Conference on Euro discusses economic crisis

A conference on the Euro at the Peterson Institute for International Economics focused mostly on the economic crisis in the U.S. and the world. Lorenzo Bini Smaghi, a member of the Executive Board of the European Central Bank, emphasized that a solution for the entire world market, not just the EU or the US, was needed. When many markets are interconnected, a weak spot in one economy affects all of the economies, he said. He wanted to reassure banks that they will get all of the money they need so that they can start lending, fearing that the credit crunch will hurt the main economy.

Dominique Strauss-Kahn, the Managing Director of the International Monetary Fund, agreed that action is needed to be taken immediately to try to solve the crisis. He pointed out that confidence in the market is necessary to stop the credit freeze. Any action taken, said Strauss-Kahn, should have a clear objective, have oversight on how public money is used, should be comprehensive and coordinated with all actors at every level. He added that the action must also be acceptable for citizens. "We can solve the problem we're facing," said Strauss-Kahn, we just need to act quickly.

Kosovo: Balkan Moment of Truth?

The Foreign Relations Senate Committee held a hearing today analyzing the recent independence of Kosovo and the problems being faced in the Balkan region. The hearing was divided into two sections with two different sets of witnesses.

During the first half of the hearing, Daniel Fried, assistant Secretary of State for European and Eurasian Affairs, introduced the situation in Kosovo, presenting the American support. He talked about the newly free and independent nation and the problems with Serbia. Serbia is trying to isolate themselves from the rest of Europe, due to the recognition of the latter to the independence of Kosovo. According to Fried, the United State’s strategic interest is, for Serbia to find itself into the European Union, but after all it remains Serbia’s responsibility.
The financial situation of the country is creating some concerns regarding its independence; however Fried explained that 25 percent of the costs will be provided by the U.S., 50 percent from Europe and the remaining from organizations such as The World Bank and United Nations.

Witnesses present in the second half of the hearing were Janusz Bugajski, from the Center for Strategic and International Studies, Daniel Serwer, vice president for Peace and Stability Operations and lastly Ivan Vejvoda, the executive director of Balkan Trust for Democracy. They gave the European and local perspective of the situation. Serwer especially emphasized on the fact that Serbia is the problem and not Kosovo.

Ambassador Wisner and Dimitri Simes discuss "Kosovo: What Next?" at the USIP

At the discussion “Kosovo: What Next?” held at the United States Institute of Peace, Ambassador Frank G. Wisner, Special Representative of the Secretary of State to the Kosovo Status talks, said that it is an “unusual declaration” for Kosovo to declare independence, because their independence will be supervised. It was clear to anyone, he said, that Kosovo had a few bridges that would need to be built across the divide toward independence. Serbia finds itself on a real threshold of history, and he said the opinion today is that Serbia is looking backwards with humiliation and cannot move forward if it continues to carry the “albatross of Kosovo” with it.

Wisner said that he did not think the outcome could have been different. The offer put on the table was limited autonomy, but the deeply held views by Serbia would prevent autonomy from being a solution. First and foremost, he said, if peace is to be maintained, the United States and the Europeans must be heavily involved in the detailed protection of the minorities in order to produce success.

The United States, he said, needs to reestablish ties with Belgrade because Serbia is a major factor in the Balkans. Why Russian chose to “draw a line’ over Kosovo is a question, he said, and Russia’s decision has produced a deep alienation between Moscow, many European capitals, and the United States. Russia’s blocking of the declaration is making them alienated, but he said he does not think that Russia’s opposition will continue much longer.

Dimitri K. Simes, President of The Nixon Center, said he thinks it is a tragedy to what extent informed people in the United States do not know “the other narrative,” which, he said, is very important. Russia is not going to use military force or establish bases in the Balkans. Russia will not cooperate, he said, because Moscow does not want Kosovo’s independence.

The problem, Simes said, is that if we are prepared to “swallow it,” he does not know why we are not prepared to make a deal with Russia. There are serious implications he said, and as a result of the United States violating the UN resolutions, Russia will most likely approach the Kosovo issue “selectively” just like the United States does. According to Simes, Moscow says that if the UN security resolutions can be ignored, Russia should be entitled to be selective when it is in Russia’s interests.

Ambassador Wisner said that his conclusion after listening to Simes was that Russia thinks it’s the most important element in the Kosovo issue, but that he disagrees. He said the United States interests were broader than that. He said he believes that Russia, like the United States, has interests that can be accommodated but that he does not believe that the cost of denying a solution to a problem that was “crying out” was wrong. His question to the audience was, ‘do we want to destroy the UN, are we going to leave the UN and revert Kosovo to autonomy?’ He declared that Russia’s view that autonomy was offered is disillusioned. UNSC Resolution 1244 makes it clear, he said, that there can be independence and that violation of national law has not occurred.