The Week in Review
Middle East
In Iraq, a series of attacks across the country on Monday killed at least 114 people and injured more than 300, in one of the deadliest waves of violence this year. The attacks on markets, a factory, checkpoints and other targets are being seen as a response by al Qaeda-connected Sunnis to the attempt by Iran-aligned Shiites to form a government.
The British ambassador to Yemen survived a suicide attack against him on Wednesday. Al Qaeda in the Arabian Peninsula claimed responsibility for the attack, accusing Britain of being “America’s closest ally in its war on Islam” and also helping in the establishment of the State of Israel, according to a statement posted on a jihadist forum. Yemen is now thought to be the third-largest sanctuary for al Qaeda. The Yemen-based al Qaeda group claimed responsibility for the failed attack on a Detroit-bound airliner December 25 last year. Senior clerics in Yemen have threatened to declare a jihad, however, if there is any foreign military intervention in the country.
Iran held eight days of military drills in the Gulf of Oman and the Strait of Hormuz, beginning May 5. This follows the military exercises held by Iran’s Revolutionary Guard just last month. The war games, according to IsraelNationalNews.com, are to train Iranian troops and intimidate potential enemies. Iran’s semi-official Fars News Agency reported that on Monday Iran’s military warned off a U.S. reconnaissance aircraft trying to observe the maneuvers.
On Tuesday, President Barack Obama phoned President Mahmoud Abbas of the Palestinian Authority (PA) to congratulate him on the start of Israeli-Palestinian proximity talks. Abbas made his long-delayed decision to enter indirect talks with Israel last Saturday. The history of such talks makes it abundantly apparent that any new round of talks will only succeed in wounding the Jewish state further, through additional concessions without any resultant peace. One Israeli official has already said that if the indirect talks show progress, Israel would be prepared to institute more confidence-building measures—such as releasing Palestinian prisoners, turning over additional territory to full PA control, and a pullback of Israeli soldiers from parts of the West Bank.
Europe
Europe’s financial crisis continues. Over the May 8-9 weekend, European leaders came together to prepare a $1 trillion bailout fund. But even that seemed to do little to assuage the market. Europe could be facing some turbulent times. Brussels is attempting to use this crisis to grab more power. On May 12, officials presented plans that would force all euro nations to submit their budgets to the other nations for review, before they are reviewed by the national parliaments. This would mean that euro nations would have to surrender control of their tax and spending policies to Europe. The German paper Handelsblatt describes what this would mean: “The old eurozone is dying. The process of founding the new eurozone is just beginning …. The new eurozone … needs to be based on a better and more comprehensive set of rules than the old stability pact. Member states will have to give up some of their sovereignty as a result. Hence the move by European Commissioner Olli Rehn to force eurozone members to grant other members a say in their budgetary planning is a good first step.” Expect Europe to use this economic crisis to gain more power over EU member nations.
Angela Merkel’s ruling coalition no longer has a majority in Germany’s upper house of parliament, the Bundesrat. This loss means that her government needs the support of one other party in order to pass legislation—a significant loss of power for Merkel. The Christian Democratic Union (cdu) lost the state elections in Germany’s most populous state, North Rhine-Westphalia on May 9. It won 34.6 percent of the vote—its lowest ever result in that state. Although the election has no clear winner—the Social Democratic Party and its Green Party allies are one seat short of having a majority—it is unlikely that the cdu will take the helm of the state. “There is a danger that (Merkel’s coalition) is, after only seven months in power, facing its political end,” said Josef Schlarmann, who serves on the cdu’s leadership committee. He said that any major government projects are now “as good as dead.” The election result sets Germany on course for further indecisive leadership. With all the instability in the world, and in Europe in particular, this will soon make Germans clamor for a more decisive government. For more, see our March 18 article “Germany: A Potentially Momentous Summer Looms.”
Asia
Moscow enjoyed its biggest VE Day celebrations since the fall of the ussr on May 9. After the fall of the Soviet Union, these celebrations became quieter as Russians reflected on their nation’s loss of power and status. But not anymore. “This year the VE celebration fully takes back its former meaning, celebrating Russia as a real power once again,” wrote Stratfor. “Over the past few years—and especially in the past few months—Russia has pushed its influence back into most of its former Soviet states through military intervention, revolution, customs unions and pro-Russian governments. Moscow is not looking to re-create the Soviet Union, but it does want to create an umbrella of states under its control that buffer Russia from the West and other regional powers” (May 7). An impressive number of leaders turned out to witness Russia’s resurgence. German Chancellor Angela Merkel was there along with French President Nicolas Sarkozy, Chinese President Hu Jintao and many others. “These are the states that Russia is hoping to prove itself to, ally with or control at some point in the future,” wrote Stratfor. Watch for Russia’s rise to continue.
Not only did the crash of the Polish military plane on April 10 kill almost all of Poland’s government leaders, but it also gave Russia a bonanza of nato secrets, according to an article published this week by the Washington Times. Several of those flying carried computers and memory sticks containing secret nato data. Russia may also have obtained the “ultra secret” codes used by nato to encrypt satellite communication. If the Russians are able to recover these codes from the wreckage, they will be able to decrypt months, if not years, of past nato communications.
Latin America
Latin American trade bloc Mercosur is preparing for trade discussions in Spain, scheduled to begin on May 17. The EU and Mercosur are planning to resume their trade and cooperation talks during the Latin America, the Caribbean and the European Union Summit in Madrid. Several EU nations, including France, oppose the lifting of trade barriers. But nations like Brazil plan on using lucrative arms contracts as a sweetener for the deal. Expect Europe and Latin America to move closer. For more information, see our July 2003 Trumpet article “Recolonizing Latin America?”
Anglo America
For the first time since World War ii, the United Kingdom has a coalition government. On Tuesday, Labor Party leader Gordon Brown resigned as prime minister after the previous week’s general elections failed to produce an overall majority and third-place Liberal Democrats threw their new weight behind the Conservative Party and new Prime Minister David Cameron. Cameron and Liberal Democrat leader Nick Clegg appeared in tandem on Wednesday to present a united front between two parties with ample room for disagreement. Meanwhile, Labor might be facing a tangled tug-of-war for its leadership between brothers David and Ed Milliband, Jon Cruddas, Ed Balls, and his wife, Yvette Cooper. Watch for Britons to become increasingly absorbed in domestic politics and a divided government that may be unable to focus on anything further afield than the nation’s nose-diving economy.
As millions of gallons of oil continue to pollute America’s Gulf Coast, the federal government is planning a new tax on oil companies. The funds would be doled out by the administration to citizens who might have lost their livelihood from the spill and to federal agencies to counteract the contamination. The move would subtly extend the government’s reach into yet another powerful arena at the same time the Senate passes legislation to establish federal regulation of credit-rating firms.
The Bank of England said Wednesday that the United States and Britain have some of the same fiscal problems as Greece when it comes to public finances. The assessment came from bank governor Mervyn King, who is regarded by some as one of the most guarded central bankers around. King also said that Europe will be forced to become a federalized fiscal union.
At the same time, Congress is reviewing a bill attempting to prevent the International Monetary Fund from bailing out Greece and the euro. Rep. Mike Pence, who introduced the bill, said, “This legislation would require that countries like Greece cut spending and put their own fiscal house in order instead of looking to the United States for a bailout. We face record unemployment and a debt crisis of our own, and American taxpayers should not be forced to bear the risk for nations that have avoided making tough choices.” It might be suggested that such rhetoric could be easily aimed right back at the U.S.—and soon will be.
