NEWS,22.10.2012

Iran Policy and the 50th Anniversary of the Cuban Missile Crisis

The unrepentant neo-cons and backbenchers on Mitt Romney's foreign policy team, such as Dan Senor and Cofer Black, always advise their candidate to attack signs of "weakness" coming from President Obama. The Administration's announcement of direct talks between the U.S. and Iran should be welcomed as good news by those who don't wish to see yet another bloodbath in the Middle East but Romney can be counted on to condemn the diplomatic breakthrough as insufficiently hawkish. The news that Obama has chosen dialogue over saber-rattling gives Romney the opportunity to vent his criticism at the sole foreign policy debate that falls on the 50th anniversary of the night when President John F. Kennedy first made public the existence of Soviet nuclear missiles in Cuba. Fifty years ago, President Kennedy, after being informed that Soviet Premier Nikita Khrushchev had deployed intermediate-range nuclear missiles in Cuba, was able to move beyond his knee jerk reaction to bomb and invade the island. Fortunately, over the course of days Kennedy tempered his response by adding statesmanship to his brinkmanship. The idea of bombing Cuba followed by a ground invasion was sidelined in favor of more incremental pressures: seeking multilateral assistance while enforcing a Naval "quarantine" of Soviet vessels to give negotiations more time.As the United States tries to assess the danger of Iran becoming a nuclear power the lessons of JFK's dealing with the Soviets over the change in the nuclear status quo is more relevant than ever.The bluster and war mongering of repeating the mantra "all options are on the table" needlessly heightens tensions and makes war more likely if it is not accompanied by face-saving ways out of the crisis. The U.S.'s adversary du jour, (in this case the fallible clerics who run the Islamic Republic of Iran), typically do not respond well to military threats of air strikes, "red lines," or "axis of evil" rhetoric (thank you David Frum). These kinds of intimidating tactics coming from a nuclear power that can lay waste to Iran, although favored by the neo-cons who brought us the disastrous war in Iraq, if devoid of any links to a pathway out of the confrontation amount to little more than bullying and belligerence. In the case of Iran, the threat of "the use of force" after years of George W. Bush's calamitous policies in the region do nothing to dissuade the Ayatollahs from continuing their nuclear enrichment program.Iran remains a signatory to the Nuclear Non-Proliferation Treaty (NPT), which has safeguards and allowances for the civilian uses of nuclear power. The best U.S. intelligence analyses conclude that Iran is not building an atomic bomb. If President Kennedy could offer an off-ramp from disaster to Nikita Khrushchev, who was at the time the U.S.'s most bombastic ideological foe who possessed a nuclear arsenal big enough to do serious damage, then a sitting U.S. president today can give Ayatollah Ali Khamenei (a far weaker adversary) a similar face-saving way out of the current "crisis." Through secret backchannels, Kennedy offered Khrushchev sweeteners in the form of offering to remove the U.S.'s Jupiter missiles from Turkey and pledging not to invade the island in exchange for the Soviets agreeing to take their missiles out of Cuba. Any public ultimatum ("red line") against Iran absent of private offers of concessions amounts to nothing more than war mongering. A wiser policy toward Iran more akin to the one Kennedy applied to Cuba during the missile crisis would be to take the military option "off the table," quiet down the noise level from actors in the U.S. and in the region (such as Bibi Netanyahu) who are screaming for a war, and deal with Iran on terms of mutual respect and a realist recognition of shared interests. This dual-track policy appears to be where President Obama and Secretary of State Hillary Rodham Clinton are heading. It is the only policy that can defuse the "crisis." There is no military solution. Let's not forget that in the aftermath of the 9/11 attacks Iran offered to help the United States track down Al Qaeda and has assisted in stemming the drug traffic out of Afghanistan. And let's also not forget that the Reagan Administration armed the government of Ayatollah Ruhollah Khomeini in the mid-1980s in an attempt (according to Reagan) to open up a "dialogue." And let's not further forget that it was the U.S. Central Intelligence Agency that in August 1953 overthrew the democratically elected government of Mohammad Mossadegh and installed the Shah Reza Pahlavi. The CIA coup d'état, organized from within the U.S. embassy in Tehran, re-wrote that nation's history denying Iran in the early 1950s what might be called today a "Persian Spring." There has never been an adequate American acknowledgement that the U.S. was responsible for propping up a dictatorship in Iran under the Shah for 25 years, which set the stage for the 1979 revolution that brought the clerics to power in the first place. The recent history of American-Iranian relations, which has been a lengthy series of underhanded and failed policies, must be taken into account. A little humility on the American side could go a long way.In October 1962, President Kennedy's sobering experience during the missile crisis led directly to his American University speech of June 1963 where he called for an end to the demonization and brinkmanship of the Cold War. The crisis also put the Atmospheric Test-Ban Treaty on the front burner of his priorities and Kennedy spent considerable political "capital" in prodding the U.S. Senate to ratify the treaty. Had Kennedy decided to bomb and invade Cuba it would have been popular with the hardliners around him and with American public opinion. But it is also highly likely that one of the 98 tactical nuclear bombs on the island would have been detonated over the heads of U.S. marines. (There had been good cause for politicians and other residents of Washington to begin readying bunkers and bomb shelters.) On October 22, 1962, in announcing the existence of the missiles President Kennedy chillingly told the world that any detonation of a nuclear device in the Western Hemisphere would be considered "an attack by the Soviet Union on the United States, requiring a full retaliatory response upon the Soviet Union." Yet he understood that Khrushchev would have to brush back the hardliners inside his own government. Imposing a U.S. Navy "quarantine" of Soviet ships heading for Cuba and bringing in the United Nations and allies to help find a way out of the crisis was the least pugnacious of the military options and it bought time for negotiations. Robert F. Kennedy was sent as his brother's emissary to privately talk to the Kremlin-connected journalist, Georgi Bolshakov, and to Soviet Ambassador Anatoly Dobrynin. The U.S. offered to dismantle its Jupiter missiles in Turkey and agreed not to try to topple the Castro regime. In late 1963, Kennedy even sent out feelers to the Cuban government that normalizing U.S. relations might be a possibility if Castro agreed to certain conditions, such as limiting the Soviet military presence. Although these efforts were cut short by Kennedy's assassination they illustrate that he was willing to make substantial concessions and push against the Cold War orthodoxy of the period that took as gospel that the Soviets only respected threats of massive violence.With the ongoing partisan attacks against President Obama when facing challenges in a more complicated world than existed a half century ago, along with his ill-advised escalation of drone attacks that only increase tensions and create new enemies, the last thing this country needs is to blunder itself into another misguided war. What's needed when dealing with Iran and its nuclear program is the cautious pragmatism and willingness to bend and make concessions that characterized President Kennedy's strategy 50 years ago.During the missile crisis the United States and the Soviet Union sidelined regional actors who called for military actions that would be in nobody's interest (including those demanding it). And like the crisis of 1962 the tensions with Iran in 2012 can be lessened with a greater willingness to compromise, the offering of concessions, and a recognition that war will only bring added misery and hardship to the people in that part of the world who have already endured enough. Romney will no doubt go on the offensive against Obama's new Iran initiative decrying it as "weak" and not aligned with his neo-con proclivities. The Right's echo chamber will denounce the timing of the announcement of talks with Iran as an "October Surprise." But we mustn't allow their shrill, politicized whining about sensible diplomatic overtures drown out the crucial need for a peaceful resolution of the conflict. Unfortunately, neither candidate today could make the kind of speech that President Kennedy delivered in June 1963 without enduring considerable political fallout. Kennedy said in his American University address: "History teaches us that enmities between nations, as between individuals, do not last forever. However fixed our likes and dislikes may seem, the tide of time and events will often bring surprising changes in the relations between nations and neighbors. So let us persevere. Peace need not be impracticable, and war need not be inevitable. By defining our goal more clearly, by making it seem more manageable and less remote, we can help all people to see it, to draw hope from it, and to move irresistibly towards it... For in the final analysis, our most basic common link is that we all inhabit this small planet. We all breathe the same air. We all cherish our children's futures. And we are all mortal .We shall  do our part to build a world of peace where the weak are safe and the strong are just. We are not helpless before that task or hopeless of its success. Confident and unafraid, we must labor on not towards a strategy of annihilation but towards a strategy of peace."

