28 June 2015

The Worst Is Yet to Come: Greece and Europe's Economic Woes Aren't Over

Milton Ezrati
June 27, 2015 

Greece could be on the brink of defaulting. What comes next?

Right now it looks as though Greece will default. Even if it does, Athens could still cut a deal later. Either way, it will remain unclear for a while whether the country stays in the common currency. In some respects, this situation is entirely manageable. That fact has fostered a dangerous complacency, for in other respects, this situation carries considerable risk for the eurozone, for European finance generally and for global finance.

As many media discussions have implied, the debt part of the financial equation is not especially threatening. Greece for one, is a small economy. Its gross domestic product (GDP) is barely 6.5 percent of Germany’s. For another, its outstanding debt amounts to barely 1 percent of Europe’s banking assets. Even if that debt were widely held, default would hardly threaten the continent’s financial stability. And since the debt is now largely held by governments and other official bodies, the financial system has an additional buffer against uncertainty. Meanwhile, the ECB’s bond-buying program should stem any fears that Greek default will force unsustainable borrowing costs on Italy, Spain and others in Europe’s troubled periphery.

Pentagon Says It Needs $270 Billion to Upgrade Nuclear Arsenal

Kris Osborn
Jun 25, 2015

The United States will need to spend as much as $18 billion per year for 15 years starting in 2021 to keep the nation's nuclear stockpile and the weapons and vehicles designed to deliver these weapons viable, Pentagon leaders told lawmakers.

"We've developed a plan to transition our aging system. Carrying out this plan will be an expensive proposition. It is projected to cost DoD an average of $18 billion a year from 2021 through 2035," Deputy Defense Secretary Bob Work told members of the House Armed Services Committee at Thursday's hearing on nuclear deterrence.

"The only existential threat to our nation is a nuclear attack. Nuclear weapons remain the most important mission we have," he added.

Work explained that keeping the country's nuclear enterprise modernized is especially important in light of the advancements made by Russia and China.

America's Obamacare Nightmare Is Just Beginning

Robert E. Moffit
June 26, 2015 

"A judicial victory doesn’t automatically translate into a political victory, let alone a policy success."

Today the U.S. Supreme Court ruled that the federal government could continue to subsidize health-insurance coverage through Healthcare.gov, the federal exchanges. An ecstatic President Obama declared that Obamacare is“here to stay.”

No, it’s not.

A judicial victory doesn’t automatically translate into a political victory, let alone a policy success. Once they’ve quaffed their celebratory champagne, the president and White House staff will need to suit up and get ready to play some hard-nosed defense.

Here’s why. The driving force behind health reform has been the desire to control rising health-care costs. From 2008 onwards, President Obama promised that his reform agenda would reduce the annual cost for the typical American family by no less than $2,500. After a while, it became a rather tiresome talking point. But it was pure nonsense from the start.

America's 'Insane' Iran Approach

Michael Rubin
June 26, 2015 

In March 2003, senior U.S. diplomats flew to Geneva to meet with Iran’s then UN ambassador (now foreign minister) Mohammad Javad Zarif. Their agenda was straight forward: Win Iran’s pledge not to interfere in Iraq. Zarif readily agreed. Two weeks later, Operation Iraqi Freedom began. Two thousand Iranian-trained militiamen flooded into Iraq and, over subsequent years, Iranian weaponry or proxies murdered hundreds of Americans. Zarif either lied outright or exaggerated his ability to make firm commitments to which all Iranians would adhere.

Nevertheless, on September 27, 2013, President Barack Obama announced that he had spoken on the phone with Iranian president Hassan Rouhani, and suggested he could trust that the Iranian leadership. “Iran’s supreme leader has issued a fatwa against the development of nuclear weapons [and] President Rouhani has indicated that Iran will never develop nuclear weapons,” Obama said.

Germans don’t think America stands for freedom anymore

By Adam Taylor
June 25 

To many, America is synonymous with freedom. The country dubbed itself the "land of the free" and, when trying to reclaim sliced and fried potatoes from the French, briefly attempted to rename "French fries" as "freedom fries.

Yet America's global reputation for personal freedom has taken a beating over the last couple of years. Data from Pew Global Research suggests a dramatic fall in the number of people around the world who say the U.S. government respects the freedom of its people. 

