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Budget cuts plunged the E. U. economy back into crisis. Britain slid into double-dip recession and Spain’s credit rating was downgraded for the second time this year. The Netherlands reached a budget deal just days after disputes over austerity led to government collapse. Pakistan said the U. S. is ignoring demands to stop drone activity. International monitors have moved to another hot spot in Syria to try to stop violence there. And former Liberian President Charles Taylor became the first head of state since World War II to be convicted by an international war crimes court. Yochi Dreazen of National Journal, Indira Lakshmanan of Bloomberg News and Stephan Richter of The Globalist join Diane for analysis of the week’s top international news stories.
- Yochi Dreazen senior national security correspondent, National Journal magazine
- Indira Lakshmanan senior reporter, Bloomberg News.
- Stephan Richter publisher and editor-in-chief of The Globalist, a daily online magazine on the global economy, politics and culture.
MS. DIANE REHMThanks for joining us. I'm Diane Rehm. In Europe, anger grows over austerity programs as the region's economic troubles worsen. Syria cease-fire agreement fails to take hold. Pakistan tests a nuclear capable missile just days after a similar test launch by India. China's leaders are embroiled in wire-tapping scandals and an international court convicts Liberia's ex-president of war crimes.
MS. DIANE REHMJoining me in the studio to discuss the week's top international stories on the Friday News Roundup, Yochi Dreazen of National Journal, Indira Lakshmanan of Bloomberg News and Stephan Richter of The Globalist. Do join us, 800-433-8850, send us your email to email@example.com, join us on Facebook or Twitter. Good morning to all of you.
MR. STEPHAN RICHTERGood morning.
MS. INDIRA LAKSHMANANGood morning.
MR. YOCHI DREAZENGood morning.
REHMStephan, let me start with you. Austerity in Europe has been dominating news there. This week in the UK apparently has slid back into recession. Just how bad are the numbers?
RICHTERThe numbers are bad, but the question, as always in a case like that, are they trying to do the right thing to rectify the ship for the long haul? This is basically a case of industrialized economies not doing their domestic bookkeeping for some decades and having too many benefits and too many public sector jobs. And ultimately, we're realizing right now global financial markets don't bail you out if you live beyond your means to a certain extent.
RICHTERAnd so what the UK government and others are doing is to try and balance their books. That is going to be wrenching. That's going to be tough. It's tough on people. It leads to unemployment. There are big debates with the French elections coming up about more growth in Europe. But, you know, in a U.S. context, what's interesting in Europe right now is that really it is the people on the right wing, the Nationalist right very often, that are demanding more state spending. It's not just the leftist as one would expect here, but in the French road and other countries, you know, the Netherlands, the government there failed last weekend.
RICHTERYou realize that it is, you know, not just arch-conservatives, but right wingers who want more state spending and that shows that the real debate is much about almost an underclass left behind by globalization. That's what we're realizing and that's pains that are going to blow the winds over our way independent of Europe, here as well.
REHMAnd Indira, what apparently that does is to create this difficulty in trying to sustain growth while cutting the deficits. You've got the same problem here in this country.
LAKSHMANANThat's right. I mean, I think we see the economic consequences as well as the political consequences of this. So, you know, if you take it to its next step, it's the failure of The Netherlands government to be able to, you know, agree on new austerity measures and a new budget led to its fall. So you can see right there a political consequence. You see in the UK how Cameron's government is under a lot of pressure.
LAKSHMANANNow, remember that the UK, out of all the countries in Europe, is one of the biggest offenders in terms of its debt. And what the UK is seeing right now is two quarters in row of shrinkage, of GDP and that's technically a recession. And they're calling it a double-dip recession because it's the first time since the mid-1970s that they've had a second dip before a full recovery to the pre-recession levels of growth.
LAKSHMANANSo Cameron is suffering a very negative reaction to some of his policies such as, you know, suggesting tax cuts for the rich and also the scandal, let's not forget, around Rupert Murdoch and the possibility of, you know, whether the Cameron government gave some favoritism to the B-Sky-B deal and all of that is also hurting him. So there are political consequences that come in that are affecting, you know, all of this economic trouble that we see as well.
REHMAnd certainly in France with the elections, Yochi?
DREAZENAnd in France, you're seeing Nicolas Sarkozy running consistently behind his leftist rival, even though Francois Hollande is not someone that is not to be diplomatic and generous. He is not someone blessed with an overabundance of charisma. He just sort of looks like an accountant, talks like an accountant, but Sarkozy who has a strong record on other things also parenthetically very pro-American, very pro-NATO, is running consistently behind.
DREAZENOne short point I would add to Indira's comment. There are economic ramifications, there are political and there are also social. What you're seeing in Europe are just enormous mass protests, in Greece, now in Spain, possibly soon in England, of people taking to the streets to say, set aside the kind of big picture macro-economic question, what is this doing to my life? I'm a retiree and my pension is cut. I'm a student and I can't find a job. So it isn't simply macro issues like politics. It comes down to the micro level of what is my life like today and what will it be down the road?