 

Romney and Obama in last chance debate

President Barack Obama and Republican challenger Mitt Romney face off in front of the cameras for a final time this afternoon as opinion polls show their battle for the White House has tightened to a dead heat.With 15 days to go until the November 6 election, the two candidates turn to foreign policy for their third and last debate.The stakes are high. The two candidates are tied at 46% each in the Reuters/Ipsos online daily tracking poll, and the debate will likely be the last time either candidate will be able to directly appeal to millions of voters.Though few voters cite the war in Afghanistan or other national-security topics as a top concern, Obama can point to a number of successes on his watch, from the end of the Iraq war to the killing of Osama bin Laden.Romney will use worries about the prospect of a nuclear Iran and turmoil in Libya to try to amplify concerns about Obama's leadership at home and abroad."Many voters are ready to fire Obama if they see Romney as an acceptable alternative," said David Yepsen, director of the Paul Simon Public Policy Center at Southern Illinois University."Foreign policy has not been a big driver of this campaign but I think Romney could add some icing to his cake if people say, 'Hey, this guy is on top of world affairs.'"Impact of debates Presidential debates have not always been consequential, but this year they have had an impact.Romney's strong performance in the first debate in Denver on October 3 helped him recover from a series of stumbles and wiped out Obama's advantage in opinion polls.Obama fared better in their second encounter on October 16, but that has not helped him regain the lead.The Obama campaign is now playing defense as it tries to limit Romney's gains in several of the battleground states that will decide the election.Romney could have a hard time winning the White House if he does not carry Ohio, and a new Quinnipiac/CBS poll shows Obama leading by 5 percentage points in the Midwestern state.Last-chance More than 60 million viewers watched each of their previous two debates, but the television audience this time could be smaller as it will air at the same time as high-profile baseball and football games.Much of the exchange, which takes place at Lynn University in Boca Raton, Florida, will likely focus on the Middle East. Other topics such as trade with China and the debt crisis in Europe could allow the candidates to circle back to the economic concerns that are topmost on voters' minds.Campaigning in Canton, Ohio, Vice President Joe Biden on Monday reminded voters of Obama's pledge to pull troops out of Afghanistan in the next two years and pointed out that Romney and his running mate Paul Ryan have made no such guarantees."They said, quote, it depends. Ladies and gentlemen, like everything with them, it depends," Biden said. "It depends on what day you find these guys."Romney accuses Obama of presiding over a weakening in US influence abroad, but he has to assure voters he is a credible alternative to the president on the world stage. The former Massachusetts governor's July trip to London, Jerusalem and Poland was marked by missteps.Libya attack The two men at their second debate last week clashed bitterly over Libya, a preview of what is to come in today's debate.They argued over Obama's handling of the attack last month on the US consulate in Benghazi, Libya, in which Ambassador Chris Stevens and three other Americans were killed.The Obama administration first labeled the incident a spontaneous reaction to a video made in the United States that lampooned the Prophet Mohammad.Later, it said it was a terrorist assault on the 11th anniversary of the September 11, 2001, attacks.This shifting account, and the fact that Obama went on a campaign trip the day after the attack, has given Romney ammunition to use at the Florida debate."The statements were either misleading by intention or they were misleading by accident. Either way, though, he's got to get to the bottom of this," Romney adviser Dan Senor said on NBC's "Today" show.'Leading from behind' Obama and his allies charge that Romney exploited the Benghazi attack for political points while officials were still accounting for the wellbeing of US diplomats.Regarding foreign policy overall, Obama's allies accuse Romney of relying on generalities and platitudes."It is astonishing that Romney has run for president for six years and never once bothered to put forward a plan to end the war in Afghanistan, for example, or to formulate a policy to go after al Qaeda," US Senator John Kerry, the Democrats' 2004 presidential nominee, wrote in a memo released by the Obama campaign on Monday.Romney has promised to tighten the screws over Iran's nuclear program and accused Obama of "leading from behind" as Syria's civil war expands.He also has faulted Obama for setting up a politically timed exit from the unpopular Afghanistan war, and accused him of failing to support Israel, an important ally in the Middle East.The Republican challenger is likely to bring up a New York Times report from Saturday that said the United States and Iran had agreed in principle to hold bilateral negotiations to halt what Washington and its allies say is a plan by Tehran to develop nuclear weapons.The 90-minute debate, moderated by Bob Schieffer of CBS, will be divided into six segments: America's role in the world; the war in Afghanistan; Israel and Iran; the changing Middle East; terrorism; and China's rise.

