Tag Archives: Five Stories You Might Have Missed

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 Missed

A suicide bomb attack in Iran killed several senior commanders of the country’s elite Revolutionary Guard and at least twenty tribal leaders in the southeastern province of Sistan-Baluchestan, which borders Pakistan and Afghanistan. The bombing was the first major terrorist attack in Iran in more than twenty years, and represents a major public relations blow for the Iranian government. A group known as Jundallah claimed responsibility for the attack, though the Iranian government has also attempted to place blame on the British government for the attack, claiming that Britain has an “overt and hidden hand in terrorist attack against Iran.” Juddallah is a Pakistan-based radical Sunni group campaigning for independence for ethnic Baluchis in Iran.

In an unrelated development, the Russian government indicated it would be willing to impose sanctions on Iran if the Iranian government fails to implement promises it made to the international community regarding its nuclear program. This represents a significant hardening of the Russian position on Iran, which it had previously dismissed as “unproductive.”

In news from outside Iran in the last week:

1. The United Nations-backed panel investigating elections in Afghanistan appears poised to overturn August election results. The panel is recommending that a number of suspicious ballots be thrown out, thus necessitating a runoff election between incumbent president Hamid Karzai and his rival, Abdullah Abdullah. The United States is attempting to resolve the growing political crisis, which threatens to complicate President Barack Obama’s decision on whether or not to expand the U.S. troop presence in the country.

2. Fights between rival drug gangs rocked Rio de Janeiro over the weekend, only one week after the city was named host of the 2016 summer Olympics. At least fourteen people were killed in the violence, and a police helicopter was shot down as members of the Comando Vermelho, Rio’s largest gang, and its rival, Amigos dos Amigos, fought in the favelas that surround the city. The state governor, Sergio Cabral, informed the International Olympic Committee of the events, noting, “We told the OIC this is not a simple matter, and they know this, and we want to arrive in 201 with Rio in peace before, during, and after the games.”

3. The Pakistani government launched a new offensive against Taliban strongholds in the South Waziristan region. The new offensive comes after two weeks in which the Taliban had engaged in a series of attacks against the Pakistani government and military. The Pakistani government believes that the Taliban may have as many as 10,000 militant fighters assembled in the region, which is also believed to be the hiding location for Osama bin Laden.

4. In a dramatic regional contrast, citizens in Botswana are expected to hand the government if Ian Khama a victory in Friday’s elections, while the government of neighboring Zimbabwe is struggling to address the continuing political instability there. Botswana is widely viewed as a success story in Southern Africa, due in part to its political stability and part to its vast diamond wealth.  But as global diamond prices fall, the economy of Botswana may begin to struggle. The government faces a severe budget shortfall, due primarily to a dramatic decline in diamond prices, necessitating a $1.5 billion loan from the African Development Bank.

Meanwhile, in Zimbabwe, Prime Minister Morgan Tsvangirai threatened to “disengage” from working with President Robert Mugabe. The two have been part of a power sharing arrangement since Febraury, but Tsvangarai’s party, the Movement for Democratic Change, has been marginalized from real political power.

5. The United States budget deficit has reached a record level of $1.4 trillion for the last fiscal year, as the government expanded spending significantly in order to address the global economic downturn. The deficit was approximately 10 percent of gross domestic product, but was $162 billion less than the administration forecast in August. Tax revenue fell by more than 16 percent as a result of the economic downturn, but spending increased by more than 18 percent.

Five Stories You Might Have Missed

The Nobel Prize Committee sparked considerable debate on Friday when they named President Barack Obama the recipient of the 2009 Nobel Peace Prize. According to the committee, Obama received the award for “his extraordinary efforts to strengthen international diplomacy and co-operation between peoples,” citing in particular his effort to reach out to the Muslim world and his push for nuclear disarmament. FT blogger Gideon Rachman commented, “while it is OK to give school children prizes for “effort” – my kids get them all the time – I think international statesmen should probably be held to a higher standard.” Qari Mohammad Yousof Ahmadi, a senior spokesman for Afghanistan’s Taliban movement said of the award, “Obama should be awarded the war prize, rather than the peace prize.” Daniel Drezner said the decision “cheapens an already devalued prize.” At Foreign Policy, David Rothkopf decried the decision as “the most ludicrous choice in the history of an award that has a pretty dubious history… It’s as if a freshman tailback were handed the Heisman Trophy as he ran onto the playing field along with a hearty pat on the back and the explanation that he’d been selected to encourage him to have a great year to come.”

