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Uniting democracies has been the key international political trend of the last hundred years. Understanding this trend and enabling it to continue is the key to world political development.

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"Restoring America's Reputation in the World: Why it Matters"

The Subcommittee on International Organizations, Human Rights, and Oversight, part of the House Foreign Affairs Committee, held a briefing yesterday on the United States' reputation around the world and how it affects American policy, security, and economy. Three experts testified: Andrew Kohut, President of the Pew Research Center, Dr. Joseph Nye, Professor at Harvard's Kennedy School of Government (pictured), and Dr. Michael Waller, Vice President of the Center for Security Policy. For more information, click here.

Accomplishments and Expectations: The Swedish and Spanish EU Presidencies

When Sweden took over the rotating presidency of the European Council of Ministers in July 2009, the EU faced many challenges. Nevertheless, Swedish Prime Minister Fredrik Reinfeldt noted at the end of Sweden’s six months that it had achieved what it set out to achieve. The Treaty of Lisbon was finally adopted and entered into force on 1 December, the EU’s financial market was given a new supervisory architecture, and the EU developed a common position on climate change, in addition to other significant achievements. For more on the outcomes of the Swedish presidency, click here.

With the beginning of 2010, Spain assumed the EU’s rotating presidency. The Spanish presidency comes at a defining moment for the EU—with the historic Lisbon Treaty coming into force, the new permanent President and High Representative taking office, andefforts continuing to help Europe escape the economic recession. As the first presidency to operate under the Lisbon Treaty, the relationship Spain develops with the new EU leaders could set a precedent for future EU presidencies. Spain also plans to act in close coordination with the next two presidency holders, Belgium and Hungary, to provide a model for increasing consistency in EU leadership.

Spain's Prime Minister, José Luis Rodríguez Zapatero, has indicated that his country’s presidency will focus on four main concerns: 1) helping Europe emerge from the economic crisis by promoting balanced and sustainable growth, 2) promoting rapid and complete application of the Lisbon Treaty, 3) encouraging participation of citizens in the EU, and 4) developing a "global, responsible, and supportive" foreign policy, which aims to strengthen the transatlantic relationship, increase dialogue with Latin America, and be supportive of member states and possible future members. For more on the outlook for the Spanish presidency and its emphasis on renewing transatlantic relations, click here.

The European Union's historic Lisbon Treaty enters into force

The Lisbon Treaty, signed by EU leaders in Portugal's capital in December 2007, and only completely ratified by all EU countries in October 2009, is a tremendous step for European unity and harmony. This marks a historic and dramatic shift in European and global dynamics. This Lisbon Treaty created the positions of President of the European Council (replacing the rotating presidency) and a High Representative for Foreign and Security Policy, which are meant to present a united position on EU policies. The Lisbon Treaty also increases the use of majority voting in the Council of Ministers and increases the involvement of the democratically-elected European Parliament in the legislative process. In addition, the pillar system was eliminated. Finally, the Treaty also made the Union's human rights charter, the Charter of Fundamental Rights, legally binding. The stated aim of the Lisbon Treaty  was "to complete the process started by the Treaty of Amsterdam [1997] and by the Treaty of Nice [2001] with a view to enhancing the efficiency and democratic legitimacy of the Union and to improving the coherence of its action."
For more information and analysis on the Lisbon Treaty click here.

