Friday, July 23, 2010

Zone 3- Euro-Americas Summary Week # 126

Week # 126 – Dated 26h June – 2nd July, 2010

WESTERN EUROPE

Britons are expected later next year to vote through referendum to change the present British voting system. The reform could further point out the differences in the conservative-liberal coalition government. The reform is expected to touch on current British system of first-past-the-post system, under which a candidate needs the highest number of votes, not an absolute majority, to win a House of Commons seats. That system has favoured the biggest parties, the Conservatives and Labour. It will also consider whether or not to continue with current voting age of 21 for 18.

Political miscalculation has caused the coalition-led German government unexpected loss. Polls continue to show the falling approval of German Chancellor Angela Merkel's coalition government and if Germans are to go for elections, it is more likely to be a problematic election for the CDU-led government. The elections will be disastrous upon the fall-apart trend in the coalition.

The EU Commission has warned that if the Eurozone must be saved from the kind of Greek financial crisis, then country at the verge of such financial troubles should cut their spending. Caution was particularly sent to Club Med (Italy, Spain, Greece and Portugal), thus explains the reason why the Portuguese government plans to bring down its public deficit to three % of GDP by 2012, bringing it into line with EU rules on budgetary discipline

Suffering a long-term fall in sales and a collapse in advertising revenue as the world goes online, some newspapers in London and elsewhere want to start charging readers for online access to their journalism.

Sweden has abolished a 100-year tradition of compulsory military service for men during peacetime, replacing it with a voluntary system with rigorous requirements to join. The new policy means that required military service will be applied only if the neutral Nordic nation of 9 million feels threatened. Lawmakers approved the change in a 2009 vote.

CENTRAL AND EASTERN EUROPE

Brussels is urging Serbia and Kosovo to start practical talk, regardless of whether Pristina’s legality is confirmed or not. For Serbia it will be a further step on its EU accession and for Kosovo it will be a measurement of its sense of neighbourhoodness.

A mini summit hosted by Kosovo President Fatmir Sejdiu stressed the importance of regional co-operation, free movement of people, the rule of law and the fight against organized crime. The summit conveyed Kosovo, Macedonia, Albania and Montenegro, while Serbia was uninvited.

Meanwhile, the latest Freedom House's report shows an improvement in democratic practices in the Balkan, though all of the countries are still facing certain domestic problems.

Albania political landscape remains traumatic in view of the political impasses between ruling and opposition parties over the transparency of last June election. On a separate note, the Socialist Movement for Integration (SMI) leader Ilir Meta is urging the political leaders to facilitate electoral legislation that will give reasonable representation to smaller parties.

Croatia-EU accession got a boost from the EU Permanent Representatives Committee (COREPER) as the committee agreed to the three remaining chapters (judiciary, competition and foreign, security and defence policy) upon which its EU membership will be finally decided.

On the economic front: Despite the strong support for Kosovo government by his country, US Ambassador to Kosovo Christopher Dell criticized Pristina for failing to allow serious privatization. Dell believes Kosovo's economy is heavily and needlessly dominated by the government such trend was inherited from UNMIK and certainly from ex-Yugoslavia times

Croatian law requires 450,000 signatures for Labour unions to call referendum, but the union said they have gotten (813,016) more than enough. With this union can seek public view on whether collective or individual bargaining should ensue between employee and employer.

Serbs from Kosovo and Serbia celebrated Vidovdan (St Vitus Day) at the Gracanica monastery on Monday (June 28th), commemorating the anniversary of the 1389 Battle of Kosovo when the Ottoman Empire defeated the Serbian kingdom.

Macedonian government is getting the heat from the opposition, asking the ruling government to call an early election which Prime Minister Nikola Gruevski has rejected. Meanwhile thousand Macedonians are protesting against government domestic and foreign policy. The protest is reported directed by the main opposition party SDSM.

In the same fashion, the Serbian Progressive Party, the Democratic Party of Serbia and New Serbia have launched general demonstrations throughout Serbia demanding early election from the government.

Montenegro and Croatia will sign an agreement on the extradition of people suspected of organised crime and corruption, Croatia had earlier signed a similar document with Serbia.

Although the austerity measures are resented by the opposition and general public and after scaling through a vote of no confidence, Romanian Prime Minister Emil Boc announced his government has decided to raise the VAT from 19% to 24% as of July 1st, in order to narrow the budget deficit, which will be in accordance with IMF requirement.

In order to get on well with its EU accession, the UN has signed a new five-year partnership strategy worth of $250m with Serbia.

