Zone 3- Euro-Americas Summary Week # 126

Week # 126 – Dated 26^h June – 2^nd 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 10^th 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. §

________________________________________________________

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.

Please Preview your comments before posting.

Zone 3- Euro-Americas Summary Week # 125

Week # 124 – Dated 20-26^h June, 2010

WESTERN EUROPE

Italians under the auspices of trade union staged a general protest against Silvio Berlusconi's centre-right measures geared at cutting funds for local government and freezing of public sector pay.

BP shares fell sharply in London last week following the company's announcement that the cost of responding to the Gulf of Mexico oil leak has risen to $2.35 billion. The share price dipped as low as 303.6 pence ($4.52) during morning trading, a 6.3 % drop. That took the shares well below half of the 655 pence price on April 20, the day an explosion killed 11 workers on the Deepwater Horizon drilling rig.

Meanwhile the coalition British government released its budget tagged as the most severe budget that cuts spending and increases tax since the early days of Margaret Thatcher’s era. The budget is expected to irk the British public, particularly the powerful public-sector unions and their allies in the Labour Party.

British Minister of State for Europe David Lidington said last week that the United Kingdom supports the independence and territorial integrity of Kosovo and opposes its partition.

The Spanish parliament has approved the Stabilization and Association Agreement (SAA) with Serbia and next will inform Brussels that the ratification procedure is completed. Spain will be the first EU member to complete the ratification. Italy will likely be next, while Austria, Denmark, Finland and Poland will kick off the procedure this fall.

German politicians are calling for the reintroduction of border controls in the areas adjacent to Poland and the Czech Republic due to a growing number of car thefts.

CENTRAL AND EASTERN EUROPE

Albanian junior ruling coalition partner, Socialist Movement for Integration (SMI) has reiterated its calls for a solution to the longstanding political crisis in the country. A protracted crisis that the European parliament was disappointed about after several steps towards reconciliation failed.

Kosovo Serb-dominated municipality of Partesh/Partes went to the polls last week to elect local leaders. Although turnout topped 65% but none of the contestants were able to secure 50% vote therefore a mayoral run-off will be required.

Meanwhile the UNDP "Early Warning Report" outlined serious worry and dissatisfaction among Kosovars for the growing failure of government institutions. Government work, unemployment, poverty and the judiciary are all worrisome issues, while KFOR and the Kosovo Police and EULEX received public appreciations. The report came amid the resolution of the Parliamentary Assembly of the Council of Europe (PACE) urging Pristina authorities, EULEX and UNMIK to demonstrate more commitment to strengthening the rule of law, required for Kosovo to meet EU standards.

Montenegrin state-level coalition partners, the Democratic Party of Socialists (DPS) and the Social Democratic Party (SDP) reached an agreement to form a coalition within Podgorica's local government.

Having failed to win a vote of no confidence, Romania’s two largest opposition parties, the Social Democratic Party and the National Liberal Party have decided to postpone a new motion of no confidence against the government until the autumn. The last vote though failed was tailored to challenge government for its austerity measures. Opposition opted for court and the court ruled that the government's decision to cut pensions by 15% as of mid-year is unconstitutional, as is the decision to end the practice of offering higher pensions for certain professions, including law enforcement and judicial posts. However, the court allowed the 25% cut in salaries of civil servants.

Croat labour unions have garnered enough signatures for referendum that will decide whether the country should continue with collective union bargaining or start an individual system where every employee will have to bargain with employer one on one.

Macedonian President Gjorge Ivanov after a meeting with his Russian counterpart Dmitry Medvedev, on the sidelines of the International Economic Forum said that energy giant Gazprom has agreed to include Macedonia in the South Stream gas pipeline project.

Macedonian Police detained 48 people last week suspected of illegal trade in archaeological artifacts.

European Integration Minister Gordana Djurovic has said that Montenegro will be prepared to join the EU by 2014.