'Fit' Fidel Castro appears in public

Cuban revolutionary leader Fidel Castro has reappeared in public, meeting at a Havana hotel with a Venezuelan politician - quashing swirling rumours that the former leader was on his death bed.Castro - who led Communist Cuba for almost five decades before illness sidelined him - "is very well", Venezuela's former vice president Elias Jaua said on Sunday after meeting the bearded revolutionary icon.The 86 year-old Castro "is very well, very lucid", Jaua, a loyal supporter of leftist Venezuelan President Hugo Chavez, whose government keeps the cash-strapped Cuban regime afloat with cut-rate oil and aid - told reporters.After the five-hour meeting on Saturday, Castro accompanied Jaua back to the posh Hotel Nacional, where the visitor was staying, and then posed wearing a straw farmer's hat for pictures with hotel staff."We are going to have Fidel with us for a long time," said hotel manager Antonio Martinez, who posed with Castro for a picture, in which Jaua also flashes a broad smile.Martinez said the former Cuban president was accompanied by his wife Dalia Soto del Valle during the visit to the hotel.Jaua, who is currently a candidate for Miranda state governor for Venezuela's ruling party, said he spoke with Castro about agriculture, history and international politics.Castro, who rose to power after the 1959 revolution, ceded the presidency to his younger brother Raul, 81, in July 2006 for health reasons.Castro had not been seen in public since 28 March, when Pope Benedict XVI paid a landmark visit to Cuba, and again briefly the following week on 5 April with Chilean student leader Camila Vallejo. Serious intestinal surgeryThat fuelled rumours his health had worsened, that he was dead or on his death bed - particularly since Castro also had not published one of his usually frequent editorials in official state media since 19 June.In the past five years since falling ill after serious intestinal surgery, Castro has penned about 400 editorials as well as books about the revolution, and welcomed a few international leaders in private events.Last week, he sent a letter of congratulations to medical school graduates which was picked up in state media, but he did not appear in public at the time.With rumours about Castro's health rife abroad, one of his sons, photographer Alex Castro, said last week at an exhibit in Guantanamo of pictures he took of his father after 2010 that Castro "was in good shape, doing his daily activities, exercising, reading and taking care of himself".The re-election of Chavez, 58, in Venezuela this month likely brought huge sighs of relief in Havana. For now, it can continue to count on Caracas' critical economic support, as Cuba presses its quest for its own oil to fund the Americas' only Communist regime in the future.Meanwhile, President Raul Castro, sporting his general's uniform, was out early on Sunday at a polling station to cast his ballot in one-party municipal elections, state TV showed. Fidel Castro cast his vote by absentee ballot, as those with physical ailments are allowed to do.

NEWS,16.10.2012

More 'energetic' Obama predicted for debate

President Barack Obama's camp is promising that the American public will see a more energised and visionary incumbent in the second presidential debate later today.Republican challenger Mitt Romney's campaign got a much-needed shot in the arm two weeks ago when the Republican came out swinging in the first matchup between the two candidates, while Obama appeared passive and tongue-tied at times.The strong debate performance helped Romney reverse his slide in the polls, and recent surveys put the race for the White House at a virtual dead heat just three weeks ahead of the November 6 election.In a Ipsos daily tracking poll on Tuesday, Obama gained ground on Romney for the third straight day, leading 46% to 43%."I think you'll see somebody who will be strong, who will be passionate, who will be energetic, who will talk about... not just the last four years but what the agenda is for the future and how we continue to move... our economy forward," Obama's senior campaign adviser Robert Gibbs said.The 90-minute debate at Hofstra University in New York begins at 9pm EDT (2pm today NZT).Velvet glove Both men will have to deal with a more intimate town hall format, which often inhibits political attacks as the candidates focus on connecting with the voters asking the questions.It also offers an element of uncertainty as the candidates cannot predict what the audience of undecided voters might ask, which could range from tax policy to job creation to foreign policy."Almost all of the pressure will be on Obama this time, given how poorly he performed in the first debate and how much that seemed to help Romney and change the race," said political scientist Andrew Taylor of North Carolina State University.The town hall format lets the candidates "talk directly to people and look them in the eye and try to connect, which has not been a strength for either of them," Taylor said."But you can still make strong points with a velvet glove."Repairing damage During the first debate, Obama was widely criticised for not challenging Romney on exactly how he plans to give Americans a big tax cut without adding to the deficit, and for not calling attention to the more moderate views Romney appeared to present during the matchup.A Gallup/USA Today poll published on Tuesday showed the two had similar favorable ratings from registered voters. But the survey showed Romney ahead of Obama by four percentage points among likely voters in the 12 battleground states.The Reuters/Ipsos poll that gave Obama an edge showed the number of undecided voters had increased, indicating a drop of support for Romney among the coveted voting bloc.The online survey of 1,846 likely voters was conducted between October 12 and October 16.The precision of the poll is measured using a credibility interval, which is plus or minus 2.6 percentage points for likely voters.For Obama, trying to repair damage from the last debate, the challenge will be to confront Romney on the issues without seeming nasty or too personal.Romney, a wealthy former private equity executive often accused of failing to connect with ordinary people, would be happy with a steady performance to keep up his momentum.Economy The economy is expected to be a dominant topic. Obama is able to tout the latest jobs report, which showed that the unemployment rate unexpectedly dropped to 7.8% in September and reached its lowest level since Obama took office.Romney has countered that the labor market is not healing fast enough.Glenn Hubbard, one of Romney's top economic advisers, told Reuters that the Republican candidate was prepared to question Obama's record on the economy."His objective is to continue the conversation with voters about what the right economic policies are for the country," Hubbard said on the sidelines of an economic conference in New York. "He did that really well last time and I'd be stunned if he doesn't do it well tonight."Since the last debate, both sides have also focused on new lines of attack that are likely to come up in today's debate. Romney was expected to stay on the offensive over the administration's handling of diplomatic security in Libya before the attacks there that killed the US ambassador and three other Americans.The debate comes a day after Secretary of State Hillary Clinton assumed responsibility for the lack of security that failed to protect against the deadly attack."It's a matter of leadership; it's a matter of straight answers," Republican National Committee chairman Reince Priebus."I just get a feeling that this president hasn't been straight with the American people."Democrats, hoping to make more inroads with women voters, have hit Romney and his running mate Paul Ryan for their opposition to abortion rights.