Transatlantic Relations News


France and Germany eye top job in EU diplomatic corps
11 March 2010 - EU Observer - Andrew Rettman
European Union member states are quietly negotiating over who will get the top jobs in the new diplomatic corps, the European External Action Service. Foreign policy chief Catherine Ashton is aiming to submit a draft of the organization of the service to EU leaders on March 17. An official familiar with the document says Ashton's office wants the EEAS to have nine senior posts, including a secretary-general. Names mentioned as favorites for the top post include Pierre Vimont, the French Ambassador to the US, Pierre Sellal, a French Foreign Ministry official, and Christoph Heusgen, an aide to German Chancellor Angela Merkel. The secretary-general will have two deputies and oversee six director-generals, who will each run a department with several hundred officials.
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Violence Mars Greek Protest; Strike Grinds Country to a Halt
11 March 2010 – The Wall Street Journal – Alkman Granitsas
Savage street clashes erupted between rioting youths and police in central Athens Thursday as more than 30,000 people demonstrated during a nationwide strike against the cash-strapped government's austerity measures. Hundreds of masked and hooded youths punched and kicked motorcycle police, knocking several off their bikes, as riot police fired volleys of tear has and stun grenades to disperse the rioters. The protests have paralyzed the country.
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Bundesbank chief dismisses idea of a European Monetary Fund
10 March 2010 – The Times UK – Carl Mortished
Axel Weber, Chief of Germany's Deutsche Bundesbank dismissed proposals of the creation of an EMF. Mr. Weber called talk of developing new EU institutions "unhelpful," adding, "New institutions won't help if the existing ones are ignored". The jury is still out on what will be the European Central Bank's position on the proposed monetary fund for the currency union but it's not an outright "no," stated Jean-Claude Trichet, ECB President. 
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New EU states make bid for more diplomatic clout
10 March 2010 - EU Observer - Andrew Rettman
The European Union's smaller members are pushing for an open process in appointments to the new diplomatic corps, hoping to ensure that they are adequately represented. The so-called Visegrad states warn that they could lose interest and disengage from EU foreign policy if they did not a fair share of power. Poland, Hungary, the Czech Republic, and Slovakia made the case for "geographic balance" in an informal paper circulated in Brussels last month. A number of other small EU members support the position. Only a small number of the European Commission's current foreign relations officials, which will be transferred to the new European External Action Service, come from the countries that most recently joined the EU. One solution proposed by Malta, the smallest member state, would have all EEAS posts from head-of-unit level up open to competition among EU diplomats and officials, with foreign policy chief Catherine Ashton having the final word. The structure of the EEAS was supposed to be determined by April, but EU leaders are now looking at July as more realistic.
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Ashton sets out vision for EU foreign policy
10 March 2010 - EU Observer - Honor Mahony
EU foreign policy chief Catherine Ashton, seeking to draw a line under her stormy first 100 days in office, has outlined her vision for European foreign policy in a wide-ranging speech to the European Parliament. She emphasized that Europe had a choice, to pull together on foreign policy or be overtaken in world affairs by other powers like China and India. "If we pull together we can safeguard our interests. If not, others will make decisions for us," she said. Ashton acknowledged the difficulty of setting up the new diplomatic corps set up under the Lisbon Treaty, which has been the subject of turf battles between the European Commission and the member states. "Any time you create something new, there will be resistance. Some prefer to minimise perceived losses rather than maximise collective gains. I see it differently," Ashton declared, urging her audience to remember "why European leaders negotiated the Treaty in the first place."
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What Should NATO's Strategic Concept Say About Russia?
9 March 2010 - Atlantic Council - Tomas Valasek
Twenty years after the end of the Cold War, relations with Russia remain sour, with Moscow still viewing NATO as a threat to its security, and former Eastern Bloc states that have since joined NATO worried by Russia's actions, especially the war in Georgia. These countries are pushing for NATO to develop defensive plans for the possibility, however remote, of conflict with Russia. Tomas Valasek recounts a recent seminar held by the Center for European Reform, where speakers discussed how the alliance's new Strategic Concept, being drafted this year, should approach Russia. Many advocated a dual-track approach; first, reassure NATO's Central European members that the alliance's commitment to mutual defense is as strong as ever, but at the same time, reach out to Russia in hopes of forging a more cooperative relationship. This could include telling Moscow that NATO would be open to Russia joining the alliance, if it so chooses and meets the criteria. This could help strengthen the hands of those in Russia arguing for economic and political modernization and cooperation with the West.