A court in Bucharest has sentenced a Romanian and a Bulgarian to 12.5 years in prison each for passing classified information to Ukraine. Floricel Achim and Petar Marinov Zikolov were arrested in March 2009 in Bucharest on charges of having delivered confidential Romanian military files to a country that is not a member of NATO.

Serbian war crimes prosecutors have pressed charges against four former members of a paramilitary group for war crimes against civilians committed in Croatia. The four allegedly took part in the 1991 killings of six non-Serbs in the Beli Manastir municipality.

Slovenia’s Foreign Minister Samuel Zbogar said last week that Croatia will not be able to wrap up its EU accession talks unless it opens its financial market to Slovenia's biggest bank, Nova Ljubljanska Banka (NLB). The central bank in Zagreb blocked access until the former Ljubljanska Banka (LB) was to settle its debts to Croatian citizens. Meanwhile Slovenian Parliament's foreign policy committee last week okayed opening the judiciary negotiation chapter of EU accession talks with Croatia at the next inter-governmental conference.

In Poland initial exit polls indicated Bronislaw Komorowski, the candidate of Civic Platform having won 40.7% of the vote. In a presidential runoff on July 4, Komorowski garnered 52.6 % of the votes, bagging the presidency.

The outcome of the Slovak election failed to favour the Socialist ruling party and its coalition partners, bringing forth Iveta Radicova as the first Slovakian female prime minister. Radicova has formed a parliamentary majority through a coalition of four small center-right parties: her SKDU-DS, Freedom and Solidarity (SaS), the Christian Democratic Movement (KDH) and Most-Hid.

Meanwhile in Hungary the political system permits selection of president by the parliament with at least 50 MPs approval. Andras Balogh, Hungarian ambassador to Thailand has been picked as the next president with 50 MPs approval

According to a latest report good financial discipline saved the Polish economy from the 2009 financial recession. The economy stood out among EU and OECD countries. It kept its inflation rate and its debt levels low, limited its borrowing in foreign currencies, and accumulated a large amount of foreign reserves. It did not overact to the financial crisis and hence prevented the panic.

Meanwhile, the European Commission wants Ireland, the Netherlands, Poland and Austria to change certain aspects of their legislation which are not in compliance with EU rules on value-added tax (VAT).

Due to recent financial problem encountered in the Eurozone, Czech President Vaclav Klaus, a pronounced Euro-sceptic has reiterated his view that the zone has no future.

Ukrainian government reported a GDP growth and sees a full-year GDP growth at around 3.7 and 4.5%. According to a separate report, the growth accelerated to 6.1% in the first five months of 2010 from 4.8 % in the first quarter.

The new Hungarian government will not be distancing itself from the prevailing austerity measures elsewhere in Europe. The government plans to cut budget deficit, raise taxes but there are no plans to introduce new taxes and it might be borrowing from IMF/EU to keep the economy stable.

Despite the energy face-off, Belarusian President Alexander Lukashenko has urged Russia to make both countries keep security and strategic relations prioritized.

The Czech President Vaclav Klaus is making an attempt to mediate between Athens and Skopje over the name dispute. During Czech presidency of the EU, an abortive effort was made to resolve the dispute.

Belarusian authority takes an adamant stance not to extradite former Kyrgyz president Kurmanbek Bakiyev taking refuge in Belarus. Bakiyev has been in Belarus under President Alexander Lukashenko’s personal protection since April this year. Kyrgyz’s interim government wants Bakiyev for charges of corruption and misuse of office.

NATO has planned using Lithuania Embassy in Georgia as the channel of communication with Georgian authority. This decision was made by member-countries of the alliance.

RUSSIA

Controversial Russian political figures are in coalition for a single party. Meanwhile the Other Russia coalition, the National Bolshevik Party, People's Democratic Union and United Civil Front are joining hands to contest the next parliamentary election.

According to recent Freedom House survey, Russia retains the status of controlling the Internet and limiting political competition among dissidents, and the government is also accused of failing to fight corruption and exercising pressure on businesses.