But most of the criticism of the award seems to be reserved for the Nobel Peace Prize Committee rather than for President Obama. Indeed, while calling the decision a “ludicrous choice,” Rothkoph also praised Obama’s speech regarding the award. He wrote,

Short of deferring his acceptance of the Nobel Prize, President Obama could not have struck a better tone in his remarks this morning accepting the award. From saying he did not deserve it to framing the award as a “call to action” to citing others who merited such an award, he was pitch-perfect. And in reciting some of his key goals — from the elimination of nuclear weapons to combating climate change to bringing a lasting peace between Israel and Palestine — he raised hope that the award might be even further motivation to advance to what are, as noted above, worthy objectives.

In news from outside the Nobel Prize awards:

1. The security situation in Pakistan appears to be in serious decline. Over the weekend, a group of militants stormed the headquarters of the Pakistani military in Rawalpindi, taking hostages and creating a standoff situation. The Pakistani military was able to retake the compound early Sunday, rescuing 42 hostages and killing most of the militants. On Friday, a car bomb exploded near a shopping mall in Peshawar, a city in the northern part of the country. The attack, described by Pakistani security officials as “one of the most daring attacks ever carried out by the Taliban,” killed 49 people and injuring nearly 100. The attack came just one day after a similar bombing outside the Indian embassy in Afghanistan, and may constitute part of a renewed offensive by Taliban elements operating along the Afghan-Pakistan border. Last week, the Pakistani government launched a renewed offensive against the Taliban in the Waziristan region of the country. But so far, the campaign has had few successes, and the increase in recent attacks, particularly the brazen attack against Pakistani military headquarters, cast doubt on the ability of the Pakistani military to effectively address the Taliban threat.

2. Despite reservations that the treaty would erode national sovereignty and transfer too much power to Germany, Lech Kaczynski, the President of Poland, signed the Lisbon Treaty on Saturday. Poland’s accession make the Czech Republic the lone European Union member that has not approved the Lisbon Treaty. Despite Czech resistance, the treaty appears to be headed for adoption and thus a radical restructuring of the European Union. The treaty would make EU decision making more efficient, streamlining the current voting system in the European Council and strengthening the role of the European Parliament.

3. A number of trade disputes intensified last week. On Thursday, the United States announced an investigation into Chinese steel pipes, the culmination of which could result in a 98.7 percent duty on steel pine imports from China. The announcement follows the imposition of a 35 percent duty on Chinese tire imports last month and a longstanding dispute over Chinese currency values.  Meanwhile, the United States filed a complaint against the European Union with the World Trade Organization on Thursday. The complaint alleges that EU restrictions on the importation of chicken meat washed with chlorine and other chemicals constitutes an unfair trade barrier. Canada last week filed a complaint with the WTO alleging US country-of-origin labeling requirements in cattle and hog exports also constitute an unfair trade barrier.

4. Intervention by Secretary of State Hillary Clinton was able to help overcome last minute setbacks to the Armenian-Turkish peace treaty on Saturday. The agreement, which must still be approved by both country’s parliaments, sets out a timeline to restore diplomatic relations and open the border between Amenia and Turkey. While the agreement was difficult to reach, both sides stand to gain. For Turkey, resolving the longstanding dispute could smooth its path to membership in the European Union and increase its influence in the Caucasus. Armenia could see its economy improve access to European Union market. Despite the potential benefits, the agreement could still be derailed due to longstanding tensions between the two countries, which date back to 1915 murder of up to 1.5 million Armenians by the Ottoman Empire, often referred to as the world’s first genocide.

