World Politics News   Articles for World Politics Course

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.

New information suggests that the oil company now known as ExxonMobil knew about the risks of carbon dioxide emissions toward the problem of climate change as early as 1981.  Nonetheless, it continued for many years to fund groups, so-called climate change deniers, that argued that there was no scientific evidence about the link.  Although the company now acknowledges the human role in climate change, by some estimates, it spent about $30 million supporting groups denying that climate change was a real problem.

The Pew Research Center has conducted research that the global middle class–a product of the process of globalization–is smaller than we have long assumed.  According to the study:

“Only 13% of the world’s population fall into the category of ‘middle income,’ living on between $10.01 and $20 a day—an annual income of between $14,600 and $29,000 for a family of four, which is barely above the official US poverty line.”

The vast majority of these people live in either Europe or North America, and about 71% of the global population still live below this level.

The humanitarian crisis in Greece is difficult to comprehend and completely under-reported in the maze of economic gibberish.   The health system is no longer available to about 25% of the Greek population and hospitals have cut their budgets as much as 50%.  Europe is beginning to plan for a massive humanitarian effort in Greece if the economic crisis is resolved.   In addition to the social crisis, Greece has already received more refugees from abroad (primarily from Syria and Africa) than it did in all of 2014.

There were some curious cyber incidents today:  the computers for United Airlines, the New York Stock Exchange, and the Wall Street Journal all experienced problems.  These problems were explained as internal problems, but there is a clear sense that something else was afoot.   Last night, Anonymous tweeted: “Wonder if tomorrow is going to be a bad day for Wall Street….We can only hope”   I doubt that we will ever really know what happened, but in trying to figure it out I came across a site that tracks cyber attacks across the world.  It is called Norse and it tracks live attacks in real time.  Fascinating stuff.

David Azoulay, Israel’s minister for religious services, has doubted the authenticity of Reform Jews as actual Jews.  Azoulay is a member of the Shas Party in Israel, an ultra-orthodox party, which became part of Prime Minister Netanyahu’s government after the last election.  Many American Jews are Reform Jews, and the message was not well received.  The Prime Minister was quick to point out that Azoulay’s statements “do not reflect the position of the government.”  But as a Cabinet Minister, Azoulay does have a significant voice.

In 1995 8,000 Muslim men and boys from the Bosnian town of Srebenica were massacred.  The UN Security Council today introduced a resolution condemning the massacre as genocide, but despite receiving 10 votes (there were four abstentions, including China), the measure did not pass because of a Russian veto.   Russian U.N. Ambassador Vitaly Churkin characterized the resolution as “not constructive, confrontational and politically motivated.”  Russia is a long-time ally of Serbia, whose forces were accused of committing the massacre.

The European economic malaise is murkier than it ever has been.  Ambrose Evans-Pritchard is one of the most connected economic journalists in Europe and he has an explosive piece in The Telegraph.  In the article, Evans-Pritchard contends that Greek Prime Minister Tsipras actually expected that the Greek people would vote “Yes” in the referendum and had no back-up plan when the results came in to reject the bailout offer.  Tsipras was blown away by the demands of Greece’s creditors and made the decision to hold the referendum as a graceful way to capitulate to those demands.  The demands, according to Evans-Pritchard, were extraordinary:

“Instead they were confronted with a text from the creditors that upped the ante, demanding a rise in VAT on tourist hotels from 7pc (de facto) to 23pc at a single stroke.

“Creditors insisted on further pension cuts of 1pc of GDP by next year and a phase out of welfare assistance (EKAS) for poorer pensioners, even though pensions have already been cut by 44pc.

“They insisted on fiscal tightening equal to 2pc of GDP in an economy reeling from six years of depression and devastating hysteresis. They offered no debt relief. The Europeans intervened behind the scenes to suppress a report by the International Monetary Fund validating Greece’s claim that its debt is ‘unsustainable'”.

The situation now is that Tsipras cannot really back down, and Germany also believes that it cannot offer debt relief without encouraging other countries in trouble to follow the Greek path.   It seems inevitable that Greece will have to leave the eurozone at some point.  The Greek economy will collapse, but slowly recover.  The biggest loser will be the European project: it cannot be a union of equals given the demonstration of German power and will.

Negotiations in Vienna between the P5+1 and Iran have been going on even though the 30 June deadline expired.  The parties have extended the deadline to the end of this week and it seems clear from the rhetoric that a deal seems possible, but the most difficult issues remain to be resolved.  According to Reuters, those issues include:

“…Iranian demands for a U.N. arms embargo and ballistic missiles sanctions to be lifted, the timing of U.S. and EU sanctions relief, and future Iranian nuclear research and development.”

The agreement will still have to be submitted to the US Congress, and there are reasons to believe that there will be strong opposition to it.