On March 25, the Belarusian Ministry of Justice filed a claim to the CIS Economic Court, over export customs duties on Russian oil products and petrochemical raw materials. The CIS Economic Court (EC) has dismissed Belarus’ motion to suspend duties on oil products from Russia.

The Georgian President Mikheil Saakashvili said last week that his country will be ready for "extensive" dialogue with Russia. The remark came barely days after the Russian president ruled out any progress in Russian-Georgian relations under Saakashvili.

Russian President Dmitry Medvedev and U.S President Barack Obama have agreed to restart exports of poultry by US companies to Russia as the two leaders found common ground on trade and investment. Washington is also backing Russia's entry into the World Trade Organisation, saying that it would deepen Moscow's integration into the global economy. However Russia-US relation was yet again strained as U.S officials apprehended and charged ten persons for conspiring to spy for Russia. The Russian foreign minister, Sergey V. Lavrov, questions the timing of the decision by the United States to break up the spy allegation. The espionage allegation nonetheless did not stop the U.S State Department to paint the Caucasian insurgent leader Doku Umarov a terrorist, a step announced on the eve of President Dmitri A. Medvedev’s visit to the White House.

According to RBC’s report Russia's foreign trade surplus from January to May 2010 was 72 billion U.S. dollars, indicating growth in export and import of the country.

Russia and the United States will collaborate on humanitarian effort for the affected people in recent Kyrgyz’s violence. The violence erupted after the president was ousted, leaving about 2,000 people dead and 400,000 ethnic Uzbeks homeless.

Russian and Canadian authorities are now in partnership of satellite monitoring project. The satellite system will monitor climatic changes and survey energy resources in the Arctic region. It will monitor the weather and environment of the North Pole, pinpoint hydrocarbon deposits on the Arctic shelf, provide telecommunications over the hard-to-access areas and ensure safe air traffic and commercial shipping in the region.

Ukrainian Prime Minister Mykola Azarov once again diffused the view that a merger between Russian energy giant Gazprom and Ukraine's state gas firm Naftogaz is far from being real. Critics have criticized the government of over depending on Russia, even though the merger is hoped by Russia to be an avenue of alleviating Ukraine from energy problem.

Russia is avoiding being left behind, as most major economies spend money on the development of new arms, hence Russia must not be an exemption. Increasing military development will benefit Russian economy as it is a major arms exporter. Moscow is planning to increase its hardware sale by 12% before the end of the year.

Russia’s ire was raised due to UN’s failure to consult the UNSC over the appointment of UN panel of Experts to investigate war crime in Sri Lanka. Russia holds that such investigation should be the principal task of Sri Lankan government. Similarly, Moscow resented Council of Europe’s invitation of Chechen separatist leader Akhmed Zakayev, to attend a CE meeting. Zakayev has been on Russia’s wanted list.

Polish-US missile system partnership has kicked off and training of the Poles for the system is started in Germany. Yet the grievance of Russia over the installation of U.S. Patriot missiles just 100 kilometres from the Russian Kaliningrad remains a concern.

US/CANADA

Gen. Stanley McChrystal’s comment during an interview in Rolling Stone magazine has cost him his job. McChrystal’s comments sounded insulting to President Barack Obama and key administrative officials, who according to McChrystal are less informed of the reality in Afghanistan and lacking serious plans to see Americans through the war. McChrystal though later apologized for the inconvenience his comment had caused.

The US Senate and House of Representatives has agreed unanimously to emasculate Iran through a new round of sanctions that will punish severely any company, either within the US or overseas, trading with Iran.

American economy grew slowly in first 3months of 2010 than previously projected. The economy was expected to grow by 3% but statistic shows a growth of 2.7%.

Meanwhile in the wake of the Gulf of Mexico oil spill President Obama ordered six month suspension of oil drill, but a federal judge in New Orleans unblocked the moratorium on economic and businesses grounds. The White House swiftly vowed to appeal the ruling.

