Geopolitics Weekly

Mrs. Clinton also said the United States handed the Iranian delegation a letter requesting its intercession in the cases of two American citizens who are being held in Iran and another who is missing.

Some officials, including Mrs. Clinton, are skeptical that Iran’s leaders will ever embrace the American overtures. But reaching out, analysts say, keeps Iran on the defensive by demonstrating to the Europeans, the Russians and others that the United States is sincerely trying. And talking about Afghanistan is easier than confronting more divisive issues, especially Iran’s nuclear ambitions.

Mrs. Clinton also reacted warmly to remarks delivered by Mr. Akhondzadeh about what Iran would do to aid reconstruction in Afghanistan and to cooperate in regional efforts to crack down on the booming Afghan drug trade, which is spilling across the Iranian border.

“The fact that they came today, that they intervened today, is a promising sign that there will be future cooperation,” she said. “The Iranian representative set forth some very clear ideas that we will all be pursuing together.”

Iran cooperated with the United States on Afghanistan in the days after the 2001 terrorist attacks, and administration officials still view it as one of the most promising avenues for a reconciliation. Mrs. Clinton had pushed for Iran to be included on the invitation list for the United Nations-sponsored conference.

Iran, which was a no-show at the last Afghanistan conference, in Paris, did not send an official of Mrs. Clinton’s level, unlike most participants. But by sending Mr. Akhondzadeh, a former ambassador to the International Atomic Energy Agency, it was clearly not trying to avoid contact.

At the conference, Iran offered support and criticism of the Obama administration’s new policy on Afghanistan. It praised the focus on regional cooperation, but it argued that sending more foreign troops to Afghanistan would be ineffective.

They want to focus on tougher regulation of the financial community. They want the summit to start re-writing the global rulebook on capitalism.

The intriguing thing is that the economic crisis and Brown's lining up with Obama, who has proclaimed his belief in the enduring "special relationship" with Britain, has revived the Franco-German alliance which used to dominate EU affairs and which had seemed to wither under Merkel and Sarkozy. She doesn't like his touchy-feely ways, he finds her incremental style of politics frustrating. They had drifted apart, but they are back sharing a political tent.

The big question on the fiscal stimulus front is: What will China do?

Brown's hope is that China, worried about the safety of its money invested in the U.S., will be ready to commit extra funds to fighting the world recession. But if he agrees to do so, President Hu Jintao will surely exact a price.

If China comes up with the money to help, it will need assurances that it will in the future enjoy greater power within such multilateral institutions as the IMF and the World Bank. The U.S. and Europe, who have dominated the G-8, now have little option too but to accept a new world order.

Whatever the outcome in London it is unlikely now that the G-8 alone will ever carry the same sway. And not surprisingly, Italian Prime Minister Silvio Berlusconi, who hosts this summer's G-8 in Sardinia, has proposed that its gathering should be immediately followed by one of the G-20.

Stiglitz: The banks that survived 80 years ago continued to lend money. Today many banks aren't lending money anymore, above all the large investment banks. This will deepen the crisis.

SPIEGEL: The US government's emergency plan is supposed to prevent this, though. The banks receive money from the state so they can continue to give loans. Stiglitz: That's the idea, but it doesn't work. We're just throwing money at them and they pay billions of it out in bonuses and dividends. We taxpayers are being robbed for all intents and purposes in order to reduce the losses that some wealthy people bear. This has to be changed.

SPIEGEL: The American government has committed over a trillion dollars to save the banks and $789 billion to boost the economy. Do you think this is too little? Stiglitz: I do. More than $700 billion sounds like a lot, but it's not. On the one hand, a large part of the money will first be given out next year, which is too late. On the other, a third of it is drained away by tax cuts. They don't really stimulate consumption, because people will save the majority of that money. I fear that the effect of the American economic stimulus plan won't be even half as big as expected.

SPIEGEL: Washington sees it that way, too. In particular, it wants countries with strong exports, like Germany, to offer further economic stimulus packages. Do you think that's justified?

Absolutely. Export surpluses are counterproductive in times of economic crisis. They have to be reduced through economic stimulus programs, for example.

I propose that countries with a positive trade balance should stream part of their surplus to the International Monetary Fund. This can then stimulate the economy in developing countries or prevent the economy from collapsing in Eastern Europe.