REHMWell, and one of the surprising outcomes of the French election seems to me was the 20 percent Le Pen got.
DREAZENAnd part of that is France has a fairly sizable anti-immigrant kind of xenophobic French, which has been there for quite some time. Part of it is the unrest that broke out on sort of the outskirts of Paris that terrified a lot of French citizens. This was a part of their country they, frankly, didn't really know existed. And when they saw them burst into flame, Sarkozy that was the moment where his popularity spiked because of his response.
DREAZENIt was also a moment where he referred to the people protesting basically as trash. So it became also a moment where his popularity spiked and then plunged. But the right wing has been doing well for some time. We forget that here. We look at France as this kind of bastion of liberalism, baguettes and all these happy things. But it has a kind of nasty right wing France that's fairly sizable.
REHMSo what's going to happen to her votes in the runoff?
LAKSHMANANIt's very interesting because Marie Le Pen has, you know, virtually said that she wants Sarkozy to fail. Even though you would think she would suddenly become the kingmaker who's going to, you know, trade her 18 percent of votes over to the Right of Center candidate, Sarkozy in exchange for Cabinet ministers or support in the parliamentary elections. So far that has not taken place and it seems as if she almost wants Sarkozy to collapse so that then she can be the new voice for the right, she can speak for the opposition.
LAKSHMANANAnd what Sarkozy has done that's been really interesting is trying to speak to her 18 percent of National Front voters while not completely legitimizing her. And he has outright said that he doesn't want National Front members in his cabinet, but that the concerns of these people, these voters, need to be taken into account. I mean, the question is for him to beat Hollande in the runoff, he would need like 80 percent of those National Front voters and most of the polls show that he would only get about 60 percent of them at best. So it doesn't look good for Sarkozy.
REHMAnd we've just gotten a report from the Associated Press that Romania's government failed today in a no-confidence vote. Opposition parties seized on widespread public anger over biting austerity measures, cronyism and corruption. Stephan, is very widespread.
RICHTERAnd not limited to Europe. It seems like news cacophony out of Europe today, but, you know, we have the princely (sp?) scandals in China, we have the same deep division probably even a deeper division in this country on the budget and so we punt all the time. We have the same level of frustration like the Le Pen voters here. A couple of things strike me, first thing is, Europe doth protest.
RICHTERNow the Americans are supposed to be the revolutionaries, the objective economic situation. Here isn't much better. I'm just surprised why the Americans are almost, and I hate to say to this as a, you know, German citizen by passport, why the Americans are so docile. That's a big surprise, you know, even in the inner cities where young African Americans are heavily out of work to the same tune -- African American males to the same tune as in Spain. There are protests on the streets, the Indignados and so on and nobody is so indignant in our country here.
RICHTERThat's the strange thing to observe, but it leads to, you know, a bigger question, whether, you know, this is the international hour, whether foreign policy is still possible in the future right now because all the countries are so almost incapacitated at the home front. And that's sort of my reflection on the week there that, you know, can countries still engage in all these other issues when there's so much trouble in each country on the home front right now? And that's an interesting challenge for the future of diplomacy.
REHMAnd of course, you did have the Wall Street protest that began there in New York spread around the country, but did not seem to have the kind impact that their founders, their starters, had hoped for.
DREAZENI mean, the only real impact, I think in a lasting sense, was rhetorical in the sense that the one percent, 99 percent phrase that's caught on, that's still used, but the protest fizzled. I mean, for a long time, they were in Chicago, they were in New York and some in parts of California, particularly Oakland, they actually shut down the port because of their size. Flash forward a few months and they're gone. I mean, in D.C., you still see a few tents here and there, but it's easily ignorable.
REHMWell, is Stephan right, that somehow we have become more passive, Indira?
LAKSHMANANWell, I was going to take it to the other point that Stephan made, which was about whether foreign policy can play a role anymore in U.S. politics, particularly going into this presidential campaign. And I think that's a really interesting question. And all the pollsters I've talked to indicate that President Obama's pretty, you know, has very ratings on foreign policy because of killing Osama Bin Laden, because of helping oust Muammar Gaddafi in Libya, because of the fight on terrorism, because of pulling out of Iraq and vowing to pull down in Afghanistan.
LAKSHMANANThose are all things that have gone over well with voters. And what's been interesting is seeing the Republicans trying to tack away from that, differentiate themselves. Marco Rubio, the up and coming Florida Senator who just gave a major foreign policy that I covered this week, it was fascinating to listen to him because he made an argument that sounded almost like talking points from Hilary Clinton.
LAKSHMANANThat, you know, America has to show leadership, but coalitions are important. Although he had some differences with the administration on foreign policy, they were very mild rebukes and so that's interesting to see that perhaps the Republican Party will focus a lot on jobs and economy and much less on foreign policy.
