4-Jan-12 World View — Europe: Another Year Older And Deeper In Debt

This morning’s key headlines from GenerationalDynamics.com.

  • Israel says that Assad ‘only has weeks’ to rule Syria
  • Israeli and Palestinian envoys meet, promise to meet again
  • Europe: Another year older and deeper in debt
  • Greece issues blunt warning that it will leave the euro without a deal
  • Germany’s unemployment rate falls to post-reunification low
  • Gunfights between rival militias erupt in Tripoli, Libya
  • Afghanistan nightmare: Withdrawing $30 billion in military equipment

Israel says that Assad ‘only has weeks’ to rule Syria

Ehud Barak and Bashar al-Assad
Ehud Barak and Bashar al-Assad

Israel’s Defense Minister Ehud Barak says the regime of Syrian president Bashar al-Assad only has ‘a few weeks’ before it loses control:

“The Assad family has no more than a few weeks to remain in control in Syria. There is no possibility in the current situation of evaluating what will happen the day after Bashar’s fall.”

Barak warned that the fall of Assad could have implications for the Israeli-occupied Golan Heights. “In the north, there may be possible implications from Syria on the Golan Heights and a broader area as the result of the loss of control.” Syrian opposition leaders have said that Israel will “likely remain an enemy” in the eyes of any government they head. Israel National News

Israeli and Palestinian envoys meet, promise to meet again

Palestinian negotiator Saeb Erekat and Israel’s envoy Yitzhak Molcho met for over three hours in Amman, Jordan, in a meeting mediated by Jordan’s Foreign Minister Nasser Judeh. Judeh later said that the meeting had been “positive,” but it was pretty clear that nothing had happened. Apparently each side presented its arguments, supported by documents, while the other side listened. These were the first face to face meetings in over 15 months. The Palestinians have set a January 26 deadline for talks to resume under two preconditions: A halt to building new settlements in the West Bank, and an agreement to begin border negotiations starting from the pre-1967 borders. Neither of these preconditions have any chance of being met. On January 26, after the Amman diversion has ended, the Palestinians plan to return to a diplomatic initiative, including trying again for United Nations recognition of a Palestinian state, and charging Israel in the U.N. criminal court with war crimes. Haaretz

Europe: Another year older and deeper in debt

It has been calculated the world’s top economies have €5.8 trillion worth of borrowings they will have to pay back in 2012. Japan in the top spot with €2.3 trillion, followed by the United States with the equivalent of €2.1 trillion. Italy needs to refinance €330 billion, France €282 billion and Germany €219 billion. All of these countries will have to borrow even more money to make these 2012 payments — and most of them will have to pay higher rates of interest, sometimes much higher. Meanwhile, the hope that the credit bubble that burst in 2007 will reflate itself has all but vanished, and there’s no sign of anywhere near enough economic growth to even make a dent in these debt figures. I heard an analyst on CNBC on Tuesday morning saying that the European debt crisis is over, and things will be back to normal this year. Where the hell do they get these guys? Euro News

Greece issues blunt warning that it will leave the euro without a deal

Greece apparently didn’t get the memo that the euro crisis is over. Greece was promised a second emergency bailout worth €130bn in October after it became clear that the first rescue package, agreed in May 2010, was not enough to stabilize its debts. Negotiations on the second bailout were supposed to be completed long ago, but they weren’t. At issue is the “voluntary haircut” that private investors will take. At first it was 21%, then it became 50%, and now it’s clear that 50% won’t be enough, but negotiations are stalled on the percentage. The deal has to be completed by March, when Greece will need a €14.5 billion bailout payment to avoid bankruptcy. According to a spokesman for the Greek government, “This famous loan agreement must be signed, otherwise we are outside the markets, out of the euro and things will become much worse.” European officials are reportedly going to request more austerity measures, but the spokesman added that imposing more austerity measures and tax increases on the Greek economy will be a problem. “We will see what the shortfall is and it is very likely that measures will be required. I also don’t believe it is easy to impose new taxes, but what does cutting spending mean? To close down the public sector? There is no easy solution.” Guardian

Germany’s unemployment rate falls to post-reunification low

While most of Europe’s economies continue to suffer, Germany’s economy is surging. Unemployment in November fell to 6.8%, the lowest rate since East and West Germany were reunified in 1991, with another 22,000 manufacturing jobs created in December. Employment has been boosted by strong exports of manufactured goods to China, as well as strong exports of German cars. BBC

Gunfights between rival militias erupt in Tripoli, Libya

Libyan gunmen in Tripoli (AFP)
Libyan gunmen in Tripoli (AFP)

A gunfight erupted in Tripoli, Libya, on Tuesday, between two competing militias that had been allied to overthrow Muammar Gaddafi. A group of men from Libya’s third-biggest city of Misrata traded anti-aircraft and heavy machinegun fire with a militia from a central Tripoli neighbourhood in broad daylight, resulting in four deaths. The incident has raised concerns of further outbreaks of violence between competing militias as there are large numbers of unsecured weapons around, and because the interim Libyan government has done little to provide security in Tripoli. AFP

Afghanistan nightmare: Withdrawing $30 billion in military equipment

The U.S. has tens of thousands of vehicles in Afghanistan, and at least twice as many sea containers holding anything from weapons systems to communications gear. That’s just a small portion of the $30 billion worth of equipment that has to be withdrawn from Afghanistan, now that the Nato troops are leaving. “We have had 10 years of bringing things in, with none of it leaving,” said one official. The problem is much worse than withdrawing from Iraq for several reasons — mainly that many Asian countries don’t want the Americans to leave and are refusing to cooperate, because the Nato forces are suppressing Islamic militants and controlling drugs and other illicit goods. Guardian