January - June 2011

Lagarde chosen to lead IMF
28 June 2011 – Howard Schneider – Washington Post
French Finance Minister Christine Lagarde has been chosen by the International Monetary Fund to be the agency’s next managing director and the first woman to be selected for the job. She begins her five-year term on July 5th and is starting in the middle of a major financial crisis in Greece that must be managed effectively. Lagarde, an attorney, is determined to bring a new sense of ethics to the agency after Dominique Strauss-Kahn’s arrest on sexual assault charges. The new minister is supported by a broad coalition of member states, including the United States. 
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IMF: Australia supports Carstens bid
27 June 2011 – International Business Times
Australia and Canada have both officially lent their support to Mexican Finance Minister Agustin Carstens in the IMF managing director candidacy race. In a joint press statement, they argued that Carstens has more experience since he has previously served as a deputy managing director for the IMF. The candidacy race has been narrowed to Carstens and French Minister Christine Lagarde. Traditionally, the head of the IMF has always been a European, and Lagarde has taken the lead in winning international support for her candidacy. However, in their joint statement, Australia and Canada said that “it is important that the new IMF managing director be selected in an open and transparent process with the candidate chosen on the basis of merit and not nationality.”
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Ban Ki-moon reelected as U.N. Secretary General
21 June 2011 – Pamela Falk – CBS News
Ban Ki-moon has been reelected for a second term as UN Secretary General, and will serve the organization for the next five years. His reelection brings good news to Washington, as Ban Ki-moon has had the closest relationship with the US government out of all previous leaders. The Secretary General has been criticized over the years  for not being as outspoken as he could be, but he has provided important leadership on various pressing international issues such as the Middle East peace process and the reconstruction of Haiti. Over the next five years, the Secretary General can expect to face many more difficult issues, especially the rising protests and revolutions in the Arab world, and the nuclear ambitions of Iran and North Korea.
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Mexico’s Carstens Says Lagarde Has Conflict of Interest for IMF Job
14 June 2011 – VOA News – Mil Arcega
The IMF candidacy race has officially become a two-way race between French Finance Minister Christine Lagarde and Agustin Carstens, the governor of Mexico’s central bank. The IMF board disqualified the Bank of Israel’s 67-year old Stanley Fischer for being above the 65-year old cutoff age for first time managing directors. While a European has traditionally headed the IMF, and analysts say that Lagarde is favored to win, Agustin Carstens insists that he is the better candidate and his appointment wouldn’t raise questions of conflicting interests as Lagarde’s appointment would. Carstens said he’s sure that “she will say that she’s working for the fund and not for the European Union, but still that question mark will be there [for her].” The IMF’s executive board is expected to announce the next director by June 30.
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Security Council mulls resolution condemning Syria