The issue may be most stark in Germany. Back in 2013, a whopping 81 percent of Germans polled by Pew thought that the U.S. government respected personal freedom. Then, in 2014, it was 58 percent. Now, according to figures released by Pew this week, just 43 percent of Germans think the U.S. government respects the freedom of its citizens. Fifty-three percent think it doesn't. 

In fixing policy on hostages, Obama makes a critical mistake


PRESIDENT OBAMA’S wide-ranging review of U.S. policy toward the taking of hostages abroad has resulted in some useful adjustments in government organization and procedure, and in one serious misstep. 

Beyond a doubt, the recent spate of captive-taking, ransom demands and brutal murders in Syria and Yemen has devastated the families of victims and exposed confusion and indifference by U.S. government officials. A lengthy New Yorker article by Lawrence Wright described the families’ anguish, along with a private effort to assist hostages that was organized by David G. Bradley, the head of Atlantic Media. At the White House, Mr. Obama seemed to be caught up in the emotional despair of these families, saying he shared their grief not only as president but also as a father and husband would. 

While China's AIIB Makes Headlines...BRICS Bank Moves Ahead

Ye Yu
June 25, 2015 

While Beijing's Asian Infrastructure Investment Bank (AIIB) has won overwhelming support (to the surprise of many, including China itself), another bank headquartered in China seems to be flying under the world's radar.

Few people have heard of the BRICS New Development Bank (NDB). This was the strong impression I got after visiting Washington, Sydney and Canberra over the last couple of months.

The NDB idea was proposed in 2011 by the Nobel Laureate Joseph Stiglitz, and it initially encountered the same cynicism as the AIIB. The five BRICS countries (Brazil, Russia, India, China, South Africa) were not deterred, however, and finally converted intention into reality in 2014. Progress on the NDB inspired the AIIB initiative intellectually, and also provided some momentum for the AIIB's launch in 2013.

United Kingdom’s Greatest Military Challenge (And It’s Not Russian Bombers)

James Goldrick
June 25, 2015

Amidst increasing alliance concern that the United Kingdom is approaching the point at which ‘little Britain’ may, in military terms, be both perception and reality, the British government has embarked upon a new Strategic Defense and Security Review (SDSR). The auguries aren’t good for Defense, which has already had to find £500 million to satisfy the Treasury.

For the defense effort as a whole, the key problem is the need to replace the fourVanguard-class nuclear-powered ballistic missile submarines. This program can’t be delayed without risking the continuous at-sea deterrent, the holy grail of the British deterrent, which has been sustained, albeit sometimes under great strain, for more than four decades. Both the Conservatives and Labour have committed to the successor force, while a number of studies have confirmed that the submarine-borne ballistic missile remains the most effective mechanism for maintaining a nuclear strike capability.

The TPA Victory: America's Place in the Pacific Century Secured?

Bates Gill,Tom Switzer
June 26, 2015 

"Obama and his unlikely Republican allies can justly celebrate a victory, and not only for the pivot and economic opportunity."

SYDNEY--It was rare moment for bipartisanship in Washington and an even rarer coalition that made it happen. But in seeing through the passage of trade promotion authority (TPA), or “fast-track”, a White House-Congressional Republican alliance bucked intense opposition from organized labor and other advocacy groups, clearing the way to achieve significant new free-trade arrangements for the 21st century.

A neophyte watching Congressional votes over the past week could be excused for assuming President Obama was the leader of the Republican Party, working together to salvage a deal. An easy mistake to make considering a majority of his actual party on Capitol Hill—and with Democratic presidential contender Hillary Clinton equivocating at best—nearly torpedoed TPA, legislation that had been granted to every post-war president, but Richard Nixon. 

Under Fire: NGOs Face Increasing Hostility


In recent decades the ubiquitous NGO has taken up the banner for charities and worthy causes. From the environment and human rights to health, education and animal welfare, nongovernment organizations have championed the dispossessed, winning legions of fans.

But in recent years pockets of NGO Land – as some call it – have lost their shine.

Too militant, too strident, and too sanctimonious are among common complaints leveled at NGOs – whether in Australia or in Southeast Asia and beyond — amid allegations of blatant lying and a victory at any cost mentality.

It was a point noted by academic and veteran correspondent Karl Wilson, from the Asian Centre for Journalism in The Philippines, who spent time working with a prominent human rights group.

The Escalating Cyber War Between Iran and Saudi Arabia and the Growing Hostility of these Two Countries

June 26, 2015

Author’s Note: Click on the headline below to see the excellent graphics accompanying this report.