Faisal Shahzad pleaded guilty last week to a 10-count indictment charging him with attempting to set off a car bomb in Times Square on May 1 in a conspiracy with Pakistan’s Taliban.

Massive protests by anti-globalization activists during the last weekend of the G8/G20 summits in the Canadian cities of Muskoka and Toronto led to arrests of more than 900 people and widespread damage to the financial sector when the crowd smashed the windows of stores and banks.

LATIN AMERICA

In Argentina Ex Foreign minister Taiana’s resignation has reportedly resulted from a clash between him and President Fernandez de Kirchner. Taiana will be succeeded by Timerman, a staunch supporter of Kirchner family and the Argentinean ambassador to US.

Presidential aspirants for the forthcoming Brazilian elections have started campaigning and introducing themselves to foreign leader. In a detailed report published by the Economist magazine, formidable economic policies of Brazil are said to be responsible for Brazil’s independent global policy. Traditionally, Brazil is a supporter of United States, but its growing economic clout can not be disconnected from its recent policy on Iranian nuclear issue.

Brazilian Foreign Minister visited Bulgaria to boost economic relations with the latter, in a first of its kind visit by a high official.

In recent Colombian elections were won by Juan Manuel Santos, an ex defense minister, who defeated Bogota’s Mayor Antanas Mockus with 69%. President-elect Juan Manuel has planned not to discontinue with Uribe’s policy of combating terrorist, drug production and trafficking. Despite the mistrust with Uribe’s government, Ecuadorian President Rafael Correa and Venezuelan Hugo Chavez have welcomed the newly elected Colombian president. Meanwhile, United States too has congratulated Santos for his election victory.

Mexicans are due to go to the poll to elect new governors, but drug cartels and drug-related violence in the country is daunting the political landscape. The influence of drug lords on politics is no news, as 12 governors are reportedly receiving the support of the lords. Meanwhile, the Roman Catholic Church of Mexico is requesting tougher government involvement in the forthcoming election in order to safeguard against drug lord election intimidations.

Meanwhile an official of United Nations Office on Drugs and Crime (UNODC) has praised the Colombian government’s role in reducing drug related activities and coca production in Colombia.

Venezuela’s President Chavez has reshuffled his cabinets as a way of preparing for upcoming September elections. The reshuffling has been criticized as a usual Chavez tactic, who reshuffles yearly.

At the economic front in Brazil President Lula da Silva defended his policy of 7.7% increase in pension. According to him, the policy should neither affect public account nor burden the government; rather it would be a mechanism for supporting eight million retired Brazilians. Similarly, the president kick started the Family Farming Harvest Plan 2010/2011 expected to create opportunity and livelihood for many families. The plan should cut interest rates on the family farming from 5.5 % to 4.5 % annually.

International Labour Organization has urged the Venezuelan government to retract from anti privatization policies that target private businesses and disturb the growth of the economy.

Meanwhile President Chavez has requested Interpol to arrest the owner of private television Globovision for criticizing the government outside the country. The United States condemned the Venezuelan move deeming it a violation of human rights.

AUSTRALASIA

In a brutally efficient move driven by bad opinion polls and the approach of a general election, Australia’s Labor party has dumped Prime Minister Kevin Rudd for his 48-year-old deputy. At a news conference that capped one of the most abrupt transitions in Australia's political history, Gillard said she accepted the job "with the greatest humility, resolve and enthusiasm."

Meanwhile Australia's new prime minister said she used her first telephone conversation with President Barack Obama last week to assure him the country's military commitment to Afghanistan would not change under her leadership. Some observers have speculated Prime Minister Julia Gillard may push for an early withdrawal of Australia's 1,550 troops from Afghanistan as the war loses popularity among Australians and elections loom. §

________________________________________________________

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.

Please Preview your comments before posting.