9 June 2011 – CNN Wire Staff
Britain, France, Germany and Portugal introduced a resolution to the UN Security Council condemning the Syrian government’s violent crackdown on anti-government protestors. The resolution calls for an end to the violence and for the Syrian leadership to seriously address the issues raised by its people. There appear to be concerns over whether or not the resolution will be received well by the other members of the Security Council, as they would like to avoid military intervention in Syria.
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Belarus expects to sign loan agreement with IMF this fall
5 June 2011 – Belarus News – Dzmitry Ulasaw
The Finance Minister of Belarus, Andrey Kharkavets, announced that the country is expected to sign a loan agreement with the IMF in the fall. The loan will provide additional funds to the country’s struggling economy beyond the $3 billion that was just loaned to Belarus through the Anti-Crisis Fund of the Eurasian Economic Community (EurAsEC). The IMF mission arrived in Minsk last week to begin their analysis of Belarus, but no amount has officially been discussed for the loan. Regarding the conditions attached to IMF loans, Mr. Kharkavets stated that Belarus plans to “proceed from the assumption that the program we have signed with the EurAsEC Anti-Crisis Fund is such comprehensive that it should satisfy the IMF.” Others, however, are preparing for a more ambitious reform program to be issued.
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Gates: Chinese military expanding, not threat to U.S.
2 June 2011 - CNN Wire Staff
China is building its military capabilities but does not intend to compete with the United States like the Soviet Union did, Defense Secretary Robert Gates said to reporters. Gates said that China is "clearly working on capabilities that are of concern to us" but added "I think that the Chinese have learned powerful lessons from the Soviet experience, and they do not intend to try to compete with us across the full range of military capabilities. But I think they are intending to build capabilities that give them a considerable freedom of action in Asia, and the opportunity to extend their influence." Gates said he understands that China is a major power. "We are not trying to hold China down. China has been a great power for thousands of years, it is a global power and will be a global power. So the question is, how do we work our way through this in a way that assures that we continue to have positive relations in areas like economics and other areas that are important to both of us and manage whatever other differences we have in the other areas?"
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War on drugs has failed, report finds
2 June 2011 – CNN Wire Staff
The global war on drugs has failed and international efforts to crack down on drug producers and consumers have had "devastating consequences for individuals and societies around the world," a report from the Global Commission on Drug Policy says. The commission, which includes former U.N. Secretary-General Kofi Annan, Virgin Group founder Richard Branson and Nobel laureate Mario Vargas Llosa, challenges the conventional wisdom about drug markets and drug use. The theory that increasing law enforcement action would lead to a shrinking drug market has not worked, the report says. To the contrary, illegal drug markets and the organized criminal organizations that traffic them have grown, the group found. The report comes as countries such as Mexico suffer from widespread drug-related violence. More than 40,000 people have been killed in Mexico in the past four years as rival cartels battle each other over lucrative smuggling corridors and as the army fights the cartels.
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ICC denounces G20 rise in protectionism
1 June 2011 – The Financial
A recent WTO-OECD-UNCTAD report found that the G20 countries are all following a worrying trend of increased protectionism. The report, which was issued on May 24, showed an alarming increase in restrictive trade measures over the last six months. The International Chamber of Commerce (ICC) has raised concerns over the report, especially since the G20 Seoul Summit was supposed to reaffirm the group’s commitment to resist protectionism. ICC Secretary General Jean-Guy Carrier stated that “this worrying trend undermines policies for economic recovery and job creation, at a time when the world economy remains at risk.” The concerns from this report have sparked the Open Market Index, created by the ICC to measure the 50 top-trading countries by order of their openness to trade and investment, which will launch before the G20 summit in France this November.
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Japan 'underestimated' tsunami risk
1 June 2011 – Al Jazeera
A UN atomic watchdog team on a visit to Japan said the country underestimated the hazard posed by tsunamis to nuclear plants. "The tsunami hazard for several sites was underestimated," the International Atomic Energy Agency (IAEA) said in a preliminary report on Wednesday. "Nuclear designers and operators should appropriately evaluate and protect against the risks of all natural hazards, and should periodically update those assessments and assessment methodologies." However, the IAEA also praised Tokyo's response to the March 11 disaster as "exemplary," but emphasized that Japan needed an independent regulatory board for nuclear facilities. The IAEA team said Japan's crisis offered several lessons for the nuclear industry globally, including that plant operators should regularly review the risks of natural disasters and that "hardened" emergency response centers should be established to deal with accidents.
