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Generational Dynamics Web Log for 26-Mar-2010
26-Mar-10 News - France and Germany compromise on Greece

Web Log - March, 2010

26-Mar-10 News - France and Germany compromise on Greece

Foreboding and talk of war in the Mideast

France and Germany reach compromise on Greece bailout plan

There are many things that we don't know, as I write this on Thursday evening.

What we know for sure is that the Europeans are popping champagne corks in celebration of announced deal between France and Germany over a bailout of Greece.

But the language of the agreement is so artful, there are many things we don't know. We don't know whether the deal actually provides for a bailout in the event it's needed. We don't know whether this is a defeat or a victory for French President Nicolas Sarkozy. We don't know whether this is a defeat or a victory for German Chancellor Angela Merkel. And we don't know whether the agreement will survive scrutiny for more than a few days.

The German people are overwhelmingly opposed to any German money being spent on a bailout of Greece, and so Merkel has been demanding that the Washington-based International Monetary Fund (IMF) handle the bailout. Sarkozy has been insisting that there must be a European solution to a European problem.

The compromise, according to the Telegraph, is a 22 billion euro bailout, with a "substantial share" from the IMF and a "majority" share from European states.

However, the IMF hasn't yet agreed to the deal, and it's not clear that they will, since they generally impose harsh conditions on countries that they bail out. This gets to the heart of Sarkozy's opposition to IMF involvement, since it means that the IMF, rather than the EU, calls the shots in Greece's austerity program.

Exactly this thought was expressed earlier in the day by European Central Bank President Jean-Claude Trichet. Bloomberg quotes him as saying, "If the IMF or any other authority exercises any responsibility instead of the euro group, instead of the governments, this would clearly be very, very bad."

But of course if the IMF is going to give several billion euros to Greece, then it HAS to exercise responsibility.

So really, the most that can be said at this point is that there may or may not be a real deal. Investors were not convinced, as the euro continued to fall after the deal was announced, although it recovered later in the evening. Reuters

Foreboding and talk of war in the Mideast

That's the gist of a BBC analysis of the mood in the Mideast. Problems are mounting, and solutions are increasingly distant.

There's a "deep chill" in U.S.-Israeli relations, which Politico ascribes to "bad personal chemistry" and "public confrontation" between President Barack Obama and Israeli Prime Minister Benjamin Netanyahu. The meeting is between portrayed as "ill-prepared" and "a disaster" by mainstream media sources quoted by CS Monitor.

The result, according to the BBC article, is that Netanyahu returns to Isreal weakened, creating a political vacuum in the Mideast. Such situations often lead to frustration and violence.

Netanyahu had come to Washington hoping to heal bruises that were caused when Israel announced plans to build 1600 new Jewish settlements in the East Bank, right in the middle of Joe Biden's recent visit. (See "12-Mar-10 News - Mideast peace talks collapse in humiliation.")

Instead, we have a much worse situation, with the bruises deeper than ever. Israel's building of Jewish settlements in east Jerusalem and the West Bank has always been a simmering issue, but with last week's debacle, it's becoming more explosive each day.

Jordan's King Abdullah told the Jordan Times that Israel is facing a crossroads, and must choose between war and peace. "In all my meetings with Israeli, American and international officials, I have warned that continued attacks on Jerusalem and its holy sites will ignite the entire region. Jerusalem has a special place in the hearts of Palestinians, Jordanians, Arabs and Muslims."

He added, "I think that the entire world is facing a moment of truth: either we achieve real, tangible and quick progress to resolve the conflict on the basis of the two-state solution within a comprehensive regional context which the Arab Peace Initiative offers; or we enter a new cycle of conflict and violence, and the whole world will pay the price."

On top of all this is the issue of Iran's nuclear weapons. Israel is becoming increasingly nervous about Iran's possible development of these weapons, and may take military action against Iran this year.

From the point of view of Generational Dynamics, nothing has changed since what I first wrote in 2003, when President Bush launched his major peace plan. (See "Mideast Roadmap - Will it bring peace?") Generational Dynamics predicts that there will be a major new Mideast war re-fighting the 1948-49 war between Jews and Arabs that followed the partitioning of Palestine, and the creation of the state of Israel. There will be no peace agreement.

What's changing now is that more of the world is reaching the same conclusion.

Additional Links

China is facing a "diabetes epidemic," according to a study published in the New England Journal of Medicine. More Chinese are adopting Western diets and sedentary lifestyles, with the same results as in the West. BBC

French President Nicolas Sarkozy and his glamorous wife Carla Bruni are rumored to have lovers. Straits Times

The US and Russia are about to announce a new nuclear arms reduction agreement. VOA.

The U.S. continues to threaten to impose sanctions on Iran over their nuclear development program, but always have to back off because Russia and China won't endorse the sanctions. Well, it's happened again, as the proposed Iran sanctions are softened. Los Angeles Times

24-year-old Frenchman Francois Cousteix has allegedly hacked into the Twitter accounts of Barack Obama and Britney Spears. Sci Tech Today

The social networking site Facebook is being blamed for an increase in syphilis, because it makes it easy to meet partners for casual sex. A Facebook spokesman responds, "Facebook is no more responsible for STD transmission than newspapers are responsible for bad vision." Telegraph

(Comments: For reader comments, questions and discussion, see the 26-Mar-10 News - France and Germany compromise on Greece thread of the Generational Dynamics forum. Comments may be posted anonymously.) (26-Mar-2010) Permanent Link
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Generational Dynamics Web Log for 26-Mar-2010 26-Mar-10 News - France and Germany compromise on Greece

France and Germany reach compromise on Greece bailout plan

Foreboding and talk of war in the Mideast

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Generational Dynamics Web Log for 26-Mar-2010
26-Mar-10 News - France and Germany compromise on Greece