REHMI heard Hilary Clinton speak last night to exactly those points, that there has to be coalition building, there has to be cooperation among governments. But as each of these governments falls into economic distress, it's going to be fascinating to watch. We'll take a short break and when we come back, we'll talk more about Spain, the Dutch government falling, your questions. Stay with us.
REHMWelcome back. Here with me for the International Hour of the Friday News Roundup, Yochi Dreazen. He's senior national security correspondent for National Journal magazine, Indira Lakshmanan, senior reporter for Bloomberg News and Stephan Richter, publisher and editor-in-chief of The Globalist. That's a daily online magazine on the global economy, politics and culture.
REHMFascinating story going on in China. Tell me about the murder of this British man -- we, I guess, call it a murder, though we don't quite know how it all happened, and the involvement of Chinese Nationalists.
DREAZENIt's an incredible case that, frankly, if it were a book or a movie, it would seem baffling even in those contexts. But step back a little bit. You had the one of the top aids to a very, very charismatic, very powerful Chinese official flee to the American consulate without reason. He was persuaded to leave. He left and was immediately arrested. Then you had this case of British citizen Heywood dying, potentially it first said natural causes. Now it appears that he was poisoned. So that was step two.
DREAZENThen there was an involvement of the wife of this very powerful Chinese official who became very wealthy. His kids go to school abroad. You know, the prince-lings that's defined, referenced these very wealthy young Chinese, the sort of children of very powerful Chinese officials who are here at Georgetown at School of Oxford or Cambridge driving Ferraris. Very, very wealthy and showy.
DREAZENNow you have the wife linked in a direct way to the death of this British citizen thinking that she may have poisoned him because he knew a lot about corruption in this particular part of China carried out by this particular Chinese official. It's just a fascinating case. So you have murder, involvement of a guy's wife, corruption. And what it does is it's rattled China and to a degree that we haven't seen in decades. This was somebody who was supposed to be a member of the standing committee of the Politburo, the nine most powerful members in the Chinese government. He's now out. It's not clear if others will be out as well.
DREAZENBut China, which keeps its government under such close wraps and prides itself that the succession is so clear from the outside, that's all thrown to disarray by this case.
LAKSHMANANWell, I was based in China for seven years as a correspondent there until 2003. And I find this story one of the most fascinating stories and incredible the way in which it has -- the information has come out in a way that would have been unimaginable ten years ago. And part of that is due to the incredible explosion of social media in China. And also the recognition that there are so many overseas Chinese who are reading the open press in the west, emailing it back. There's so much exchange of information that wasn't even possible three years ago.
LAKSHMANANAnd I think the government, to some extent, understands that they can't control the great firewall in the way they used to. They've not even attempted to control some of the social media rumors. There've been wild rumors all over and they've also allowed the official media to go, you know, strongly forward with some of the denunciations of Bo Xilai and his wife Gu Kailai. Now in terms of the chronology, of course, the death of this British businessman, Neil Heywood, actually happened last November.
LAKSHMANANAnd so it was the flight of this deposed police chief of Chongqing, Wang Lijun, which only happened in February, that brought those allegations forward. He went to the U.S. consulate in the nearby town of Chengdu, apparently fearful for his own life and safety because of his falling out with Bo Xilai who had been his boss. There's now talk that the falling out, you know, might have been -- they, you know, were comrades for a very long time and...
REHMAnd who investigated this...
LAKSHMANANWell, this is what's interesting is that the Central Party authorities were already investigating Bo Xilai and potentially already investigating Wang Lijun. And we now know that there are allegations that Bo and Wang were together wiretapping senior officials, including the president of China, Hu Jintao, and the vice-president, who is expected to be the next leader, Xi Jinping. And that when central authorities realized that Bo and Wang were together wiretapping top officials in China, that, you know, that's really when they started putting the screws on them.
REHMSounds like the Murdoch scandal.
RICHTERIt sounds like the best reality TV show that neither British nor American producers ever invented. I mean, this is rich stuff and very meaningful. But the news gets worse for the Chinese because they don't officially have a president elect. But the gentleman who is Xi, you know, who's supposed to have that job, and most likely will as things stand, is a prince-ling himself. He's the kid of a very prominent revolutionary official. And so the perception from the Chinese people's side is not fortunate. And the party leadership and the Central planning personnel committee and those planning bodies are extremely nervous because they have this wonderful succession planned.
RICHTERBut, you know, the other thing that is almost tragic -- we here in Washington are always so keen on term limits, and I personally have asked myself this question, why on earth the Chinese have this strict case of term limits. Because Wen Jiabao the prime minister is a rather good guy, it seems to me, who often at least asks the right questions, may not have the ultimate word. So it would be nicer if he could've moved on. But the Chinese, of course, have this very tough rule that if you haven't made the top job by 60, you're out.
RICHTERAnd, you know, so compare that to the age of the United States Senate. So the Chinese have a lot of dynamism here that's definitely a positive thing, but it's going to come back to haunt them because it's exactly about the question of economic justice and equity in society that the party leadership is so nervous, nerve wracked about that they have now brought upon themselves in the form of a great novel that, you know, gets Tweeted daily.
