Atlantic Update 06/06/11


Europe continues to tackle the E. Coli issue. Greece may require another bailout, wheareas the European Central Bank receives junk bonds from European banks, which is potentially harmful to its reputation and the Euro. The German cabinet approves the eradication of nuclear power by 2022, and Mladic threatens a hunger strike if his rights are violated.


EU voices mixed emotions about Yemen revolution (EU Observer)

Initial EU reactions to the departure of President Ali Abdullah Saleh from Yemen have voiced concern about threats to security rather than welcoming a third Arab Spring victory. Speaking on national TV on Sunday (4 June), British foreign minister William Hague said Yemen appears to be falling apart and that he is "very worried" that Al-Qaeda in the Arabian Peninsula (AQAP) will exploit the situation to create a new stronghold in the Middle East. 

What’s Gone Wrong with German-US Relations? (Der Spiegel)

On Tuesday, German Chancellor Angela Merkel will be fêted in the White House as a recipient of America’s highest civilian award. But the honor comes at a time when the US and Germany have struggled to reach agreement on issues ranging from the economy to foreign policy. There are honors that are not awarded for past accomplishments. Instead, they convey the hope that, at some point in the future, the person honored with the award will actually earn it. Such was the case in 2009, when United States President Barack Obama was awarded the Nobel Peace Prize. At that point, Obama had only been in office a few months and hadn’t accomplished anything significant in terms of world peace.

On Tuesday, German Chancellor Angela Merkel will be in Washington to discuss a number of pressing issues with Obama, but she will also use the opportunity to pick up the Presidential Medal of Freedom Award, America’s highest civilian honor. The only other German politician to receive the award was Helmut Kohl, Germany’s chancellor between 1982 and 1998. She will be given the award at a state dinner held at the White House, and Obama will deliver the award speech himself. Merkel will be accompanied by her husband, Joachim Sauer, a rare occurrence meant to highlight the importance of the event.

German cabinet approves 2022 nuclear shutdown  (Deutsche Welle)

German cabinet members voted in a special session Monday morning to confirm government plans to shut down all the country’s nuclear power stations by 2022. This decision means the proposal can now be debated in the houses of parliament, with Chancellor Angela Merkel’s government currently hoping to pass the new law on July 8. Merkel’s administration is seeking to hurry through its energy about-face as quickly as possible, having radically altered its approach to nuclear power since the accident at Japan’s Fukushima power plant and the resultant backlash to atomic energy in Germany.

Under the deal, the country’s nuclear reactors would be phased out gradually. Eight are set for immediate closure, although one of them might remain operational on a standby basis, if the German Federal Network Agency for Electricity deems it necessary. The remaining nine stations would be shut down between 2015 and 2022.

Mladic threatens hunger strike if rights not observed (Ria Novosti)

Jailed former Bosnian Serb army chief Ratko Mladic has threatened to go on hunger strike if he continues to be denied medical treatment and visits from his lawyer and family, Serbian newspaper Blic said on Monday. Mladic, 68, is standing trial in The Hague on charges of ordering the genocide of 8,000 Bosnian Muslims during the 1992-95 Bosnian War. He was arrested in Serbia on May 26 after 16 years on the run.

Moscow alarmed over NATO’s disproportionate use of force in Libya- vie- premier (Ria Novosti)

Moscow is alarmed over NATO’s disproportionate use of force in Libya and the alliance’s clear support for one side in the Libyan conflict, Russian Deputy Prime Minister Sergei Ivanov said on Sunday. Moscow is concerned "over increasingly frequent disproportionate use of military force in the country where the nature and the parameters of interference from outside have been clearly defined by the UN decisions," Ivanov said.

Russia, Ukraine reach breakthrough in sea border talks- Lavrov (Ria Novosti)

Russia and Ukraine have reached a breakthrough in their talks on maritime border delimitation, Russian Foreign Minister Sergei Lavrov said on Sunday. "A qualitative breakthrough has been achieved on the issue of the Kerch Strait. We have reached fundamental understanding with the Ukrainian leadership on how to resolve this problem," Lavrov said in an interview with Ekho Moskvy radio station. The Ukrainian-Russian border in the Kerch Strait, which links the Sea of Azov to the Black Sea, remains undefined since the collapse of the Soviet Union.

EU to hold E. Coli crisis meeting (European Voice)

The EU’s ministers for agriculture will hold a special meeting in Luxembourg on Tuesday to discuss the effects of the E. coli crisis on fruit and vegetable growers. Ministers are expected to present an assessment of the effects on their farmers of the E. coli crisis that has so far killed 22 people in northern Europe. The meeting will discuss ways to compensate farmers for losses caused by supermarkets cancelling orders for fresh produce. Spanish growers have been hit especially hard following reports that cucumbers were the source of the contamination. Spanish producer organisation claim they are losing up to €200 million a week in lost sales. EU officials said that ministers’ first priority was to ensure consumer safety. 

