Atlantic Update 6/13/2011


Is Erdogan’s win in Turkey good for its future? NATO is in a dilemma about its future after the critical speech by U.S. Secretary of Defense Robert Gates. Private creditors in Europe are assuming some burden to the Greek financial crisis whereas Germany seeks to attach strings to bailout packages. 

Private Creditors Could Agree to 35-Billion-Euro Rollover (Der Spiegel)

Calls for private creditors to bear some of the costs in the Greek debt crisis appear to be taking on more concrete form in Brussels this week. SPIEGEL has learned from sources with close knowledge of the situation that European Union finance ministers are considering a plan in which private creditors possessing Greek state bonds would be asked to cover €20 to €35 billion of the costs.

The model currently being discussed is a so-called rollover, which would see private creditors exchanging their existing outstanding debts from Greece with new securities with longer maturities. The move is being prompted by the increasingly disastrous financial situation in Greece.French President Nicolas Sarkozy and Italian Prime Minister Silvio Berlusconi have put aside their differences to call on the European Union to reform the Schengen zone of border-free travel. German commentators dismiss the move as a populist stunt.

Germany’s Top Court May Attach Strings to Euro Bailout (Der Speigel)

Germany’s top court will soon hear a complaint filed against the Greek bailout and euro rescue fund. A recent remark by the court’s president suggests it may attach strings to its approval of the bailouts — and thereby reinforce the country’s reputation for obstructionism in the fight to save the euro.The judges of the German Federal Constitutional Court are not known for giving hints about future rulings in panel discussions. But at the annual meeting of the German Bar Association in Strasbourg, France, on June 3, the court’s president, Andreas Vosskuhle, made a casual and yet carefully worded statement that led to precisely such conclusions.

IMF targeted in cyberattack, extent not disclosed (Stars and Stripes)

The International Monetary Fund, already reeling from last month’s arrest of its former leader, is investigating an attack on its computer system. IMF spokesman David Hawley said the organization is fully functional. He declined to provide further details on what he termed an "IT incident," including its scope or nature and whether any sensitive data were taken. The IMF has confidential information on countries in financial trouble. The New York Times cited unnamed IMF officials as saying the attack was sophisticated and serious.

NATO at the crossroads after Gates speech (Stars and Stripes)

Created as a bulwark against Soviet expansion, NATO is facing an identity crisis as its members grapple with just how much its long and often-unpopular mission in Afghanistan and its new air campaign in Libya size up as national interests – or not – when many countries’ budgets are under strain. In an unusually blunt parting speech Friday, outgoing U.S. Secretary of Defense Robert Gates called on the Atlantic allies of the U.S. to pay and do more to overcome the alliance’s military shortcomings – raising the question: What is NATO today, and what does it need to be? The allies will be doing some soul-searching in the coming months, with Osama bin Laden dead, many European state coffers squeezed by high debt and slow economic growth, the U.S. drawdown in Afghanistan about to start and tough questions about how long its air campaign over Libya could last.

EU welcomes Erdoğan’s third election victory (European Voice)

Turkey’s ruling Justice and Development (AK) party won a landslide victory in a general election yesterday (12 June), but failed to get enough seats in the Grand National Assembly to be able to change the constitution on its own. This is the third victory in a decade for the mildly Islamist AK party, led by Prime Minister Recep Tayyip Erdoğan.

German, French, Polish Lawmakers To Meet Regularly on Defense (Defense News)

The defense committees of the parliaments of Germany, France and Poland will begin a regular exchange on the common foreign and security policy. This is the result of the June 9 meeting of the chairmen, deputy chairmen, and security and defense policy spokesmen of the German Bundestag, the French Assemblée Nationale and the Polish Sejm in Berlin.

Russia, China keep talking gas as Chinese president’s visit nears (Ria Novosti)

Gazprom and China National Petroleum Corporation (CNPC) will continue discussions on a major gas supply deal on Tuesday, the Russian energy giant said on Monday after a second straight day of talks in Moscow. "The second round of talks between Gazprom and CNPC on gas deliveries to China, which involved [Gazprom CEO] Alexei Miller and [CNPC president] Jiang Jiemin, have finished in Moscow. The talks will continue tomorrow," Gazprom said in a statement.

Deaths from E. coli still rising in Germany (BBC News)

The death toll has risen to 35 in Germany’s E. coli epidemic and health officials say about 100 patients have severe kidney damage. The source of infection has been identified as bean sprouts from an organic farm in northern Germany. At least 3,255 people have fallen ill, mostly in Germany, of whom at least 812 have a complication that can be fatal. About 100 patients with damaged kidneys will need transplants or life-long dialysis, one health expert said. Karl Lauterbach, an epidemiologist who is also an opposition Social Democrat (SPD) politician, warned that E. coli infections were growing worldwide.


How Europe Can Retain the IMF (EUObserver)

Dominique Strauss-Kahn’s likely replacement as managing director of the International Monetary fund by Christine Lagarde, another French Finance Minister, has highlighted an awkward reality – Europe’s predominance over the world’s foremost international financial institution.

Not only has a European, by tradition, always been appointed managing director, but Europeans have also dominated the IMF’s executive board, which oversees its day to day management. Together, the member states of the European Union account for 31 per cent of board votes, despite forming just 20 per cent of global GDP in purchasing power parity terms (figure 1). Even after a major quota reform approved last year, demands for reallocation are likely to continue as Europe’s relative economic clout continues to decline in the twenty-first century.

Something for Everyone: Why Turkey’s Vote is Good for Democracy (Time)

Turkish democracy is alive and kicking. Yes, conservative Prime Minister Recep Tayyip Erdogan — under fire for his authoritarian leanings — won Sunday’s elections with a landslide 50% of the vote, basking in the longest period of economic prosperity in the country’s recent memory. But his Justice and Development Party (AKP) fell short of a sought-after two thirds "supermajority" which would have allowed him to change the country’s founding principles without seeking the opposition’s consent.
And, as a result of the vote, he finally has a robust, colorful opposition to contend with. The new Turkish parliament has more women, more Kurds and more human rights activists than ever before. Voter turnout was a record 87%.


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