Charles Kindleberger maintained that in order for market rules to work in an open world economy a dominant power able to play the role of stabilizer of the system was necessary. Today there is no emerging hegemonic power that could even aspire to replace the US in its role of world banker and gendarme. The decline of US power underscores a phase of transition in which the global balance of power is shifting from the US to the EU, China, India, Brazil and so forth. None of these states alone appears to have sufficient power to impose its decisions in the foreseeable future. None of them is strong enough to aspire to world hegemony. The Cold War was the last old style conflict, i.e. a struggle for world hegemony. At present, a multi-polar distribution of power is replacing the American mono-polarism that governed the world after the fall of the Berlin wall and the collapse of the communist bloc.

The G20 represents a step on the way to a reorganization of world power relations. It marks the beginning of a new epoch in world history. Lacking a dominant power, it is now co-operation between the protagonists of world economy and politics which seems to be the leading tendency of the emerging world order. Global challenges such as nuclear proliferation, climate change, international terrorism, the eradication of poverty, etc. can only be successfully tackled by co-operation within the framework of international organizations.

But this trend, even though desirable, is not inevitably destined to prevail. The disappointing result of the Copenhagen Conference, the tough negotiations between the clashing interests of the new and old giants of world politics, the proud assertion of the Chinese leaders that they will not tolerate any limitation to their national sovereignty all point to the difficulties faced by the birth of a new world order. The EU was believed to be the leader in the attempt to combat global warming, and yet despite the fact that the Lisbon Treaty had entered into force a few days before the Conference started, making it possible for the European Commission to speak on behalf of all member states, the final agreement of the Copenhagen Conference was reached in the EU’s absence. All this demonstrates how outdated the world leaders' patterns of action are, how distant they are from the real needs of our time, and how slow they are to recognize the existence of humankind’s common interests.

While the US still belongs to the epoch of the nation-states and conducts its policies according to the principles enunciated in the Treaty of Westphalia, the EU was created to overcome power politics and to build a pacific international order. The EU, therefore, can be defined as being a post-Westphalian community. The US is reluctant to recognize the overarching authority of a supranational order, and the most striking evidence of this reluctance is its opposition to surrendering the privilege of the dollar as international reserve currency; though it has to be stressed that Brazil, Russia, India and China (the so-called BRIC) are also, to a considerable degree, still in the category of the Westphalian states, since they are keen to assert their power in the world. Yet, in an apparent contradiction, they propose that the dollar should be replaced by a basket of currencies, a move which they see as a step towards a world currency. The EU meanwhile has declined to take part in the struggle for the formation of a new world monetary order.

The Lisbon Treaty entitles Europe to strengthen its voice in the monetary and environmental debates, but it appears to be a senescent society, lacking in political will; and yet at the same time the EU is the laboratory for a new form of statehood whose distinctive feature lies in moving on from the military dimension of nation-states’ power which, in the past, formed the bedrock not only of individual states’ independence and security but also of Europe's predominance and leadership in the world.

Supranational institutions have been established during the half-century of constructing European unity that transcend the largely obsolete concept of sovereignty. While to a considerable degree preserving the independence of national units they also impose permanent limitations on states’ rights. Even though the EU cannot be defined as a federation, an evolution in that direction is clearly visible, as proved by the direct election of the European Parliament and the creation of the euro.

The EU is therefore the world’s most advanced experiment in building a supranational community in which the hegemonic ambitions of even the strongest member states are restrained. Other regional organizations are now following a similar path. The above mentioned BRIC and the US each aim to play a leadership role in their respective regions and regional organizations: MERCOSUR, CIS, SAARC, NAFTA and ASEAN. Even though China does not belong to ASEAN, it has recently signed an agreement with it for the creation of a regional trade and monetary area. The evolution of supranational communities represents the main way to mitigate the nationalism of the leading states and to restrain their hegemonic ambitions. This also offers a model for the institutional evolution of the UN.

Decision-making procedures between states also need examination. The limitations of a procedure based on consensus, i.e. on the unanimity rule, were recently demonstrated by the inability of the Copenhagen Conference to reach a shared conclusion. Moreover, the weakness of international agreements such as the Kyoto Protocol whose application depends solely on the goodwill of the signatory states arises from the lack of a binding mechanism. To be effective, international organizations must therefore be endowed with binding powers. In addition, if their efforts to deal with global challenges such as climate change are to have any chance of success, their decisions must be based on the majority principle.