RUSSIA

A recent Freedom House’s report delineated that 2009 was the gloomiest year for the Russian democracy in recent decade.

Russia, Kazakhstan and Belarus all planned to have a common Custom union, a union expected to give them common representation in the WTO. Belarus has formally ratified the union code after a long hesitation even though the Custom union came into existence on January 1, 2010. Membership of WTO for Russia will not be easy without Moscow addressing problems with the protection of intellectual property rights, a major requirement to WTO accession. Meanwhile, Belarus has raised the transit fees for Russian oil products through its territory, both Russia and Belarus have been in energy price tussle.

The growth in Russian economy is indicated by recent borrowing of two Russian financial firms. Sberbank and Vneshekonombank are borrowing as much as $2.5 billion in the international bond market for the first time in two years.

The World Bank’s report released in March, has warned Russia of a shrinking population more likely to affect the nation. The working population is predicted to shrink between 800,000 and 1.1 million people a year until 2013, and will need around 12 million immigrants to fill the gap. The report tallies with the fear of population decrease in the Far East Federal District.

Foreigners and Diasporas wanting permanent settlement in Moscow will have to live by certain code refer to as Muscovite’s Code. The latter will require them to avoid slaughtering sheep in the backyard, not grilling shashliks on the balcony, not walking around the city in national attire, and speaking in Russian.

The growing Russia-Ukraine friendship is unravelling in different dimensions. The new Ukrianian government is critiqued for too much dependence on Russia. The government is now proposing that Russia and the European Union build a new gas pipeline across its territory to increase Russian gas transit to Europe.

The Parliamentary Assembly of the Council of Europe has not reached a consensus on the Russian-Georgian dossier. PACE has repeatedly asked Russia to reverse its recognition of the former Georgian republics of Abkhazia and South Ossetia, after the five-day war in August 2008.

Both Russia and the United States have played a mature game in the recent espionage debacle ending with spies’ exchange. It was a remarkable step from the Cold War era and a display that both countries are not interested to see their rebuilding relations sour.

The Russians are hesitant finalizing weapon transaction with Iran after the new UNSC sanction which punishes any country having related deal with Iran. The latter claims the weapon (S-300) deal was completed before the sanction and if Russia must refuse fulfilling the transaction, Moscow stands to lose.

US/CANADA

In the US the unstable American economy appears responsible for the divide between the House and Senate over war spending. Both Houses are divided on the amount to be added to the existing fund, which further tipped the question of why domestic spending should not be accorded serious attention as war fund.

Ten Russian agents who infiltrated suburban America and acted as spies for Moscow headed back to Russian last week, just hours after a US judge ordered their deportation as part of a swap between the United States and Russia. The talks that led to exchange of spies in Vienna began, an official said, shortly after the FBI arrested the Russian agents, because both sides wanted a speedy resolution of the case to avoid casting a shadow over improving US-Russian relations

Elena Kagan, the new Supreme Court nominee is faceing the Senate Judiciary Committee for her confirmation. The committee examined her based on her past statements and rulings on critical social issues in the U.S.

In the aftermath of removal of Gen. Stanley McChrystal new rules from the pentagon require top military officials to get Pentagon clearance before taking interviews or having contact with reporters.

Meanwhile the Gulf of Mexico oil spill is becoming a mess and embarrassment for both BP and Obama administration. Complaints continue to mount on BP and Obama of not doing much to accelarate the cleanup. Willingness to help from at least 44 nations with technical advice to skimmer boats and booms are all reported to have been taken with levity, thus irking concerned Americans. Meanwhile, the administration insists that cleanup work is unabated on the coast and the view that they rejected help is a myth.

Low confidence in economic recovery was depicted by the report of the Conference Board of Canada and a poll done by Angus Reid, but that sentiment was challenged by survey released by Royal Bank of Canada (RBC) showing that Canadians hold positive view about the economy. Although the RBC’s report delineated certain degree of worries about personal savings and rising interest rates among the public

LATIN AMERICA

The Argentine government appointed Hector Timerman as its new foreign minister. Hector is a Jew and the President Kirchner said the appointment of the Jew as foreign minister displays Argentine non anti-Semitic society. The former foreign minister resigned due to clash with President Kirchner.

