing in the Financial Times, Stefan Wagstyl argues that Merkel is in a “lose-lose” situation:

“She must decide whether to back a new loan programme and keep a troubled country in the common currency — or save the money and face the unpredictable consequences of Grexit and the ignominy of a first-ever reversal in the long history of EU integration.

“For the chancellor, a rescue risks widespread complaints from German taxpayers, who have already borne the brunt of two Greek bailouts. It could also provoke a large revolt in her conservative CDU/CSU bloc where MPs are fuming not only at the demands by Greek prime minister Alexis Tsipras but also his seeming contempt for the country’s creditors.

“But, given her stature, a Grexit would leave her carrying much of the international criticism for a manifest failure of EU solidarity.”

Indeed, the former Finance Minister of Greece, Yanis Varoufakis, makes the argument that the German Finance Minister, Wolfgang Schäuble, wants to force Greece out of the eurozone in order to “discipline” France:

“What do I mean by that? Based on months of negotiation, my conviction is that the German finance minister [Schäuble] wants Greece to be pushed out of the single currency to put the fear of God into the French and have them accept his model of a disciplinarian eurozone.”

The price Germany would pay for appearing to be the “bully” in the European Union would be the long-run dissolution of the Union, hardly something that Merkel could desire.   But the short-run costs of alienating her Party’s base would be the loss of effectiveness and even power in Germany.

An article in the most recent issue of Science suggests that we may have already passed the tipping point for a significant rise in sea levels because of global warming.   The new study looked at three previous periods of warming and found that the 2 degree Celsius limit that most use as an overall tipping point for the planet as a whole has led to significant sea level increases due to polar ice melting.  The study projects a 6 meter increase in sea levels by the year 2100 given the current levels of greenhouse gas emissions.   To get an idea of how this would affect the world, here is a list of the major cities in the world that would be inundated by such an increase.  Unfortunately, all the cities are in Asia because they are ranked by population.  In the US, for example, Miami, New York, Philadelphia, and Boston would also be seriously affected.   The chart comes from Climate Central which has some incredible information based on the projected increase.