The Kyoto Protocol is an example of the limitations of what in the political jargon is called global governance. This formula is based on two dogmas:
-    that it is possible to find a solution to the principal international issues exclusively through co-operation between sovereign states, and
-    that states will never willingly and irrevocably delegate a portion of their power to a supranational authority.
If the world wishes to face global challenges effectively, these principles should be revised.

Governments welcomed the idea of global governance because it does not question state sovereignty. But the price paid in terms of effectiveness and democracy is very high: namely, the recognition of individual governments’ right of veto and the rejection of the peoples’ right to have a say in decisions taken at international level and in their name.

We are on the threshold of a new age which requires basic changes in the nature of international institutions. In order to face up to our present global challenges and, primarily, the economic and financial crisis, a new generation of international organizations is needed, replacing the old ones. The WTO and the ICC are messengers of a new epoch of history whose basic need is the extension of the rule of law at international level. But we have to ask ourselves whether opening a constituent phase from which new federal or pre-federal institutions can spring, is possible. Our knowledge of history is no sure guide in the situation which confronts us today, for we are venturing on previously un-trodden territory.

I would venture to suggest that two of the factors characterizing the world’s current predicament appear to favour launching the necessary changes. The first, globalization, promotes the formation of a global market, a global civil society, and an interdependent world system of states governed and regulated at international level. The second is the emergence of a balance of power between the old and new protagonists in world politics which could lead to agreements between them and, ultimately, to the foundation of new federal forms of statehood at world level.

Our own task meanwhile is to keep alive the federalist alternative to the prevailing patterns of action. Sooner or later, a time will come when what today seems politically impossible will be seen as a political necessity.

No one with a minimum knowledge of the issues at stake could hope that the World Climate Conference (COP15) in Copenhagen would allow to reach a truly binding agreement between the parties.

It is enough to remember that Barack Obama (the main actor and performer of the “green” turning point of the post-Bush era) was taking part in the negotiations with his hands tied, as he could not afford to offend the Congress, before which essential reforms for his presidency were in delicate balance (among which the Healthcare Reform and the American Clean Energy and Security Act).

However, one should greet as a positive step the fact that, for the first time, the major polluting countries (namely China and the United States) took part in the Summit with the intention of assuming direct responsibilities, no longer denying or underestimating the global effects of the planet warming, acknowledged as the consequence of human activity.

In spite of this, the results achieved remain quite insufficient in front of the gravity of the issues and the time available to solve them.

One was hoping that the Copenhagen Summit would allow to establish a two-step process, i.e. a first one to be implemented in Copenhagen, that would allow at least to set common behaviours and aspirations as well as clear objectives, spaced over a definite time period; and postponing to a later stage the implementation of targets, decision-making and control mechanisms as well as legal commitments.

The agreement reached only contains the general proposal of limiting to 2°C the increase of the Earth average temperature, along with the financial aid to the poorest countries, amounting to 30 billion dollars for the three-year period 2010-2012 and 100 billion dollars per year from 2020 onward.

Besides the lack of binding commitments, no reference is made to the objectives of CO2 emission reduction set by the IPCC – Intergovernmental Panel on Climate Change (-25% compared to 1990 levels by 2020 and -50% by 2050).

Furthermore, the funds allocated to the development of clean technologies in underdeveloped countries for the three-year period 2010-2012 are significantly lower than those usually deemed necessary; no commitments were made for the period following 2012 and, in this context, the promises for the 2020-onward period have no value and cannot be taken into serious consideration.

The form of the agreement and the way it was approved arouse significant perplexity and concern. Until Copenhagen, the negotiations were always supervised by the United Nations and the documents were drafted or adopted by the UN Secretary.

In Copenhagen, on the contrary, five countries (United States, China, India, Brazil and South Africa) made a choice for all, leaving the others (Europe and Japan in the first place) in front of the alternative of accepting the deal or not having any.

They discussed between themselves, drafted and finally agreed on the “Copenhagen Accord” whilst the UN Assembly (the Conference of the Parties) merely acknowledged the signature of the agreement.

The procedure followed in Copenhagen represents a further loss of credibility for the United Nation and an affront to the current Secretary-General.

During the negotiations, all the major actors played with a stacked deck, being only concerned with the protection of the national interest and sovereignty of their respective countries¹.

Europe, which had fulfilled all the necessary requirements by implementing a consistent climatic policy and setting suitable and binding objectives for CO2 emission reduction within 2020 (-20% / 30% compared to 1990), was not able to occupy the leadership position which should have been its due, considering its overall economic and geopolitical importance.

