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.
Over the next year, Egypt will hold three important elections, none of which stand any chance of redistributing power in the country. Egypt needs long-term democratic reforms, and the United States can play an effective role in promoting those reforms.
The Obama administration announced its new Afghanistan strategy, which asks European allies to send as many as 5,000 extra combat troops in support of a war which more than two-thirds of the European public believe is already lost.
Anders Fogh Rasmussen, NATO's new Secretary-General, must provide transformational leadership, not just status-quo management, for the alliance to bridge the chasm between its ambitions and its capacities.
Obama has made listening and dialogue the trade-mark of the first 100 days of his foreign policy. Europe has responded with more rhetoric when what the transatlantic relationship really needs is commitment and courage.
Although Obama's renewed strategy towards Afghanistan has been received well in Europe, the war in Afghanistan will now be an American war with international help rather than a coalition effort.
Five fallacies continue to dominate discussions of the future of European and NATO strategies in Afghanistan, and undermine the hard questions on effectiveness.