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G8 Nonproliferation Effort Renewed
31 May 2011 – Global Security Newswire – Martin Matishak
The G-8 renewed the Global Partnership Against the Spread of Weapons and Materials of Mass Destruction mandate on Friday at their summit in France. It will be continued beyond the original 2012 expiration date based on “the significant progress” that the 23 partners of the program have achieved. The 2010 mandate addresses four areas of emphasis: securing nuclear and radiological materials, biosecurity, engagement of weapons scientists to prevent diversion of expertise, and implementation of U.N. Security Council Resolution 1540. Resolution 1540 aims to prevent nonstate actors from obtaining weapons of mass destruction, their means of delivery and related materials. The next goal of the group is to expand membership in the partnership.
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G8 to discuss aid for new Arab democracies
26 May 2011 – Al Jazeera
Officials from the G8 - the United States, Canada, Britain, France, Germany, Italy, Japan and Russia - held preparatory talks in France on Wednesday in the seaside resort of Deauville to hammer out common positions on the world economy, Libya's civil war, Iran's nuclear goals, unrest in Syria, and other issues. The two-day summit beginning on Thursday is expected to approve a multi-billion-dollar aid package for Tunisia and Egypt, after "Arab Spring" uprisings deposed their autocratic leaders, and to seal an agreement to back others in the region who want democracy. "We share a compelling interest in seeing the transitions in Egypt and Tunisia succeed and become models for the region," US Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner wrote in a letter to the G8 on Wednesday.
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G8 to discuss aid for new Arab democracies
26 May 2011 – Al Jazeera
Officials from the G8 - the United States, Canada, Britain, France, Germany, Italy, Japan and Russia - held preparatory talks in France on Wednesday in the seaside resort of Deauville to hammer out common positions on the world economy, Libya's civil war, Iran's nuclear goals, unrest in Syria, and other issues. The two-day summit beginning on Thursday is expected to approve a multi-billion-dollar aid package for Tunisia and Egypt, after "Arab Spring" uprisings deposed their autocratic leaders, and to seal an agreement to back others in the region who want democracy. "We share a compelling interest in seeing the transitions in Egypt and Tunisia succeed and become models for the region," US Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner wrote in a letter to the G8 on Wednesday.
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G8 to discuss Arab Spring, IMF post could feature
24 May 2011 – Reuters – John Irish
G8 leaders will gather in Deauville, France on Thursday and Friday for talks on global issues ranging from the world economy to Iran's nuclear program and Syria's crackdown on pro-democracy protests. The summit is expected to approve a multi-billion dollar aid package for Tunisia and Egypt, whose authoritarian leaders have been ousted in popular revolts, and seal an agreement to back other Arab states seeking democratic change. The conflict in Libya will also be discussed, and there is likely to be some mention of the IMF’s search for a new managing director.
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Zoellick Sees Economic Risks from Food Prices, Debt, Inflation
12 April 2011 – Bloomberg – Rebecca Christie
In comments to reporters, World Bank President Robert Zoellick warned that Europe’s debt crisis, repeated natural disasters, and political turmoil in the Middle East pose risks to the recovery of the global economy. He urged the G-20 to take action to shore up the economy and curb hunger, which has increased due to rising food prices. Zoellick also noted that the World Bank plans to assist African countries in political transition, such as Tunisia, Egypt, and the Ivory Coast. Egypt, he said, cannot return to the “old, failed ways” of a government-driven economy and instead needs new ways to create jobs and use aid. 
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G8 Backs Away from Libyan No-Fly Zone
15 March 2011 – Voice of America
At a G8 ministerial meeting in Paris, members backed away from Franco-British calls for a no-fly zone over Libya and have instead agreed to ask the UN Security Council to increase economic pressure on Libyan leader Moammar Gadhafi. German foreign minister Guido Westerwelle opposed military intervention, arguing that it would be difficult to escape and could be a “slippery slope.” Russia’s Ambassador to the UN, Vitaly Churkin, said that “fundamental questions needed to be answered” before imposing a no-fly zone. On the sidelines of the meeting, U.S. Secretary of State Hillary Clinton met with representatives of Libya’s opposition National Council and agreed to consider the group’s request for foreign assistance.
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US warns against Afghanistan troop withdrawal
11 March 2011 – The Guardian - Ewen MacAskill 