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Little Sign of CDS Speculation on Greek Debt, BaFin Finds
09 March 2010 - The Wall Street Journal
A head of political steam seems to be gathering in Europe to “control” speculators who in the EU leadership judgment have unfairly attacked Greece. However a study released Monday from Bafin, the German financial regulator, suggests the role of CDS in the current Greek crisis may be very limited. Furthermore it stated that an analysis of market data has found no evidence that CDS have been used to speculate against Greek national debt. The net volume of outstanding credit default contracts on Greek national debt has remained unchanged since January at about $9 billion, compared to total Greek government debt of about $400 billion, leading the regulator to conclude that “the market data do not show massive speculation in CDS.”
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EU Considers ban on some CDS Trades
09 March 2010 – The Wall Street Journal - By Gabriele Arussini & Patrick McGroarty
German Chancellor Angela Merkel and Luxembourg Prime Minister Jean-Claude Juncker called for urgent regulation of credit-default swaps to shore up the euro area. Merkel stressed that the EU must take the lead in curbing the “very speculative elements” of derivatives trading, going beyond previous Group of 20 nations agreements. European leaders are ratcheting up the pressure for tighter global regulation of derivatives as they seek to learn the lessons of the Greek fiscal crisis. Greek Prime Minister Papandreou will press Obama today to help combat the “unprincipled speculators” he said threaten a new global financial crisis.
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A Europe Bailout Fund Gains Backing
09 March 2010 – The Wall Street Journal – Stephen Fidler
A European monetary fund to bail out Eurozone nations in need would send a clear signal to markets speculating on the possible break-up of Europe's currency union. Greece's debt crisis is forcing the European Union to make changes that would allow "coherent economic policy-making”. EU leaders are working towards a tighter framework that could orderly handle a potential default by a Eurozone country. German Chancellor Angela Merkel asked for the U.S. help to curb traders' bets on a possible default in the Eurozone. Merkel stated that “We have looked at this and we think that now a quick action is needed" to stop this practice. "The U.S. needs to make a gesture ... We think a step forward would greatly help."
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IMF Proposes Climate Change Fund
8 March 2010 - Guardian
The managing director of the IMF, Dominique Strauss-Kahn, has proposed a plan for the world's governments to pool together to raise money necessary to adapt to climate change. He proposed that countries adopt a quota system similar to the one the fund uses. "We all know that [carbon taxes and other fund-raising methods] will take time and we don't have this time. So we need something which looks like an interim solution, which will bridge the gap between now and the time when those carbon taxs will be big enough to solve the problem." The IMF will release their full proposal later this week, detailing the scope of the plan.
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EU's Foreign Policy Chief Seeks to Spell Out Agenda
8 March 2010 - New York Times
Catherine Ashton, the European Union's top diplomat, will set out her foreign policy agenda in detail in a speech to the European Parliament on Wednesday. After some stumbles and facing heavy criticism in her first four months on the job, Ashton has begun pushing back against her critics, with the policy announcement and a trip to the Middle East. "The next month is going to be a big test of her substance," said one EU diplomat. The Middle East, Iran, Ukraine, and the Balkans are expected to figure prominently in the speech, as is Europe's new diplomatic service. Ashton laid out the framework for the External Action Service at a meeting of EU foreign ministers in Spain over the weekend, and received broad support. The service will be overseen by Ashton and have as many as 3,000 diplomats around the world.
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EU's Ashton Seeks Gaza Visit During Middle East Tour
6 March 2010 - New York Times
EU foreign policy chief Catherine Ashton will seek to visit Gaza during a trip to the Middle East this month. Aiming to engage the EU in resolving the Israeli-Palestinian conflict, Ashton is scheduled to visit Israel, Jordan, Egypt, and Syria. She hopes to add Gaza to the trip to assess the humanitarian situation. "I have asked to go to Gaza," Ashton told reporters in Spain. "We are providing a huge amount of aid into Gaza and I'm very interested to make sure that we are seeing the benefits of that aid going in." Controlled by Hamas and blockaded by Israel, Gaza is generally off limits to foreign dignitaries. However, Irish Foreign Minister Micheal Martin was able to visit last week. The US is hoping to restart peace talks within days, and the EU, which is part of the "Quartet" of negotiators along with the US, Russia, and UN, is hoping to boost its role in the process and increase its international clout.
