This week is a good time for a brief reminder that the most important decisions in the world aren’t always made in Washington, D.C.
As I write this, the governments of the two countries (currently) at the center of Europe’s fiscal-financial-political-currency crisis appear to be up for grabs. Greek politicians are still negotiating the appointment of a new prime minister and formation of a new cabinet. Only after they do so will European leaders decide whether to fork over billions more in bailout funds — which in turn will help determine whether, or maybe just how quickly, markets around the world jump back on the roller coaster.
And if Greece is a stone plopped into the world economy, with ripple effects far beyond itself, Italy is a relative boulder set to make an even bigger splash. Silvio Berlusconi, the man who Italians, in their wisdom, have given political life after political life during the past two decades, is trying to hang onto power. My friend Alberto Mingardi explains that Berlusconi has “talk[ed] bold and acted soft” in his four stints as premier, leaving the country without the reforms he promised and which it needs to avoid fiscal collapse — and possibly send the world economy into a tailspin. (France, which has an even bigger economy than Italy’s, is once again aiming to cut billions from its budget to keep from being next in line.)
And, if the world economy survives all that, it may face the prospect of a full-blown Israeli-Iranian war. After years of playing down the Iranian nuclear threat when the “cowboy” George Bush was in the White House, suddenly international bureaucrats are getting nervous about Tehran’s ambitions. The International Atomic Energy Agency is to issue its latest report on Iran’s nuclear program tomorrow, and there’s been rampant speculation about what will happen next. But there’s an apparent consensus that the report will make clear that Iran is building a bomb. Israeli officials have said publicly they cannot tolerate an Iranian bomb, and Turkey, the Saudis and other Gulf nations are scarcely less blunt about the consequences of Tehran having nukes. It will be virtually impossible for the United States to sit on the sidelines if war breaks out across the Middle East.
For the U.S., the only thing worse than bearing the burden of being the leading nation in the world may be watching other nations set the path we have to navigate.
– By Kyle Wingfield