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NightWatch 20111205


For the night of 5 December 2011

Pakistan-US: Prime Minister Gilani said that the government has decided to reconsider the agreements reached with US, NATO and ISAF during the Pervez Musharraf era. Pakistan decided to terminate existing anti-terror cooperation agreements with the United States after a review of the two countries' political, diplomatic and military ties following the recent NATO airstrikes in Pakistan, according to Pakistani officials familiar with the development.

The government in Islamabad wants to enter a new agreement with Washington that stipulates clearly Pakistan's "red lines" - the limits of permitted actions by the US -- and contains assurances that the United States will not violate those limits in the future, the officials said.

Comment: An important background factor in the public discussion about the US relationship appears to be tension between the elected government and the leadership of the Pakistan Army.

Prime Minister Gilani apparently still lacks a full briefing on agreements made with the US by former President Musharraf or by the Pakistan Army leadership. Otherwise he would not need to reset the relationship. A new arrangement with the civilian government would nullify all prior agreements and enable the civilian government to reject claims that earlier Pakistani governments agreed to the US attacks and cross border raids. A clean slate probably is in the interests of the US and Pakistan.

Saudi Arabia: Former Saudi intelligence chief, Prince Turki al-Faisal, told a security forum in Riyadh on 5 December that Saudi Arabia may consider acquiring nuclear weapons to match regional rivals Israel and Iran. "Our efforts and those of the world have failed to convince Israel to abandon its weapons of mass destruction, as well as Iran... therefore it is our duty towards our nation and people to consider all possible options, including the possession of these weapons."

Comment: The conventional wisdom from a few years ago was that proof of an Iranian nuclear weapons program might prompt Jordan, Turkey, Egypt or Saudi Arabia to develop a nuclear weapons program so that there would be an Arab riposte to the Persians.

The implication of Turki's comment is that Saudi Arabia has capabilities, or access to capabilities, that are not generally known. Proof that Iran has a nuclear weapon not only has implications for Israel's security, but also for the Sunni states of the Middle East.

Egypt: Turnout for Egypt's recent elections was 52 percent, significantly lower than the previously reported 62 percent, according to the Elections High Commission chairman Abdel Moaz Ibrahim. Members of the commission's secretariat made a counting mistake that skewed the previously published numbers, Ibrahim said.

Comment: By now most Readers know that the Brotherhood's party and the Salafists, combined, won about 60% of the vote in the first stage of parliamentary elections. The secular liberals were eliminated in the nine governates that voted on 28 November.

The significance of the revised turnout figure is that it undermines several weekend assessments. First it means that half of the Egyptian populace did not trust the voting process so as to risk voting or did not care. The turnout provided no clear result relative to Egyptian popular sentiment towards the military government; the path towards democracy or about moving Egypt towards an Islamic government.

Second it weakens conclusions about the strength of Islamic sentiment in Egypt. It now appears to be ambiguous, whereas the initial reports suggested Egypt had turned strongly Islamic.

The two strongest Islamist parties won the vote count, but widespread popular distrust of the system or apathy won the election. Those who are distrustful or apathetic, however, have no representation in parliament. Still, those who won the vote count have little basis for claiming they have been given a mandate from the Egyptian people.

The 28 November elections were a first stage in a lengthy and complicated election schedule leading to presidential elections in 2012. The next stage of the parliamentary elections is scheduled for 14 December.

Russia: Comment. Most assessments of the Russian elections concluded that the outcome was a disaster for Prime Minister Putin and his One, also translated United, Russia Party. Putin's party won 49.7 percent of the vote. In 2007, it won almost 45 million votes. This time it won about 33 million votes.

Vladimir Zhirinovsky's nationalist Liberal Democratic Party of Russia got 11.7 percent and the center-left A Just Russia won 13.2 percent. The only truly democratic party, the liberal Yabloko, won 3.2 percent of the vote, missing the 7 percent threshold for winning seats in the Duma. Putin's party has lost its previous two-thirds majority in parliament.