Zone 3- Euro-Americas Summary Week # 124

Week # 124 – Dated 13^th- 19^th June, 2010

WESTERN EUROPE

In Germany coalition partners are divided, resignation of top officers, the loss of a crucial regional election and the lack of foresight on how to react to recent financial crisis that gripped Europe. There is speculation that Germans are likely to go for another election less than a year after Merkel won re-election. According to a German ARD television poll a record low 86 % of Germans are dissatisfied.

During the last week, a group of experts from the IMF, the European Commission (EC) and the European Central Bank (ECB) were in Athens to assess the recent bailout package. The review went well with satisfactory remark on Greece’s economic progress.

In France, police banned a party organised by a group who intended to serve pork and alcohol on the street where Muslims offer their Friday prayer. The police said it was tailored to offend and cause trouble, though a counterparty organised by Muslim groups was also banned.

Meanwhile Ireland has followed the track of Britain and Australia, by expelling the Israeli diplomat accused of complicty in the passport forgery used in the assasination of Hamas leader in Dubai.

The EU has added more heat to the recent sanctions placed on Iran by the UNSC. The unilateral sanction includes the prohibition of new investment, trade insurance, financial transactions, technical assistance and transfers of technologies. The sanction also affects Iran's shipping and air cargo companies, new visa bans and asset freezes imposed on Iran's Revolutionary Guard.

CENTRAL AND EASTERN EUROPE

The Council of Europe has urged the Albanian opposition to take its case of election irregularities to court. Meanwhile as part of the prerequisites for induction in the Schengen visa liberalization scheme Albania has to ensure the repatriation of its citizens from Europe. This condition has forced Tirana to establish a special structure to deal with repatriated citizens.

Regardless of the awaited ICJ ruling on the legality of Kosovo independence, the International Steering Group (ISG) under the International Civilian Office head Pieter Feith has opined that Kosovo independence is irrevocable.

European parliament members are urging the EU to start accession talks with Skopje, due to the improvement in its reforms, though Macedonia remains entangled in the name dispute with Greece.

Effort by the Romanian government to regulate the economy by reducing deficit, slashing salaries, pensions and hiking taxes has thrown the government into hot water. Many Romanians are against the austerity measures and the cabinet now faces vote of no confidence from the opposition Social Democratic Party (PSD which it survived. Meanwhile the opposition has shown its readiness to further pursue the case in court.

According to reports Romanian deputy Foreign Minister Bogdan Aurescu has announced that Bucharest and Washington have begun talks on deploying elements of the proposed US missile shield in Romania.

The Macedonian government too is geared at cutting salaries of some government officials, including Prime Minister Nikola Gruevski.

Croatian labour unions are gathering signatures for a referendum for amending labour law. Laborers are wrestling with government over whether or not the union should continue with collective bargaining or individual agreement with employers.

Similarly in Serbia, Alliance of Independent Unions of Serbia President Ljubisav Orbovic has warned that the workforce situation has become critical where at least 1 million citizens are subsisting below the poverty line.

Albanian government has declared two groups, Islamic Jihad and al-Qaeda, illegal in Albania. During a meeting, the cabinet also announced a list of 62 businessmen and nine commercial companies believed to be connected with al-Qaeda and the Taleban, groups that the UN considers sponsors of terrorism.

High Representative Valentin Inzko has urged Bosnian lawmakers to adopt a law on population census, calling for a compromise so that the headcount could be conducted next year.

EULEX officials want Belgrade to take the next step in collecting information regarding the Raska mass grave, believed to contain the bodies of 250 Albanians.

The family of the fugitive Serb commander Ratko Mladic wants the government to declare Mladic dead since Mladic’s whereabouts have been unknow. The Serbian government however insists on continuing with the search.

Meanwhile Serbia has strengthens its ties with rich European countries by opening its border to citizens of EU countries and Switzerland, Norway and Iceland. Also the bloc’s foreign ministers have kicked off ratifying the bloc's Stabilisation and Association Agreement (SAA) with Serbia, two years after it was signed. Meanwhile the Kosovar government has planned not to invite Serbian president to a regional mini-summit to be held in Kosovo.