Cyber warfare is an increasingly prominent aspect of the Iranian-Saudi hegemonic rivalry in the Middle East. Cyber attacks offer new revenge (e.g., 2012 attack on Saudi Aramco) and propaganda opportunities in this long running “cold war” type conflict. 
Following Saudi airstrikes in Yemen during late March, the Iran-Saudi cyber conflict escalated. OSINT reveals a rapid exchange of website defacements and social media account hijackings between Saudi and Iranian hackers during mid-April. This period began when pro-Saudi hackers, unusually the aggressors,attacked Fars News Agency’s website on March 31. This incident appears to have spurred pro-Iranian hackers into action as detailed below. 

The Yemen Cyber Army (YCA) emerged in mid-April. Unknown prior to its attack on Saudi newspaper Al-Hayat, the group has since been linked to a data breach at the Saudi Foreign Ministry of Foreign Affairs. The timing of YCA attacks, its communications footprint (Fars News “exclusives” and NewsQuickLeak.ir), and the tagline “Cutting Sword of Justice” used in the Saudi Aramco attack suggest, at a minimum, coordination with Iranian actors. 

China Most Likely Behind OPM Data Hack, DNI Clapper

Damian Paletta
June 26, 2015

WASHINGTON—The top U.S. intelligence official signaled Thursday that Chinese hackers were behind the theft of millions of personnel records from the federal government, marking the administration’s most pointed assignment of blame since the breach was announced June 4.

Director of National Intelligence James Clapper, speaking at a Washington intelligence conference, said China was the “leading suspect” in the attacks, adding that given the difficulty of the intrusion, “You have to kind of salute the Chinese for what they did.”

Mr. Clapper’s pointed remarks come as U.S. officials are debating how and whether to retaliate against Chinese officials for the breach of records and background investigation data from the Office of Personnel Management. Officials are still studying how many people were affected, but they believe 18 million Social Security numbers could have been compromised.

President Barack Obama in April signed an executive order that would make it easier for the Treasury Department to impose sanctions against any person who conducts a cyberattack that represents a “significant threat” against the U.S. government or a U.S. firm.

How EU data protection law could interfere with targeted ads

James Davenport

While greater data protection in Europe seems inevitable, the eventual form it takes is still up for grabs.

The successor to the 20-year-old European data protection directive has inched closer to becoming law, having been approved by the Council of Ministers, which represents each of the 28 EU member states. This has led to howls of anguish from some parts of the computing industry, not just the usual suspects based in the US such as IBM and Amazon, but also European firms such as German software company SAP.

Data protection law governs who can gather and retain personal data, the circumstances under which it is allowed, and what they can do with it. The move to an increasingly digital economy makes this vital to get right: too little protection erodes trust and leaves businesses and individuals vulnerable, while overbearing rules make it difficult for organisations to work together. The new General Data Protection Regulation (GDPR) aims to encompass the technological changes since its predecessor was enacted, such as the rise of social media and cloud computing.

A Computer Glitch May Have Caused LOT Airlines Computers to Go Down, Not Hackers

June 25, 2015 

Computer error a possible cause of Poland airline outage: prosecutors 

Polish prosecutors are looking into whether the outage which grounded dozens of jets operated by Polish airline Lot at Warsaw’s main airport on Sunday may have been caused by a computer system error, a spokesman for the Warsaw prosecutor’s office said on Wednesday. 

The prosecutor’s spokesman said computer error was one of the versions being examined. 

The carrier has said the outage was caused by a cyber attack. 

Asked about the possibility of computer error having been the cause, the carrier’s spokesman said on Wednesday: “The current state of our knowledge indicates that outside interference must have taken place.” 

Around 1,400 passengers were stranded at Warsaw’s Chopin airport when the flight plan system went down for around five hours on Sunday. The airline said the problem did not affect flights in the air, and passenger safety was not compromised. 

WEEKEND READING, JUNE 26-28 EDITION

Lauren Katzenberg
June 26, 2015

Every week, I scour the the Internet for the best articles, analysis, and multimedia on foreign policy and national security just for you, dear reader. You’re welcome.

Don’t blame China for the OPM security breach. “Fingers quickly pointed to China, and why not? The Chinese have pretty much had a freehand in American databases for the better part of a decade and the attacks fit their policy, their needs, their tactics and their tools. The only thing missing was a formal American accusation. But let me quickly add that I do not blame the Chinese. If we determine that China did this, we would be assigning responsibility, but blame is a different matter. I blame China when they penetrate American industry (an unfair nation state vs. private company fight) and rip off intellectual property for commercial gain (something we view as criminal).” — Retired Air Force Gen. Michael Hayden on how Congress’ failure to pass cyber security laws that would have offered better protection is to blame for the recent OPM security breach, not China.