Once again, it appeared clearly that the European Union is an “economic giant but a political dwarf” as it still lacks a federal government capable of acting and speaking with a single voice.

The European Union thus had to give up the idea of occupying the leading position that it deserved for its history and its capacity to show the world the method to be used when the States have to face jointly issues that reach beyond national boundaries.

Europe, through its inability and inadequacy, is therefore also responsible if the Copenhagen Summit was not able to arouse the awareness that climate stabilisation (and, more generally, natural environment) is a public property for the whole planet.

Climate and natural environment must be protected jointly by the major polluting countries, through common institutions capable of making decisions and having the appropriate means to implement those decisions.

International agreements are not suitable to govern jointly complex situations in constant evolution such as climate and global environmental issues.

Jean Monnet, one of the founding fathers of the European Union, used to say “there is an unfathomable difference between negotiating an international agreement and facing a common issue. In the first case, each party brings its own issue to the negotiating table. In the second case, there is a single issue which is the same for all parties, and everyone brings to the negotiating table not its own issue, but the wisdom to find a solution to the common issue”.

The experience of the European unification process has shown that progress was made when there was the will to face a common issue and, vice versa, the situation remained stalemated when the intergovernmental agreement method was adopted.

The experience of European integration should be transposed at worldwide level whenever we are faced with an issue on a global scale, such as climate stabilisation, that must be solved jointly by the main countries of the world.

Other targets have been programmed in 2010, after Copenhagen. To prepare for these targets, the International community must change its patterns and ways of thinking, inverting the increasingly strong tendency to re-nationalise international cooperation.

The International community must not only pursue goals and undertake binding obligations to be implemented gradually, within a well-defined period of time. It must also acquire a tool that is essential to govern jointly the global environmental issues, setting up a World Environmental Organisation – based on the European Carbon and Steel Community (ECSC) model – capable of making decisions, supervised by an independent High Authority under the aegis of the UN, and having appropriate financial resources to implement the decisions made.

This new World Organisation should be entrusted with the task of continuously monitoring the climate changes and the fulfilment of the undertaken obligations; encouraging technological exchanges; coordinating and developing technological innovation; assisting the developing countries with suitable financial and technological support to allow them to comply with the emission reduction parameters for climatic and environmental improvement.

Its financial means (amounting to $100 billion a year) should derive from automatic revenues, through the institution at worldwide level, by the main polluting countries, of a world carbon tax intended as a consumption tax on fossil fuels or as a “world” addition to the national equivalent duty, if any.

This world carbon tax should provide for different rates:
-    between fossil fuels, according to their different carbon content
-    between the states, taking into account the per capita emissions of each country, for equity purposes.

The world carbon tax would generate a double dividend: on the one hand, it would discourage the use of fossil fuels and, on the other hand, it would deduct from the states’ budgets (already significantly indebted as a consequence of the economic and financial crisis) the financing of climate stabilisation, imposing it onto the polluting consumers.

The eventual promulgation of the above objectives at the next Conference (COP16), next year in Mexico City, would require the intervention of some extraordinary event capable of affecting deeply the willingness of the World’s decision-makers.

An event of this type could be represented by the involvement of civil society and the many NGOs acting in its name, which should join forces to sustain in a coordinated and united manner, a realistic and efficient World Environmental Plan focused on the project of creating a World Environmental Organisation, as proposed above.

1 The United States has proposed to reduce the CO2 emissions in the atmosphere by 17% compared to the current emissions, whereas the Kyoto Protocol (as well as the EU binding objectives) measures the reductions with reference to year 1990. In equivalent terms, the US proposition corresponds to a 4% reduction compared to the 1990 emissions. For its part, China has always avoided to make reference to any quantitative reductions of CO2 in the negotiations, and has merely mentioned the improvement of energy efficiency and reduction of its carbon intensity. Carbon intensity is the emissions / GDP ratio and must not be confused with emission reduction. In fact, the increase of the Gross Domestic Product can easily compensate for the reductions resulting from efficiency improvements, even though they appear significant (from the point of view of developed countries with growth rates much lower than that of China). India and Brazil have always made their commitment conditional on the granting of consistent financial support from more developed countries.

