Power and Policy Team update (English)

Iraq’s neighbors
This Los Angeles Times article describes the struggle between some of Iraq’s neighbors to fill the void that the United States might leave. “Iran, Saudi Arabia, Syria and Turkey are all pursuing their agendas and taking sides along a Sunni-Shiite divide. That could become dangerous as U.S. troops withdraw.”

Pakistan
Raza Haider, the leader of the Muttahida Quami Movement (MQM), was assassinated on Monday. His death set off a wave of violence that has left at least 47 people dead the southern port of Karachi, Pakistan’s largest city. (See NYT report.)

BP Oil Spill
According to the White House 75% percent of the oil spill has been “captured, burned off, evaporated or broken down”. (Source: The Guardian.)

U.S. Supreme Court
Debate on Elena Kagan’s nomination started in the Senate. She has the support of all Democrats and some Republicans, and is expected to be confirmed by the end of the week. (More in NYT.)

Health care reform setback
Voters in Missouri approved a measure “intended to invalidate a crucial element of President Obama's health care law — namely, that most people be required to get health insurance or pay a tax penalty.” The effect of the vote remains uncertain, since the insurance requirement does not take effect until 2014 and since by then the courts “are likely to weigh in on the provision”. (See NYT report.)

Israel and Lebanon
Israeli and Lebanese forces exchanged fire among the border. At least four people were killed, the deadliest incident in the border since 2006. Lebanon and Israel traded accusations, but neither seemed interested in escalating the conflict. (Seen in FT$.)

Patrick Signoret and Isabel Gil

Power and Policy Team update (English)

Italy no-confidence vote on Wednesday
The vote will be a test to see if Berlusconi’s ruling coalition can survive the defection a breakaway faction of 33 members (Gianfranco Fini and his new Future and Liberty group). It’s not clear what the result will be. The motion was brought by opposition parties, not by the breakaway faction, and the Future and Liberty group considers itself center-right (same as ruling government coalition).
(FT)

U.S. Fed considers “symbolic shift”
The Wall Street Journal reports that the Fed is considering a “modest but symbolically important change in the management of their massive securities portfolio “ in a meeting next week, in the wake of a slowdown in growth. It might use the cash it receives fom mature mortgage-bond holdings to buy new mortgage or Treasury bonds, instead of allowing its portfolio to slowly shrink. Here is the complete article.

Koreas
North Korea continues to threaten the South with retaliation, in response to a series of war drills planned by the South to start on Thursday. These exercises are considered by the North as a direct military invasion. (NYT)

Pakistan and Afghanistan
According to the Pakistani president, the war against the Taliban is being lost. The international community, he said, has failed to win hearts and minds. These declarations were made just before his visit to the UK, with whom relations are tense after the accusations following the document leaks, which accused Pakistan of playing a double game in the Afghan war, and David Cameron’s cozy visit to India. (The Guardian)

Patrick Signoret and Isabel Gil