Tag Archives: coalition government

Five Stories You Might Have Missed

Debates over Wall Street compensation reemerged on the national stage last week, as the government urged companies that received federal assistance under the Troubled Asset Recovery Program (TARP) limit executive compensation. On Thursday, the Federal Reserve issued draft rules governing compensation for companies that have not repaid TARP assistance. Under the new rules, the companies would be required to demonstrate that their compensation packages do not encourage excessive risk-taking. In an interview with the Financial Times, George Soros weighed in on the debate, calling Wall Street’s profits this quarter “hidden gifts” from the U.S. government. He commented that, “Those earning are not from the achievement of risk-takers. These are gifts, hidden gifts, so I don’t think that those monies should be used to pay bonuses. There’s a resentment which I think is justified.”

Meanwhile, concerns over the spread of the H1N1 (swine flu) virus continue to grow. On Saturday, President Barack Obama declared a declaration of “national emergency” to combat the flu. Under the declaration, hospitals eases some restrictions on hospital operations, giving them additional powers to treat the flu. 

In news from outside the United States last week:

1. German Chancellor Angela Merkel formally announced her new coalition agreement on Saturday. There were few surprises, as Merkel’s center right Christian Democrats allied with the liberal Free Democratic Party. The coalition contract included a promise to pass a €24 billion tax cut for poor and middle-income Germans and will reform inheritance laws. Under the new coalition agreement, Guido Westerwelle, the leader of the Free Democrats, will assume the post of foreign minister. The Christian Democrat’s Wolfgang Schäuble, a strong fiscal conservative, will become finance minister.

2. In two separate attacks, two car bombs exploded outside government buildings in Baghdad, Iraq, on Sunday, killed more than 130 people and injuring more than 500. The attacks were the deadliest in more than two months. Iraq had been enjoying a period of relative stability, as Western-backed tribal leaders had pushed al Qaeda militants into the margins. But U.S. officials contend that Iraq may be entering a period of increased violence, as militants attempt to reignite sectarian violence ahead of parliamentary elections scheduled for next year.

3. Negotiations intended to resolve the standoff over the Iranian nuclear program appear to have stalled. The talks, which were reopened early last week, were intended to develop an agreement which reduced Iran’s stockpile of low enriched uranium (LEU), building upon an agreement reached earlier this month under which Iran agreed, in principle, to send some of its estimated 1,200 kg of LEU to Russia and France, which would convert the fuel into medical isotopes before sending it back to Iran. But after Iran failed to meet a Friday deadline, the United States warned that it would be willing to wait for a few more days, but cautioned that its patience was limited. Iran’s current stockpile, if enriched, could provide enough uranium for a single nuclear weapon.

4. Figthing between Somali insurgents and African Union (AU) peacekeepers broke out in Mogadishu on Thursday, killing at least 30 people. According to witnesses, militants attacked using mortars as Somali President Sheikh Sharif Ahmed was leaving the country for a meeting in Uganda. AU forces responded with artillery fire. More than 19,000 civilians have been killed, and an estimated 1.5 million people have been displaced from their homes since 2007 as a result of ongoing fighting in Somalia, which has made the country a center for international piracy and terrorism.

5. The government of Brazil on Tuesday imposed a two percent tax on some capital inflows into the country. The decision, which as intended to slow the increase in the value of the real, Brazil’s currency, which had already increased more than 36 percent against the U.S. dollar this year. The new tax targets portfolio investment and financial speculation, not productive investment in the country. Nevertheless, the announcement was not well received by the market, and stocks fell sharply after the government made its announcement. But analysts offered a more positive pronouncement. In an editorial comment, the Financial Times described the new tax as “wise,” “sensible,” and “honest.”

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Five Stories You Might Have Missesd

Efforts to rescue the failing auto industry continue, as President Bush last week announced a $17.4 billion package targeting the big three American auto manufacturers.  The Canadian government has stepped in with a C$4 billion package of its own, and pressure is growing on the British government to follow suit.

Here’s five other stories important from the previous week:

 1.  Despite the announcement of a record production cut by OPEC last week, oil prices continued to slide, falling below $34 per barrel—a four year low—on Friday.  Many analysts have raised concerns about the stability of oil prices, though oil producers and oil consumers remain at odds over precisely what the price should be.  In an interesting side note, falling oil prices have also undermined the ability of Venezuela to pursue its policy of supporting like-minded governments in Latin America.  Chavez’s government has pledged $30 billion in direct payments, oil financings, and other initiatives developed through the Bolivarian Alternative for the Americas, whose members include Venezuela, Cuba, Bolivia, Dominica, and Honduras.

2.  Prime Minister Yves Leterme’s government in Belgium resigned on Friday after the country’s supreme court found signs that the government had attempted to exercise undue influence over the country’s courts.  The resignation of Leterme’s government is the most recent indication of political instability in the country, sharply divided along linguistic lines and perpetually in danger of dissolution.  The government has been in office since March, after taking more than nine months to cobble together his five-party coalition.  As head of state, King Albert II must now decide whether to accept the resignation and schedule new elections, or try to form a new coalition out of the country’s sharply divided parliament.

3.  Palestinians living in the Gaza Strip and Israelis living near it are bracing for a renewal of violence this weekend as the Egyptian-negotiated ceasefire between the Israeli government and the Hamas-led government in Gaza ended on Friday.  The fragile ceasefire has been in place for six months, but both sides have regularly violated the agreement.  In response to rocket attacks against Israeli settlements, the Israeli military has closed all entry-points into Gaza, effectively cutting the region off from the outside world and creating severe shortages of key materials, including food and fuel.  The Hamas government asserts that it will not stop the rocket attacks until the blockage is lifted.

4.  On Thursday, a United Nations court found Colonel Theoneste Bagosora guilty of genocide, crimes against humanity, and war crimes in Rwanda and sentenced him to life in prison.  Bagosora assumed leadership of the military, and became the de facto leader of Rwanda after President Huvenal Habyarimana’s plane was shot down in April, 1994.  The downing of the plane marked the beginning of the mass killings, which resulted in the murder of more than 800,000 Tutsis in Rwanda.  The conviction makes Bagosora the highest-ranking member of the Hutu-dominated Rwandan government to be convicted. 

5.  The United States is preparing to expand its mission in Afghanistan, projecting an increased force commitment of between 20,000 and 30,000 soldiers by next summer.  The extra troops are necessary to fight a growing Taliban insurgency centered in the east and south of Afghanistan.