The Euro: Bad Idea, Poorly Executed, Hard to Fix

When the Norwegian Nobel Committee awarded the 2012 Peace Prize to the European Union (EU), they cited advances in "peace, democracy, and human rights." The common currency zone we call the Euro Area isn't mentioned, unless it's implied by the phrase "grave economic difficulties." If the EU has been a success, the European Monetary Union (EMU) is revealing itself to be the opposite. One might argue that the euro was a mistake from the start, that the history of fixed exchange systems is littered with failure. We have some sympathy with that view, but we'd like to make two different points. First, flaws in the design and implementation of the EMU have made the crisis worse. Second, the decentralized decision-making process of the EU, with political power concentrated in countries rather than Europe, makes effective crisis management nearly impossible. The euro crisis combines, in our view, a sovereign debt crisis and a banking crisis, with mutually adverse feedback between the two. But design flaws in the system magnified their impact and feedback. The most important flaws were: Inadequate fiscal discipline. Limits on debt and deficits (the Stability and Growth Pact) failed early on when France and Germany ignored them. That paved the way for countries with weaker fundamentals, including Greece and Portugal, to issue more debt than they could support. When the crisis struck, the no-bailout clause of the Maastricht Treaty also proved to be vacuous. Compare that to the federal system in the United States. Fiscal difficulties in Illinois or New Jersey come with clear precedent against bailouts and have little impact on other states, the federal government, or the monetary system. . Symmetric treatment of sovereign debt. National bank regulators regulation remains a national activity, not a European one decided to treat the debt of Euro Area members as risk-free for capital requirements. The European Central Bank compounded the mistake, accepting all such debt as collateral on similar terms until recently. It's not hard to imagine this made the debt of weak states more attractive and allowed them to issue debt on better terms than their fundamentals indicated. These policies further weakened the credibility of the no-bailout commitment. National regulation, deposit insurance, and bank resolution. Consider a system with no limit on cross-border capital flows, but with national responsibility for regulation, deposit insurance, and resolution of insolvent banks. Add regulatory tolerance of home-country bank risk and sovereign debt problems and you have the perfect environment for a cross-border credit expansion followed by an international bank run. Add national guarantees of banks and you have a feedback amplifier linking banks and sovereigns. The feedback intensifies when bank and fiscal consolidation hit the economy. Leaks in the payments system. The Euro Area payments system (TARGET2) allowed weak banks to borrow from the European Central Bank to replace their evaporating deposit base. While this avoided a collapse of the euro, it subsidized weak banks, delayed their recapitalization, and reinforced the ongoing disintegration of the Euro Area financial market. Official funds continue to flow on a large scale from the ECB to banks in weak countries. When they buy home-country debt, the financial system becomes riskier, fragmentation more permanent, and market discipline on sovereigns less effective. The enormous growth of TARGET2 balances also makes the creditor countries worry about their exposure to a potentially fragile union. As of September, the Bundesbank's TARGET2 claims was nearly 700 billion euros. No exit strategy. The authors of the Maastrict Treaty suggested that membership in the Euro Area was irreversible: there were no provisions for exit or expulsion. The threat to leave, however, gives weak countries more leverage than strong ones. They threaten contagion to others, whose membership is revealed to be revocable, and ask for financial help to void the threat. Consider the contrasting situation of Ecuador, which decided to use the US dollar as its currency. Ecuadorians made this decision on their own, and they can change it any time they wish, with no perceivable impact on the U.S. or any other country. None of these features of European Monetary Union were essential to a common currency system. They were, in a sense, implementation details, but details or not, they made the crisis worse. We see the results now all over Europe. On top of this, the decentralized nature of political power in Europe makes it extremely difficult for anyone to respond effectively to the crisis. Political power, particularly the power to raise revenue, still resides in countries, not in Europe or a euro-area agency. Many important decisions require unanimous approval of the member states. That leads to concerns about whether (say) Finland will approve a measure to deal with the crisis. The best minds of Europe have come up with some creative workarounds, but it shouldn't have been this hard. The political structure has taken a difficult problem and made it nearly impossible. That was always the inherent tension at the heart of the system: collective monetary policy vs. national political power. It was never a good combination. If you could do it over again, you wouldn't do it this way. Where will this lead? Maybe Greece will leave, maybe it won't, but the rest probably will continue to muddle along from crisis to crisis. Even if the system holds together for a time, the cost is likely to be an extended period of poor economic performance  in our view, more extended than it has to be. I would love to be wrong.

 

Chinese Warships Off Japan Cross Near Island Of Yonaguni

 

Japanese military officials said they closely watching seven Chinese warships spotted in waters off a southern island Tuesday. It was unclear whether the ship movements were related to a territorial dispute that has prompted both countries to show off their maritime muscles.The Chinese ships were sighted about 49 kilometers (30 miles) from the island of Yonaguni, in Japan's Okinawa prefecture (state), according to Japan's Defense Ministry. They were about 200 kilometers (125 miles) from a chain of small islands that have sparked a heated dispute between Japan and China.The ships were believed to be returning to China after training in the Pacific.Defense Minister Satoshi Morimoto said Japan is monitoring the ships' movement. Japan considers the area part of its contiguous waters, but it is not illegal for foreign vessels to transit them.It is not unusual for the Chinese navy to transit waters around Okinawa en route to the Pacific, but this is the first such operation observed this year, according to public broadcaster NHK. The ships included frigates, a guided missile destroyer, a refueler and two submarine rescue vessels.It was unclear if their mission was directly related to the territorial issue, or whether they were trying to avoid an approaching typhoon.China's Defense Ministry said the ships were on a scheduled cruising exercise and were acting in a manner that was "appropriate and legal."Underscoring China's sharper stance, it also protested the scrambling of a Japanese military plane in the direction of the disputed islands, calling that a "gross violation" of Chinese sovereign rights."The Chinese military is closely following the actions of the Japanese side and demands Japan halt all actions complicating or escalating the situation," the ministry said in a short statement on its website.Japan angered China last month by nationalizing part of the chain of uninhabited East China Sea islands called Senkaku in Japanese and Diaoyu in Chinese. The move sparked violent protests in China.Chief Cabinet Secretary Osamu Fujimura said Tokyo has urged Beijing to "avoid any actions that would go counter to the mutual benefit."Nearby Taiwan also claims the islands, which are uninhabited but surrounded by rich fishing grounds and possibly lucrative undersea energy deposits.China and Japan have recently stepped up naval activities in the area around Okinawa because of the dispute, but there have been no clashes between their warships, which have generally stayed away from the islands themselves.Wary of missteps that could lead to a sudden escalation of tensions, the countries have instead sent less threatening coast guard ships. Over the past week, however, both have made a point of showing off their naval prowess.Chinese websites were abuzz Monday with photographs of navy pilots practicing touch-and-go landing exercises on China's first aircraft carrier. It wasn't clear when the pictures were taken, and they did not appear on the Defense Ministry's website or in official media.The carrier was launched last month without aircraft or an accompanying battle group, and actual flight operations could be years away. But it is widely seen as a symbol of China's ambitions to be a leading Asian naval power, especially as it faces sharpening territorial conflicts with Japan and other countries.Japan's navy, meanwhile, marked its 60th anniversary with a major exercise on Sunday. Japan also plans to hold a joint exercise with the U.S. military later this year, reportedly using a scenario of taking a remote island back from a foreign intruder.Asked how China sees the reported scenario, Chinese Foreign Ministry spokesman Hong Lei said, "To maintain the peace and stability of Asia-Pacific is beneficial to all sides." He added: "Increasing tension is against the bigger trends of regional security, peace and the buildup of political and security trust. We reserve the right to take further action."Defense Minister Morimoto declined to confirm the scenario or give other details.In Sunday's exercise, about 40 ships – including state-of-the-art destroyers, hovercraft able to launch assaults on rough coastlines and new conventionally powered submarines took part in Fleet Review 2012, the maritime equivalent of a military parade.About 30 naval aircraft, mostly helicopters, also participated. For the first time, Japan's navy was joined by warships from the United States, Singapore and Australia. Representatives from more than 20 countries, including China, attended the event staged in waters south of Tokyo.