The economic crisis that has ravaged the world originated in the financial sector, but rapidly spread into the real economy. It arose out of a fundamental disequilibrium within the American economy, where demand has for many years outstripped the value of output, with an ensuing permanent deficit in the trade balance, twinned to a budgetary deficit in continuous expansion during the Bush Administration and to a growing indebtedness of the private sector since the banks were interested in increasing their profits favouring the demand of houses and other durable goods as well as consumption goods. These disequilibria within the American economy have been financed by funds flowing from China, that invests into US Treasury Bills a large share of its foreign currency reserves deriving from its huge balance of payments surplus, in exchange for import of technologies from the United States to support the accelerating spreading out on the world market of the Chinese industry.

Europe has not contributed substantially to prop up the crisis, but has paid a huge cost for it. In this way it atones for its inability to take part in the governance of the process of globalisation, lacking a real power for playing an active role in the establishment of a new world equilibrium. Equally, the European Union is unable to face effectively the current difficulties, lacking a real power to rule the economy. But it should also be emphasised that a phase of the process of growth of the European economy – that has characterised the second half of the previous century – has now definitively ended. The main factor determining its growth rate was technological progress through import of the best technologies from the most advanced foreign countries, in order to raise productivity and to increase the standard of living of European people. But European economy has now reached the technological frontier and is unable to restart growth through import of technologies from abroad. If a new phase of growth has to be kicked off, Europe must exploit its own resources and, in particular, must promote an autonomous capacity of innovation in order to enhance productivity and competitiveness of its industrial system on the global market.

At the world level the pattern of growth followed in the past is now unsustainable, from all points of view. The global environment is unable to support the enormously increased pressure on natural resources. From the point of view of equity, it appears unacceptable that more than one billion human beings living in the bottom poor countries be excluded from a reasonable standard of living. Finally, while the availability of consumption goods has been continuously increasing, even in the affluent societies many essential needs are not adequately satisfied. Hence, policy measures to support consumption demand are not an effective way out of the current crisis; a new plan for the promotion of a sustainable development – from an economic, social and environmental point of view – must be carried out as soon as possible.

The driver of this new pattern of growth should be public investments targeted not only to build up the most needed material infrastructures, but also to support higher education and research and development expenditures so that technological innovation could be promoted and upheld. A policy based on investments’ promotion will have either short-run effects on demand and employment, with a positive impact on GDP growth, or long-run effects on supply, enhancing potential income and improving the competitiveness of the European economic system. The achievement of these goals is essential so that the financial sustainability of the welfare system prevailing in Europe can be guaranteed also to future generations.

Facing the continuously worsening crisis, the Member States of the European Union were held in a more and more vise-like grip: from one side, they were obliged to adopt very costly and immediately effective measures, to avoid the risk of failure of whole industrial and financial sectors; from the other, they had to support workers having lost their jobs and, more generally, low-income people heavily hit by the crisis. Furthermore, these measures had to be adopted when public finances were endogenously deteriorated by the fall in income and constrained by the need to comply with the limits of the Maastricht Treaty in order to avoid the market sanctions through an enlarged spread on bonds emissions.

Hence, the spur of public investments is held back, in Europe and in the Member States, by the budget constraint; and, whereas the new American Administration has immediately supported the economic and financial system with the huge resources that the federal government is able to mobilise – through a consistent flow of new debt as well –, the European Union has limited itself to a very ineffective coordination of national plans, adding only a tiny amount of resources, already previously allocated in the Union budget. But the lack of a European response to the crisis could be easily explained:
- in the political field: the limits of the coordination model for fiscal policies adopted in Maastricht depend on the fact that Europe-wide coordination must be implemented in the absence of a European power that defines the kind of economic policy to be pursued and to guarantee behaviours coherent with the decisions eventually made at European level. Within the frame of the confederal structure existing in Europe, in particular in the area of fiscal policy where the veto power prevails and co-ordination is not supported by effective powers attributed to the higher tier of government, a true European policy does not come out; what comes out instead is but a sum of national policies, unable to guarantee the promotion of growth that the European economy needs;
- in the economic field: given the strict interdependence between the economies in the euro zone, every Member State has a convenience to behave like a “free rider”, avoiding to support its own economy at the national level, while trying to exploit the benefits flowing from policies carried out by other countries. Hence, as it happens whenever external benefits exist, the production of the public good stabilisation is sub-optimal.

