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China has come through the global financial and economic crisis in a confident manner. Economic growth is strong and China's foreign policy has become more assertive. Bobo Lo's essay challenges many western assumptions about the rise of China. He argues that the economy is increasingly driven by domestic consumption rather than exports. At the same time, the Communist Party is consolidating its control while avoiding significant political reform. Lo regards friction between a more influential China and the West as inevitable, and concludes that American and European attempts to 'get tough' with Beijing will achieve little.
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David Cameron, the leader of Britain's Conservatives and perhaps its next prime minister, has unveiled a new strategy for the European Union. Charles Grant assesses its viability and argues that Cameron's scheme to opt out of the EU treaties will be hard to pull off, particularly in the area of social policy. Grant urges Cameron to focus instead on safeguarding key British interests such as the City of London. He concludes that a Conservative Britain would boost its influence in the EU if it came up with constructive proposals on economic reform, energy, climate change and European defence.
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Many European countries feel threatened by terrorist plots against civilians and infrastructure. European governments have strengthened their efforts to co-operate on counter-terrorism over the past decade. But they have been hampered by differing perceptions of the terrorist threats, poor co-ordination between EU and national agencies and ineffective rules on decision-making. Hugo Brady argues that both the new-found willingness of the US to work with its partners and the new rules that will come with the Lisbon treaty (when implemented) will improve the EU's performance. He calls for a joint EU-US counter-terrorism strategy and suggests how EU governments can better co-operate on internal security.
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How relevant is Europe in the emerging multipolar world? On current trends, the EU seems unlikely to be one of the powers that shapes the new order. Divisions among the member-states and a lack of military muscle have weakened the EU's foreign and defence policy. Charles Grant analyses the reasons for Europe's underperformance, such as the impact of enlargement, the lack of a common strategic culture and the changing role of Germany. He concludes with a set of suggestions on how to boost the EU's power. Robert Cooper responds that while one should not judge the EU by the standards of a state, its actions around the world have helped to spread peace and stability.
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The economic crisis is accentuating the rise of informal global governance. These days, bodies such as the G8 and the G20 arguably matter as much as more formal, treaty-based organisations. Risto Penttilä argues that this 'multilateralism light' should be welcomed, since it brings together leaders who can change things, and it offers a fast way of incorporating emerging powers such as India and China into global governance. He explains that informal and formal bodies depend on each other: informal institutions are increasingly responsible for the process of solving problems while formal, treaty-based bodies concentrate on legitimising the results.
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The euro is riding high and the financial crisis has illustrated the safe haven that membership provides. On the face of it, the future of the single currency looks rosy. But in this essay, Simon Tilford argues that the growth prospects of the eurozone risk being handicapped by the inflexibility and the external imbalances of its member-states. Countries such as Italy, Spain, Greece and Portugal need to move fast to improve their productivity. Germany needs to boost its domestic demand. Otherwise, the euro may have a troubled future.
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