Turkey is emerging strongly from the Great Recession, but the Euro area crisis, a soaring current account deficit, and domestic political uncertainty threaten the economy.
Russia needs Europe’s technological resources to maintain its current economic and political system. Europe, however, wants its investment in Russia to lead to long-term institutional reform in Moscow.
Moscow’s unwillingness to trust market forces and continued insistence on top-down economic policies undermines any attempt at a true economic partnership with Europe.
The need for a strong relationship between Moscow and Brussels is clear, but Europe faces administrative and political barriers to a common policy on Russia and Russia remains unwilling to undertake the reforms that would make it more compatible with the EU.
Changing market conditions, increasing costs of production, and a new commitment to efficiency have given Russia an opportunity to increase its collaboration with Europe on issues of energy security.
As Moscow grapples with the question of whether to intervene to stop the violence in southern Kyrgyzstan, it is forced to confront a vexing issue: can Russia utilize its political and military potential to help resolve local and regional conflicts in Central Asia?
Germany, which benefited from the introduction of the euro, should boost its domestic demand to compensate for the deflationary measures taken by other countries in Europe.
Though headlines label the Euro crisis as one caused by sovereign debt, Europe’s most troubled economies are suffering from not only fiscal profligacy, but also a severe loss of competitiveness.
While tensions are rising on the Korean Peninsula and forecasting the North Korean leadership’s next steps is difficult, none of the parties involved have any interest in further escalation.
Though the eight newest EU are committed to eventually adopting the euro, they all already suffer from the problems that dragged Greece into crisis, suggesting that none of them are ready to join the Euro area yet.
As the number of countries with the ambition to play a role in world affairs increases, Washington must decide whether to deal with them as legitimate global players or treat them as meddlers to be dismissed.
The formation of a new Iraqi government may still be months away, not because the issues to be negotiated will take time, but because serious negotiations do not appear to have started yet.
Twelve years after defaulting on its debt, Russian policy makers are again facing difficult choices regarding public spending. With debt remaining at relatively low levels, however, the government should focus on economic recovery, not deficit reduction.
Whether or not Spain can overcome the challenges it now faces—which stem from the same source as those in Greece—depends on how quickly and forcefully the government responds.
The post-election phase in Iraq appears even more difficult than anticipated, postponing improvements in Iraq’s long-term security and economic development.
Though Italy has exhibited better fiscal management than Greece, its debt level is still higher and its competitiveness has deteriorated just as sharply. To avoid its own sovereign debt crisis, Italy must raise its primary balance, cut labor costs, and enact structural reform.
The Kremlin’s control over the media may allow Russia’s elites to avoid the immediate consequences of the recent metro bombings, but if the security problem is not resolved, the current authorities will face growing calls for accountability.
The global recovery is strengthening and growth in 2010 is likely to be modestly higher than consensus estimates, but the crisis in Greece—and its possible spread to other Euro area countries—poses a significant risk.
While the economic crisis has caused widespread economic suffering, it appears that democracies, even struggling ones, are demonstrating more resilience to the crisis than many predicted.
History shows that while leaving the Euro area and defaulting would have disastrous implications for Greece and Euro area, it may become the best of bad options if Greece does not receive adequate support from the EU.