A policy promoting the recovery of the European economy must be adopted with no delay in order to come out of a dramatic fall in output and employment and to favour the start of a process of sustainable growth within Europe. This policy should be targeted to strengthening the European economic and social model through the implementation of a plan providing the funding of expenditure projects in different areas:
- investments for completing the European network in the fields of transport, energy and telecommunications;
- research and development expenditures and promotion of higher education, to strengthen the competitiveness of European production;
- public and private investments in advanced technologies and support to European champions in the new leading industrial sectors;
- projects improving the quality of life for European citizens (water and air quality, sustainable mobility, renewable energy, urban renewal, provision of efficient health and personal services, especially for weak people);
- investments to promote conservation and to enlarge utilisation of cultural goods and natural resources.

The OECD foresees for the euro area in 2009 a large drop in GDP and a further decrease in employment, with an ensuing growing rate of unemployment. Confronted with the (predictable) social tensions, it is quite sure that the Member States will be obliged to take policy measures in order to face this dramatic worsening of economic perspectives; and the French President has already put forward the idea of a great national loan to support economic growth. But also this choice seems ineffective, for two different reasons: either a large part of the benefits are exported into other Member States and the impact of the policy measures on the national economy is quite limited; or they are assisted by binding constraints so that the expenditures should be directed exclusively towards domestic goods, but this hypothesis implies the end of the internal market and, in perspective, the collapse of the Monetary Union. The only way out is a European recovery plan.

The funding of this European recovery plan could be provided by a large "Union Loan for the European Growth". The direct emission of Union bonds could allow to raise – on the international and domestic markets – the financial resources needed to support the plan for enhancing the productivity and competitiveness of the European economic system and to improve the quality of life of the Europeans, favouring the transition to a sustainable growth. Given the Union’s reputation on the world financial market and the current strength of the euro, these bonds could be sold at a low interest rate, drawing a large share of world savings that now, lacking effective alternatives, are invested into Treasury Bills on the American market, notwithstanding the progressive loss of value of the dollar. These emissions of Union bonds would be guaranteed through the Union budget, that will be split in two sections: the first with a balanced budget according to Article 268 of the Treaty, that finances the production of European public goods and the Union’s redistribution and cohesion policies; and a capital account, funded with Union bonds and targeted to the financing of the European recovery plan.

Within the perspective of a reform of the Union’s budget, necessary to support the funding of the investments laid down in the “European Plan for Growth and Sustainable Development” through the emission of Union bonds, a new own resource could be provided with the implementation of a carbon/energy tax. When the risks linked to climate changes and the ensuing global warming become more and more evident and the need to curb CO2 emissions and substitute fossil fuels with alternative energy sources appears more urgent, a tax levied according to the carbon content of different fuels seems to be an effective instrument to promote energy saving and fuel switching processes, targeted to the production of renewable energy, cutting down the negative impact on the environment of energy consumption and favouring the introduction of less energy intensive production processes.

In a recent decision, the Bundesverfassungsgericht designed the European Union as an association of sovereign national states (Staatenverbund) to which sovereign powers are transferred. The concept of Verbund covers a close long-term association of states which remain sovereign, an association which exercises public authority on the basis of a treaty, whose fundamental order, however, is subject to the disposal of the Member States alone and in which the peoples of their Member States, i.e. the citizens of the States, remain the subjects of democratic legitimisation. In other terms, this decision implies that a true European policy is possible only if a full federation (Staatsverband) is achieved. If this is not the case, every Member State will evaluate – and comply with – a policy decision according to the benefits that its own citizens derive from it.

This means that the implementation of the recovery plan has a political pre-requisite: the starting of a process targeted to the foundation of a federal State in Europe in order to guarantee an effective management of the European economic policy and an adequate coordination of national policies. In this perspective, an important step forward could be represented by the implementation of the recovery plan funded with the emission of Union bonds. The economic recovery, strengthening the confidence of the European citizens, could back positively the relaunch of the unification process in the political field, that appears in any case unavoidable if a multipolar order is aimed at, that will not marginalise Europe, as it happened in recent times since – as it was pointed out by P. Stephens on the Financial Times – "Europe has become the greater Switzerland of the 21st century: comfortable, complacent and unwilling to venture abroad". In the framework of this new global order, a Europe united by a federal link will be able to promote peace exploiting all its power resources and to guarantee to the Union the necessary power to rule successfully the European economy, to favour the growth of the developing countries within the Third World – particularly of Africa – and to negotiate, on a level playing field with the United States and the other great regional powers, a plan for a sustainable development of the global economy and the rules of a new monetary international order. Now, as probably never before, it is no longer possible for Europe to postpone heeding the warning advocated by the Ventotene Manifesto: “unite or perish”.