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Croatia faces 'demanding' membership negotiations
5 March 2010 - European Voice - Toby Vogel
European Commission President Jose Manuel Barroso told Croatia's new president that the country faces a "very demanding" process in joining the European Union. Croatia's hope to join in 2012 was realistic, Barroso said, but negotiations in some areas would be difficult, especially judicial reform. Croatian President Ivo Josipovic, who took office on February 18, was making his first official visit to Brussels. In addition to judicial reform, stepping up the fight against corruption and full cooperation with the Hague war crimes tribunal would also be necessary for Croatia's accession, Barroso said. He and Josipovic also discussed the situation in Bosnia, where political reform has been at a stalemate. Croats in Bosnia have Croatian citizenship and voting rights, but this may soon change.
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Lady Ashton launches fightback against critics ahead of key talks on EU foreign policy
4 March 2010 - The Guardian - Ian Traynor
EU foreign policy chief Catherine Ashton will push back against her critics at a meeting of foreign ministers in Spain, where the shape of a new diplomatic corps will be discussed. Ashton has faced heavy criticism of her job performance in the months since she took up the position. She claims the criticism is premature, as she has not yet been given all the tools she needs. Prior to the meeting in Cordoba, she will meet with French officials, who have been among the harshest critics, to mend fences. Ashton is likely to support the position of France and other large EU states that the new European External Action Service to be a strong agency with autonomy from the European Commission and other institutions. They also want national governments to have the main say in appointing EU ambassadors. The Commission has been trying to keep as much power and funding under its control as possible. Ashton must decide on the structure and scope of the EEAS by the end of April. Her message to the foreign ministers will be to "take collective responsibility for what they created."
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Greece Outlines More Steps to Pare Deficit
04 March 2010 – The Wall Street Journal – Costas Paris & Alkman Granitsas
Greece announced its new austerity measures, cutting salaries and bonuses for government workers by 12%. This includes a 30% cut in Christmas, Easter and holiday bonuses. In addition, court officials will see their entitlement for accelerated processing of court cases cut by 20% and a 7% across the board cut in entitlements at employees of state-owned companies who receive government money. Furthermore there will be investment cuts of 5% in government spending on public works projects, and a €200 million cut in spending on education. Plus increases in luxury, fuel and value added taxes.
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Athens Aims to Persuade Germany That Help Is Essential
04 March 2010 – The Wall Street Journal – Marcus Walker
Greek Prime Minister George Papandreou will press the EU and especially Germany to show support for the Greek government efforts and possibly open the door to a financial backstop. This move would pave the way for a bond offering in the coming days that is needed to roll over debts that are coming due. Greek officials won verbal support from the EU leadership, but also said they would not rule out IMF help if needed. In turn Ms. Merkel doesn’t appear keen to the idea of a German backed aid program in the immediate term. "We can only justify a bailout if it's about protecting Germany, not Greece," said an aide to Ms. Merkel.
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Markets Welcome Greece Plan
04 March 2010 – The Wall Street Journal - Ainsley Thomson & Emese Bartha
Markets reacted positively to the Greek Governments plan. The news lifted the euro, which rose to $1.3664 compared with $1.3607 late Tuesday in New York. The risk premium investors demand for holding Greek government bonds rather than their German equivalents fell to 2.91 percentage points from 3.11 points. The annual cost of insuring €10 million of Greek government debt against default for five years fell by €4,500, to €315,600. In turn Moody's Investors Service, whose support for Greece's efforts is important for the country's ability to borrow on bond markets, stated the Greek plan is in tune with Greece's current A2 credit rating.
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Greece Agrees Plan for New Taxes and Pay Cuts
03 March 2010 – New York Times – Kiti Kitsantonis