European Banks Dump Junk Bonds on ECB (Der Spiegel)

European bankers from countries with ailing economies need fresh infusions of cash from the European Central Bank, but the ECB has turned into the dumping ground for European banks’ junk bonds. The practice could harm the central bank’s reputation as well as the euro. One item on the list of eligible securities of the European Central Bank (ECB) is a Portuguese bond from the year 1943. It will be roughly 8,000 years before this money is due for repayment on Dec. 31, 9999.

But this bizarre bond is now extremely valuable for a Portuguese bank, because the document can be submitted to the ECB as collateral in return for a fresh loan in euros. Since the international capital markets are practically closed to banks from Portugal, Greece and the other ailing economies in the euro zone, the financial institutions in these countries desperately need such cash injections from the ECB. Many of the submitted securities are not really secure — and it is difficult to say what they are actually worth. As a result, the ECB is slowly degenerating from the guardian of the euro to the bad bank of the euro system, where Europe’s banks can dump their junk bonds.

Greece Back on the Brink (Der Spiegel )

Greece needs even more money — EU officials estimate that a new bailout will cost over 100 billion euros rather than the previously assumed 60 billion. It will get the aid, even though the rescue strategy adopted so far seems doomed. The economy is shrinking, and ambitious privatization plans are illusory.The crisis in Greece does have its upsides, at least for tourists. The Acropolis, a UNESCO World Heritage site above the rooftops of Athens, recently extended its opening hours. It now closes at 7 p.m. Before, it often closed shortly after lunchtime. "It was unacceptable for our foreign visitors," says Transport Minister Dimitrios Reppas.Officials from the European Union, the International Monetary Fund (IMF) and the European Central Bank (ECB), who have a different definition of consolidation, are unlikely to be quite as enthusiastic. They approved €110 billion ($159 billion) in financial aid for Greece about a year ago, imposing tough requirements on the country in return. Since then, Prime Minister Georgios Papandreou has tried to drastically reduce Greece’s €330 billion in debts through radical austerity measures, downsizing and structural reforms. At the same time, the government is seeking to increase revenues by 8.5 percent and reduce its deficit to 7.5 percent of GDP this year.


Original Sin (Foreign Policy)

The European debt crisis — which saw its latest iteration inaugurated on Wednesday, April 6, when Portugal indicated it would request an EU bailout — has exposed every single lie, every fudge, and every political, legal, and economic loophole that went into making the continent’s common currency. One reason Europeans have yet to set the euro right is that they still haven’t reckoned with the extent of bad faith that went into its creation.

To sell the euro to a diverse populace back in the 1990s, its advocates made a series of mostly inconstant promises. The Germans were promised that monetary union would not give rise to fiscal transfers, and would create a currency at least as stable as the Deutschmark. The French understood the euro as a vehicle for improved domestic competitiveness and global reach. For the Italians and the Spanish, it offered an opportunity for monetary stability and permanently low interest rates. And in countries with highly deregulated banking systems, such as Spain and Ireland, it brought the prospect of sudden wealth. The various promises culminated in a lowest-common-denominator governance regime. Monetary discipline would be enforced by an independent central bank tasked with ensuring price stability. Fiscal discipline was supposed to be covered by the stability and growth pact, which set the famous 3 percent rule — the ceiling of permitted annual deficits in relation to gross domestic product. And that was it.

The Shame of Serbia(The New York Times)

THE arrest of Ratko Mladic on May 26 caught me off guard. I couldn’t believe it. I clenched my fists, trying to grip him tightly in my hands. Finally, I breathed a sigh of relief. But then I heard the speech by the Serbian president, Boris Tadic. For him, Mr. Mladic’s arrest represents the closing of a dark chapter in our history and a removal of the mark of shame that has stained the Serbian people for two decades. But there was no mention of the many other perpetrators of genocide during the 1990s or of the responsibility the Serbian state bears for those crimes. Once again, it seems, we might lose the chance to open a painful but necessary debate about the past. Not long ago, for a brief moment, it seemed that all of Serbia would side with “foreign” victims against its “own” perpetrators. That was in 2005, after my colleagues and I uncovered and released a 1995 video showing the execution of six Muslim men from the Bosnian town of Srebrenica. For the first time, the Serbian public saw incontrovertible evidence of the state’s involvement in massacring 7,000 Muslims there. 


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