The Americans have always been masters at changing a supposed regulation measure into further deregulation.

Speaking to what the Associated Press describes as a roomful of "cringing diplomats", the new foreign minister said Israel was not bound by the Annapolis peace talks. These were initiated in November 2007 to solve the Israeli-Palestinian conflict and involved around 40 countries.

"The Israeli government never ratified Annapolis; nor did [the] Knesset," said Lieberman, promising to honour only the US-initiated "road map" of 2002, which has long been in stalemate amid accusations from both sides.

In today's speech, Lieberman was more amiable towards Egypt, which he described as an "important element in the Arab world". This is an improvement on a few weeks ago, when he said the Egyptian president, Hosni Mubarak, could "go to hell".

The new posture of the Israeli government is certain to complicate the already tenuous position of Palestinian moderates, foremost among them President Mahmoud Abbas, who has staked everything on the two-state solution. "This minister is an obstacle to peace," said Yasser Abed Rabbo, an aide to Mr Abbas. "Nothing obliges us to deal with a racist person hostile to peace."

Tzipi Livni, who in the previous government oversaw the final status negotiations and was present in the Foreign Ministry yesterday, told Mr Lieberman that "your speech has proven to me that I did the right thing by not joining [a national unity government]".

As the new prime minister, Mr. Netanyahu has tried to strike a more conciliatory tone, promising to hold negotiations with the Palestinian Authority toward a permanent accord. But he has also stopped short of endorsing the two-state solution, putting the new government at odds with the United States and the European Union.

Tony Blair, the special envoy of the so-called quartet of Middle East peacemakers, which consists of the United States, the European Union, the United Nations and Russia, said Wednesday that the peace process was in “very great jeopardy.”

He once advocated bombing the Aswan dam in the event of a war with Egypt, and last year he suggested that Egypt’s president should “go to hell” if he did not want to visit Israel.

Often contradictory and contrary in his positions, Mr. Lieberman, a resident of a Jewish settlement in the West Bank, has said that he advocates the creation of a viable Palestinian state. Yet in January 2008 he pulled his party out of the last governing coalition, led by Ehud Olmert and the centrist Kadima Party, in protest against the Annapolis-inspired talks.

Mr. Lieberman said on Wednesday that instead of Annapolis, Israel was committed to the “road map,” a 2003 American-backed performance-based peace plan that made the creation of a Palestinian state contingent on the Palestinians ending all violence and dismantling terrorist networks.Mr. Erekat, the Palestinian negotiator, noted that the plan also called for Israel to freeze all settlement construction. “I’d really like to know, are we going to see a settlement freeze?” Mr. Erekat said.

After the dinner he told a Czech newspaper that a decision had been made to cancel a summit between the Israeli prime minister and EU leaders planned for late May or early June.

One communique expressed the impression of one guest at the dinner, who spoke of an atmosphere of "ganging up on Israel," and that terms were imposed "on a government that had not yet been formed."

The message also indicated that several ministers spoke of the "need to teach Israel a lesson about its treatment of the Palestinians."

The central issue discussed at the dinner was the future of Israel-EU relations. Many ministers demanded that Israel be presented with an ultimatum stating that an upgrade of those relations be carried out only with an Israeli government explicitly committing itself to the two-state solution.

A source in Prime Minister Benjamin Netanyahu's party confirmed Wednesday that his new government intended to distance itself from U.S.-sponsored understandings on working towards a Palestinian state.

Asked about ultra-nationalist Lieberman's remark that Israel was no longer bound by the 2007 framework, the source replied: "There is no problem here. He [Lieberman] is distancing himself from the Annapolis label, as the government intends to do."

Hadash MK Afu Aghbaria, meanwhile, urged the international community to impose a diplomatic embargo on Israel in the wake of Lieberman;s statements. "It isn't surprising that a racist foreign minister would produce such vehement suggestions, only a day after the new government was formed," Aghbaria said.

Palestinian President Mahmoud Abbas responded to the swearing-in of Benjamin Netanyahu's government by saying: "We want to tell the world that this man doesn't believe in peace and therefore we cannot deal with him... the world should put pressure on him."

"The right always says that we don't have a partner on the Palestinian side, as an excuse for the lack of progress. Now we are not a partner," Livni said.

