International politics

So far Ireland and Greece have been bailed out with relative ease. If Portugal required external assistance, Europe could run to that too. But bailing out Spain would be another matter entirely. As The New York Times points out today, the Spanish economy is twice as big as the Irish, Greek and Portuguese ones combined. Spain’s situation is not yet critical. But as the NYT piece sets out very clearly, there are some extremely worrying signs. The gap between Spanish and German gilt yields is now at the biggest point it has been since the introduction of the euro. Spanish banks are also heavily exposed to Portuguese debt. Compounding these

There is no diplomacy with maniacs. North Korea has been the grip of one or another lunatic for 60 years; with the succession still unsettled, Pyongyang is now a salon for the insane. The escalation of posturing, violence and the nuclear programme is a brazenly mad strategy to bribe other countries in exchange for good behaviour; it’s piratical. The world’s geopolitics may be changing, but the US President remains supreme among leaders. Yesterday, Iain Martin argued that Barack Obama had to make a strong and unequivocal statement about the situation, at least to encourage China to reprimand its errant ally. The President did so. In a long interview with the

Over the last decade, Wall Street has become an important foreign policy actor in its own right, almost as important as the lobbyists on K-Street and the White House on Pensylvania Avenue. The ebb and flow of capital has been a decisive international force in determining the fate of nations – most recently illustrated in the cases of Greece and Ireland. As an aide to President Clinton once said: in a second life he would like to come back as the bond market. But Wall Street has influenced foreign policy in a deeper way too: by changing the way that successive US administrations see the world. Not by focusing on

After months of rumours, plummeting approval ratings, and battles with anti-reform protesters, French President Nicolas Sarkozy reshuffled his Cabinet yesterday. With a new government in place, the worst of the reforms behind him and the G-20 chairmanship in the offing, President Sarkozy is hoping to rebuild his profile before the next presidential election. But will it work? The popular François Fillon continues as Prime Minister despite a strained relationship with the Élysée. But Defense Minister Hervé Morin and Foreign Minister Bernard Kouchner have been replaced by Alain Juppé, a former prime minister and protege of former President Jacques Chirac, and Michèle Alliot-Marie, a former justice minister in the last cabinet.

In his recent cover story for The Spectator, the Financial Times’ Gideon Rachman talked about how, in the United States, China was beginning to take on the appearance of a new Cold War-style foe. Many Americans accuse China of stealing US jobs, of keeping the its currency undervalued, of exporting deflation by selling its products abroad at unfair prices, and of failing to meet its commitments to the World Trade Organisation. Two months ago, a poll from WSJ/CNBC showed that the majority of Tea Party activists oppose free trade – seeing China as the sole beneficiary of a free trade policy. But it is not only the Tea Party that

President Obama’s return to Indonesia this week was remarkable, in part, for the limited attention it has garnered outside his childhood nation. You can’t walk through an airport bookshop without being inundated by bestsellers about China’s rise. India has always occupied a special part in British hearts. But Indonesia is different. There are few in the British foreign policy establishment who really know the place. Some British military officers know a few Indonesian counterparts through their time at Sandhurst and the Defence Academy. The human rights lobby grew familiar with Indonesia over years of protests against the Sukarno/Suharto dictatorships and the country’s mistreatment of East Timor. But, on the whole,