President Obama standing in a Prague square on an April day in 2009, in a telecast speech to millions of people around the world, raised their hopes by stating: “So today, I state clearly and with conviction America's commitment to seek the peace and security of a world without nuclear weapons.”

This call by American and many other world leaders has been echoed for decades since World War II’s first explosion of a nuclear bomb revealed its tremendous destructive power. In fact, the United Nations General Assembly’s very first resolution in January 1946 called for “the elimination from national armaments of atomic weapons.” In 1968, this global wish was given serious hope by the signing of The Treaty on the Non-Proliferation of Nuclear Weapons (NPT), two years later in 1970, the Treaty came into force, after all the State signatories to the treaty also obtained their national legislative ratifications. NPT is the only and the largest multilateral treaty on nuclear non proliferation and disarmament. With 188 state signatories, it is only four countries (India, Israel, North Korea and Pakistan) short of the full UN membership.

To one side of the stakeholders to the treaty, there are only five countries, – the powerful “nuclear haves”, which also happen to be the Five Permanent Members of the Security Council (the Permanent Five), that primarily initiated the Treaty to stop the race of other countries going nuclear and prevent proliferation. That they have achieved with relative success; NPT in its first thirty years was very successful in not letting any new member country proliferate. Further, some countries with known nuclear weapon programs in advanced stages, such as Brazil and South Africa, once members of NPT, abandoned their nuclear weapons programs. The last decade, however, witnessed also the proliferation case of North Korea, and Iran is also on that threshold.

To the other side of the stakeholders to the Treaty, there is the majority, the 183 nuclear “not-haves”; their primary stake is “the goal of achieving nuclear disarmament and general and complete disarmament”, by means of the “good faith” promised in Article VI of the treaty. This commitment primarily applies to the nuclear “haves”, since they are the holders of the nuclear arsenals which they must get rid of. The “not haves”’ promise is not to seek or ever produce such weapons.

The Treaty founders assumed that the treaty will complete its mission in twenty five years, thus the expiration clause of 25 years going into effect starting in 1970. The mission being not accomplished at the 1995 Five year Review Conference, the nuclear “have-nots” proved their loyalty to the treaty by making another major concession to the nuclear weapon States, which was to extend the treaty indefinitely, with no termination date. As their contribution to the bargain, in the final joint statement the nuclear weapon States party to the Treaty agreed to some major steps in escalating the Article VI disarmament clause and taking concrete steps in implementing it.

The substantial Package of Decisions, the output of the 1995 Conference, included Decision 4, Section (C): “The determined pursuit by the nuclear-weapon States of systematic and progressive efforts to reduce nuclear weapons globally, with the ultimate goals of elimination of those weapons.”

Once the legal issue came up as to the interpretation of Article VI and whether the nuclear weapon States should wait for one reason or another, for example a “general disarmament”, to start their “nuclear disarmament”, and whether “good faith” in doing something really means doing it, the World Court judges, in The International Court of Justice Advisory Opinion of July 8, 1996, unanimously ruled: “There exists an obligation to pursue in good faith and bring to a conclusion negotiations leading to nuclear disarmament in all its aspects, under strict and effective international control.” Thus further setting the stage, and clarifying the legal commitment for nuclear disarmament.

The high point in the NPT’s history was the Review Conference of 2000, where the planned commitment toward disarmament was further reinforced, and agreed upon by all the members of the treaty in its 13 Points Declaration, transforming the 1995 Package of Decisions into concrete further steps towards achieving disarmament, including the signing of the Comprehensive Test Ban Treaty (CTBT), banning “the production of fissile material for nuclear weapons use” under the Conference on Disarmament, and calling for more transparency and reporting by member states.

The Declaration also put additional emphasis on “an unequivocal undertaking by the nuclear-weapon States to accomplish the total elimination of their nuclear arsenals leading to nuclear disarmament, to which all States parties are committed under Article VI.” In other words, the nuclear weapon States were reminded of their obligation to eliminate their nuclear arsenals.

The decade following the NPT Review Conference of 2000 proved to be one of crisis for the Treaty. The US Senate rejected the CTBT Treaty, which President Clinton had signed. President Bush’s Administration policy was not in favour of CTBT, and decided not to pursue its ratification. No Conference on Disarmament activities was held in Geneva as planned, and therefore no progress on the banning of production of fissile materials was made, and no other multilateral treaties on “irreversible” nuclear disarmament were initiated, as had been intended in the 2000 agreements.

