Ben W. Heineman, Jr.
By Ben W. Heineman Jr.
(This article first appeared on TheAtlantic.com, where Ben Heineman wries frequently.)
Just after the New Year, President Obama will have to decide whether to take a dramatic, high-stakes gamble on a very unsexy topic: a U.S.-E.U. free trade agreement. It will be one of the key high-risk, high-reward choices of his second term.
By removing all barriers on goods and by facilitating fairer and more transparent competition in services, investment, and public procurement, such an agreement could stimulate growth and increase jobs in the world’s two largest economies, which together comprise more than 50 percent of the world’s GDP.
Such economic benefits could occur without any additional government expenditure. An agreement could provide a needed, long-lasting jolt to the ailing economies on both sides of the Atlantic. It could avoid the dilemmas posed by the current policy choice between austerity at a time of anemic growth and stimulus at a time of fiscal disarray. Read more
By Kayhan Barzegar
Director of the Institute for Middle East Strategic Studies, Tehran; Former Belfer Center Research Fellow in the Managing the Atom Project and International Security Program
As a consequence of the failure of the latest negotiations over Iran’s nuclear program, the European Union ban on the importation of Iranian oil took effect on July 1, 2012, and closure of the Strait of Hormuz by Iran became an issue again. This has provoked the following question: What actually is Iran’s strategy in the Strait of Hormuz?
The West has two perspectives on Iran closing the Strait. The first, based on a defensive standpoint, perceives Iran’s threat to be nothing more than a bluff, merely made to assert its power. Iran may be able to close the Strait temporarily, but lacks the superior military power to continue the closure. Read more
Joseph S. Nye
By Joseph S. Nye
The recovery of the American economy has slowed, and the collapse of the Euro — a financial crisis in Europe — could tip the United States into the feared double dip of recession. Ironically for the Obama Administration, the greatest threat to the president’s re-election comes not from Afghanistan or Yemen, but from our allies in Europe.
What are the prospects of a collapse of the Euro? On Wednesday, 20,000 Greeks rioted in Athens in opposition to the austerity measures that are required to meet the conditions for payments from the $600 billion European Financial Stability Facility. As one observer noted, “there is no sign of a national spirit of sacrifice to save the country.” And although the German Bundestag voted on September 29 for an expanded bailout fund, there is still resistance in Germany to allowing the European Central Bank to issue Eurobonds or act as an unlimited lender of last resort to prevent the contagion of loss of confidence spreading from Greece to the sovereign debt of Portugal, Ireland, Spain, and Italy (as well as to the Northern European banks that hold much of that debt.) Markets believe that the EFSF is too small to deal with the problem, but German Finance Minister Wolfgang Schauble says “we do not have the intention” of enlarging the emergency fund. Read more