Archive for June, 2009

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Papal Diplomacy Might be Dead, but Don’t Tell the Pope

June 29, 2009
Pope Benedict XVI looks to the faithful during his meeting at Renzo Piano church, dedicated to Padre Pio, in San Giovanni Rotondo, southern Italy on June 21, 2009. (ANDREAS SOLARO/AFP/Getty Images)

Pope Benedict XVI looks to the faithful during his meeting at Renzo Piano church, dedicated to Padre Pio, in San Giovanni Rotondo, southern Italy on June 21, 2009. (ANDREAS SOLARO/AFP/Getty Images)

Most world leaders have viewed the financial crisis as a chance to re-think vital financial systems, including free trade, market regulation, and to some extent even capitalism. Not so, the Pope, who in a new encyclical due to be released soon, will demand globalization be harnessed not to make the rich richer, but to help the poor survive during this time of crisis.

It has been well established that poorer and developing countries have been most impacted by the recession, despite the evolution (ahem…sorry, Pontiff) of international financial institutions such as the World Bank or the International Monetary Fund. Yet, in an age of interconnectedness, many developed countries are closing ranks and neglecting to honor established methods of assisting their less fortunate neighbors – even the EU, an economic union, has fallen prey to the Hobbesian practice.

Aiming to reverse this trend, Pope Benedict XVI’s third encyclical urges world leaders to not burden the poor with the costs of financial reregulation – but to instead design the new system with them explicitly in mind. It’s a great idea – now if only the Papacy had the same influence it did, many years ago…

-Chris Hildebrand

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EU Moves to Confront CBRN Threats

June 25, 2009
General view of the nuclear power plant in Jaslovske Bohunice, 60 kms west from Bratislava on January 12, 2009. If the Slovakian government reactivates the Bohunice nuclear plant "that would be a clear violation" of the treaty which Bratisklava signed to become an EU member, said commission spokesman Ferran Tarradellas. SAMUEL KUBANI/AFP/Getty Images)

General view of the nuclear power plant in Jaslovske Bohunice, 60 kms west from Bratislava on January 12, 2009. If the Slovakian government reactivates the Bohunice nuclear plant "that would be a clear violation" of the treaty which Bratisklava signed to become an EU member, said commission spokesman Ferran Tarradellas. SAMUEL KUBANI/AFP/Getty Images)

Terrorism is a scary business – but “scary” goes right out the door when nuclear weapons get involved. EU Justice Commissioner Jacques Barrot agrees, saying “Terrorist groups acquiring weapons of mass destruction, including CBRN materials is the most frightening scenario.”

The EU, decidedly against anything “frightening,” outlined a plan in response on June 24th, committing up to 100 million Euros towards a policy proposal to strengthen European security against chemical, biological, radiological, and nuclear threats.

The plan, which includes over 133 measures, has three main components: improving the difficulty of acquiring CBRN materials; increasing detection capabilities; and enhancing and streamlining preparedness and response protocols.

“[The EU] cannot be complacent,” warned Barrot. “The proposed package represents the EU contribution to support the efforts of the MS in this field.”

Providing further contributions, the union also decided it would be a good idea if they made it harder for CBRN materials to be “lost or stolen.”

-Chris Hildebrand

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The next step for the US

June 25, 2009
Peter Loescher, President and CEO of Siemens AG, delivers the keynote address on June 24, 2009 at the US Chamber of Commerce in Washington, DC. Siemens is a global powerhouse in electronics and electrical engineering, operating in the industry, energy and healthcare sectors. KAREN BLEIER/AFP/Getty Images

Peter Loescher, President and CEO of Siemens AG, delivers the keynote address on June 24, 2009 at the US Chamber of Commerce in Washington, DC. Siemens is a global powerhouse in electronics and electrical engineering, operating in the industry, energy and healthcare sectors. KAREN BLEIER/AFP/Getty Images

“The markets must stay free and open” said the CEO of Siemens AG during a conference at the Chamber of Commerce Wednesday.  Siemens Corporation was ridden with scandal when current CEO Peter Loescher took over the company in 2006.  Following an international corruption scandal he raised the company from the lowest ranked company on Dow Jones’ integrity index to the highest ranked in just two short years.

Now Mr. Loescher is turning to the American markets and infrastructure for his next big transformation.

At the event, hosted by the National Chamber Foundation, he said that the days of easy loans and readily available capital are gone for good.  We are now entering a day when we will have more regulation, but need to be cautious of too much regulation.  The markets must remain open and free to trade between countries if we, as a world community, want to come out of the global recession. The world economy cannot rebound without the United States, and the United States cannot rebound without free trade.

Mr. Loescher met with California Governor Arnold Schwarzenegger Tuesday to discuss plans for a high-speed train in California. Details of the conversation were not included in his remarks but in his observations he noted that most all other developed nations have a well-established train system.

One of the major themes of his remarks today was that it is time for the United States to play catch up.  While the US leads the world’s economy and is known as one of the strongest nations, it lacks the infrastructure, both physically and politically, to remain at the head. Changes have to be implemented if the US is to come out of the recession as the dominate force in the world.

