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TAIWAN/CHINA: Beijing may fret despite impotent Chen
President Chen Shui-bian steps down in May. He has adopted an increasingly pronounced pro-independence position since coming to office in 2000, and the question arises whether he might chose to follow the precedent set by his predecessor, Lee Teng-hui, who became more combative on pro-Taiwan issues on leaving office. After the presidential election in March, Chen will have a couple of months left to push his agenda, but his room for manoeuvre will be limited by the checks and balances of Taiwanese democracy. After May, Chen will probably spend much of his time fighting legal charges against him and his family, although he will retain his interest in politics.


EUROPEAN UNION: EU rights charter strengthens ECJ role
The status of the EU Charter of Fundamental Rights was one of the most contentious issues in last year's Lisbon Treaty negotiations. Member states reached an awkward compromise making the charter legally binding, but not including its text in the treaty and allowing 'opt-outs'. By making the Charter of Fundamental Rights legally binding, the Lisbon Treaty will strengthen the role of the European Court of Justice in protecting fundamental rights of European citizens. Despite assurances that the charter will not extend EU power or undermine national laws, there is likely to be an increase of rights litigation before EU courts in the coming years, some of which will challenge national laws and practices.


ROMANIA: Loose budgets call for better NBR policies
A higher-than-expected budget deficit, a slowdown in growth, inflation overshooting its target by more than 1.5% percentage points, rising public foreign debt and a weakening currency are signs of distress recalling the troubled 1990s. While successful implementation of the early phases of pension reform is an indication of broad support for the economic and political system among the population, the fear remains that this election year will bring with it the usual expansion of government spending, rather than the necessary strengthening of fiscal and monetary policy stances.


POLAND/RUSSIA: Talks "agree to disagree"
Moscow bears no ill will towards Poland and wants to improve bilateral relations, Russian President Vladimir Putin told visiting Polish Prime Minister Donald Tusk in the Kremlin on Friday. However, little seems to have been achieved from the visit. Tusk said afterwards that he and Putin had agreed to disagree over plans for interceptors for a US Missile Defence (MD) system in Poland, and that Poland was still vetoing negotiations for a new EU-Russia partnership agreement. According to Polish Foreign Minister Radoslaw Sikorski, Warsaw wants energy security included in such a deal with Russia. Tusk said Putin wanted permanent monitoring of MD installations to ensure they were not a threat to Russia; Poland did not want Russian inspectors permanently on its soil, but a compromise might be found. No agreement was found on the Baltic natural gas pipeline, which Poland wants to run overland through the Baltic states and Poland to Germany. The two sides avoided open disagreement on the issues that divide them, which is a move forward from the unnecessarily provocative foreign policy of the previous Polish government, while Moscow is making strong statements rhetorically that seem directed mostly at the upcoming presidential election.


INDIA: Global slowdown poses threat to inflows
The Bombay Stock Exchange today closed down around 5%. Volatile market conditions have coincided with a slowdown in growth, as questions are raised about the impact on India of global economic problems. Low dependence on international trade, rising investment expenditures and the exploitation of opportunities in the business process outsourcing sector may help to keep the economy relatively safe from turbulence in global markets. However, such strengths could quickly be sapped if foreign investment flows start to dry up, and if political problems prevent infrastructure investment from being realised.




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