She added that Kadima would have joined a unity government had Lieberman been prevented from joining.

In an interview Wednesday with Israel's Channel 2 TV, Lieberman went beyond his criticism of peace talks with the Palestinians and said he opposed any withdrawal from the Golan Heights in return for a peace deal with Syria.

"I am very much in favor of peace with Syria, but only on one basis - peace in return for peace," he said, adding there would be "no withdrawals from the Golan during my time and hopefully not at any time."

Former Prime Minister Ehud Olmert's government held indirect peace talks last year with Syria, which demands that Israel return the Golan as a condition for any deal. Erdan said Lieberman's statement conformed with the government's platform. "We said during the election campaign that we oppose concessions on the Golan Heights," he said. "You have to get used to it - this is the position of most of the public."

Mr. Netanyahu said Tuesday that his government would support a “Palestinian security apparatus that will fight terrorism” — apparently a reference to the forces being trained in an American-backed program under the Annapolis framework.

In Israel, however, public criticism has focused on the sheer size of the new cabinet, swelled by Mr. Netanyahu’s attempts to satisfy his coalition partners’ competing demands. With 30 ministers and at least 7 deputy ministers, the cabinet has grown into the largest in Israel’s history, prompting charges that it will prove unmanageable and constitute a waste of public funds during a recession.

In 1996, Mr. Netanyahu prided himself on his establishment of a lean cabinet, with 18 ministers. The government established by Mr. Olmert in May 2006 had 25.

Mr. Netanyahu has so far emphasized his plans for economic development in the West Bank. His refusal to endorse the two-state solution has led to skepticism and despondency on the Palestinian side, exacerbated by fears that his government will expedite Jewish settlement expansion in the West Bank.

Meanwhile, not all Israelis accept the gloomy forecasts of strained relations with Washington. “As long as Hamas is in power in Gaza, we are off the hook,” said Efraim Inbar, a professor of political science at Bar-Ilan University. Under these circumstances, “nobody can really pressure Israel to do anything,” he said in a telephone interview.

The BBC's Jo Floto in Jerusalem says Mr Lieberman's supporters are unlikely to be troubled by the police interest in him.

Lieberman has taken the idea of two states for two peoples to an extreme. He seeks an Israel that effectively is not only predominantly Jewish, but one that is almost entirely Jewish. Lieberman imagines a transfer of some Israeli cities with Arab populations bordering the 1967 green line out of the Israeli polity, but to where? His prime minister has ruled out the creation of a Palestinian state in the West Bank and the Gaza Strip. 

More broadly, the mix of official government opposition to Palestinian independence, open discussion of ethnic separation, and the almost apocalyptic discourse being promoted by Israeli academics such as Benny Morris are creating a Balkan-like situation within Israel proper that could quickly eclipse the situation in the occupied territories as a threat to international peace and stability if allowed to continue.

sraeli leaders and their advocates have already promoted a full-court blitz demanding that the United States "stop" Iran, or Israel will be forced to do so on its own. In part, this is bluster, as few analysts believe Israel is able to attack Iran on its own, and no one believes that Iran wouldn't retaliate, which would force the United States into the middle of the conflict. However, this emphasis on Iran serves another useful purpose for Netanyahu and Lieberman: Not only does it remove Palestinian independence and potential Israeli peace treaties with the Arab world from U.S. focus, but it sets the agenda for the U.S.-Israeli talks that are to take place this May.

Dealing with a hostile and recalcitrant enemy in Afghanistan and Pakistan is hard enough, but the Obama administration may find that dealing with a hostile and recalcitrant ally brings its own set of challenges.

the limited reinforcements made available by the Europeans — and the restrictions to noncombatant roles in order to win the consent of Europe's mostly antiwar electorates — has raised questions about the purpose of the Alliance. "NATO lost its credibility when it refused to commit the resources needed," says Barkawi.

In Europe, says De Hoop Scheffer, a former Dutch politician, "fighting is not very popular."

During the 1990s, the Alliance began expanding, inducting nine new members from Eastern Europe's former Soviet territories and satellites that sought protection from Russian power.

But that program seemed to hit a wall last August, when Georgia fought a five-day war against Russia for control of South Ossetia.