In the first decade of the twenty first century, not only was the “good faith” commitment toward nuclear disarmament by the nuclear weapon States in Article VI not translated into action, but in fact the nuclear “haves” went in the opposite direction, by publicly announcing plans to bolster their nuclear arsenals.

The United States Department of Defence declared that improvements were needed in the quality of its nuclear weapons and their gradual replacement. Russian President Dmitry Medvedev revealed major upgrading plans for its nuclear weapon arsenal by 2020. Prime Minister Tony Blair said it would be "unwise and dangerous" for the United Kingdom to get rid of its weapons in such an uncertain world, and the UK announced it would keep and possibly upgrade its Trident nuclear submarines.

The NPT regime in the first decade of the 2000s was weakened on another front by a conspicuous crack in its non-proliferation regime. The NPT has been relatively successful in controlling the spread of nuclear arms among its non-nuclear-weapon States. However, in 2003, the world witnessed North Korea’s nuclear weapon tests. Put under pressure for its treaty obligations, North Korea found it easier to terminate its obligations and leave the NPT Treaty. The other proliferation challenge to the NPT is the Islamic Republic of Iran, which, like North Korea, might cross the line and become a nuclear weapon State. The Iranian regime, being surrounded by US occupying forces to its east (Afghanistan) and to its west (Iraq), and within easy reach of its arch enemy (Israel), may very well decide to go nuclear. After all, a popular belief in international relations is the premise that once your country goes nuclear, no country dares invade you.

The other major hurdle for the nuclear weapon States party to the Treaty (which they have not been able to resolve for the past 40 years) is to bring in the three nuclear weapon States outside of the treaty and thus make the NPT universal. India, Israel, and Pakistan did not join the NPT treaty at its onset in 1968, nor did they join it in its 40 years of existence.

Dr. Hans Blix, the former Swedish foreign minister and former head of the International Atomic Energy Agency (IAEA), headed an independent Commission on Weapons of Mass Destruction. The Commission’s final report in 2006 expresses concern over the vital role these freewheeling nuclear states have in the success of any nuclear disarmament process, and expresses concern over their growing nuclear arsenals. The Commission reports that Israel, with its nuclear arsenal estimated in the hundreds, may have already surpassed the UK in terms of the number of nuclear warheads. The existence of these nuclear state countries outside of the Treaty severely undermines the viability of the NPT Treaty for two reasons. First, after forty years, the Treaty’s member states have failed to bring in the other three nuclear states under its umbrella and make it universally binding. The second point is the precedent of North Korea, where a member state violated NPT rules, proliferated and then simply abandoned the treaty. The double failure for NPT in relation to this group is therefore not only the Treaty’s inability to integrate this group, but also its letting its members proliferate as well.

The next NPT five-year Review Conference, scheduled for May 2010, with all the above challenges, seems to face the same fate as its predecessor, the 2005 Review Conference, where not only did the nuclear “haves” and “have-nots” fail to conclude an agreement, but they failed even to issue a joint statement.

After the crises of the last decade, it seems that the non-compliance of the Permanent Five, and how serious they are about their “good faith” in the Treaty, is now out in the open. Are the nuclear weapon States of the Treaty really serious about disarmament? Will they take concrete steps to implement the previously agreed Decision 4, Sect. (C), of the 1995 and the 13 Points of the 2000 Review Conferences? Can they herd the nuclear weapon States outside of the treaty into the treaty, and thus make a future nuclear disarmament universal?

It seems that non-proliferation of nuclear weapons and disarmament are two sides of the same coin. Their successes are interdependent. Although the NPT treaty has both components, it seems unbalanced toward its minority members, who are the nuclear weapon States and their goal of non-proliferation. It appears, in view of the lack of concrete advances in disarmament, that the minority Permanent Five members, while stopping other countries from acquiring nuclear weapons within the framework of the Treaty, are simply ignoring the wishes of the non-nuclear-weapon States regarding nuclear disarmament.

The limited, reversible nuclear arms reduction achievements of the past 40 years, mostly by the United States and Russia, have occurred as a result of bilateral agreements or unilateral actions. As a Chinese Major General Pan Zhenqiang (retired), now a security expert, points out, these US and Russian limited arm reductions of the past have mainly been a matter of convenience, aimed to shedding the economic and security burdens related to the highly inflated nuclear numbers of the cold war era, without affecting the striking capabilities of their respective countries. The number of weapons has decreased, but the quality and potential destructive power and precision have increased. If, after North Korea, Iran goes nuclear, it might touch off a series of new countries wanting to do the same, and the treaty will see a breakdown of the non proliferation regime.