-Daniel Smart

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More Woes in Sight for Ailing Lisbon Treaty

June 24, 2009
A member of the small euro sceptic party Libertas dressed as a skeleton poses near a tombstone displaying dates when the Lisbon Treaty was ratified in some of the 27 EU countries, during a protest outside the European Commission headquarters in Brussels March 18, 2009. They are demonstrating against the European Union treaty still to be signed in Ireland. REUTERS/Yves Herman

A member of the small euro sceptic party Libertas dressed as a skeleton poses near a tombstone displaying dates when the Lisbon Treaty was ratified in some of the 27 EU countries, during a protest outside the European Commission headquarters in Brussels March 18, 2009. They are demonstrating against the European Union treaty still to be signed in Ireland. REUTERS/Yves Herman

Czech President Vaclav Klaus has thrown another kink in the already rocky path of the EU’s famed Lisbon Treaty. Klaus, a well-known Euroskeptic, repeated on Tuesday an earlier declaration that he will “certainly not rush [to sign the treaty],” saying instead that he will be the last to decide on the treaty.

Klaus’ claims are not new – he made the same statement in May of 2009 – but have gained further merit over the past few days with his increasingly anti-Lisbon treaty rhetoric. Klaus is not alone in Europe, however. The Irish, who famously rejected the Lisbon Treaty in a popular referendum last year, have yet to vote again, and Poland and Germany have also not signed the treaty.

Much hinges on the second Irish referendum, which is anticipated to occur in autumn. The Irish narrowly defeated the Lisbon Treaty in a first referendum, but amid cries from European leaders that the Irish government did not do enough to promote the treaty, polling for the second referendum initially indicates the vote will be successful this time around.

The stalwarts are still hiding out, therefore, and as time goes by with no successful ratification from all 27 member states, the challenges facing the much-needed Lisbon Treaty will only continue to grow. Most notably, with the Conservative Party expecting to win in British elections (set to take place at the latest in June 2010), and other European elections in the short- to long-term future, the Lisbon Treaty needs to pass – and soon.

-Chris Hildebrand

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Merkel Comes to Washington; Dual Challenges Await

June 24, 2009
WEIMAR, GERMANY - JUNE 05:  U.S. President Barack Obama and German Chancellor Angela Merkel visit the former Buchenwald concentration camp on June 5, 2009 near Weimar, Germany. (Photo by Sean Gallup/Getty Images)

WEIMAR, GERMANY - JUNE 05: U.S. President Barack Obama and German Chancellor Angela Merkel visit the former Buchenwald concentration camp on June 5, 2009 near Weimar, Germany. (Photo by Sean Gallup/Getty Images)

German Chancellor Angela Merkel will visit Washington on Friday, where her tough agenda with President Obama includes time to discuss climate change and the financial crisis.

Compounding the already difficult program, however, are the contrasting views of the two leaders. On the financial crisis, Germany is still haunted by fears of the devastating effects of the hyperinflation from 1923. The US, on the other hand, is plagued by a nearly opposite fear of the stagnating economy of the 1929 Great Depression.

When it comes to climate change, there’s no getting around the fact that Germany – and it’s “climate change chancellor” – mean business. Merkel strongly believes that America and the Obama administration are not doing enough, and Merkel’s Environment Minister claimed recently that “America may have a black President, but Obama still needs to prove that he is also a green President.”

Despite these differences, Germany, like the rest of Europe, fear that Europe is being demoted in the world hierarchy and replaced by emerging economies such as China or India. Media-savvy Obama and his results-driven approach have spooked European politicians, who fear that if Obama does not get the results he wants out of Europe, he will be quick to look elsewhere.

So while Merkel comes to America armed with criticisms and differing viewpoints, she might be hesitant to express them. If she is too critical, and doesn’t “sell” Germany enough to America, then she risks being relegated to the international sidelines.

-Chris Hildebrand

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Cloned animals make a comeback in EU

June 23, 2009

Cows ClonesThe offspring of cloned animals are now legal for consumption according to a decision by the European Union on Monday.  The decision comes after heated debate over the issue, particularly from Germany.

The European Food Safety Authority concluded that there is no difference between cloned meat and conventional meat. There are still large risks with this meat as the long term affects of consumption are not yet known due to a lack of sample size and breadth.

This decision places the European Union with countries such as Canada and the United States who already allow the consumption of the offspring on cloned animals.  The US has allowed consumption since 2008. A large difference is that the meat will have to be explicitly marked as cloned meat in Europe, where as no notations are made in the US or Canada.

While some may worry about the effects of this meat, right now the cost of production is approximately 50x that of traditional meat.  So next time you go to your favorite hamburger place, if it costs you $100, it might not just be the hard financial times driving up prices.

-Daniel Smart

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Bain Capital invests $432m in Chinese Company

June 23, 2009
People walk past a GOME store at the shopping Mongkok district in Hong Kong June 22, 2009. GOME Electrical Appliances, a top China electronics retailer, announced on Monday that U.S. private equity firm Bain Capital has agreed to take up to a quarter of its shares under a plan to raise $418 million or more.   REUTERS/Bobby Yip   (CHINA BUSINESS)

People walk past a GOME store at the shopping Mongkok district in Hong Kong June 22, 2009. GOME Electrical Appliances, a top China electronics retailer, announced on Monday that U.S. private equity firm Bain Capital has agreed to take up to a quarter of its shares under a plan to raise $418 million or more. REUTERS/Bobby Yip (CHINA BUSINESS)

In one of the largest American investments ever made in a Chinese company, Bain capital announced that it would be investing $432 million in Gome Electrical Appliances, a large Chinese retailer.  They will invest about $233 million in convertible bonds and then purchase as much as $199 million of new stock.  Following weeks of rumors, the deal was announced Monday.

Gome Electrical Appliances produced $6.7 billion in revenues last year, but also saw their stock plummet by more than 70 per cent.  This came following the arrest of former chairman Huang who was being investigated by the government for “economic crimes.”

-Daniel Smart