The alert came today in a brief article in the Dutch newspaper De Volkskrant: Pakistan has been picked as chairman of the Board of Governors of the IAEA, the Vienna-based international agency charged as the watchdog against any use of nuclear energy for military purposes, even as at the same time it is supposed to promote it for peaceful uses.

For anyone reasonably informed about recent nuclear weapons history, the name “Pakistan” does call forth many associations – but all of them related precisely to the sort of nuclear misuse that the IAEA is supposed to stop. Admittedly, the Volkskrant piece does devote a full three-quarters of its exiguous length to listing some of these doubts: Pakistan has never signed the Nuclear Non-Proliferation Treaty; Pakistan has been locked in a dangerous nuclear stand-off with arch-rival India ever since first conducting nuclear explosions in 1998; the Pakistani nuclear scientist Abdul Qadeer Khan was primarily responsible not only for his own country gaining a nuclear weapons capability, but also (for a price) North Korea, Libya (since dismantled) and potentially Iran.

Still, the irony of another Pakistani being chosen to chair the IAEA’s governors was better captured by the lead paragraph in this report from the AFP (and not just because it’s in English):

VIENNA, Austria — Pakistan, which refuses to sign the nuclear [sic] Non-Proliferation Treaty and was home to a notorious nuclear smuggling ring, was named head of the UN nuclear watchdog’s governing board here Monday.

The AFP also judiciously supplements the previous reasons to doubt Pakistan’s anti-nuclear credentials with the additional fact that that country’s atomic weapons stockpiles are now the focus of widespread worry that they will somehow fall into Taliban and/or Al-Qaeda hands.

Yet, strangely, the tail-end of this AFP piece describes how many at the top levels of international nuclear policy find this new situation not to be at all unusual. “They are a member” of the IAEA after all, notes one diplomat, quoted anonymously. And the US ambassador to the IAEA declares that “The United States of America looks forward very much to working with the Pakistani governor as chairman of the board of governors.” In this light, appointing a Greenlander, say, to the UN’s Food and Agricultural Organization would be positively a breath of fresh air; at least no Greenlander has been known to go around burning grain warehouses to the ground.

The scoop ultimately belonged to the Financial Times, but that article is ensconced behind their semi-porous paywall. So here at €S we had to get the news from Lidové noviny, from the Twitter alert by @cznews (Oh no! Not Rozpočtoví hříšnici!):

Rozpočtoví hříšnici v eurozóně zaplatí pokutu ve výši 0,2 % HDP: Země eurozóny, které v budoucnosti po... http://bit.ly/9X8tCn #czech #news

September 24, 2010 9:09 am via twitterfeedReplyRetweetFavorite

@cznews

Czech Business News

And a scoop it truly is, for the FT journalists (Peter Spiegel and Joshua Chaffin) have unearthed proposed “legislation” set to be officially unveiled by Economic and Monetary Affairs Commissioner Olli Rehn next Wednesday, which their article terms “the EU’s most ambitious attempt to reorder its economic governance since this spring’s debt crisis that nearly destroyed the single currency.” Basically, the Commission would step up to take up a role in examining the national budgets of the 16 Eurozone member-states in a big way, with the authority to impose fines of 0.2% of GDP on governments which “consistently fail to bring down their public debt levels” – or “fail to control their annual spending,” or “fail to reform their economies to improve their competitiveness.” Once having decided to fine a member-state, the Commission under the proposal could only be stopped by a qualified majority vote from the European Council within 10 days of the decision. (Similar rules for member-states still outside the Eurozone will apparently be forthcoming later.)

Even just ignoring recommendations about how to improve national competitiveness (from the Commission presumably; and so how can they really be described as “recommendations”?) could make a government liable to a 0.1% of GDP fine. And, somewhat ludicrously, the Commission would also maintain a productivity data “scoreboard,” sort of like the running list of grades on an elementary school classroom wall.

Pretty amazing – especially when those of us with any sort of historical memory (it need not go back any further than ten years or so) recall the Stability and Growth Pact that was a key component to the introduction of the euro at the end of the 1990s. That also prescribed monitoring of (Eurozone) member-states’ public finances by the Commission; and it also prescribed “sanctions” (initially fines) for those governments who continued to violate the fiscal rules (budget deficit less than 3% of GDP, national debt less than 60% of GDP or getting there) after repeated warnings.

But it didn’t work: among the first to break these rules were the giants making up the EU’s “axis,” namely Germany and France, and no one ever dared to try to punish them in any way. Besides, there was always the fundamental bit of illogic in such arrangements of trying to punish by means of a monetary fine a government which has gotten into trouble because it doesn’t have enough money available.

So Why Now?

What’s the difference this time, that makes Commission staff think that these sorts of proposals will be accepted, and that they even will work if enacted to influence member-state government behavior? Obviously it’s the big Greek/Spanish/Portuguese/Irish/etc. debt crisis of 2010, which in May prompted the panicked assembling of a €700 billion+ support fund for states in trouble with their sovereign debt. It’s by no means clear that that will be enough to head off trouble; it’s by no means clear, for example, that Greece will in fact be able to avoid default (or, probably, the same thing camouflaged as debt “restructuring”).

Neither is it clear that member-states will be at all receptive to these latest Commission proposals as they are formally presented next week (together with similar ones from Council President Herman van Rompuy). It’s hard to avoid the thought that this sort of supervision of their budget processes from an external, super-national body of experts, backed up by sanctions with financial teeth, was not what most if not all of them thought they were getting into when they joined the EU and then the Eurozone. That historical process of European integration is likely about to face a decisive “gut check” moment, coming up next week.

On Sunday 3 October the run-off election is scheduled for Mayor (Oberbürgermeister) of Potsdam, that city of around 150,000 inhabitants just to the southwest of Berlin which was Frederick the Great’s capital and garrison-town and now is the capital of the state of Brandenburg. There’s a run-off because in the regular election, last Sunday, no one candidate got a majority of the votes, so the competition has now been narrowed down to the top two. Lying as it does within the former East Germany, Potsdam is not surprisingly a rather left-wing place, so it’s no surprise that those two candidates represent Germany’s main leftist party, the Social Democrats (SPD), in the person of incumbent Oberbürgermeister Jann Jacobs, and the formation even more to the left, namely The Left (Die Linke), represented by one Hans-Jürgen Scharfenberg.

Jacobs has been Potsdam’s mayor for a while now, since March of 1999, and he did come out on top of that initial vote with 41%. But Scharfenberg was not all that far behind at 33%, and the guy does have many useful qualities, such as being a shrewd judge of people’s character, and able both to keep a secret and submit thorough, informative reports. How do I know this? Because Hans-Jürgen Scharfenberg is also unique as the first significant German political candidate known to have been an informer back in the day for the East German Ministerium für Staatssicherheit, better known as the Stasi. (more…)