REHMIt sounds as though this story is going to continue to unravel perhaps with webbed fingers.
LAKSHMANANThis is a huge story. And it's the biggest challenge to the Communist Party's leadership, you know, a lot of people are saying since the Tiananmen uprising in 1989, I would say going as far back as the early '70s and the death of Lin Biao who was challenging Mao Tse-tung for leadership. I mean, this is a serious crisis for the Chinese leadership. And I think it plays out in so many ways.
LAKSHMANANOne is in terms of the corruption and the abuse of power and privileges as perceived by the Chinese public. Now, the Chinese leadership has tried to say, okay, this happens at a local level, at a provincial level, but we, the top guys in Beijing, we're trying to crack down on it. We're trying to put a lid on it. All of these stories about prince-lings -- and there's been some fabulous reporting by my Bloomberg colleagues in Beijing and Hong Kong, who've tracked stock and regulatory filings. And they've been able to show a minimum of a $136 million fortune held by just two sisters of Gu Kailai, this woman who's now accused of murdering the British businessman.
LAKSHMANANAnd another $10 million fortune just in the hands of an older son of Bo Xilai. And they managed to interview that older son of Bo Xilai who's disavowing any kind of corruption. But, you know, these questions are going to continue to linger for these prince-lings. And the presumed president Xi Jinping has been very careful to keep a much lower profile. His daughter studies at Harvard, but under an assumed name.
REHMOh, I see.
LAKSHMANANAnd so, you know, not everybody is flaunting the wealth in the same way. But it'll be interesting to watch it play out.
REHMAll right. Let's talk about Charles Taylor being found guilty of war crimes, Yochi.
DREAZENI mean, this was also a fascinating case. This is a person who was the first world leader since World War II convicted of crimes against humanity and war crimes. In his case, 11 counts primarily involving his neighboring country Sierra Leone where he was accused of using blood diamonds and other economic means primarily to fund tremendous, horrific violence in that country, amputations, children being forced to kill their parents, parents being forced to watch their children be killed, the stuff of nightmares.
DREAZENThis was one of the first major convictions, not only of a world leader, but even just of a prominent leader, in quite some time. You know, one question that comes up is that many of the leaders who have been either tried, and in this case now convicted, come from Africa, a vastly disproportionate number. So one question is, are African leaders just this much worse? The other question asked by many of the African leaders themselves is, are we, as Africans, being picked on? You know, why are corrupt European leaders not being held accountable? Why are Latin American leaders, many of whom are tied to human rights pieces, why are they not being held accountable?
DREAZENSo on the one hand, you have the long arm of kind of international justice bringing to justice Charles Taylor, something I think rarely on this show do you talk about what many would consider good news. Many would consider this good news. But there is a question about what happens from here. What other leaders should be brought to charges and where do they come from?
LAKSHMANANWell, I mean, the scale of the killings in several of these African nations is just beyond the scale that we've seen under any one leadership in Europe and Latin America I would argue. So that's where you have a difference. I mean, the scale of the killing in Sierra Leone and Democratic Republic Congo and Rwanda is on a different level. But what I -- and, you know, Slobodan Milosevic was brought to trial, but he ended up dying in his cell in 2006, so that was a different case.
LAKSHMANANWhat I find fascinating is the message that this sends. And I would hope that it sends a very strong message to world leaders in any part that, you know, they can be held accountable. And fascinatingly, you know, Hassan Al-Bashir of Sudan has -- there's been a warrant out for his arrest on war crimes and genocide for ages. And he's managed to evade arrest and continue being a leader and get away with it. But I would think this should be a message that you can't necessarily get away with it forever.
RICHTERIt's also a big time message for the home front here. With all the political opposition that we've always seen about the International Criminal Court, you know, what does the Taylor case do? It establishes the oldest and greatest principle of American law, the power of precedent. We finally have it. This is a good one. You know, it's absolutely right, we can't limit it to Africans, but it's important that we have a first base.
RICHTERJust imagine if we had tried with a wiser policy -- instead of invading Iraq, if we had tried that to at least bring it as a procedure on Saddam Hussein or something like that. It would have definitely saved the American taxpayers billions -- trillions that could've been used for infrastructure, education and all these good things.
RICHTERSo, you know, these are big questions. When we look at it over the next 30 or 40 years, there's a big significance that goes far beyond, you know, part of Western Africa. But in that sense it's positive actually that Africa leads the way because it establishes also something great that in Africa not only do we have these prosecutions but we're beginning to have transitions -- democratic transitions on the basis of elections where old guys who've been ruling their country with an iron fist for 30, 40 years actually ultimately get voted out and submits to the vote. That is a fascinating story.
RICHTERNow that Latin American with a much higher level of development at the time did not have for decades, but even there it's the same case that you have election after election there. So in that sense, I think we actually stumble into some good news in unexpected quarters.