5. On Tuesday, Idelphonse Nizeyimana, a key player in Rwanda’s 1994 genocide, was arrested in Uganda. Nizeyimana was responsible for the organization of the genocide in Butare, a southern province in Rwanda. The arrest was the second high profile detention in a month, following the arrest of Gregoire Ndahimana in the Democratic Republic of the Congo. But the arrests highlight tensions between Rwanda and the United Nations over the handling of charges related to the genocide, in which more than 800,000 ethnic Tutsis and politically moderate Hutus will killed. Both Nizeyimana and Ndahimana have been transferred to Tanzania to stand trial at the International Criminal Tribunal for Rwanda, despite efforts by the Rwandan government to have them tried by the Rwandan government in Kigali.

Five Stories You Might Have Missed

There have been several interesting developments in European politics over the past few days. Final results were released Saturday from the Irish referendum on the Lisbon Treaty. The Irish approved the treaty by a wide margin (with 67.1% of voters in favor) after defeating the treaty in June 2008 by a 53.4 percent majority. Ireland’s approval of the treaty represents an important step forward in approving a restructuring of the European Union; a restructuring that would expand the influence of the European Parliament, establish a full-time presidency for the EU (a position for which former British Prime Minister Tony Blair may be tapped), and limit the ability of national governments to veto EU legislation in certain areas. But despite the approval by Irish voters, Czech President Vaclav Klaus tempered expectations, stating that he may delay signing the treaty until a Czech appeals court can review the treaty and assess its implications for Czech sovereignty.

Two important elections also took place recently. In Germany, Angela Merkel won reelection as Germany’s Chancellor. The victory of her center-right coalition promises to continue her emphasis on greater openness for the German economy. Preliminary results from Greek elections on Sunday suggest that the Socialists will soundly defeat the ruling New Democracy party, possibly securing a legislative majority in the national parliament. The contradictory results suggest an interesting restructuring of European politics.

In news from outside of the European Union last week:

1. Government ministers at the annual meeting of the International Monetary Fund in Turkey this week rejected warnings by the banking sector that new financial regulations could undermine economic growth. Representatives from the United States, Italy, and the United Kingdom all rejected claims by the global bankers association that regulatory overkill could undermine global economic growth and result in the creation of fewer jobs. But despite apparent agreement on the need for new financial regulations, considerable debate over the exact nature and structure of those regulations remains, and an agreement on the details appears to be a ways off.

2. The International Olympic Committee granted Rio de Janeiro the right to host the 2016 Olympic Games on Friday, making Rio the first South American city to host the Olympics. A last minute visit by President Barack Obama to Copenhagen was unable to convince the IOC to grant the games to Chicago, which was also bidding to host. Several observers have raised concerns that Obama’s unsuccessful campaign to win the games may undermine his ability to deliver on health care reform and foreign policy objectives.

3. A massive earthquake in Indonesia resulted in the deaths of an estimated 1,100 people last week. The tragedy follows a tsunami in the South Pacific that killed more than 100 people. Concerns that another, larger quake could strike soon were also raised on Saturday. International aid campaigns have begun delivering supplies to the region, but the widespread devastation of government facilities in the region could hamper aid efforts.

4. The President of Burkina Faso has been dispatched to meet with the military rulers of Guinea to address the emerging crisis in the country. More than 100 people have been killed in Guinea in the past week, as the county’s military government has moved to quash opposition protests. On Thursday, Cellou Dalein Diallo, former prime minister and current opposition leader, was forced to flee the country, as Captain Moussa Dadis Camara, who came to power as the country’s leader in a December coup, has attempted to solidify his hold on power.

5. On Sunday, the government of Iran agreed to permit International Atomic Energy Agency inspectors to visit a secret uranium enrichment facility made public by the United States last week. The discovery of the site led the Russian government to concede the possibility of United Nations sanctions on the Iranian government—a proposal which both Russia and China have long opposed. The Iranian decision comes ahead of scheduled six-party talks, involving the United States, Russia, France, China, Britain, Germany, and Iran, at the end of the month.

Five Stories You Might Have Missed

The G20 meeting in Pittsburg this week resulted in agreement on several important principles, with the group agreeing in principle to establish guidelines for bankers’ pay, developing a timetable for reforming financial regulations, and establishing a new framework for economic growth. The G20 also agreed to transfer five percent of the shares in the International Monetary Fund and three percent of the shares in the World Bank to emerging countries. The organizations have long been criticized for voting structures which over-represent the developed world at the expense of the developing world.