The Obama administration has begun to lower expectations of a significant withdrawal of troops from Afghanistan in July and warned European allies against pulling out their forces too soon. US defence secretary, Robert Gates, speaking at a meeting of the 48 countries contributing troops to Afghanistan, said he was worried that security gains in Afghanistan "could be threatened by ill-timed, precipitous or unco-ordinated national drawdown" by countries contributing troops.   "Unfortunately, some recent rhetoric coming from capitals on this continent is calling into question that resolve. Frankly, there is too much talk about leaving and not enough talk about getting the job done right," Gates told his fellow defence ministers at a meeting at Nato headquarters on Friday. Gates did not specify which capitals he had in mind. Politicians in Poland, Denmark, Germany and Italy have spoken about troop withdrawals.
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More Americans Believe in Climate Change than in Global Warming
10 March 2011 – Joshua S. Hill – Reuters
A new study conducted by University of Michigan researchers shows that more Americans believe in “climate change” than in “global warming.” In attempting to explain why this is the case, they analyzed the use of the terms on political think tank websites and found that liberals use “climate change” and conservatives use “global warming” to describe the same phenomenon. Overall, 86 percent of Democrats and 60 percent of Republicans believe that “climate change” is real. The partisan gap is wider on “global warming,” with 86 percent and 40 percent believing respectively. 
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IMF Warns of Two-Speed Recovery
23 February 2011 – Guardian – Phillip Inman
In a report on the recent G20 finance ministers’ meeting, the IMF warns of risks to the global economy. One is the fragility of Europe’s financial sector, which remains weak due to sovereign debt crises and banking sector risks in the eurozone’s periphery. Another is rising demand and soaring inflation in countries such as Brazil and China – trends magnified by a flight of capital from west to east as investors increasingly favor fast-growing emerging economies. As a result, the West faces a weak recovery and emerging economies are overheating. The report urges emerging economies to allow their currencies to rise and restrain lending while arguing for the repair of eurozone financial systems and, if necessary, additional bailouts. 
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Oil Price Spike Threatens Global Recovery
23 February 2011 – MSNBC.com – John W. Schoen
As portions of Libyan oil production are shut down by armed clashes between Moammar Gadhafi’s regime and his opponents, global oil prices have risen above $110 a barrel. By raising the cost of gasoline and exacerbating the problem of rising food prices, the price hikes risk derailing global economic recovery. Although the surplus capacity of OPEC and other Gulf oil producers can compensate for a complete shutdown in Libyan production, additional cuts in other oil producing states could eliminate this margin of safety. Of particular concern is the prospect of turmoil spreading to Saudi Arabia, which possesses the largest portion of this excess capacity and shares many of the same conditions that sparked uprisings in neighboring countries. 
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Rift Lowers Hope of G20 Breakthrough
18 February 2011 – Financial Times 
G20 members have reached an impasse on defining indicators that would be used to identify and address global economic imbalances. While there is broad agreement on using public debt and deficits - as well as private savings - as indicators, a disagreement over the current account measure has emerged. China is opposed to including the full current account as an indicator, and instead supports substituting this with trade figures. China is also opposed to the inclusion of real exchange rates, foreign exchange reserves, and specific targets. 
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Divisions Threaten French Hope for G20 Policy Deal
15 February 2011 – Reuters – Daniel Flynn
G20 finance ministers are meeting in Paris this week to consider “indicators” that would be used to measure dangerous imbalances in the world economy. Although there is agreement that government debt and deficits must be at the core of the G20’s economic guidelines, emerging economies – China in particular – are opposed to rules that would limit their external surpluses. The US is likely to face criticism for its large budget deficit and policy of monetary easing; developing economies are blaming the latter for upward pressure on their currencies and asset prices.  Divisions over French proposals to address rising commodity prices and reform the international monetary system have also emerged. 
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IMF Chief Urges Changes to Monetary System to Prevent Future Global Crises
10 February 2011 – Bloomberg – Sandrine Rastello
IMF head Dominique Strauss-Kahn is urging policy makers to tackle the problem of global imbalances, which if left unchecked could lead to a new financial crisis. Issues that were of concern before the crisis, including “large and volatile capital flows, exchange rate pressures, rapidly growing excess reserves,” are back. Strauss-Kahn argued that enhancing international cooperation to reduce volatility in capital flows and exchange rates, as well as ensuring that liquidity goes to countries that need it, is vital to growth. Another way to achieve these objectives, he argued, would be to increase the role of IMF Special Drawing Rights (SDR) - the IMF basket of currencies that its members use to settle accounts with each other. He supports adding emerging markets’ currencies to this basket. 
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Bernanke to Congress: We’re Much Closer to Total Destruction Than You Think