Mayor and gubernatorial elections have started in Mexico, but the atmosphere is replete with violence, as upshot of drug lord involvement in politics. There has been a correlation between politics and drug in Mexico and a big concern for neighboring states like the United States that has sent more than 500 security forces to the southern border for securing the US-Mexican border

Meanwhile the target killing of a popular gubernatorial candidate in the northern Mexican state of Tamaulipas was disheartening but the Mexican economy minister has diffused the fear that the death might affect foreign investment

At the economic front: Argentine-China relations were strained over Chinese refusal to buy Argentine’s Soy oil, even though it is one of the cheapest in the market. Buenos Aires retaliated by taking a strict position on Chinese dumping in Argentine. Both countries hope to resolve their difference as President Cristina Fernandez de Kirchner pays her first visit to China this week.

The Brazilian economy is witnessing an unexpected growth according to the chief economist of Brazil. The government estimated growth falls around 5.2 % but experienced figure runs up to 5.7 %.

Colombian economy is expected to retain its pace even as Juan Manual Santos is elected as president. Meanwhile, IMF hoped that mutual relation between Colombia and Venezuela will further strengthened Colombian economy.

Mexican auto industry is lucrative and forthcoming, providing 20 % of total GDP of Mexico and 11 % of total industrial jobs for Mexicans. With this background the government plans to make the auto industry pay the taxes of the poor families.

A heavy flood in the northeastern part of Brazil, where President Lula de Silva hails from prevented him from attending the G 20 summit in Toronto, Canada.

The new British coalition government does not intend to de-track from the legacy of previous British governments on Falkland Island. Argentina received that strong signal as the new government of Downing Street will not deny British sovereignty over the island.

Argentina-Syria relations attained a new level as President Bashar al-Assad of Syria visited Argentina and signed several agreements with the government ranging from the field of technology, transportation and culture.

Departing from Argentina, his next stop was in Brazil where he met with President da Silva and lauded his leadership skill within the region and the world at large, particularly in the Middle East conflict and Brazil’s role in UNSC.

Assad also visited Venezuela for the first time where he received a warm reception from President Hugo Chavez.

Similarly, Brazil-Italy tie was consolidated by the visit of Prime Minister Berlusconi to Brasilia. During the august visit Berlusconi praised President da Silva’s good leadership and inked several agreements of mutual interests with the largest nation in Latin America.

Mr. Jose Serra, one of the fore runners in the upcoming Brazilian election is not satisfied with Brazil’s relations with certain countries like Venezuela and Cuba, if elected president, he will reverse the direction of the relation. Meanwhile, Brazil and Venezuela have inked agreement to increase cooperation in trade, electricity, cars and agricultural goods.

On the other hand, Brazilian government also signed agreement with Argentina by which Brazil’s central bank will provide US $100 million to Argentina’s trading companies in Brazil and in response Argentina will also provide financial advantages to the Brazilian trading commercial companies in the country.

Colombian President Juan Manual Santos will want to continue with the legacy of fighting drug lords and revolutionary groups championed by the former President Uribe. Santos has requested the French president to scout out foreign minister of FARC rebel group allegedly present in France.

Colombia has a good economic standing within the region and plans to extend its economic tentacles beyond the region. Colombian Minister of Trade, Industry and Tourism Luis Guillermo Plata said Colombia will sign a Free Trade Agreement (FTA) with Korea. With the agreement Korean companies will provide auto vehicles plants of KIA, Daewoo and Hyundai in Colombia.

ALBA countries (Venezuela, Ecuador, Bolivia, Cuba, Nicaragua, Antigua and Barbuda, Dominica, and St. Vincent and the Grenadines) had their 10th summit in Ecuadorian city of Otavalo. The summit reiterated the concern for trade and environmental issues.

Meanwhile, Venezuela’s President Chavez has invited Ecuadorian president to Caracas. The visit is expected to see both countries sign several agreements on social sovereignty, scientific knowledge, security and defense, energy and trade issues.

AUSTRALASIA

The new Australian Prime Minister Julia Gillard is determined to retract the tax policy on mining industry. The tax policy among others damaged the reputation of ex-PM Kevin Rudd, whose two years government ended dozen years of conservative rule. Meanwhile, the new government has brokered a deal with the industry limiting the heavy tax the previous Rudd’s government demanded. Both the government and the industry want a solution to the issue although elements in the industry are sceptical of the whole plan. Election is expected and Gillard hopes to take advantage of the respect she now commands for an election victory. §

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Business and Politics in the Muslim World (BPM)refers to the project entitled, "Globalized Business and Politics: A View from the Muslim World.' The blog development project has been undertaken and jointly developed by the Gilani Research Foundation and BPM as a free resource and social discussion tool.
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