In other news from the previous week:

1. There were several important developments in Iran this week. On Sunday, Iran test fired a short-range missile as part of ongoing war games in the country. The missile, a Shahab-3, has range sufficient to reach Israel and U.S. bases in the Persian Gulf. The launch comes just days after the United States announced it had discovered Iran possessed a second, secret uranium enrichment facility. France and the United Kingdom joined the United States in condemning Iran for misleading the international community. The discovery and announcement put pressure on Tehran, which maintains that the facility is used for peaceful purposes. The most recent announcement produced new signals from Russia, which had historically opposed sanctions against Iran. But after being briefed on the new facilities by the Obama administration, Russian President Dmitry Medvedev indicated that the Russian government may be willing to consider sanctions as a way of addressing the Iranian nuclear situation.

2. Germany is headed to the polls today, with most analysts calling the election too close to call and many speculating about what kind of coalition will take control of the world’s fourth largest economy. Although Angela Merkel’s ruling Christian Democrats have been leading throughout the campaign, her support has been slipping over the past week. With low turnout forecast, observers believe that the election could still be close. Further, a quirk in the German voting system could result in Merkel’s CDU winning a plurality of seats in the Bundestag despite winning a smaller percentage of the popular vote than her rivals. Her rival, the Social Democrats, have lagged in the polls throughout the campaign but managed a late-campaign surge. No matter what the margins, negotiations around a forming a new coalition in Germany will likely be the central focus of German politics in coming days.

3. Two car bombings believed to the work of the Taliban in Pakistan killed 27 people on Saturday. The attacks targeted Pakistan’s military and police forces, coming just days after the country’s President, Asif Ali Zardari, appealed to the G20 for assistance in fighting terrorism in Pakistan. The attacks demonstrate the resilience of the Taliban in Pakistan, which has been engaged in a protracted war with the national military. Last month, the Pakistani military killed Baitullah Mehsud, the Taliban’s main leader in Pakistan, and earlier this year, the military killed more than 3,000 Taliban militants in operations in the Swat valley region. Despite these losses, however, the Taliban remains a central threat to the stability of the Pakistani regime. 

4. The government of Guinea is moving forward with its efforts to overturn some of the contracts signed with foreign companies under the military dictatorship of Lansana Conté, whose 24 year-rule ended with his death in December. The new government has already forced Rio Tinto to return a portion of its iron ore concessions and convinced the South African gold company, AngloGold Ashanti, to establish a $10 million fund to pay for environmental damages caused by their operations in the country. On Tuesday, the government ordered the Russian aluminum company Rusal to quit the country, claiming that it owed more than$750 million in taxes, royalties, and other duties owed since 2002. With a GDP per capita of $442, Guinea remains one of the poorest and least developed countries in the world.

5. Deposed President Manuel Zelaya returned to Honduras last week, sneaking into the country and hiding in the Brazilian embassy in Tegucigalpa. Honduran security forces used water cannons and tear gas to dispurse crowds which had gathered outside the embassy in support of Zelaya. The Brazilian government has called on the international community to do more to support Zelaya’s return. Most of the international community has refused to recognize the new government and international assistance from the World Bank and the International Monetary Fund has been suspended. Speaking before the United Nations General Assembly on Wednesday, Brazlian President Luiz Inácio Lula da Silva said, “The international community demands that Mr Zelaya return immediately to the presidency of his country and must be alert to ensure the inviolability of Brazil’s diplomatic mission in the capital of Honduras.”

Five Stories You Might Have Missed

President Barack Obama has been busy on the diplomatic front this week. On Thursday, Obama announced his administration would cancel President George Bush’s proposed deployment of a missile defense system to Eastern Europe.  The missile defense system would have involved deployment of radar systems to Poland and the Czech Republic, a move which the Russian government insisted undermined its own national security and necessitated the expansion of its missile systems into Eastern Europe. Although the Russian government denied there was a quid-pro-quo agreement for the U.S. move, the Obama administration is hoping that the change in U.S. policy will help improve relations with Russia and lead to greater cooperation in other areas, including addressing the situation in Iran. However, Russian Prime Minister Vladimir Putin responded to the announcement with a demand for greater U.S. concessions, including support for Russian membership in the World Trade Organization, leading some analysts to speculate that the United States had miscalculated if it believed that its policy change in missile defense would result in a dramatic shift in Russian policy.

