The world remains focused on the Greek financial crisis, but an important positive spin-off could be a deeper Greek-Turkish détente. Greece’s high defense spending has fueled to its economic woes, and better relations with Turkey would enable Prime Minister George Papandreou to cut spending, thereby helping to rescue the economy while promoting regional stability.
Greece’s high defense spending has contributed to its economic woes. Indeed, the country has Europe’s highest military expenditures relative to GDP. Improvement in relations with Turkey could enable Prime Minister George Papandreou – who hosts Turkish Prime Minister Recep Tayyip Erdoğan this week – to cut defense spending and make it easier to rescue an economy on the brink of bankruptcy.
Improved Greek-Turkish ties would be welcomed not only by foreign investors and European Union officials, but also by Greece’s NATO allies – above all the United States. Clashes between Greek and Turkish military aircraft in the Aegean remain frequent. In 2006, a Greek fighter pilot was killed in a mock dogfight with a Turkish fighter aircraft.
These incidents could lead to inadvertent military conflict between the two NATO allies. This nearly happened in February 1996 during the crisis over the islet of Imia/Kardak, which was claimed by both countries. At a time when NATO faces growing challenges in Afghanistan, the last thing it needs is a conflict in the Aegean.
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The long-standing economic consensus that interest rates would remain low indefinitely, making debt cost-free, is no longer tenable. Even if inflation declines, soaring debt levels, deglobalization, and populist pressures will keep rates higher for the next decade than they were in the decade following the 2008 financial crisis.
thinks that policymakers and economists must reassess their beliefs in light of current market realities.
Since the 1990s, Western companies have invested a fortune in the Chinese economy, and tens of thousands of Chinese students have studied in US and European universities or worked in Western companies. None of this made China more democratic, and now it is heading toward an economic showdown with the US.
argue that the strategy of economic engagement has failed to mitigate the Chinese regime’s behavior.
Greece’s high defense spending has contributed to its economic woes. Indeed, the country has Europe’s highest military expenditures relative to GDP. Improvement in relations with Turkey could enable Prime Minister George Papandreou – who hosts Turkish Prime Minister Recep Tayyip Erdoğan this week – to cut defense spending and make it easier to rescue an economy on the brink of bankruptcy.
Improved Greek-Turkish ties would be welcomed not only by foreign investors and European Union officials, but also by Greece’s NATO allies – above all the United States. Clashes between Greek and Turkish military aircraft in the Aegean remain frequent. In 2006, a Greek fighter pilot was killed in a mock dogfight with a Turkish fighter aircraft.
These incidents could lead to inadvertent military conflict between the two NATO allies. This nearly happened in February 1996 during the crisis over the islet of Imia/Kardak, which was claimed by both countries. At a time when NATO faces growing challenges in Afghanistan, the last thing it needs is a conflict in the Aegean.
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