3 Ways China and Japan Could Go to War

Kyle Mizokami
June 27, 2015 

"Wars start all the time, often unintentionally by parties that have far too much to lose."

China and Japan have gone to war three times since 1894. At the end of the Second World War, with Japan in ruins and under Allied control, it seemed unlikely the two countries would ever fight again.

War between the two countries seemed even more unlikely after the adoption of Japan’s pacifist constitution, which disavows war as an instrument of national policy. At the time, China was a poor, largely agrarian society barely capable of defending itself.

The rise of China over the last thirty years has dispelled the notion that the two powers will never fight again. China’s military, fueled by decades of double-digit budget increases, is now the region’s largest.

How Not to Write About Atomic War

DAVID AXE

The late Robert Heinlein wrote Starship Troopers, one of the Cold War’s best military novels — a scifi adventure set in a frightening, fascistic near-future and exploring universal, unchanging truths about combat, leadership and soldiering.

Heinlein, who died in 1988, also wrote one of the Cold War’s worst novels — the execrable Farnham’s Freehold, which I picked up on a whim last week at Angel City, a quaint used-book store in Santa Monica.

It was $2.95 well spent, but only in a cautionary sense. Farnham’s Freehold, a sorta-satirical speculative adventure about surviving atomic World War III, is as silly, alienating and tone-deaf as Starship Troopers is weighty, engaging and timeless.

Spoilers follow. But trust me, you don’t need to read this book. Now, where to begin …

Farnham’s Freehold, first published in 1964, concerns former U.S. Navy Seabee-turned-middle-class survivalist Hugh Farnham, his petulant grown son Duke, hysterical alcoholic wife Grace, teenage daughter Karen and her friend Barbara plus Joe, the family’s … ugh, I can’t stand writing this … household servant.

It should go without saying that Farnham & friends are white. Joe is black. Sadly, this is very important to the book’s perplexing, uneven plot.

Should 'Killer Robots' Be Banned?

Paul Scharre, Michael Horowitz
June 26, 2015 

Autonomous weapons could be a military game changer that many want banned. Before considering such a move, we need to refine the debate—and America must demonstrate leadership. 

Autonomous weapons that select and engage targets on their own might sound far-fetched, but 90 countries and over 50 NGOs are taking their possible development seriously. For two years now, they have come together for sober discussions on autonomous weapons at the United Nations Convention on Certain Conventional Weapons (CCW), most recently in April 2015. Talks are progressing, but the glacial pace of international diplomacy is out of step with rapid advancements in autonomy and artificial intelligence.

(W)ARCHIVES: THE NAVAL LYCEUM AND THE FIRST “X” ARTICLE

Claude Berube
June 26, 2015

If we define an era of naval enlightenment as a rising tide of junior officers guided by more senior officers gathered together to think, speak, and write about their profession, then the United States Navy has undergone three distinct periods that meet this definition. The most recent such period covers the past decade, during which junior officers wrote in both traditional and online media, and self-organized through groups such as the Center for International Maritime Security (CIMSEC) to discuss current and future military challenges. Before that came a period at the end of the 19th century, when the U.S. Naval Institute and the Naval War College were founded. During this period a generation of naval officers such as Alfred Thayer Mahan, Stephen B. Luce, Williams Sims, and others joined with like-minded navalist politicians such as Theodore Roosevelt and Henry Cabot Lodge to stress the importance of the Navy’s global role. However, the original age of naval enlightenment occurred in the 1830s, when officers like Matthew Perry charted the course with the founding the Naval Lyceum.

After all the chest thumping on Myanmar strikes, it's time to go back to the table

Ashok K Mehta

The lesson from the Manipur episode is that the 'keeping the lid on' strategy is not working and must be replaced with an outcome-oriented dialogue.

Following the cross-border raid in Myanmar, National Security Advisor Ajit Doval's recent flying visit to NayPyiDaw was to invoke the 2014 Memorandum of Understanding on border cooperation so that sanctuaries provided to the Nationalist Socialist Council of Nagaland (Khaplang), the perpetrators of the June 4, 2015 ambush, are denied and mechanisms devised to coordinate border security better.