REHMAll right. And let's move to Mexico where Walmart has had some major allegations against it. What is this all about, Indira?
LAKSHMANANThat's also an incredible case and credit to the New York Times for, you know, breaking that story. But what has been interesting is that the office of Mexico's Attorney General at first had been reluctant to look into corruption allegations that, you know, the Mexican arm of Walmart used extensive bribery to extend its market share south of the border. And essentially they've been embarrassed into finally on Thursday having to say, okay yes we will start an investigation into bribery allegations because it looked somewhat bad that the U.S. Justice Department would be looking into it and something that happened on Mexican soil that Mexico wouldn't be looking into it.
LAKSHMANANI mean, keep in mind that the massive retailer accounts for more than half of all supermarket sales in Mexico. So if they used bribery to get there, wow, that's an amazing story.
REHMIndira Lakshmanan. She's senior reporter for Bloomberg News. Short break. When we come back your calls, your comments. And of course you're listening to "The Diane Rehm Show." Of course, it's not just Walmart, but it's dozens of companies that may be involved here.
DREAZENI mean, typically when we think of bribery cases overseas they often involve oil companies. And these are often oil companies working particularly in (word?) parts of the world, Nigeria, Russia, places where the rule of law is nil. So when you hear of cases of bribery, it's often in the oil sector.
DREAZENWhat's fascinating to me about the Walmart case is not just, obviously, as Indira mentioned, the size and the prominence of Walmart. But there is in this country the Foreign Corrupt Practices Act where if you have evidence that -- and in the Walmart case, it's not clear the evidence exists. But if you have evidence that this was done for commercial benefit and that senior officials elsewhere in the company knew about it, you can bring criminal charges here.
DREAZENAnd that's not just an issue in the Walmart case. A sideline to the Murdoch case in England, which has gotten some attention but not as much as I think it deserves, is that if it is clear that senior members of News Corp. again knew about this, allowed it to happen and did it for commercial benefit, you could see charges brought against members of the Murdoch family. So these cases aren't simply kind of one-offs, you know. Bribery in Mexico, wiretapping in England, these are cases that can, in a direct way, come back to the United States.
RICHTERUnless we think this is an issue for Mexicans, you know, if we also look at today's headlines, in this case credit to the Wall Street Journal, Goldman Sachs is facing serious allegations of having been fingering the Galleon hedge fund trade case, which is a criminal case and has led to a prosecution. So some of our biggest icons, you know, on the financial front Goldman Sachs and Walmart on the commercial front are now in great trepidation.
RICHTERBut Indira said before something that I find very important, credit to the New York Times and so on, it's not usual that U.S. papers actually write about CEOs before they fall. Usually, we get the news stories very often after they have been gunned for something. And I think it's very important to keep our economy clean, to have more of what these stories the Washington Post even, rather than saying, oh, the New York Times had this story so we don't need to cover it.
RICHTERThis piling on. That's a tradition that's always been a surprise to me was in Europe, when some newspaper reporter gets beat or a paper gets beat on a story, the editor-in-chief will say to the guy or gal who got beat, you know, show me that you're worth your money. Where's the next story to pile on these guys? And in America, we have this (word?) tradition, oh, somebody already, you know, threatened Walmart or threatened Goldman Sachs or came up with the truth a little bit. You know, they've done that, we don't need to.
RICHTERI think that leads to a very unhealthy form of corporatism and we are not strong in terms of the market economy because we protect large corporations too much with a mental hesitation that we have built into our system. So this is currently a very positive story as well.
REHMLet me ask you about Syria and whether it's honoring the cease fire agreement, Yochi.
DREAZENAnd that may be the easiest question to answer of this entire show 'cause we can answer it in two letters, no.
DREAZENYeah, this was something where almost immediately after Kofi Annan came out of Syria saying that he had had some sort of fragile six-point peace deal crafted together, the main points of which were gradual cease fire and the violence, gradual move to some form of political dialogue, it did not have any kind of firm timeline for Assad to depart, or even any commitment that Assad would depart.
DREAZENBut within moments of him leaving the country, you had shelling resume in Homs and Daraa. You had this case yesterday of a house collapsing, killing between 70, if you listen to the Human Rights Activists, 16 if you listen to the government. The violence has not slackened at all.
REHMDo you believe, as I heard some commentators say on this program the other day, that Assad will be gone?
DREAZENYou know, in talking to people -- I'd done some reporting in The Gulf a short time ago and then back with other Gulf people once I got back to the U.S. The feeling had changed completely. I mean, earlier in the year the feeling was he would -- he'd be out of power soon. Now the feeling is he may hold on much longer than we had ever thought. He has the backing of the Chinese and Russians. He has an enormous arms austerity. Obviously, the U.S. has said, we will not intervene. We will not arm the opposition. The Gulf countries are kind of hedging about whether they'll arm it. Turkey's hedging about what they'll do.
