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U.S.-Iran Relations: Policy Compendium
Article 5 and Strategic Reassurance
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The U.S., NATO and the EU: Partnership in the Balance
Council Highlights
Damon Wilson discusses NATO, Turkey, and Azerbaijan
Damon Wilson, vice president and director of the Atlantic Council Program on International Security, was interviewed by Leyla Tagiyeva of Azerbaijani news site News.Az about U.S.-Turkey relations in the context of NATO and its role in the Caucasus region.
Sven Biscop and Jo Coelmont: Permanent Structured Cooperation and European Armed Forces
Prof. Dr. Sven Biscop, Director of the Security & Global Governance Programme at the Egmont Institute and member of the Atlantic Council Strategic Advisors Group, and Brig-Gen. (Ret.) Jo Coelmont, former Belgian Representative to the European Union Military Committee, co-authored an Egmont Institute Security Issue Brief entitled Permanent Structured Cooperation for Effective European Armed Forces.
Banning Garrett Discusses U.S.-China Relations
Banning Garret, director of the Council's Asia Program, was interviewed by Daniel Ryntjes of Feature Story News about U.S.-China relations after the February 18 meeting between President Obama and the Dalai Lama.
Shuja Nawaz on Al Jazeera English: India-Pakistan Relations
Shuja Nawaz, director of the Atlantic Council's South Asia Center, spoke with Al Jazeera English's Riz Khan about the renewed India-Pakistan peace talks.
FEATURED ISSUE
Eurozone Crisis: Threat of Sovereign Debt Default
The Atlantic Council's Global Business and Economics Program hosted a conference call with Professor Leszek Balcerowicz on the Euro debt crisis.
EU Economy Update
Peter Cassata | November 29, 2008UK
In the UK, RBS became the latest bank to be taken over by the government as a result of the financial crisis, according to IHT:
The British government took majority control of Royal Bank of Scotland on Friday after investors shunned the lender's share sale, paving the way for a larger government role in Britain's banking sector. Investors only signed up for 0.24 percent of the shares, which were offered as part of a plan to bolster the bank's capital, and the government had to take up the rest, leaving it with a 57.9 percent stake in RBS. The government agreed to buy a separate block of preferred shares bringing its investment in RBS to about £20 ($30.8) billion.
[...]
RBS was one of three British financial services companies that tapped government help to fulfill stricter capital requirements intended to help them survive the credit crisis. Lloyds TSB and the mortgage lender HBOS, which have recently agreed to combine, also relied on the government to take up any shares they could not sell to investors as part of a banking bailout plan orchestrated by Prime Minister Gordon Brown. But some analysts warned that even those stricter capital rules might not guarantee the stability of Britain's banks as the turmoil in the financial markets continued.
The government will hold the RBS stocks until they are profitable again.
France
Ahead of expected benchmark rate cuts by the ECB, a proposed bailout of major French banks was blocked by the European Commission, who said France must reduce its lending rate before approval. The FT reported:
The French government’s plan to shore up the capital position of France’s six main retail banks is being blocked by the European Commission, which insists they must reduce their lending in return for state support. Christine Lagarde, French finance minister, on Friday spoke to Neelie Kroes, EU competition commissioner, to persuade her to lift her veto on France’s €10.5 ($13.3) billion support package but Ms. Kroes is sticking to her view that banks cannot use state aid to increase their lending books.
[...]
The French government reacted furiously to the Commission’s argument. One senior official described it as "ridiculous" and "stupid" because it would exacerbate the credit crunch – the very thing Paris said it was trying to avert when it decided last month to inject capital into all its large high-street banks.
France – unlike the UK, Germany or Italy – intended to recapitalize all its lenders at the same time to ensure they did not tighten credit to business and households. Paris argued that without state support, and in view of the frozen interbank lending markets, banks would have shored up their capital positions by reducing loans, with catastrophic consequences for the real economy.
Eurozone
Eurozone inflation fell in November due largely to increases in unemployment. With fourth quarter projections anticipating a third straight quarter of negative growth, the ECB is expected to cut rates by as much as 1 percent in December from its current key rate of 3.25 percent. This should continue to help inflation drop in early 2009. The IHT provided details:
Euro-zone inflation declined in November and unemployment jumped more than expected, reports showed Friday, lifting chances that the European Central Bank would increase the size of an expected interest rate cut next week to aid a shrinking economy.
With recession pressing on growth, the Italian government became the latest European country to offer an economic stimulus package, totaling €80 ($101.5) billion. That came one day after Spain announced a €11 ($14) billion plan. President Nicolas Sarkozy of France on Friday said he would present a €19 ($24.1) billion program next week that would help the struggling car industry and invest in infrastructure.
More evidence of the slowdown was reflected in data released by the Eurostat statistics office. It said consumer price inflation in the 15-country euro area fell this month by 1.1 percentage points to 2.1 percent. Forecasters had expected a decline to just 2.3 percent.
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