It would be a grave error of western bias to conclude that Putin now is weaker. His party lost seats in the Duma, but the Duma is not Putin's power base.

Second and more important, parliamentary elections in Russia are not like parliamentary elections in the West. They do not decide the direction of government. That is determined outside the public political charade, according to Russian political authorities.

Russia has a strong presidency or a strong prime ministership, depending on whether Putin holds the office. Putin is set to return to the presidency in March 2012 elections.

Some Russian commentators are putting a positive spin on the elections as a sign of political maturity. One/United Russia will need to work in coalition with other parties, as if government depended on coalitions of elected deputies. That is good camouflage while Putin plans his presidential run.

Putin's party leaders are not describing the vote as a disaster, which some will argue as predictable, but might be accurate in a sinister way. A divided parliament would seem to invite a strong Russian President, next year. It is premature to draw strong conclusions about Putin from the vote outcome.

Europe: For the record. Standard and Poors put 15 of the 17 Eurozone countries on watch for a downgrade of their credit worthiness.

Germany- France: France and Germany want a new European Union (EU) treaty by March 2012 with tougher budgetary rules to deal with the eurozone debt crisis, French President Sarkozy and German Chancellor Merkel said after crisis talks Monday, 5 December.

Sarkozy said, "The goal that we have with the Chancellor is for an agreement to have been negotiated and concluded between the 17 members of the eurozone in March, because we must move quickly." Sarkozy warned of a "forced march to re-establish confidence in the euro and the eurozone."

The Franco-German proposal is to be detailed in a letter to EU president Herman Van Rompuy on Wednesday, the day before the EU summit convenes in Brussels.

New terms in a new agreement. Sarkozy said that the new treaty would be either for all 27 EU members or for the 17 members of the eurozone, with other nations signing on a voluntary basis.

"Germany and France are in complete agreement to say that eurobonds are in no case a solution to the crisis," Sarkozy said after meeting German Chancellor Merkel. "How can we convince others to make the efforts we are making ourselves if we pool our debts as of now? None of this makes any sense."

The two leaders backed automatic sanctions against EU member states whose deficits exceed three percent of GDP and called for a "reinforced and harmonized Golden Rule" on the deficits of eurozone states. The European Court of Justice should be tasked with verifying that national budgets obey deficit rules, but it should not be able to declare budgets "null and void", Merkel said.

Comment: The leaders of the two strongest European economies, Germany and France, have decided that the European debt crisis can only be settled by fundamental political change, reducing national sovereignty and integrating nations as states of Europe. They judge that the EU administration must be given sovereign power over the economic choices of elected national governments. The Germans and the French want the treaty to be modified so that only a majority vote in favor of the new treaty would bind all members.

This is a watershed development in the post-War history of Europe. If a new treaty of this nature is enacted, it would establish a European condominium dominated by the Germans and the French. It also would exploit economic troubles to advance a broad political agenda for European unification under German and French leadership that exceeds economic exigency.

The resort to political structural changes is an admission that economic policy has failed to fix the European debt crisis. Political structural and authority changes are seldom solutions to primarily economic problems.

Another consideration is that politicians seldom have the wisdom to fix economic problems. That is one of the paramount lessons of the collapse of the Soviet Union. Politicians are seldom smart enough to run economies.

Additionally, it is not clear that structural change in the EU with enforcement authority is the remedy for the debt problem and might backfire. In earlier times, Greece, for example, tended to buy off unions and other activist groups in order to maintain internal stability - to stop strikes and riots. The new EU measures would eliminate that practice as an option for European countries prone to violent internal protests.

That suggests that the structural changes Germany and France now demand -- as a one size fits all solution --might make some European countries more unstable in the future by negating arrangements that protected property and persons. Successful businessmen, entrepreneurs and venture capitalists do not appear to be invited to the debt discussions.

End of NightWatch for 5 December.

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