from The Water's Edge

The World Next Week

November 18, 2010

Blog Post
Blog posts represent the views of CFR fellows and staff and not those of CFR, which takes no institutional positions.

The podcast for the The World Next Week is up. I am off-site at a conference, so Robert McMahon sat down with Sebastian Mallaby, who directs CFR’s Maurice R. Greenberg Center for Geoeconomic Studies, to discuss some looming issues for next week. They talked about what to expect at the upcoming Cancun Climate Summit, the Eurozone crisis, and potential strikes in Greece and France in response to austerity measures and economic reforms. The pending report of the U.S. presidential commission on deficit reform also entered into the discussion. You can listen to their conversation here:


The highlights:

  • Expect the Cancun Summit to involve modest efforts at firming up political commitments made last year in Copenhagen to reduce emissions, and further tough bargaining from China, the world’s largest emitter of greenhouse gases. The new U.S. political alignment could weaken the Obama administration’s ability to make credible pledges in Cancun.

  • The pending bailout of Ireland’s banks by the EU highlights the multifaceted nature of the Eurozone crisis, triggered by a profligate Greek government and now spreading to Ireland, a country that had seemed to take the most disciplined austerity steps.

  • The tough measures and public demonstrations in Europe could be a harbinger of events to come in the deeply indebted United States. One step U.S. policymakers must be prepared to consider is removing the tax break for interest on home mortgages, which has encouraged debt accumulation with little impact on home ownership compared to other countries that do not allow this deduction.

Along with Bob and Sebastian, a number of other experts and news outlets are considering the same issues. Reuters runs down possible outcomes of the Cancun Summit, the Guardian publishes on investors’ pressure on policymakers to cut a deal during the summit, while the UN Dispatch wonders if the Cancun will only bring a repeat of Copenhagen’s disappointing outcome. Bloomberg offers an overview of Greece’s new budget while the Economist blogs on Ireland’s imminent bailout.   CFR’s own Peter Orszag weighs in on the deficit commission’s proposal, and the New York Times reports on an alternative approach to the deficit and offers a detailed breakdown of the different options for shrinking the debt.

(Photo: A protester waves a flag in front of the Greek parliament building during an August 2010 rally related to austerity measures. John Kolesidis/courtesy Reuters).