NEWS,03.10.2012

Costly US intelligence effort 'inaccurate'

A multibillion-dollar information-sharing programme created in the aftermath of 9/11 has improperly collected information about innocent Americans and produced little valuable intelligence on terrorism, a US Senate report concludes. It portrays an effort that ballooned far beyond anyone's ability to control.What began as an attempt to put local, state and federal officials in the same room analysing the same intelligence has instead cost huge amounts of money for data-mining software, flat screen televisions and, in Arizona, two fully equipped Chevrolet Tahoes that are used for commuting, investigators found.The lengthy, bipartisan report is a scathing evaluation of what the Department of Homeland Security has held up as a crown jewel of its security efforts. The report underscores a reality of post-9/11 Washington: National security programmes tend to grow, never shrink, even when their money and manpower far surpass the actual subject of terrorism. Much of this money went for ordinary local crime-fighting.Disagreeing with the critical conclusions of the report, the Department of Homeland Security (DHS) says it is outdated, inaccurate and too focused on information produced by the programme, ignoring benefits to local governments from their involvement with federal intelligence officials.Because of a convoluted grants process set up by Congress, Homeland Security officials don't know how much they have spent in their decade-long effort to set up so-called fusion centres in every state. Politically important money Government estimates range from less than $300m to $1.4bn in federal money, plus much more invested by state and local governments. Federal funding is pegged at about 20% to 30%.Despite that, Congress is unlikely to pull the plug. That's because, whether or not it stops terrorists, the programme means politically important money for state and local governments.A Senate Homeland Security subcommittee reviewed more than 600 unclassified reports over a one-year period and concluded that most had nothing to do with terrorism. The panel's chairperson is Democrat Carl Levin of Michigan, the ranking Republican Tom Coburn of Oklahoma."The subcommittee investigation could identify no reporting which uncovered a terrorist threat, nor could it identify a contribution such fusion centre reporting made to disrupt an active terrorist plot," the report said.When fusion centres did address terrorism, they sometimes did so in ways that infringed on civil liberties. The centres have made headlines for circulating information about Ron Paul supporters, the ACLU, activists on both sides of the abortion debate, war protesters and advocates of gun rights.One fusion centre cited in the Senate investigation wrote a report about a Muslim community group's list of book recommendations. Others discussed American citizens speaking at mosques or talking to Muslim groups about parenting.'Out of date'No evidence of criminal activity was contained in those reports. The government did not circulate them, but it kept them on government computers. The federal government is prohibited from storing information about First Amendment activities not related to crimes."It was not clear why, if DHS had determined that the reports were improper to disseminate, the reports were proper to store indefinitely," the report said.Homeland Security Department spokesperson Matthew Chandler called the report "out of date, inaccurate and misleading". He said that it focused entirely on information being produced by fusion centres and did not consider the benefit the involved officials got receiving intelligence from the federal government.The report is as much an indictment of Congress as it is the Homeland Security Department. In setting up the department, lawmakers wanted their states to decide what to spend the money on.Time and again, that set-up has meant the federal government has no way to know how its security money is being spent.Collaboration urgedInside Homeland Security, officials have long known there were problems with the reports coming out of fusion centres, the report shows."You would have some guys, the information you'd see from them, you'd scratch your head and say, 'What planet are you from?'" an unidentified Homeland Security official told Congress.Until this year, the federal reports officers received five days of training and were never tested or graded afterward, the report said.States have had criminal analysis centres for years. But the story of fusion centres began in the frenzied aftermath of the 11 September 2001 attacks.The 9/11 Commission urged better collaboration among government agencies. As officials realised that a terrorism tip was as likely to come from a local police officer as the CIA, fusion centres became a hot topic.But putting people together to share intelligence proved complicated. Special phone and computer lines had to be installed. The people reading the reports needed background checks. Some information could only be read in secure areas, which meant construction projects.All of that cost money.Independent operationMeanwhile, federal intelligence agencies were under orders from Congress to hire more analysts. That meant state and local agencies had to compete for smart counterterrorism thinkers. And federal training for local analysts wasn't an early priority.Though fusion centres receive money from the federal government, they are operated independently. Counterterrorism money started flowing to states in 2003. But it wasn't until late 2007 that the Bush administration told states how to run the centres.State officials soon realised there simply wasn't that much local terrorism-related intelligence. Terrorist attacks didn't happen often, but police faced drugs, guns and violent crime every day. Normal criminal information started moving through fusion centres.Under federal law, that was fine. When lawmakers enacted recommendations of the 9/11 Commission in 2007, they allowed fusion centres to study "criminal or terrorist activity". The law was co-sponsored by Senators Susan Collins and Joe Lieberman, the driving forces behind the creation of Homeland Security.Five years later, Senate investigators found, terrorism is often a secondary focus."Many fusion centres lacked either the capability or stated objective of contributing meaningfully to the federal counterterrorism mission," the Senate report said. Continued support"Many centres didn't consider counterterrorism an explicit part of their mission, and federal officials said some were simply not concerned with doing counterterrorism work."When Janet Napolitano became Homeland Security secretary in 2009, the former Arizona governor embraced the idea that fusion centres should look beyond terrorism. Testifying before Congress that year, she distinguished fusion centres from the FBI-led Joint Terrorism Task Forces (JTTF) that are the leading investigative and analytical arms of the domestic counterterrorism effort."A JTTF is really focused on terrorism and terrorism-related investigations," she said. "Fusion centres are almost everything else."Congress, including the committee that authored the report, supports that notion. And though the report recommends the Senate reconsider the amount of money it spends on fusion centres, that seems unlikely."Congress and two administrations have urged DHS to continue or even expand its support of fusion centres, without providing sufficient oversight to ensure the intelligence from fusion centres is commensurate with the level of federal investment," the report said.And following the release of the report, Homeland Security officials indicated their continued strong support for the programme.