9 February 2011 – CNBC – John Carney
In remarks before the House Budget Committee, Federal Reserve Chairman Ben Bernanke warned that official Congressional budget estimates understate the danger posed by the federal government’s rising debt. According to Bernanke, forecasts produced by the Congressional Budget Office do not account for the fact that economic growth would slow as the debt rises. He recommended action sooner rather than later: “The question is whether these adjustments will take place through a careful and deliberative process that weighs priorities and gives people adequate time to adjust to changes in government programs or tax policies, or whether the needed fiscal adjustments will come as a rapid and painful response to a looming or actual fiscal crisis.”
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European Foreign Policy Chief Ashton Reaffirms Commitment to Strong UN

9 February 2011 – The Sofia Echo
In an address to the UN Security Council, EU foreign policy chief Catherine Ashton reaffirmed the EU’s commitment to UN efforts to promote security, development, human rights, and democracy around the world. She highlighted EU-UN convergence a wide range of challenges, including the Israeli-Palestinian conflict, North Africa, the Middle East, South Sudan, and Cote d’Ivoire. "There are many others [cases] in which the EU is engaged, with, and in support of, the UN, to protect the vulnerable and ensure that genuine democracy can take root," she said.
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Asia-Pacific Region at Risk from Climate Migration

8 February 2011 – Reuters – David Fogarty
A draft report by the Asian Development Bank indicates that climate change will lead to major migration both within and between Asian nations. Current preparations at the national and international level for such an eventuality are inadequate, the report warns. Highlighting the Pacific region’s vulnerability to climate change due to exposure to environmental risks and high population density, it argues that the carrying capacity of fast-growing Asian megacities will come under severe pressure as they attempt to cope with natural disasters and migration. 
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Report Urges G-20 Overhaul

7 February 2011 – Wall Street Journal – Nathalie Boschat
An updated report commissioned by French President Nicolas Sarkozy to guide France’s presidency of the G20 recommends granting members the ability to represent neighboring countries. This would give every country a voice in the G20 and, the report argues, make it more legitimate and efficient at preventing crises. The report also recommends creating a currency system that is less dependent on the US dollar and based on a wider range of currencies. Other suggestions include strengthening crisis-management mechanisms to prevent countries from accumulating excessive foreign exchange reserves, drafting common rules to help nations cope with unexpected capital inflows, granting the IMF’s International Monetary and Financial Committee decision-making authority, increasing IMF resources so that it can function as a lender of last resort in any future financial crises, and giving the IMF sanction powers to enforce agreements.
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World Economic Forum at Davos: Still Standing

4 February 2011 – Time – Michael Elliott 
Policy makers and business leaders who attended the World Economic Forum’s recent meeting in Davos, Switzerland highlighted the risk to global economic recovery posed by rising food and commodity prices. Even so, they foresee what the IMF has called a “two-speed” recovery; one in which advanced economies continue to struggle and emerging markets forge ahead. European leaders at the meeting reiterated their commitment to defending the euro on economic and political grounds. US Treasury Secretary Timothy Geithner argued that President Obama’s commitment to innovation is the key to the future of the US economy and that the US’ deteriorating fiscal position must be addressed. Leaders from the developed and developing world recognized growing inequality in their states as another major challenge. 
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Iran Could Make Nuclear Weapon in 1-2 Years – IISS