DREAZENIt's nice to think that Assad will be out of power soon. There's some comfort in it as we're watching these scenes of slaughter and carnage. But I think it's very premature to think that's going to happen.
REHMYochi Dreazen, Indira Lakshmanan, Stephan Richter. When we come back, it will be time to open the phones. Join us on 800-433-8850. Send us your email to firstname.lastname@example.org.
REHMAnd it's time to open the phones so let's go first to Tampa, Fla. Good morning, Robert, you're on the air.
ROBERTOh, my gosh, thank you so much. I love you so much, Diane.
ROBERTI wanted to ask in the event that Nicholas Sarkozy is defeated in his presidential campaign, how would that affect the German, French relationship and how would it affect the confidence from the international community regarding the future of the Eurozone?
RICHTERExcellent question and let me take it in reverse order. President Hollande, for that is what it looks like, that the Socialist candidate will in the end win, has a much smaller margin of maneuver than he's letting on. He's saying he will renegotiate a lot of things and so on, but we're forgetting that some small countries, such as Italy and Spain, are literally on the brink and at the mercy of confidence in the financial markets.
RICHTERIf the president, the new president of France, wants to throw oil into the fire, that will not work, he will not do it. This man is known in the good sense as a bureaucrat, as a circumspect political manager, not a firebrand, not a revolutionary, not a Socialist.
RICHTERHe's a manager who has managed the Socialist Party, but, you know, he's a manager first of all. So he has very little space and that also is why I believe, in terms of the Franco-German relationship, it will be more -- maybe there will be some symbolic changes. But in the end, you know, changing the role of what the ECB, the European Central Bank, injects into the markets, they've already spent several hundred billion dollars very much in a stabilizing spirit.
RICHTERI don't think that, you know, Angela Merkel is going to move much, simply not because she can't move, but because the financial markets would bring helter-skelter to all of Europe if the French tried to have a nice cozy side deal.
DREAZENI mean, I think that's exactly right, particularly the point about Spain. I mean, there is a real question about what can happen if the euro falls. What can happen if countries decide to pull out of the euro, which is not at this point unrealistic. Iceland is talking about pulling out and adopting the Canadian loonie as the new currency, which I just love the Canadian loonie.
DREAZENBut the idea that the Eurozone could collapse, that countries could pull out, which was unthinkable, unimaginable a few years ago, is no longer unimaginable. So quite apart from the caller's very good question on France and Germany and their relationship, it's as broad a question of what happens to Europe and to this dream of a common economy, a common market, a common currency. Does that survive?
REHMAll right, to New Orleans. Good morning, Ross.
ROSSGood morning ma'am, a long-time listener, first-time caller.
ROSSThe question I had was concerning Walmart's scandal with Mexico. I'm assuming that this goes back in time. And the reporting that I've seen during the campaign for the 2008 election was that our now first lady had been either associated with or on the board of Walmart. And I was wondering what implication for the White House this may bring.
DREAZENYou're off by two administrations. That was Hilary Clinton and not the first lady and that was at a time before she ever moved to the White House. And this case with the vice-chairman of Walmart, who is a Mexican national and was groomed for the CEO-ship and obviously that won't happen -- was way before, you know, way after she left the company so I think that's one bridge too many to travel on and it crashes.
RICHTERWhat I think the caller was referring to was that early on, Michelle Obama did a public event with Walmart over organic food and Walmart's commitment to try to do more recycling, better quality food. But that was a public relations issue. It was not that she was on the board or ...
REHMBut yeah, she was never on that one.
DREAZENAnd on that one, one should add, Walmart is actually leading the way. I'm very impressed because they actually go into what are called food deserts which we have right here in Washington, D.C. we have in your home town, in Chicago and so on, where we've had the Safeways and all these other companies for decades never really going in. And Walmart is going into the poor neighborhoods because they look at where they can expand their markets.
DREAZENThey have such a high level of saturation and, of course, they use it against the liberals in the United States to penetrate the urban areas because they can say to the liberals, well, look, at least we provide fresh food to economically weak people and that's, you know, quite an interesting story.
REHMTo Louisville, Ky. Good morning, Sophia.
SOPHIAHello, Diane, thank you so much for taking my call.
SOPHIAI just wanted to comment on why you made a comment earlier about why Americans weren't as angry as Europeans with regard to what's going on, if I'm not mistaken.
REHMI didn't make that comment. I think Stephan did, but go ahead.
RICHTERI did, guilty as charged.
SOPHIAIt was one of you, I apologize. The Occupy Movement, I think,. is in many ways stronger than ever. It's just not getting much coverage by corporate media. There were a great many actions this week all over the country that weren't covered. I think we are a very decentralized, large, spread-out population so it's hard for us to organize an event in a denser way that would show a more concentrated source of anger.
SOPHIAYou know, our capital is thousands of miles away for many people. That may be a reason. I do think the Occupy Movement is very strong, but it's just gotten less and less and less coverage.