 

IMF: Crisis to last 10 years

The world economic crisis could take 10 years to run its course, the IMF's chief economist Olivier Blanchard told Hungarian business news site Portfolio.hu in an interview published on Wednesday."It's not yet a lost decade," Blanchard said, "but it will surely take at least a decade from the beginning of the crisis for the world economy to get back to decent shape."Urging greater solidarity between member countries of the eurozone and more integration in fiscal and economic policy, he said Europe "has to go forward" with integration to make the common currency zone a success."It cannot stay where it is. I think nobody really wants to go back," he said."When a country is doing poorly the others have to be willing to help in various ways, not only out of solidarity, but because trouble in one country may well spill over to theirs."This is why the fiscal union and the banking union proposals being worked on as we speak are so important," he explained.Blanchard also said the United States has a fiscal problem which it hasn't dealt with yet."Most analysts are confident that when it needs to be done it will be done. I hope they are right," he said.Elsewhere, Blanchard said Japan faced a difficult fiscal adjustment and could take decades to solve its debt problems, but that the IMF did not forecast any hard landing for China."China has probably taken care of its asset boom although it has slower growth than before," he said.

Iran presses on despite currency woes

Iran will press on with its nuclear programme despite the problems caused by Western sanctions, including a dramatic slide in the value of its currency, President Mahmoud Ahmadinejad said on Tuesday."We are not a people to retreat on the nuclear issue," he told a news conference in Tehran."If somebody thinks they can pressure Iran, they are certainly wrong and they must correct their behaviour," he said.Ahmadinejad's comments came amid an accelerated slide in Iran's currency, which has now lost more than 80% of its value compared with a year ago - with 17% of its value shed on Monday alone.The rial slipped another 4% on Tuesday to close at 36 100 to the dollar, according to exchange tracking websites.Ahmadinejad said the plunge was part of an economic "war" waged by the West on the Islamic republic and "a psychological war on the exchange market".Under 'enormous pressure'Iran, he said, had sufficient foreign currency reserves.Those reserves were estimated at around $100bn at the end of last year, thanks to surging oil exports.The White House said on Tuesday that Iranians blamed their leaders for the rising deprivation caused by US and international sanctions over Tehran's nuclear programme.White House spokesperson Jay Carney said the fast-deteriorating economic situation in Iran, which has also sparked price hikes in basic foods, was a sign the government in Tehran was under "enormous pressure"."The Iranian people are aware of who is responsible for the circumstances that have befallen the Iranian economy as a result of the regime's intransigence in its refusal to abide by its obligations."The US Treasury estimates Iran's foreign earnings have been cut by $5bn a month under the Western economic measures.Criticism over talksIn his media conference, Ahmadinejad backtracked on hints he had made during a visit to New York at the UN General Assembly that Iran could consider direct negotiations with the United States on the nuclear issue."Direct negotiation is possible, but needs conditions, and I do not think the conditions are there for talks. Dialogue should be based on fairness and mutual respect," he said.But he also said: "I think that this situation cannot last in the relations between Iran and the United States."Hardliners in Iran criticised Ahmadinejad on his return for opening the door to the possibility of talks with the United States. That also fuelled criticism that his government has mismanaged the economy.The chairperson of Tehran's chamber of commerce, Yahya Ale-Eshagh, was quoted as saying by the Mehr news agency that "part of this [currency] tumult is due to sanctions".No vote of confidenceBut he also said "the person who is not able to manage in a time of crisis should not continue working in his post".Mohammad Bayatian, a member of parliament on an industry and mines commission, said, according to the parliamentary website icana.ir, that "a petition has been prepared to question the president".He said the petition was "due to the government not paying attention to the parliament's remarks over its management of the forex market".The parliament's presiding board was to decide whether to admit the petition. If it goes ahead, it would only be to hear Ahmadinejad speak on the issue, and it would not involve a confidence vote or other serious procedure.Mehdi Mohammadi, a figure close to Iran's Supreme National Security Council, wrote in a piece for the Vatan Emrouz newspaper on Tuesday: "Is the currency situation in the market due to sanctions? No... The problem is not a lack of [foreign] currency."Israel 'not a concern'He blamed the government, and unidentified "mafias" he said were profiting from the currency volatility.Mohammadi also said holding talks with the United States was not an option."Past experience shows that speaking of negotiations in these conditions only sends a signal of weakness. The enemy only makes concessions and takes you seriously when you're strong," he wrote.On the prospect of a military conflict breaking out over the nuclear issue, Ahmadinejad reaffirmed that he was "not very concerned" about persistent threats from Israel."Iran is not a country to be shaken by, let's say, a few firecrackers," he said.

