World

Greece's Desperate Measures

A budget agreement reduces the minimum wage and cuts pensions.

(AP Photo/Thanassis Stavrakis)
After days of intense negotiations during which its membership in the eurozone seemed to hang by a thread, Greece finally reached an agreement today on the measures that will accompany the new loan package from its European partners and the International Monetary Fund. The measures agreed on are draconian. They include a 22 percent cut in the monthly minimum wage, reducing earnings from 751 euros to 586 euros per month. For people under 25, it will be even lower, down to 511 euros, and any increase before 2016 is ruled out. In addition, further reductions to the minimum wage may take place in July. Meanwhile, all automatic wage increases that are included in collective-bargaining agreements will be frozen until unemployment falls below 10 percent (it is currently at 20.9 percent). Employers are also considerably strengthened in their bargaining position vis-à-vis the unions through changes in arbitration regulations and a contraction of the time period (from six to three months)...

What It Feels Like to Be Poor

Katherine Boo chronicles the intimate realities of poverty in an Indian slum.

Behind the Beautiful Forevers: Life, Death, and Hope in a Mumbai Undercity. By Katherine Boo, Random House, 256 pages, $27.00 I n 2004, shortly after winning a MacArthur genius grant for her reporting on poverty as a New Yorker staff writer, an audibly nervous Katherine Boo told an NPR interviewer, “If I have any gifts at all, one of them is invisibility.” She was talking about a quality of her work: the way she strives to witness her subjects’ lives so intimately it can seem as if the subjects don’t know she’s observing them. Boo’s byline itself hasn’t appeared in the magazine since 2009. From November 2007 until last March, she was in Annawadi, a slum near the Mumbai airport. Her tightly woven first book about a core of that neighborhood’s struggling residents, Behind the Beautiful Forevers: Life, Death, and Hope in a Mumbai Undercity , offers a rebuke to official reports and dry statistics on the global poor. “Annawadi sat two hundred yards off the Sahar Airport Road,” Boo writes...

The Fall of the House of Assad?

If and when the Syrian regime crumbles, an American administration will have to seize opportunities.

AP Photos
B ashar al-Assad has not yet fallen. I note this only because of the tone of inevitability in some news reports on Syria's civil war. The downfall of Tunisia's Ben Ali, Egypt's Hosni Mubarak, and Libya's Moammar Gadhafi may be no more predictive than a roulette ball falling on red in the last three spins. Arguably, the popular convulsion in the Middle East began not in Tunisia in late 2010 but in Teheran in mid-2009, when the Iranian regime—Assad's patron—crushed a popular revolution and erased the immense hopes it had raised. Still, it would be foolish to bet heavily on Assad's long-term survival as Syria's leader. His forces may have retaken rebel-held suburbs of Damascus this week, but armed rebels holding suburbs of a capital even for a few days is the political equivalent of a tubercular cough. Wagering on when the regime will crumble or what will replace it is equally risky. Assad has already defied Israeli Defense Minister Ehud Barak's December prediction that the Syrian regime...

Under Threat of Greek Default

The European Union outlines a budget pact in the shadow of economic disaster.

AP Photo/Virginia Mayo
BRUSSELS, BELGIUM —The specter of Greek default haunted Monday’s informal European Union summit. Despite valiant efforts by EU leaders to focus on promoting growth and jobs, an issue they finally seem to have woken up to, and on finalizing the new fiscal compact agreed on last December, Greece’s debt odyssey hovered menacingly over the proceedings. And, as if the Greek situation were not enough, nerves were further frayed by the evolving Portuguese disaster. As talks were under way in Brussels, ten-year Portuguese bond spreads were reaching euro-era highs of more than 15 percent amid growing fears that the Iberian country would follow in Greece’s footsteps and restructure its debt. The most significant development coming out of the summit was the agreement on the specific terms of the new fiscal compact, which aims to enforce greater budgetary discipline among signatory countries. But the Czech Republic opted out of the new pact during the negotiating process, citing nebulous...

Austerity Über Alles

Germany's insistence on belt-tightening during the recession stems from a fear of history repeating itself.

BERLIN, GERMANY —Score another one for Angie. Last night in Brussels, the leaders of 25 of the 27 European Union countries agreed to become more like Germany. Not in so many words, of course. There was talk of spurring growth, creating jobs, and liberalizing trade. But at the heart of the pact was the so-called debt brake. Modeled on Germany’s own 2009 Schuldenbremse , which imposed a tight cap on federal and state deficits, the debt brake compels participating eurozone countries to keep their structural deficits under 0.5 percent of their gross domestic product (GDP). The 25 countries that signed on—that is, every EU country but non-eurozone Britain and the Czech Republic—are now expected to write language into their national constitutions codifying the deficit limit, with violators to be hauled before the European Court of Justice, which can fine member countries as much as 0.1 percent of their GDP. The fiscal pact is a major victory for German Chancellor Angela Merkel, who set it...