3 February 2011 – Reuters – Adrian Croft and Peter Apps
According to a new report by the International Institute for Strategic Studies (IISS), a London-based think tank, Iran could produce a nuclear weapon in one to two years. Although technical challenges, sanctions, and the Stuxnet computer worm have slowed its progress, Iran could produce enough highly enriched uranium (HEU) for a weapon in one year and seven months if it uses the production method sold by Pakistani nuclear scientist A.Q. Khan on the black market. If it utilizes the untested but faster “batch enrichment process,” it could do so in six months. Both methods would require six additional months to convert the HEU from gas into metal and fashion it into a weapon. 
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French Anger at Speculators Hits G20 Hopes

2 February 2011 – Financial Times – Peggy Hollinger and Javier Blas
French President Nicolas Sarkozy, who has made food security and commodity prices a priority of France’s G20 presidency, has done so with an eye to strengthening his domestic political position ahead of next year’s presidential election. Despite firm evidence linking commodity derivatives trading to volatility, Sarkozy’s tirades against speculators are being well-received by France’s conservative farming community. But such rhetoric, privately opposed by US and European officials, may make it more difficult for the G20 to reach a consensus on other commodities and food issues at its meeting in June. 
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Afghan War Winnable Without Pakistan Help on Border: US

1 February 2011 – AFP
General David Rodriguez, head of NATO’s International Security Assistance Force (ISAF) Joint Command, believes NATO can win in Afghanistan without additional help from Pakistan. Although Pakistan has made “significant” contributions on its side of the border, it has failed to crack down on the Haqqani network and other militants in North Waziristan. According to diplomats, Pakistan maintains ties with militant groups to hedge against India and guarantee its influence in Afghanistan. Rodriguez predicts that the Taliban will shift its approach from confronting heavily-armed NATO forces to targeting Afghan officials this spring.
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Global Economic Recovery “Beset by Tensions and Strains” Warns IMF Chief

1 February 2011 – The Guardian – Phillip Inman
In a speech in Singapore, IMF head Dominique Strauss-Kahn cited growing imbalances and inequality as threats to global economic recovery. Allowing emerging markets to capture the bulk of global growth at a time when developed states are burdened by high levels of debt, he argued, risks creating unsustainable imbalances. Growing inequality in developed and developing states, moreover, could trigger social unrest and undermine future growth. For advanced economies, Strauss-Kahn prescribed a focus on repairing and reforming their financial sectors to spur growth and job creation. Other immediate concerns include rising commodity prices and large and volatile capital flows to emerging economies, which complicate macroeconomic management and may compromise these countries’ financial stability.  
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Sarkozy Lays Out G20 Agenda, Targets Commodities
24 January 2011 – Euractiv/Reuters
In a speech before reporters at the Elysee, French President Nicolas Sarkozy outlined France’s agenda for the G20. France, which holds the rotating presidency of the G20, will focus on reducing the volatility of commodity prices, improving the world monetary system, and reforming global economic governance. Sarkozy, citing the risk of food riots and reduced global economic growth, argued for the regulation of commodity markets. While acknowledging that the US dollar will continue to play a central role in any international monetary order, he posited that it does not need to be the “sole currency.” Sarkozy also voiced support for creating a permanent institutional framework for the G20 and taxing financial transactions.  
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States Take Lead in Efforts to Fight Climate Change
23 January 2011 – USA Today – Wendy Koch
In the wake of the US Congress’ failure to pass a climate bill last year and an ongoing Republican-led attempt to stop the Environmental Protection Agency from regulating greenhouse gas emissions, US states continue to invest in reducing their own emissions. They have doubled spending on energy efficiency between 2007 and 2009 and have formed three regional groupings – the Midwestern Greenhouse Gas Reduction Accord, the Western Climate Initiative, and the Regional Greenhouse Gas Initiative - to work on cap-and-trade programs. Altogether, these initiatives include at least 22 US states.
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