NEWS,12.08.2012

Israel - Iran threat dwarfs all others

The threat from Iran dwarfs all other challenges the Jewish state faces, Israel's prime minister declared on Sunday, as high-level hints of a possible Israeli attack on Iran's suspect nuclear programme mounted. One indirect indication came on Sunday, when Israel's military began sending mock text messages to cell phones warning of incoming missiles, part of a nationwide experiment that is to continue through Thursday and reach hundreds of thousands of cell phone users. Last week, defence officials confirmed that Israel's top-tier missile defence system has been upgraded."All threats directed at the Israeli home front are dwarfed by another threat, different in its magnitude and substance, and so I have repeated and shall repeat: Iran must not be allowed to obtain nuclear weapons," Prime Minister Benjamin Netanyahu told his Cabinet on Sunday.The prime minister's opening statement at the Cabinet meeting is open to reporters, providing him with a channel for a weekly public message.Sceptics say Israel is rattling its sabres as part of a diplomatic campaign but would hesitate to actually attack Iran, because of the real possibility that it could trigger an all-out war targeting Israel from several directions at once.Tehran insists its nuclear program is peaceful and designed to produce energy and medical isotopes, but Israel, like much of the international community, thinks it could be a cover to build bombs.Netanyahu said earlier this month that Israel has not decided whether to launch an attack. But he and other leading Israeli officials have noted that tough international sanctions have not pressured Iran to abandon its suspect uranium enrichment programme - a process that has civilian uses but could also be used to build bombs.Some senior officials have suggested in the past that Israel cannot wait beyond early fall to strike, as Iran moves key facilities into fortified underground bunkers out of the reach of Israeli bombs.Over the weekend, a senior "decision-maker" widely identified as Defence Minister Ehud Barak was quoted by an Israeli newspaper as saying that "the sword hanging over our neck today is a lot sharper than the sword that hung over our neck" before the Jewish state went to war with three Arab nations in 1967.Although Israeli leaders haven't explicitly threatened to attack, they have been saying for years that they would not tolerate a nuclear Iran, and "all options are on the table." The US has a similar policy.Standing beside US Defence Secretary Leon Panetta earlier this month, Netanyahu warned that time was quickly running out to stop Iran from achieving nuclear capability.The United States has said it would be prepared to use military force to prevent Iran from becoming a nuclear power. But with its superior fire power, it could wait longer than Israel could to strike at Iran's underground facilities, and experts have judged Washington has more than a year to act.Another factor in the timing could be the US presidential election in November, where a Mideast flare-up sending oil prices soaring could harm President Barack Obama's re-election chances.White House spokesperson Jay Carney said over the weekend that Obama "remains committed to preventing Iran from acquiring a nuclear weapon," but that the US still thinks there is time to persuade Iran through sanctions and diplomacy.While Netanyahu and Barak have concentrated on the perceived nuclear threat, critics of an attack - including a recently retired spymaster and previous internal security chief - have warned of its repercussions.At best, they say, Israel could set back Iran's nuclear development for two to three years, and at worst, trigger a harsh retaliation from Iran and its proxies in Lebanon and Gaza - and possibly set off a region-wide war.

Swiss banks sweat tax fall-out

 

Swiss banks hoping to atone for decades of complicity in tax evasion may be left to sweat it out for months as the United States and Germany ponder the right level of punishment.Switzerland has long dodged US accusations of hiding money for wealthy Americans. But now eleven Swiss banks are under investigation in the United States and there is pressure too from Europe where burdened taxpayers want scalps after numerous banking scandals. The Swiss need a deal to remove the taint from their financial industry.However, Washington must factor forthcoming elections into its thinking, and Germany is delaying ratification of a tax deal key to Switzerland’s efforts to strike similar agreements elsewhere in Europe. So the Swiss may be in limbo for a whileThe wait is painful for a country which counts on banking for 7% of its economic output: until Swiss banks know how much information they need to share with foreign tax authorities they will struggle to attract new clients.As a result the share prices of its top banks - Credit Suisse and Julius Baer are among those being investigated - are falling as investors fret about earnings.“We are prepared to sign a settlement with the US for the Swiss banks today. We feel we have made a constructive proposal to the US but it is up to them to accept it or not,” said Switzerland’s Finance Minister Eveline Widmer Schlumpf.“This depends on whether the US is willing to reach a settlement before or after their elections, which is unclear at the moment,” she said.Both Widmer-Schlumpf and chief negotiator Michael Ambuehl have dampened expectations for a US deal by November, stoked as recently as last month by the finance minister herself.“There is an open window after the summer lull, but it’s relatively tight. Otherwise, I think we’re looking at next year,”  said Martin Naville, chief executive of the Swiss-American Chamber of Commerce in Zurich.Switzerland’s efforts to spur along a deal include tentatively agreeing with the US Foreign Account Tax Compliance Act, an anti-tax evasion law known as Fatca.The rules on enforcing Fatca have yet to be finalised, but many Swiss bankers see it as a crippling blow that effectively prevents their clients from investing in US securities.Acquiescing to Fatca was a tactic to build goodwill for a Swiss bank deal, a source close to the talks said.But the strategy doesn’t seem to be paying off.Washington is now pushing banks in Switzerland to divulge names and financial details of wealthy Americans hiding money in their accounts, spurred on by success in 2009 when UBS handed over data to avert a criminal indictment.“Contrary to what may appear as inactivity, the US is in fact keeping the pressure on Swiss banks, which are like mice before a snake,” said Martin Janssen, professor of finance at the University of Zurich. “The US is really maximising its position here.” The tension is such that Swiss bankers are afraid they will be personally targeted by US officials if they leave the country, after Credit Suisse and Julius Baer handed over employee names to US authorities. Originally a gesture towards cooperation, the move now has many Swiss bankers hunkered down at home, fearful of arrest and extradition if they leave Switzerland.

 

UK economy misses out on Olympic gold

 

With the London Olympics set to wrap up on Sunday, analysts said Britain's recession-hit economy was unlikely to have won a major boost from the Games that have been a triumph for the nation's athletes.While Britain's construction sector benefited hugely before the Olympics, experts have said the 17-day sporting spectacle had not delivered significant financial rewards and neither was it expected to in the months and years ahead.Mary Rance, chief executive of tourism body UKinbound, said the Olympics which have cost British taxpayers £9.3bn ($14.5bn) to stage have failed to lift her sector."From a positive perspective, the Olympics have been a catalyst for huge investment in infrastructure in London," Rance told AFP.But she added: "All the signs are that the Olympics have not delivered additional visitors to London and the UK. In fact, it is expected that numbers may well end up having fallen by well over 30%." Following claims in the first few days of the Games that they had turned London into a ghost town, British Prime Minister David Cameron urged people to "come back into the capital".And his words seem to have made an impact, with retailers across London's main shopping district in and around Oxford Street reporting an increase in sales and a higher footfall in the days after Cameron's remarks.In the run-up to the Olympics, which began on July 27, commuters and tourists were warned to stay away amid fears that London's transport system could not cope with millions of extra people descending on the capital.The Games had long been heralded as a key boost to the British economy but industry body the European Tour Operators Association said tourist numbers had fallen "dramatically" in the first few days of the Games."Hotels have been cutting their prices and many shopping areas, restaurants, theatres, attractions and entertainment venues have seen a significant reduction in business," added Rance. "Although it must be said that shopping centres like Westfield Stratford City, next to the Olympic Park, have benefited significantly - and over recent days visitors seem to be returning to central London," she added.Businesses complained of being sidelined as tourists made a beeline for the Games and avoided the capital's other attractions and shopping destinations, while non-sports fans opted to stay at home or delay their trips.The Bank of England's chief economist Spencer Dale last week said the Olympics would provide only "a small positive contribution" to the British economy. "There may well be some extra spending from tourism, but as many of us know there has also been travel disruption, more people are going on holiday. So I think those effects are small."But the contribution from ticket sales and TV rights may lead to a very small boost to GDP in the third quarter."Britain's Office for National Statistics has already said that Olympic tickets sold last year would be incorporated into gross domestic product figures for the third quarter, despite the bulk having been paid for last year.Asked about the long-term benefits to the economy from the Olympics, Dale said: "Those type of effects are a lot harder to try and work out and I don't think it will have a material impact in our projections."Analysts have said the Games could added 0.3 percentage points to British output in the third quarter, or July to September period.