Regional and foreign observers have been closely monitoring the stance of the Bulgarian government, whether the latter will maintain undivided ties with U.S or seek an economic and energy friendship with Russia. The proposed Burgas-Alexandroupolis pipeline has been the cause of the unclear stance. For clarity Prime Minister Boyko Borisov holds that the government will wait for an environmental impact assessment before making a final decision on its participation in the Burgas-Alexandroupolis pipeline.

Polls for the upcoming Polish election suggest a tight outcome between the late president's identical twin brother, Jaroslaw Kaczynski (skeptical of the benefits of adopting the Euro) and Bronislaw Komorowski, the pro-business parliament speaker with a market-friendly policy.

Poland's finance minister has made a request to International Monetary Fund for a renewal of flexible credit line of $20 billion dollars for his country. Meanwhile the UAE has becomes Poland's largest trading partner in the Arab world. A few years back Saudi Arabia occupied that position.

The outcome of the recent Slovakia election shows that despite the success of the ruling centre-left SMER-SD party, the current coalition parties will not likely be part of the team as they failed to garner sufficient votes. Hence, a centre-right government is more likely expected.

EU has approved Estonia-Eurozone membership as the 17^th member, following consent among EU leaders that Estonia had met the conditions to join the Euro area.

Ukraine borrowed $2bn from Russia last week to bridge its budget deficit since talks for IMF loan are dragging. Meanwhile dependency on IMF’s loans has been articulated by Latvian President Valdis Zatlers who cautioned against excessive optimism and holds that despite the signs of recovering from deep recession; his country is still in need of international financial assistance.

Hungarian government has thrown its support for a possible change in European Union regulations on private pension fund systems. The change will help the newly formed government to significantly narrow budget deficit and lower public debt. The government is also geared at central price regulation, a reminiscent system of communist-era price controls.

The Czech Republic's nascent three-party centre-right government has agreed to expand the controversial Temelin nuclear power plant and upgrade the atomic plant in Dukovany.

Belarusian government has refused the request of Kyrgyz government to extradite deposed President Kurmanbek Bakiyev who is wanted over the charges of murder and abuse of power.

RUSSIA

Amendments to Russia’s 2010 budget have triggered concern for The International Monetary Fund (IMF). The concern could also be linked to the Russians’ plan to borrow less from foreign market in 2011.

Meanwhile joint WTO membership of Russia-Khazakistan-Belarus (RKB) may put additional obstacles for these countries, but the membership is expected to force Russia to readjust its protectionist policy.

The European Parliament has welcomed the "constructive" nature of the first EU-Russia summit since the Lisbon Treaty was approved held earlier this month.

A few weeks back, Belarus expressed its willingness to offer Russia gas pipeline passage in exchange for cheap gas. However according to recent reports Russia has given an ultimatum to Belarus to pay off its $200m gas debt.

Russian state-owned hi-tech corporation Rostekhnologii (Russian Technology) is organizing Eurosatory 2010, wherein over 30 Russian defense industry setups will be exhibiting.

A recent visit of Russian leader to Paris has spotlighted the economic concern between the the two countries. meanwhile France has signed to be part of the South Stream gas pipeline project, that will transport Russian gas to the rest of Europe.

Russian parliament has welcomed the signing of an agreement that will establish an early-warning mechanism on energy security between the EU and Russia. EU-Russia energy co-operation must be based on the principles of the Energy Charter.

The French are handing over night vision technology to Russia; as the city of Vologda in central Russia will start assembling the Thales-developed thermal imaging cameras. The local production of the camera will reduce production cost and is hoped to be affordable for civilian purposes in the future.

Russian parliament endorsed the visa-free travel regime between the EU and Russia and believes the negotiation should be based on a step-by-step approach.