On Saturday, the White House announced that President Obama would hold a joint meeting with Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abba on Tuesday. Obama hopes that the meeting will restart peace talks, which reached an impasse last year. U.S. Special Envoy for the Middle East, George Mitchell, has been engaged in shuttle diplomacy to address the stalled talks for more than a week, but Netanyahu remains under domestic political pressure not to make any concessions on the expansion of Israeli settlement activity in the West Bank, a key obstacle for the Palestinians.

In other news from the past week:

1. Last week’s meeting of the Central Committee of the Chinese Communist Party raised questions about who will succeed Hu Jintao as the country’s leader. Most analysts had believed that Vice President Xi Jinping was Hu’s heir apparent, poised to take control of the party (and the country) after Hu steps down in 2012. When Xi was named to the Politburo in 2009, it was assumed that his elevation would follow the same path as Hu’s. Hu’s political power rests in his control of three offices: Secretary General of the Communist Party, President of China, and Chairman of the Central Military Commission. Xi was expected to be nominated to succeed Hu as Chairman of the Central Military Commission on Friday, but no announcement from the Central Committee was forthcoming. Although some analysts believe that Xi’s appointment may be announced at a later date, others believe that Hu may be trying to retain control of key positions, including head of the military, after his 2012 retirement.

2. Efforts to resolve the political crisis in Afghanistan continued over the weekend, as closed-door meetings between foreign envoys, opposition leaders, and representatives of President Hamid Karzai discussed the future of the country. Although President Karzai was declared the winner of last month’s presidential elections by the Afghan elections commission, most observers believe that the vote was badly flawed, with the European Union suggesting that as many as 1 million of Karzai’s votes (which would represent more than ¼ of all votes cast in the election) should be viewed as suspect. Seeking to address the political standoff, the West is pushing for a power-sharing agreement in Afghanistan that would see Karzai claim the presidency but would considerably weaken the office, transferring significant political authority to appointed technocrats.

3. On Thursday, Islamic insurgents launched a suicide bomb attack against African Union peacekeeping forces in Somalia, in a move retaliating against a U.S. strike that killed Saleh Ali Saleh Nebhan, a suspected al-Qaeda leader. The African Union force, comprised primarily of Ugandan and Burundian soldiers, remains understaffed despite being responsible for addressing the threat posed by Islamic radicals intent on toppling the fragile government.

4. The government of Venezuela has been busy courting foreign assistance in developing its oil production facilities. The Venezulan government last week announced the discovery of a “very large” pocket of natural gas offshore, following a similar announcement by the government of Brazil. The Venezulean government announced that it had signed a $20 billion deal with the Russian government and a $16 billion with the Chinese government to expand oil production in the country by as much as 1.35 million barrels per day.

5. The campaign around the Irish ratification vote on the Treaty of Lisbon, scheduled for October 2, has entered full swing. Charlie McCreevy, Ireland’s European Commissioner, delivered a strongly-worded speech to the business community in Dublin suggesting that “international investors would take flight” from the country if it rejected the Treaty. The Treaty, viewed as vital to the continued growth and expansion of the European Union, was rejected by Irish voters in 2008, sparking a furious round of diplomacy to get the Treaty passed. But many observers are forecasting another no vote by Ireland in October could lead to the defeat of the Treaty in other Euroskeptic countries, including Poland and the Czech Republic.