In an effort to dramatically lower the budget, Greece has approved another set of tax increases and pay cuts for public employees.  This measure alone is expected to save approximately €4.8 billion ($6.54 billion) and has been accepted on the heels of another cut that is supposed to save €5 billion – the cut that incited the riots.  Some of the tax increases include a 20-percent increase on alcohol and a six percent increase on cigarettes.  The pay cut amounts to 30-precent of the public employees’ holiday bonus, which is essentially the wage for two months of work.  Greek Prime Minister, George Papandreou, said in a statement that, “The new measures were not a choice but a necessity.”
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Britain’s Fuel and Food Prices Give The Country Highest Inflation Rate in West
03 March 2010 – Mail Online – Sean Poulter
Britain’s food and energy price spikes have given the UK the highest inflation levels in the Western world.  During this period of price increase in the UK, most other countries have found that their food prices are dropping.  In regard to energy prices, the OECD reports that Britain’s price increase is greater than most other countries – a 7.8% increase, compared to Germany’s 1.0% and France’s 6.1%.  In the latest OECD report, it reports that Britain’s CPI inflation rate in January was 3.5 percent – two to three times higher than any other Western nation.  Vince Cable, the LibDem Treasury spokesman, explained in a conference that it is only natural for there to be inflation when the pound is weak.
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EU and Vietnam to Start Free-Trade Talks
03 March 2010 – Wall Street Journal – John W. Miller and Patrick Barta
The European Union and Vietnam announced on Tuesday that would begin negotiations for a free-trade partnership.  This would allow the EU to have a “privileged trade and investment relationship” with a $100 billion economy that is willing to purchase European “cars, wine, cheese and pharmaceuticals.”  This agreement would surely entice manufacturers out of China so that they could tap into the EU’s $15 trillion economy.  However, under the Lisbon Treaty, ratification of this measure would have to go through the European Parliament, where many members have protectionist views and human-rights concerns.  This is only the latest in a string of efforts by the EU and United States to facilitate trade worldwide.  Last week, the US completed deals with South Korea and Colombia, but they have yet to be ratified by Congress.
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Kosovo problem will be solved after Serbia joins EU,' diplomat says
03 March 2010 - Euractiv
The dispute over the status of Kosovo can be resolved after Serbia becomes a member of the European Union, according to Belgrade's ambassador to Germany. In an interview with Euractiv, Ivo Viskovic said that Serbia was prepared to compromise, but could not accept anything based on the current state of affairs. A resolution was not a condition for accession to the EU, he stressed, asserting instead that "The Kosovo situation could be resolved fully after we have entered the EU." A ruling from the International Court of Justice on the legality of Kosovo's declaration of independence is expected in June. Viskovic mentioned 2014 as a target date for Serbian accession, and said the process should not be delayed by the Kosovo issue or any external issues. "The accession of Serbia to the EU has to lie on the achievements of Serbia alone," he said.
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NATO air forces to train over Baltic countries
02 March 2010 - Associated Press
NATO air forces will conduct an exercise this month over the Baltic states, possibly offering some reassurance to member states nervous about the alliance's reengagement with Russia. The mission, which will involve French, Polish, and American planes, aims to "demonstrate solidarity with NATO's Baltic members." The alliance has kept a detachment of fighter jets in the Baltics for policing duties since Latvia, Lithuania, and Estonia joined in 2004. Relations between NATO and Russia have improved under the Obama administration, from a low point in 2008 after the war in Georgia. This has made the Baltic states nervous, and they were especially alarmed at the recent sale of French Mistral warships to Russia. A NATO spokesman denied the exercise was related to this deal, however.
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Europe All Mouth and No Money in Green Tech Race
02 March 2010 - Reuters - Pete Harrison
Wednesday, the 3rd of March, EC President Barroso will lay out his vision for the next decade, and it is expected that he will champion green technlogy as a means of boosting jobs and protecting the climate. Many EP politicians had hoped that the EU's Emissions Trading System would have made traditional fossil fuels so expensive that firms would steadily shift to greener sources. However, companies are not converting as fast as hoped for and many decision-makers have realized the need to speed the shift by subsidizing green technology. The EU allotted budget for subsidizing the green tech, however, is much lower than rival countries such as the US, Japan, and China. Britain, Denmark, Sweden, and the Netherlands are pushing to increase the budget with funds previously for agriculture, something France (which recieves a fifth of the budget) will fight against.