Georgia, whose bid to join the Alliance had been strongly backed by the U.S., was viewed by many Western officials as having provoked a senseless fight, which would have obliged NATO to get involved had Georgia been a full member. Last summer's confrontation put Georgia's membership in the deep freeze, as well as that of Ukraine, whose accession to NATO would also be taken as a provocation by Moscow.

Moreover, NATO's passivity in the face of Russia's pummeling of Georgia will have left member nations along Russia's western frontier wondering what extent of support they could rely on from NATO allies in the event of a confrontation with Moscow.

Vague low-carbon language and climate change negotiations in Copenhagen in December were relegated to two paragraphs at the communique's end.

Some critics also pointed out that the summit failed to produce a co-ordinated plan to purge the global banking system of billions of dollars of toxic assets, and suggested that regulation of the financial industry should have gone further.

Brown said that the existing agreed fiscal stimulus will amount to $5tn by 2010, and the measures will raise world output by 4% by the end of next year.

The prime minister also won agreement from other G20 world leaders that the International Monetary Fund will monitor the existing stimulus,

Overall, the resources of the IMF will be trebled from $250bn to $700bn, following the lifting by the US of years of opposition. In a sign of the shift in world power, China agreed to provide $40bn of the new loans given to the IMF, with more to come from Saudi Arabia.

At the centre of the deal was a six-point plan:• Reform of the global banking system, with controls on hedge funds, better accounting standards, tighter rules for credit rating agencies, and immediate naming-and-shaming of tax havens that fail to share information.• A global common approach to dealing with toxic assets that impair the ability of banks to lend.• A $1.1tn package to supplement the $5tn stimulus to the global economy by individual countries. The $1.1tn will allow the IMF, the World Bank and others to increase lending to vulnerable countries. There will be a tenfold increase to $250bn in the IMF's facility allowing members to borrow from other countries' foreign currency reserves.• More power for leading developing countries within the IMF and World Bank, to end the stranglehold of the US and Europe on their top jobs.• $200bn of trade finance over two years to help reverse the steepest decline in world trade since 1945, with cash from a range of public and private sources.• A pledge that the fiscal stimulus, including the sale of gold by the IMF due to raise $6bn, will give help to the poorest nations and create green jobs.

Nicolas Sarkozy said the summit meant that the era of secrecy by banks was over; "great progress" had been made, he said, and the page had been turned on the economic model which had dominated since Bretton Woods in 1944 created the world's institutional framework."Since Bretton Woods, the world has been living on a financial model, the Anglo-Saxon model. It's not my place to criticise it, it has its advantages [but] clearly today a page has been turned," he said.

The summit's biggest loser may have been the fight against climate change. Diplomatic sources said China led the opposition to green language in the final communique. David Norman, the WWF campaigns director, claimed that the summit had been "a huge missed opportunity".

This is a radical change of tone and content from the Bush administration which envisaged that emissions would continue to grow to 2025.

Mr Pershing did promise that the US would help poor countries to fund clean technology. He would not mention figures but he hinted the sums would be much less than many developing countries demanded.

He said the best role for governments would be to incentivise the private sector to develop energy efficiency, clean technologies and reduce deforestation. He said China did not want money for technology from the USA but co-operation on technology development.

Negotiators from China, India and Papua (representing vulnerable states) all told BBC News that the US and other rich nations needed to cut emissions much harder and offer concrete funding. Surya Sethi from India said: "Progress is extremely slow. Rich nations seem to think that developing countries can help the world out of the climate problem. But the poorest 50% have just 11% of emissions. "It is crystal clear that the answer is for the United States and other rich nations to change their lifestyles and their methods of production and consumption. We do not see any real evidence that they have grasped that issue properly yet."

"We are working on terms for the granting of amnesty for those who are prepared to lay down their arms," he told a meeting of leaders of his People's Democratic Party (PDP).

The country is one of the largest oil producers in Africa, but the attacks have severely hit its oil revenue and caused many oil companies withdraw their staff. Some of the militants says they are fighting for a bigger share in the oil wealth for people living in the Delta. But others use an almost complete breakdown in the rule of law to make money by extortion, oil theft and kidnapping.

The most visible group, the Movement for the Emancipation of the Niger Delta (Mend), said they would not give up their arms because of "a mere verbal statement" from the president.