By Nicholas Walton, Special to CNN
Editor's note: Nicholas Walton is the communications director of the European Council on Foreign Relations. The views expressed are his own.
The first notable dissenting voice came from a familiar figure, that sensible German woman with her reasonable manner and head full of common sense. “Let’s talk,” said Angela Merkel, in response to her British counterpart David Cameron’s speech on Europe, in which he pledged a referendum in the next parliament on whether Britain should leave the European Union.
The wider European response to Britain’s perceived wrecking tactics had ranged from scorn to anger; Merkel spoke instead of reaching a “fair compromise” with the perfidious Brits. Although this left plenty of future room for Merkel to be able to twist British arms towards her own Europhile viewpoint, it also spoke to a wider concern about the direction the European project might be taking: while some worry that the Brits are turning away from Europe, others worry that Europe is turning away from the world.
By Hans Kundnani, Special to CNN
Editor’s note: Hans Kundnani is editorial director at the European Council on Foreign Relations. The views expressed are his own.
The overwhelming feeling in Europe following Barack Obama’s re-election was a sense of relief. Although European approval of his administration’s foreign policy has dipped since he took office in 2009 – particularly over his increased use of drones and his perceived failure to put greater pressure on Israel – Europeans overwhelmingly preferred him to Mitt Romney. Indeed, according to one poll carried out in 12 European Union member states before the election, 75 percent said they would vote for Obama and only 8 percent for Romney if they could choose.
Still, Obama’s second-term foreign policy has the potential to divide Europe – and to divide Europe and America. Two developments in particular will shape Obama’s second-term foreign policy – deficit woes and a pivot towards the Asia-Pacific. Both will create tough choices for Europeans as they struggle to deal with the euro crisis.
By Sebastian Dullien, Special to CNN
Editor’s note: Sebastian Dullien is senior policy fellow at the European Council on Foreign Relations and professor for International Economics at HTW Berlin – University of Applied Science. The views expressed are his own.
Throughout the euro crisis, it has been remarkable how often the financial markets have gotten things wrong when analyzing policy decisions. After almost every major summit of the past couple of years the markets have reacted with immediate enthusiasm, sending share prices and bonds soaring and bringing spreads down. However, the relief never seemed to last long, and within a few days markets soberly realized that the steps announced after each EU summit were less far-reaching than originally thought, and insufficient to put an end to the euro crisis.
Last week, the financial markets were disappointed by the words of European Central Bank President Mario Draghi. Instead of at once beginning to print money and buying periphery bonds (as some market participants had hoped), or at least cutting the main refinancing rate further from its already low 0.75 percent, the ECB simply announced that its council “may consider undertaking further non-standard monetary policy measures according to what is required to repair monetary policy transmission” (ie bring down excessively high spreads between the yields of periphery bonds and those of Germany) and would work on modalities over the coming weeks. Mario Draghi even made it clear that the ECB would only buy periphery bonds if the country in question had agreed on a program with the EFSF/ESM bailout funds. Markets didn’t like the news, and reacted with rising spreads on periphery bonds and falling share prices. The euro also weakened.
Editor’s note: GPS speaks with historian Niall Ferguson about the rise of China, the likelihood of conflict in Asia and whether Europe is relevant. Watch GPS on Sunday at 10 a.m. and 1 p.m. ET for Ferguson's take on the euro crisis.
One of the biggest stories in international terms this century has clearly been the gradual shift in power from West to East, and especially the rise of China. Is China’s continued rise inevitable?
Not much in history is inevitable, but the shift from the West to the East looks like a pretty profound trend that it’s hard to imagine suddenly stopping. The IMF has China’s GDP exceeding that of the United States within four years, and the way growth rates are right now, something amazing would have to happen here in the U.S., and something very terrible would have to happen in China, for that not to take place.
So I think this is the biggest trend in economics, and perhaps geopolitics, in our lifetime. It goes back to the late 1970s and the reforms of Deng Xiaoping. I don’t think it’s going to stop for at least another 10 or 20 years, at which point demographics and other forces will start to slow the Chinese economy down. But this isn’t something that is just about to collapse, and those that think there’s a China implosion just around the corner are engaging in wishful non-thinking. It’s not going to crash. It may slow, but it’s not going to implode.
Editor's Note: The following text is from GlobalPost, which provides views — important, moving or just odd — from around the world.
By Siobhan Dowling, GlobalPost
The German military is changing. What was once a male bastion has slowly been taking on a more female hue, with women accounting for almost one in 10 of those serving in the armed forces.
Now the military, or Bundeswehr, says it wants to see even more women in its ranks. “Currently 9 percent of all soldiers are women,” Chief of Staff Volker Wieker told Bild am Sonntag this month. “Our goal is a combined ratio of 15 percent.”
To achieve that, the army intends to make itself more attractive to female recruits, in particular by improving family-friendly structures. Yet problems persist. FULL POST
Editor’s note: Will Marshall is the president and founder of the Progressive Policy Institute. The views in this article are solely those of Will Marshall.
By Will Marshall, Special to CNN
Despite all the attention lavished on the Greek election, the outcome barely registered in Europe’s financial markets. Everyone knows the eurozone’s fate won’t be decided by the shimmering Aegean Sea, but in drizzly Berlin.
