This Week's Top Stories in Foreign Affairs:
It was a week of tense financial news from Washington to Athens. In the American Capitol, members of Congress grilled Goldman Sachs executives over their controversial mortgage derivative trading activities and new documents alleging that the financial giant knowingly engaged in activity that contributed to the 2008 economic downturn. While Americans bickered, Europeans dealt with a much more tangible economic crisis: that of Greece. Finding a tenable way to manage the crippling debt in Athens has faltered due to the intractable positions of European leaders, the IMF and the Papoulias government. Markets grow ever more aware that Greece is not alone in its structural economic weakness and attention has spread to other parts of the EU, notably Spain. As Greece went into meltdown, Spain's credit rating plummeted, and fear for the future of the Euro spread throughout the continent. As a result, increased criticism has been given to debt-rating agencies like the S&P for their role in casting a negative light on and castigating national markets. One concern that has begun to resonate among analysts is this: what effect could the crisis in Greece have on the world's economic recovery?
An Iraqi court disqualifies two candidates in Ayad Allawi's winning coalition in last months, erasing his two seat lead over incumbent Nuri al-Maliki. Many analysts decried al-Maliki's specious manipulation of the election results and worried that Iraq would be unable to form a coalition government ahead of the scheduled US withdrawal of combat forces in September. At best this is a transient political crisis, at worse a protracted leadership vacuum could lead space for violent sectarian conflict to resume.
US and Afghan forces continued their preliminary actions into Kandahar Province ahead of a major offensive there. President Karzai's brother Ahmed Wali Karzai heads the Kandahar Provincial Council and critics say that his corrupt practices and collusion with drug leaders have in advance already undermined any positive effect of a military victory against the Taliban. Elsewhere, reports emerge that Pakistan may be taking action against the Taliban in North Waziristan, where Afghan insurgents have long enjoyed relative sanctuary. If true and if successful, it would be a significant advantage for the US effort in Afghanistan.
Analysis in Brief:
Japan and the US relations are strained as the Hatoyama government flails to find a solution to relocating the locally reviled Marine Corps Air Station Futenma on Okinawa ahead of a self-imposed deadline of end May. There are reports that an agreement could see the base moved to Henoko Bay, outside of the city center but still on Okinawa. Nearly 100,000 protesters took to the street demanding the relocation of the Station off the Island. Some analysts believe that Tokyo wants the base moved to Tokunoshima Island, about 200 miles away and separating the Marine Station from the other US forces on Okinawa, a move previously rejected by Washington but perhaps an imperfect resolution to the problem.
Encryption and Decryption in China
How do you control the market? Make the rules such that you have access to everything. That's what Beijing did this week to electronics by introducing rules that force electronics manufacturers to reveal the encryption codes to their products. These codes which are proprietary per manufacturer, will allow the Chinese government to access much more data and technological control than before. Most irked by this new regulation are foreign companies like Cisco Systems. Although Cisco and other companies have not commented, many analysts remark that the measure will serve to bolster Chinese business and deter foreign companies that have no desire to decrypt their products.
Russia's Rosy Week
It was a week of diplomatic victories for Moscow. Perhaps the biggest victory was in Ukraine. Ukrainian Prime Minister Mykola Azarov announced that Moscow and Kiev would hold bilateral talks aimed at cooperation in a variety of arenas. This came after physical fighting in the Ukrainian Parliament over a series of Russian-related agreements over a Black Sea port and pipeline issues. In the end, analysts agree that the Kiev-Moscow pact further solidifies Russia's hold over its former Soviet region, and spells bad news for European energy independence, at least in the short term. Also this week, Russia and Norway ended a territorial dispute over their border on the floor of the Arctic Ocean. Meanwhile, analysts note that Russo-Polish ties could be warming.
Hungary Turns Conservative
Hungary's conservative party Fidesz won a two-thirds majority in a general election victory and its leader Viktor Orban will become prime minister.
Crisis in Thailand
Though PM Abhisit Vejjajiva says he favors a political solution, the Thai government seemed to turn to a more strong handed response to the six week long political crisis that is turning more violent by the day with opposition red shirts and supporters of Thaksin Shinawatra who want the government to call early elections.
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