Five Stories You Might Have Missed

It’s been an interesting week for the U.S. economy. According to figures released on Thursday, the U.S. trade deficit jumped by 16.3 percent to $32 billion in June, a figure sharply higher than the $27 billion that had been forecast. The dramatic increase in imports was fueled by the “Cash for Clunkers” program, which led to a dramatic increase in auto imports. Meanwhile, the Commerce Department reported that the poverty rate had increased from 12.5 percent in 2007 to 13.2 percent in 2008. The poverty rate, which is defined as the number of people with an annual income of less than $11,200 (or less than $22,000 for a family of four), increased as a result of the global economic downturn. Home foreclosures also remain near their record high level. The troubled status of the U.S. economy led the Federal Reserve to indicate that it would be unlikely to raise interest rates in the first half of next year.

In news from outside the U.S. economy last week:

1. A trade dispute between the United States and China may be headed to the World Trade Organization for resolution. The United States last week imposed a new duty on tires manufactured in China, less than one week after it also imposed higher tariffs on Chinese steel piping. A spokesperson for the Chinese government condemned the move as protectionism, warning that “a chain reaction of trade protectionist measures that could slow the current pace of revival in the world economy.” Observers fear that the Chinese could respond with higher tariffs on U.S. agricultural and automotive exports, potentially sparking a trade war. But in an interesting editorial in the Financial Times, Clyde Prestowiz argued that the imposition of higher tariffs on Chinese exports to the Untied States could potentially help the push for free trade.

2. With the German election just a couple of weeks away, campaigning is in full force, and observers are already working through the numerous possible coalition arrangements. But in perhaps the most interesting development to date, German Finance Minister Peer Steinbrück last week called for the imposition of a new global tax on international financial transaction, the proceeds of which would be used to repay governments for the cost of fiscal stimulus packages and bank rescue operations. While not dismissing the idea out of hand, German Chancellor Angela Merkel called the proposal “electioneering.” Steinbrück’s call follows a similar proposal made by the Chair of the British Financial Services Authority, Lord Turner, and could make for interesting discussions at the upcoming G20 summit.

3. The counting process in the Afghan elections continues to drag on. Although incumbent President Hamid Karzai now has enough votes to win the disputed presidential election outright, according to the most recent results of the Independent Election Commission, widespread irregularities have led to calls for partial recounts. On Sunday, the IEC agreed to move forward with discussions on a recount, but it stopped short of spelling out precisely what votes would or would not be included. The Electoral Complains Commission, a body established by the United Nations to observe elections and investigate allegations of fraud, noted “clear and convincing” evidence of fraud and vote rigging in southern provinces which went heavily towards Karzai.

4. The first high-level contact between the government of Zimbabwe and the west took place on Sunday, as the European Union’s Commissioner for Humanitarian Aid and Development and the Swedish Prime Minister (who also holds the European Union’s rotating presidency) met with representatives of the Zimbabwean government in Harare. The meeting is the first high-level contact since the European Union imposed sanctions against Zimbabwe in 2002. While the European Union delegation remained noncommittal regarding the future direction of contact with the Zimbabwean government, stating only that “We’re entering a new phase. The [power-sharing agreement in Zimbabwe] was an important step forward, but much more needs to be done. The key to re-engagement is the full implementation of the political agreement.” The status of the power sharing arrangement in Zimbabwe remains uncertain, as President Robert Mugabe and his rival, Prime Minister Morgan Tsvangirai, continue to struggle over the distribution of political authority within the country.

5. The government of Guatemala last week declared a “state of calamity” in response to the widespread hunger gripping the country. The World Food Programme estimated that the country would require an immediate shipment of 20 tons of food the worst affected areas in order to stave off starvation. Alvar Colom, Guatemala’s president, said that global climate change was affecting the El Niño, causing a massive drought in the northeastern portion of the country. But Colom was also critical of the high level of inequality in the country, observing that “There is food, but those who go hungry have no money to buy it.” Critics also note that poorly defined land rights, narcoviolence, and alleged corruption have also undermined food production. According to the World Food Programme, half of all children under five in Guatemala suffer from malnutrition.

And in a bonus story for this week:

6. After more than three months since the general election, the political situation in Lebanon remains cloudy. On Thursday, Saad Hariri, the leader of Lebanon’s pro-Western majority, resigned as prime minister designee, despite performing well-above expectations in June’s elections. According to Hariri, the country’s parliamentary minority blocked efforts to develop a coalition government, leaving the country in a period of political uncertainty.