Our March Newsletter features our regular section on Spain. As regards Foreign Policy, Inside Spain reports on Prime Minister José Luis Rodríguez Zapatero’s visit to Tunisia, the first of a foreign leader following the overthrow of Zine el-Abidine Ben Ali. Spain will provide €300 million in loans through the European Investment Bank to help spur an economic recovery in Tunisia, while it will join France and the UK in organising an air bridge to move thousands of foreign workers stranded on the Tunisian side of the Libyan border. The PM also visited the Gulf states of Qatar and the United Arab Emirates (UAE) where he sought to drum up business and investment in the Spanish economy.
On the Domestic Scene, the Attorney General has said the government will contest before the Supreme Court the legalisation of Sortu, the new version of Batasuna outlawed in 2003 for its ties to the Basque terrorist group ETA, after it presented its statutes last month in a move to try to take part in May’s local elections in the Basque Country. On the Economy, William Chislett examines a newly approved law which requires banks to strengthen their capital by September or run the risk of partial nationalisation; it also gives the unlisted savings banks or cajas (the weakest part of Spain’s financial system because they have a proportionately much larger share of their total lending in mortgages than the commercial banks) until March 2012 to organise stock market flotations. The speed limit on motorways was reduced from 120km/hour to 110km in a move aimed at saving petrol, following the sharp rise in crude oil prices as a result of the uprising in Libya, a country which supplied around 13% of Spain’s imported oil in 2010 and 1.6% of its gas. And finally, Spain met its budget deficit target for 2010 even though 13 of the 17 regional governments failed to meet theirs as part of the austerity measures to calm the international bond markets.
Our first highlight this month is an analysis by our Senior Analyst for the Mediterranean and Arab World, Haizam Amirah-Fernández, on the international relations of the Gulf States. He explains how the heavy dependence of the international system on the Gulf countries’ energy resources has conditioned their international relations, making them highly complex and subject to the establishment of alliances to defend or challenge the status quo and to security dilemmas which often lead to paradoxes and contradictions. As Amirah-Fernández concludes, ‘their political calculations depend, above all, on their perception of how regional events and the movements of their rivals could endanger their own safety and perpetuation in power’. Luis Martí writes our second highlight, within Europe, under the title Rebuilding the Eurozone: Germany’s Role, where he examines in depth the initiative led by the German government to revamp the regulatory and operating framework of the European Economic and Monetary Union (EMU) in the wake of the crises affecting various member states. The initiative, Martí says ‘is important, and hotly debated’. Our last highlight, by Ramiro Albrieu & José M. Fanelli, is a working paper that looks at the effects on Latin America of the financial turmoil at the end of 2008 and the consequences of the subsequent recovery, with a particular focus on the size and characteristics of the external shocks endured by the region, its vulnerability to the shocks and the political responses they elicited.
In addition, our analysts Carlos Malamud & Federico Steinberg contribute a piece on the Latin America’s prospects in which they consider that ‘Latin America’s economic and political outlook for 2011 is favourable. Growth and political stability appear to be guaranteed, although there are some risks on the horizon’. After exploring the area’s general macroeconomic strengths, the authors analyse the risks which the currency war, inflation and the commodity, energy and food price boom could pose for some countries. Also in International Economy and Trade, Luis A. Riveros, on the subject of the G-20 economies and the financial crisis, concludes that the G-20’s in building global governance has not been satisfactory and that, at the same time, there has been no reform in the support for governance and social policies in the poorest countries to allow international organisations to give effective priority to this field. On Sub-Saharan Africa we publish the text of the speech delivered at the Elcano Royal Institute by Ambassador Joseph Mutaboba, the UN Secretary General’s Special Envoy to Guinea-Bissau on the ‘Challenges facing the international community in addressing peace building priorities in Guinea-Bissau’.
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