Meanwhile Russia and China will be relieved from the British yearly £2.9bn bilateral aid. Britain is reviewing its policy and believes the aid should go to most needy countries.

As ethnic tension mounts in Kyrgyzstan, Kyrgyz public has requested external intervention particularly from Russia, although the government is not totally consenting to such a proposal. Yet the Collective Security Treaty Organisation (CSTO…Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia and Tajikistan) are contemplating offering emergency aid. Meanwhile, Russian President Dmitry Medvedev warns that ethnic clashes in Kyrgyzstan could lead to Taliban-style forces taking advantage of the unrest to seize power.

The signing of 'wide range' of nuke documents between Russia and Kazakhstan is expected to move the two countries to a new level of relations and cement the new custom agreement between them.

Meanwhile Statement of Russian president that U.S should quit its Kyrgyzstan’s base once NATO-led operations end in nearby Afghanistan indicates a futurist thinking. It also shows the concern of Moscow about U.S presence in what is traditionally seen as Russia’s sphere.

While Russia might be supporting the new UNSC round of sanctions on Iran, seen as diplomatic success by the Western powers, President Medvedev has cautioned against unilateral sanctions by the United States and the EU, which according him will worsen the situation.

US/CANADA

US President Obama’s repeated visit to the Gulf of Mexico has been a show of commitment towards finding a solution. His latest visit was stepped up to reassure American consumers that seafood from the Gulf of Mexico is safe and promoting tourism in the region; meanwhile his administration is accelerating efforts for cleanup. The president has also reteirated his plea for alternative energy and less dependence on oil.

In a show of being in-charge, President Obama was able to broker an understanding with BP executive following which BP compensates all those affected by the oil spill. The oil giant is expected to create a $20 billion fund to pay damage claims to thousands of fishermen and others along the Gulf Coast. The fund will be administered by Kenneth R. Feinberg, the lawyer and mediator who ran the fund for victims of the Sept. 11 attacks.

LATIN AMERICA

In Brazil PSDB party candidate Mr. Serra and Ms. Rousseff of the Workers’ Party (PT).have been nominated formally to run for the forthcoming election.

Chavez believes Venezuela is democratic while no country is more democratic than his nation. Rejecting criticism against his government, Chavez holds that foreign support and meddling are behind the political condemnation he faces.

Argentine economy is picking up better than expected. Previous forcast of the economy puts growth at around 4.1%, but the economy is witnessing a 5.2 % growth.

Brazil’s economic clout in the region and across the globe is also on rise, yet the central bank of Brazil warns that Brazil must equip itself with improved economic institutions in order to avoid the kind of financial crisis seen in Europe. President Lula believes the forthcoming election result will not halt the country’s economy path as predicted. Meanwhile the U.S Congress is debating whether or not to continue with ethanol trade with Brazil, if the latter insist on trading its ethanol with Iran regardless of the UNSC’s sanctions.

Brazil and Peru have reached agreement which will allow Peru to provide hydroelectric power to Brazil.

As drug related money and other source of laundering get heightened, Mexican government has launched a new policy regarding money transactions through banks and limiting the amount of transaction in dollars. Meanwhile 15 federal security officers were recently ambushed at two different places, the largest attack on federal security officers since president Calderon took office. Also President Calderon has accused US government of not making enough effort to control its drug addicts who fuel the Drug supply.

Venezuelan economy remains at a stooping direction due to nationalization and lack of good performance by the major (oil) sector of the economy. Even though Caracas is now ranked as the 2^nd largest reservoir of oil after Saudi Arabia, yet the nation’s oil company is reported to have shown low performance this year as compared to the previous year.

Meanwhile the Inter-American Commission on Human Rights (IACHR) reports that human rights record in Venezuela is worsening due to the high rate of political crackdown on opposition candidates and ban on opposition media. President Hugo Chavez has injected a new rule into his 21^st century socialism that deems alcohol consumption as anti socialist, hence Venezuelans have been told to abstain from it. §

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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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