DREAZENWell, it was also winter time, which is not a time when students typically go out, but I agree that there is going to be more to this story than the people are giving it credit because simply this. American students go into heavy debt in order to graduate from university. There are very few jobs out there. It's not pretty. We've seen this in other countries.
DREAZENOnce young people realize that the American dream is not theirs anymore and we see numbers about people moving back home with their parents because they can't afford rents, they don't have a job and so on, I think there is some social foment to this story whether it's Occupy Wall Street or not, but there is a lot of frustration among the young generation, which is very similar to what's going on in China in an interesting way.
REHMAll right. I think we talked earlier about the government of Rumania falling today in a no-confidence vote. The Dutch caretaker government secured a majority in parliament for an austerity package last night. Yochi?
DREAZENI mean, we're seeing almost dominoes, countries are having -- each country having to do this, some countries falling, their governments falling, some not. Some countries figuring out a package that wins the confidence of capital markets, wins the confidence of their neighbors. The new Greek government, for instance, is very popular, even though it's facing gargantuan amounts of unrest within its own borders. But it's dominoes and it's not going to end for quite some time.
REHMAnd to Hillsdale, Mich. Julie, you're on the air.
JULIEThank you for taking my call, Diane, and the panel. I really enjoy the discussion. I'd just like to tell you just a little short story about -- it's the Walmart issue of, you know, oh, my goodness, there's corruption in Mexico. Thirty years ago, when I was in Chicago, my girlfriend's family had a grandmother that got sick. She was out in the country. She'd had a ranch, you know, many years. She got ill, went into a hospital and was gone for over a year from her place.
JULIEBy the time my girlfriend's family came down, somebody else owned the ranch and my girlfriend's family said, well, it's going to take us 10, 20 years and there's going to be bribery throughout the courts. And my girlfriend's parents, to this day, they've had a home down there for 25 years. They know they have to show up at their home in Mexico not much more than six months. If they don't, then someone's already started the process of bribery to own their home.
REHMSo what Julie is saying is that bribery may be the way things can operate at times in Mexico?
INDIRA LAKSHMANANWell, I mean, I'd say bribery exists throughout the world...
LAKSHMANANI mean, similar situations exist in every country.
REHMAll right and to Euless, Tx. Good morning, Peter.
PETERGood morning, Diane. I've been listening to your show since I moved to the United States nine years ago.
REHMI'm so glad.
PETERMy question is regards Charles Taylor and the verdict against him. The international court was initially set up as a hybrid court wherein the local laws of Sierra Leone were to be combined with international law to try him. Now that he's been found guilty by the international court, primarily by that international law, is he going to be tried in Sierra Leone under the Sierra Leone local laws wherein he'll have to face the prospect of the death penalty should he be found guilty?
DREAZENNo, he won't. I mean, under the law of the court, he cannot be given a prison sentence of more than 25 years, nor do they have a death penalty. So it's an incredibly good question by the caller, but he will be sentenced under the laws of the international court that convicted him. They have very strict guidelines on the sentencing. They do not include the death penalty nor do they include what would effectively be life in prison.
LAKSHMANANAnd apparently under this judgment, he would serve the time in a British prison is what I had read. But I think the caller was also trying to understand whether there was a double jeopardy issue or could he be tried in a separate Sierra Leonian court and that's a good question. I don't know what the charter is of the international court, in terms of whether you can also be tried locally or whether that would be concurrent with him serving time. I'm not quite sure how that would work.
REHMAnd let's talk about Pakistan, which successfully tested a new nuclear-capable missile. The significance of that, Yochi.
DREAZENIt's another reminder to the U.S. of why, in many ways, despite the utter dysfunction of our relationship, despite the tremendous hatred many average Pakistanis have toward the U.S., why the relationship matters. This is an extraordinarily powerful country. It's nuclear armed. It has very capable nuclear intercontinental long-range nuclear missiles. It has tremendous amounts of armaments aimed at India so it's very tempting because Pakistan is so irrational, hates us so much, tries to block the drone program, whatever everyone thinks of the merits of that program.
DREAZENThey reacted so fiercely to the Osama bin Laden raid, the anniversary of which is coming up in a few days, not because of the raid, you know, the capture, the killing of him, I should say, in their borders, but that the U.S. is willing to breach their borders to do so. But this is a reminder that Pakistan matters. As much as we would like to cut ties, we can't.
REHMDo we know how the Pakistan government feels about the capture and killing of Osama bin Laden?
LAKSHMANANIf we're thinking about that, in terms of an anniversary issue, I would say that that was, you know, one of the low points in a whole series of terrible things that happened to U.S./Pakistani relations last year. Now, we know that the Pakistani government was extremely upset, both civilian and military leaders, because of exactly what Yochi said, that it was a sovereignty issue, that the U.S. breached its borders, didn’t even tell Pakistan, and didn't say, we know Osama bin Laden is here. Why, because of a deep lack of trust.