Couture's Chinese Culture Shock

Chinese luxury consumers are becoming an important market but fashion's racial stereotypes persist.

AP Images
We’re witnessing a remarkable shift in China’s relationship to global fashion: once “the world’s factory,” in Asian American fashion scholar Thuy Linh N. Tu’s words, China is now poised to be the world’s mall. While China remains a poor country with an average annual per capita consumption of $2,500 (in contrast, the U.S. per capita average is $30,000), China’s rising number of millionaires and the Internet-enabled diffusion of Western fashion consumer culture are quickly transforming the communist nation into what The New York Times has called “The Shoppers’ Republic of China.” Today, young Chinese—like Lu Jing, a 22-year-old Beijing resident who told the China Daily that she earns $943 a month and saved up for a $3,200 Louis Vuitton handbag by surviving on instant noodles and taking public transportation—make up an new consumer class. Fashionistas between 20 and 30 years old are buying luxury fashion and micro-blogging about it on Sina Weibo (China’s version of Twitter) where...

Missing the Arab Awakening

Fears of radical Islam and a depleted budget may keep the U.S. from shepherding a Middle Eastern transition to democracy.

Twitter/Shokeir
On January 25, Egyptians marked the one-year anniversary of their revolution with another massive demonstration in Tahrir Square, the epicenter of what has become known variously as the Arab Spring, the Arab Awakening, or the Arab Uprising. Whatever term one chooses for the events that began with the self-immolation of a Tunisian fruit vendor in December 2010 and soon swept through Egypt, Yemen, Libya, and Syria—the last year has marked a decisive shift in the modern history of the Arab world. Though the situations in different countries have and will continue to take different paths, the people of the region have voiced their unmistakable rejection of the political and economic arrangements that have dominated their countries for decades. But what of the United States' role in the current era of transition? As I wrote in The American Prospect one year ago, the Egyptian uprisings offered President Barack Obama an opportunity to make good on the unfulfilled promise of his historic June...

Eurozone Overexposed

EU leaders scuttle a Greek bond deal for fear of greater losses.

AP Photo/Thanassis Stavrakis
Greece is once again the focal point of efforts to stem the bleeding of investor confidence and save the eurozone. Intense negotiations continue on the precise terms of the restructuring of privately held debt in the struggling Mediterranean country. Agreement is a necessary condition for the approval of a second bailout package from Greece’s eurozone partners and the International Monetary Fund (IMF), which, at 130 billion euros or more, will exceed the first one. On Friday, it looked as though the Greek government and the Institute of International Finance (IIF), the global banking lobby group, were close to a deal and a tentative agreement on interest rates, averaging out around 4 percent for coupons on the 30-year bonds issued in exchange for Greece’s existing debt. As the day progressed, however, it became clear that, even though the Greeks and the bankers had reached the essentials of an agreement, the deal could not be finalized. The IMF and the eurozone countries, in...

Best New York Times Caption Ever

A typo in the caption of this New York Times photo raises questions about the nature of war. Isn’t that how wars start? Someone tells a story about what happened to them. Another person tells a different story. And so a fissure forms and widens. Fiction between ostensible allies leads to disasters. Honesty is the best policy.

Sex, Preaching, and Abortion

AP Photo/Orlin Wagner
You know the colloquial definition of "chutzpah" as well as I do: the man who murders his parents and then throws himself at the mercy of the court because he's an orphan. As you know by now, our good buddy Newt is steadily exercising more chutzpah than our homicidal orphan. Do you remember that, way back while he was trying to impeach President Bill Clinton for, um, perjury, Newt Gingrich had to resign as speaker because he was cheating on Marianne? And now he is shocked that the liberal media would bring all that up, despite his career as a moral scold . ("Liberal media" is one word, just like "gays in the military" once was.) He prayed it all away, OK? 'Nuff said! Ah, just another entertaining moment in the sideshow we call the primaries. But while you were snorting out your coffee over Newt's antics, the Guttmacher Institute announced that the drop in the world's abortion rate has stalled. (Guttmacher is generally respected as the most accurate and nonpartisan source of...