Britain escaped a deep downturn in late 2009 but fell back into recession at the end of 2011. Latest official data showed GDP slumped 0.7% in the second quarter from the first three months of this year.Meanwhile the nation's coalition government, which has been hosting country leaders such as Russian President Vladimir Putin on the sidelines of the Olympics, said it hoped to strike trade deals during the event.And it believes it can generate £13bn of business, including almost half coming from foreign direct investment, over the next four years as a direct result of the Olympics.But Slavena Nazarova, economist at French bank Credit Agricole, said the longer-term target was "a little exaggerated" given that Cameron had not included the greatest benefit thus far - the boost to the construction sector as a result of transforming a disused part of east London to host much of the Games.

NEWS,31.07.2012

Cyprus taxes set for hike to pay for bailout

International lenders negotiating a bailout for cash-strapped Cyprus are likely to seek cutbacks in its public payroll and some increases in taxation, the Cypriot finance minister said today.Officials from the International Monetary Fund, European Commission and European Central Bank held inconclusive talks in Cyprus last week. Cypriot officials said discussions would continue, with a new visit by the team, known as the "troika", possibly in September."From our side, there are certain issues which are not acceptable from the outset and require further discussion," said Vassos Shiarly, Cyprus's finance minister.He did not elaborate on the differences with lenders - the troika's insistence on scrapping wage indexation has been widely reported as a point of dispute - but implied that cutbacks in salaries in an inflated public sector could be an option.Cyprus, one of the smallest of 17 nations sharing the euro, became the fifth member of the currency bloc to seek a bailout last month, in its case from a banking sector burdened by the debt restructuring European leaders agreed for Greece."Based on the experience of Portugal and Spain, we believe the troika will expect cutbacks in state spending, which include the payroll, and an increase in taxes which will not impact the economy," Shiarly, a former top banker, told the semi-official Cyprus News Agency.He said however that the decision on what measures to take would be up to Cyprus, and not lenders."Since we are trying to find a considerable amount, that won't be achieved by cutting back on electricity or telephone bills," he said.Authorities introduced staggered cuts in public sector salaries last year, a two-percentage point rise in value-added tax this year, and increased tax on private-sector earnings.Glafcos Hadjipetrou, who heads Cyprus's main civil servants union Pasydy, said any measures should be balanced. "It is not possible for some people to finger-point and target public sector workers at every opportunity," he told reporters.Cyprus's two largest banks booked considerable losses on the writedown in Greek sovereign debt this year, diluting their regulatory capital and forcing them to seek government aid to recapitalise. Combined, the banks seek 2.4 billion euros, the equivalent of more than 10 percent of Cyprus's GDP.Shut out of international financial markets for more than a year in part because of fiscal slippage, Cyprus had little option but to seek aid from its EU partners.It has also asked Russia, which lent Cyprus 2.5 billion euros last year, for another 5 billion euro loan.It is not clear how much Cyprus will require from the troika. Authorities say the bailout will be comprehensive, and not limited to recapitalising banks.

 

Greece says cash reserves drying up

 

Near-bankrupt Greece is fast running out of cash while it waits for its next installment of aid from international lenders, a deputy finance minister said on Tuesday, sounding the alarm on the country's precarious financial position. Greece's European partners have repeatedly promised the country will be funded through August, when it must repay a 3.2 billion euro bond, but the details of the funding have yet to be disclosed.In the absence of that money, Greece would run out of funds to pay everyday public expenses ranging from police and other public service wages to pensions and social benefits. The country is wholly reliant on aid from its European partners and the International Monetary Fund, who have turned up the pressure in recent weeks by withholding further aid until an assesment of Greece's compliance with reforms is complete."Cash reserves are almost zero. It is risky to say until when (they will last) as it always depends on the budget execution, revenues and expenditure," Deputy Finance Minister Christos Staikouras told state NET television."But we are certainly on the brink, we did not receive the aid tranche we were supposed to and we have the pending issue of an ECB bond maturing on Aug. 20." Greece has narrowly dodged bankruptcy several times before, with the government carrying out a juggling act of holding off on paying some suppliers and issuing T-bills until the next tranche of aid from lenders arrives. The assessment of Greece's progress in meeting the terms of its bailout by EU/IMF inspectors, who are currently on a visit to Athens, is not expected until September. Adding to the uncertainty, Greek political leaders have been wrangling over €11.5bn of cuts that are crucial to appeasing the lenders.

 

Obama: Eurozone must take decisive steps

 

US President Barack Obama said on Monday that the eurozone is not buckling under the weight of the debt crisis, but that "decisive steps" have yet to be taken.Speaking at an event for campaign donors, the Democratic incumbent in the November 6 presidential election noted that the US economy is still unsteady, and warned of "some continued headwinds over the next several months.""Europe is still a challenge, and a lot of people in this room who have business in Europe understand that," he said to some sixty people, including Wall Street CEOs. "I don't think ultimately that the Europeans will let the euro unravel. But they're going to have to take some decisive steps. And I'm spending an enormous amount of time trying to work with them - and Tim Geithner is spending a lot of time working with them - to recognise that the sooner they take some decisive action, the better off we're going to be," Obama added, referring to the US treasury secretary.Obama spoke of the US's own "decisive action," referring to the $800bn stimulus package his administration pushed for in 2009."Despite it's unpopularity, (the plan) avoided this chronic bleeding wound that has been an enormous problem not just for Europe now, but for the entire global economy," he said.Obama's campaign for reelection suffers in the the polls from voters' attitudes on the wavering economy. Unemployment is at 8.2%, still 3% higher than before the 2008 crisis, and the White House does not expect the rate to dip below 7.9% before the end of the year.