LAKSHMANANThe president and, you know, his advisors were concerned that if the U.S. let Pakistan know Osama bin Laden is here in Abbottabad and we're going to go and get him, that somebody who was on his side somewhere in the Pakistani establishment, be it military or intelligence, would feed that information back to his people. But I think the larger issue is the important one, which is how do all of these events that happened in the last year affect U.S./Pakistani relations?
LAKSHMANANAnd as you know, the Pakistani parliament had an all-parties conference, a special committee that was formed, specifically to freeze and review the status of U.S./Pakistani relations. And this came after November, two dozen Pakistani soldiers were accidently killed in a border skirmish by the U.S. So now what's so interesting is the Pakistani parliament has come forward and said, this is what we want in U.S./Pakistani relations and one of the number one things was no more drone strikes by the U.S. This is going to be a serious problem for the U.S. because it's been the backbone of our counter-terrorism strategy.
REHMAnd you're listening to "The Diane Rehm Show." Publically, Stephan, Pakistan says it wants the drones, but has Pakistan given implicit permission for the drone strikes to continue?
RICHTERThey don't even need to give implicit permission because they do have an air force that's powerful, that the military receives U.S. funding. And as far as I understand, drones have the speed, if I'm not mistaken, of World War II helicopters so anybody who doesn't want them in their own country can take them out.
RICHTERHaving said that, I think it's also very important to get beyond the Washington hooray about using drones, this techno-warfare thing. You know, it's not helping us solve any real problems on the ground in the long term because taking out people surgically might make us feel good.
RICHTERIt might have been the combination with Osama bin Laden, but for the many others, you know, we don't change the structural issues in Pakistan and elsewhere and I think it's very important with regard to the nuclear tests also to realize that the Cold War is still going. You know, we're very Western conceited thinking it was the Soviets and the Americans.
RICHTERIf you do the math on just the Pakistani/Indian border, that's almost 200 million people at one point, 1.5 billion people, so it's 1.35 trillion people who are currently having a lot of tensions with each other, which is far more than the entire NATO populations with the (word?) populations ever being at loggerheads. So there are some real issues out there that we need to look at way beyond the Washington mindset or making everything a bilateral Washington to somewhere gain.
RICHTERYou know, we can't control everything and we need to make sure that the domestic forces in those countries figure out how that can be done. We can't do it from the air here.
LAKSHMANANWell, I mean, I think what is interesting to your earlier point about whether Pakistan really means it this time when it says, no drones. I think the answer is yes. The Pakistani officials who I've talked to have said, that this is different from before. For years, the Pakistani government was giving tacit, you know, acceptance to the U.S. conducting drone strikes. So publicly, for their own domestic consumption, they were saying, no, no, no, no, we don't agree with it.
LAKSHMANANPrivately, they were telling the U.S., keep going, it's okay. This time it's different. This time, publicly and privately, the message is we're sick of drone strikes. You're not listening to us. Either you have to cooperate with us, share intelligence or we get a veto power over the drone strikes that we don't want to happen. I mean, Pakistan wants to be a partner in this. So Pakistan's position is not that we're being an obstacle, no, but we want to be an equal partner.
LAKSHMANANAnd the U.S., this goes back to the trust issue, does not want them to be an equal partner because of the fear of the violations of that intelligence and whether it might be shared with some of the targets.
DREAZENI mean, in the past, it wasn't just implicit. The U.S. had an actual CIA-staffed base, at least one within Pakistan doing nothing but the drone program. That base has now been closed. The U.S. has been asking for quite some time to expand what's known as the boxes in which the drones can operate, to include areas where the Haqqani network, which is the main adversary of our forces in Afghanistan, where they're situated and Pakistan has said no. Now they're trying to shrink the number of boxes in which the drones operate.
DREAZENOne point that I think is worth mentioning, a lot of the people on the left here who are disappointed with President Obama settle on Guantanamo Bay just because it's such an emotive issue. But it isn't simply that Obama has expanded the number of drone strikes exponentially, it's that he's loosened the rules by which drone targets are chosen to a degree that very few people talk about.
DREAZENIt used to be that it had to be a very specific, named target. You had to have a dossier on each target. Now in Yemen, just this week, we discovered that targets there can be killed even if we don't know their name, don't know their identity and don't really know their precise role, if any, in planning attacks against the U.S. So we talk a lot about the number of drone strikes increasing, which is true and which matters. We don't talk a lot about the fact that the number of targets and how they are chosen is also increasing and that's, in some ways to my mind, more significant and potentially more dangerous.
REHMSo what's going to happen with these drone strikes?
DREAZENIf we're talking Pakistan, they're not going to stop. If we're talking Yemen, they're going to expand significantly as they already are in Somalia as well. I mean, this is not going to end.
REHMYochi Dreazen of National Journal magazine, Indira Lakshmanan of Bloomberg News, Stephan Richter, he's publisher and editor-in-chief of The Globalist, thank you all.
LAKSHMANANThank you, Diane.
REHMAnd thanks for listening. Have a great weekend everybody. I'm Diane Rehm.
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