Germany is the key, but it’s torn by conflicting impulses. As the main engine of European economic integration, Germany is determined to preserve the 17-nation eurozone. But as Europe’s lender of last resort, it’s loath to bail out countries that took advantage of the euro to borrow extravagantly and live beyond their means.
To avoid such “moral hazard,” German Chancellor Angela Merkel sternly insists that Greece and other debt-ridden nations, notably Spain and Italy, commit to stringent fiscal discipline in return for the loans they need to service their enormous debts and pay their bills. Greek voters were incensed by these Teutonic demands for spending cuts and tax hikes, but they narrowly chose to stick with the euro rather than risking a “Grexit” from the eurozone.
What the “Club Med” countries really need, however, is not a morally bracing dose of austerity, but the kind of structural adjustments that Germany itself undertook — during its “Third Way” phase — to meet the challenges of globalization. The fundamental problem isn’t that these countries are profligate, though some have been. It’s that their economies are uncompetitive, a reality masked until now by a strong common currency.
Editor's note: Clyde Prestowitz writes on globalization for ForeignPolicy.com and is president of the Economic Strategy Institute. John Prout is the former Paris-based treasurer of Credit Commercial de France.
By Clyde Prestowitz and John Prout, Special to CNN
With Greece probably heading for an exit from the euro, the European and global economies may be facing disaster. However, there is still time for European leaders to reverse this destructive dynamic with one simple, outside-the-box solution: Instead of pushing Greece out of the eurozone, Germany should voluntarily withdraw and reissue its beloved deutsche mark.
The analysis of the problems of the euro and the European Union has long been upside down, focused on the debt and competitive weaknesses of the so-called peripheral countries (Greece, Italy, Spain, Portugal and Ireland) and especially of Greece. But issues of debt and competitiveness existed and were dealt with rather easily long before the euro arrived, through periodic devaluation of the currencies of the less-competitive countries against those of the more competitive countries, and especially against the deutsche mark.
Everyone is worried that Greece might default on its national debt. That's really not news. By one estimate, in the 180 years since it gained its independence from the Ottomans in 1832, the country has been in default or restructuring for half this period. The news is that this time, Germany is willing to bail Greece out.
Throughout the euro-zone crisis, it has been conventional wisdom to regard the Germans as narrow-minded, ungenerous and dogmatically wedded to prescriptions of austerity to treat Europe's problems. These criticisms are vastly overstated.
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Can a president who's elected on a promise to be normal deal with Europe in the throes of a crisis of abnormality?
With France's Francois Hollande taking office, an all-star panel debates "Mr. Normal" and how the politics will reverberate across Europe in this excerpt from the past week's "Fareed Zakaria GPS." Watch the video above.
And is Germany taking too much of the anger? Here's what Josef Joffe, Die Zeit editor, had to say:
ZAKARIA: Josef Joffe, you know that much of the rhetoric and the anger is directed at Germany. The idea is the Germans are forcing all this austerity on Europe, European governments having forced to cut their budgets. It's causing misery, unemployment. It's even causing bigger budget deficits.
But you've sort of defended the German position, isn't it fair to say?
JOSEF JOFFE, EDITOR, DIE ZEIT: Well, I mean, Angela Merkel makes for a nice whipping boy for problems which are deeply rooted in the societies that we've just heard about [France, Greece, Spain]. ... FULL POST
Although Francois Hollande rode to victory in France on an anti-austerity platform, Germany is standing fast.
Even with a new government in France, Europe's fiscal discipline pact is not up for negotiation, says German Chancellor Angela Merkel.
"It is a basic approach in Europe that we do not change everything we have decided upon already after elections, whether in big or small countries," she said this week. "If that was the case, then we could not work in Europe."
Some say these are possible signs of turbulent times ahead for the European Union, with some calling into question the whole idea of European integration.
In this video report, CNN's Fred Pleitgen takes a look at how the current crisis may shape the EU.
Editor's Note: Mohamed El-Erian, CEO and co-CIO of PIMCO, is the author of When Markets Collide. For more from El-Erian, visit Project Syndicate or follow it on Facebook and Twitter.
By Mohamed El-Erian, Project Syndicate
On a recent trip to Germany, I was struck by two distinct narratives. One narrative features a robust German economy with low unemployment, strong finances, and the right competitive position to exploit the most dynamic segments of global demand. The other narrative describes an economy that is encumbered by never-ending European debt crises whose perpetrators seek to shift their responsibility – and their financing needs – onto Germany’s pristine balance sheet.
Both narratives are understandable. But they cannot co-exist forever. After all, it is difficult to be a good house in a deteriorating neighborhood. Either the neighborhood improves, or the value of the house declines. And it matters a great deal which narrative prevails – for Germany, for Europe, and for the global economy. FULL POST
Editor's Note: The following text is from GlobalPost, which provides excellent coverage of world news – important, moving and just odd.
By Hélène Hofman, GlobalPost
A mystery benefactor has been leaving packets of money to charitable organizations and needy individuals in Braunschweig, Germany.
Blank white envelopes containing bundles of bank notes have been arriving at various addresses in the Lower Saxony city since late last year, the Daily Mail reports.
So far a total of at least 190,000 Euros (US$251,000) has been sent to a robbery victim, a hospice, a kindergarten, various charities and the family of a handicapped boy. FULL POST
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