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IMF Document Calls For EU-Wide Body To Manage Bank Failures
01 March 2010 – NASDAQ – Matthew Dalton
The IMF envisions a central EU authority with a wide range of powers that would “require capital increases from bank shareholders, temporarily limit executive compensation and force banks to sell risky assets”. European Governments are expected to resist any kind of interference in their internal finances even in a time of crisis. The commission, the EU executive arm, is holding a conference at the end of march to propose legislation to address this issue.
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Athens, Berlin Spar as Bailout Takes Shape
01 March 2010 – Wall Street Journal - Carrick Mollenkamp, Costas Paris and Marcus Walker
A bailout plan for Greece engineered by France and Germany is being hammered out. One idea being considered by Berlin is to delegate the buying of Greek bonds to the state bank KfW and other commercial banks, with the government providing loan guarantees to the institutions doing the heavy lifting for it. Greek officials expect to seal the deal this Friday, but German officials pointed out there were no definite plans.
The structure of any bail-out will depend in large part on the size of Greece’s eventual funding gap. Greece has been given until March 16 to prove that its budget will no longer be a bucket draining at a faster rate than new funds pouring in.
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Brussels Rolls Out Red Carpet For New Ukraine Leader
01 March 2010 - Radio Free Europe/Radio Liberty - Ahto Lobjakas
Ukrainian President Viktor Yanukovych visited Brussels on his first foreign trip since being sworn in Thursday. European Commission President Jose Manuel Barroso told Yanukovych he was "among friends of Ukraine, committed to supporting [the] stability and prosperity of your country." The EU was pleased that Yanukovych chose to make his first presidential visit to Brussels, rather than Moscow. He sought to reassure Ukraine's Western backers, saying that integration with the EU was still a key priority. While setting aside ambitions to join NATO, Yanukovych said he would not withdraw from any existing agreements with the alliance, which include contributions to the NATO Response Force. His stance of balancing Ukraine's relationships with Russia and the West were met favorably by EU officials, and the country's difficult economic situation gives him strong incentive to maintain friendly ties to Europe.
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Anti-EU sentiment hardening in Iceland
01 March 2010 - EU Observer - Leigh Phillips
Opposition to European Union membership is increasing in Iceland, days before a referendum on an agreement between the government and two EU countries to repay assistance they gave during the banking crisis. Britain and the Netherlands compensated account holders who lost their deposits in the online bank Icesave. While the government had agreed to repay the money, much of the public was angered, believing the deal would burden them and undermine social program funding. The recent poll showed 56 percent against EU membership, with 33 percent in favor. This represents a sharp drop since the height of the financial crisis, when a majority favored joining. Last week, the European Commission endorsed beginning accession talks with Iceland.
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US diplomat soothes EU nerves after summit debacle
01 March 2010
The US Ambassador to the European Union, William Kennard, told the EU Observer that the special relationship between America and Europe had not been damaged by confusion arising from the Lisbon Treaty or Washington's moves to improve relations with Russia and China. Kennard reiterated the Obama administration's belief in multilateralism and building ties with other emerging powers, but said that this could not exceed the trust between the US and Europe. In February when the EU learned that President Obama would not be attending a summit with EU leaders in May, it was taken by many as a snub. Kennard claimed that Obama had never committed to attending, and laid some blame on the Spanish government, which holds the EU presidency, for assuming otherwise. A US spokesman had said at the time that Washington did not know who was in charge in Europe following the Lisbon Treaty. But Kennard voiced support for the Lisbon integration process, while adding that it would take some patience.
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EU needs new CO2 strategy for global talks: Poland
27 Feburary 2010 - Reuters
The EU agreed to lower emissions by 20 percent over the next 10 years with the hopes that others would follow their "good example." This has not happened and the insufficient engagement has prevented the EU from increasing their cuts to 30 percent. Bernard Blaszczyk, who is part of the EU's Emissions Trading Scheme, said that now the Union should focus on shoring up the economy and wait for other large emitters to match their pledge. "Now we should wait for the others...focus our actions on the internal market and strengthening Europe's economic competitiveness."
(Read More)

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