Look Who's Downgraded Now

The reappraisal of Austria's and France's credit ratings shows that the Greek economic crisis is at high-risk of contagion.

AP Photo/Remy de la Maviniere
Friday was another very bad day for Europe’s crisis managers. Within the space of a few hours, it was revealed that talks between Greece and its international creditors had reached a dead end and were being put on hold and that Standard & Poor’s had downgraded nine eurozone countries, including France and Austria, which formerly held AAA ratings. Both developments are alarming, but the Greek situation is the more immediately pressing. The Institute of International Finance, whose managing director, Charles Dallara—a former high-ranking Treasury official under Ronald Reagan and George H.W. Bush who has lately made Athens his home away from home—issued a statement Friday afternoon saying that “discussions with Greece and the official sector are paused for reflection on the benefits of a voluntary approach.” The main sticking point, according to people familiar with the talks, is the level of the interest rate to be paid on the new, lower-principal bonds that creditors will get in...

Friday Miscellany

Good lord, the week goes by fast, and I don't get to comment on 10 percent of what's interesting out there. So here are a few items not to be missed: Jerry Sandusky . Sara Ganim, the amazing young reporter who tracked down and revealed the sordid story at Penn State, reports on the back story behind the investigation and indictment. It's a fascinating article, with between-the-lines suggestions that either someone held the police back or that they were amazingly clueless in investigating the former Penn State coach's serial child molestation, abuse, and assault. She also gives hints to how one victim's mother took the lead in showing police who else might have been molested—by going through Sandusky's creepily titled book Touched. The mother said that the boys had to be subpoenaed before they would testify. The whole piece is worth a read, but here is the opening: The investigation of Jerry Sandusky took three years. And it took Sandusky himself—through the pages of his autobiography...

It All Falls Apart

In the beautiful A Separation, even the family is no refuge from society.

Berthold Stadler/dapd
W ho are you to judge? Another’s life, the beliefs and attachments, rational and otherwise, that make up another’s choices—how can anyone evaluate such things? Yet the arguing Iranian couple in A Separation demand judgment. They face the camera in the opening scene, a comely woman with dyed-red hair under her veil, and her bearded, exasperated husband. Simin (Leila Hatami) and Nader (Peyman Moadi) are presenting their case for divorce to an unseen magistrate and in turn, to us. She seeks a better life for their daughter abroad; he refuses to leave behind his home and his elderly father, who is stricken with Alzheimer’s disease. The judge denies them a divorce, declaring, “My finding is that your problem is a small problem.” They are stuck with each other and with us. These are the seemingly low stakes of Asghar Farhadi’s latest, which has the unlikely distinction of being an Iranian film with Oscar buzz. (Iran hasn’t had a nomination since Majid Majidi’s Children of Heaven was up for...

Women, War, & Peace

AP Photo/J. Scott Applewhite
I'm not a gender essentialist. I don't believe that women are from Venus and men are from Mars. I suspect strongly, in fact, that women and men are the same species and might even be able to reproduce. At the same time, it's true that women and men—on average, in general—tend to behave differently. You can't predict any individual woman's or man's behavior based on sex; as we've discussed here before, some boys want to be princesses, and some girls are hard-core jocks with a fabulous swagger. Yet at the same time, the international policy community knows that, on average, women tend to invest in their families while men spend their money on themselves. And that if women are involved in peacemaking and national rebuilding, that peace is more stable than if it were all organized by men. Last month, Hillary Clinton gave an extraordinary speech that got little attention, buried as it was during the holidays. In it, she discussed: ... the growing body of evidence that shows how women...

Hungary Games

The country is seeking help from the IMF even as its internal policies scare off investors.

Hungarian Prime Minister Viktor Orban. AP Photo/Tamas Kovacs
T amas Fellegi, Hungary’s chief negotiator with the International Monetary Fund, has a tough task this week. Fellegi, a minister without portfolio in Viktor Orban’s right-wing government, is in Washington for preliminary talks with the IMF, in the hopes of setting the foundations for a new package of financial support that will prevent the country’s descent into the Hades of default. This new package, which Orban had previously stated would not be needed, was made necessary in part because of the dramatic deterioration in the economic outlook of the whole of Europe as a result of the eurozone debt crisis and the inept way it has been handled. But the Hungarian government shares responsibility for its predicament: Through its policies in the last year and a half, it has made investors particularly jittery. Critics, whose ranks are rapidly swelling and which include the U.S. administration, argue that the problem is not just one of economic policy. In their view, Orban’s reforms,...

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