Therefore, the NPT Review Conference in May 2010 is expected to fail to provide an agreement regarding concrete steps toward disarmament. In fact, all the future review conferences will also fail as long as the NPT, in the eyes of its key stakeholders, namely the Permanent Five, is seen merely as a nuclear arms control regime rather than a nuclear disarmament treaty. For the treaty to work, the “disarmament” clause of Article VI must be transformed into concrete actions. To start with, it can take the output of the 2000 Review Conference, and implement its 13 Steps action plan.

The United States, as the most powerful economic and military power in the world, and the only country which has actually used nuclear weapons in the past, must take responsibility and leadership. This year is President Obama’s chance, through his personal attention and the US leadership, to revive the Treaty from being merely a non-proliferation and arms control regime, and to direct it to its main objective of nuclear disarmament. This year’s Review Conference is President Obama’ s chance to show his and America’s “good faith” in the NPT, and start delivering on the US commitment of “a world without nuclear weapons”.

The international monetary system is at a crossroads of two paths that look quite similar, but can produce very different results. As a consequence of the decline of the dollar's international role, of the creation of the euro and of the increasing propensity to diversify official reserves and private portfolios, the dollar standard (in force since the gold exchange standard, instituted at Bretton Woods, was abandoned in 1971) gave way to a multicurrency foreign exchange regime. As the deepest effects of the financial crisis gradually emerged, this monetary regime too has been subject to tensions, incompatible with a continued approval of globalization.

On the one hand, the action of individual States and the signing of international agreements, mostly on a regional scale, but also at inter-regional level (as in the case of the BRICs), is gradually transforming the multi-currency regime into a multi-basket regime. The most recent example of that trend is given by the Gulf monetary Union, which, in the intention of the adhering countries¹, will materialize with the creation of the gulfo, a single currency bound to replace the dollar in the international contracts on crude oil.

On the other hand, the global objectives to redress fundamental unbalances, to stabilize the financial markets, to start a new investment cycle for a sustainable development, can be hardly met without recognizing cooperation, symbolically and substantially, as the “raison d'état” of globalization. A world currency would provide such a symbol, because “imprinted” no longer with the effigy of a monarch, but of a world institution, no longer with force but with law, and it would have a substance because it would rest on a reliable-enough “underlying asset”, the world's wealth, if we are able to preserve it.

The first, spontaneous path would not be incompatible with the second, managed at the global level, if they will keep pace with one another, consciously. It would lead instead to uncorrelated monetary blocs, with the risk of terrible monetary earthquakes along the fault lines, if the regional solutions are implemented in a disorderly fashion, in a hectic search for an alternative to the dollar, or even in panic situations during which the search for safety on the part of everybody will lead to the ruin of all.

Some American economists have well understood that opposing other currencies and SDRs to be put side by side with the dollar will be not only impossible but also dangerous for the United States. But while they accept that the dollar be accompanied by other financial instruments in official reserves and private portfolios, in a jumble of baskets, of exchange agreements between groups of countries, of dirty floating between currencies left to the markets, some for real, others as a sham, and others still subject to regimes of capital-movements control, those economists do not accept the perspective of a world basket of reference, which the dollar itself shall be referred to and which therefore shall replace it as the international currency. Fred Bergsten looks to me to be the most skilful supporter of that position, which, although marked by methodological nationalism, is anyway the most articulate, open and coherent with Obama's multilateral policy.

According to estimates of the Administration and the Congressional Budget Office (CBO), the balance deficits will exceed by far any previous record: in the short term due to the crisis, and in the long term due to the demographic and pension-related dynamics. The American public debt will reach 215% of GDP in 2039, and above 600% in 2080. Within less than ten years the expenditure for interests would touch 20% of federal revenues. Bergsten² draws from such estimates some conclusions about the US international position: “the international economic position of the United States is likely to deteriorate enormously as a result, with the current account deficit rising from a previous record of six percent of GDP to over 15 percent (more than $5 trillion annually) by 2030 and net debt climbing from $3.5 trillion today to $50 trillion (the equivalent of 140 percent of GDP and more than 700 percent of exports) by 2030. The United States would then be transferring a full seven percent ($2.5 trillion) of its entire economic output to foreigners every year in order to service its external debt”³.

This is an unbearable scenario and implies, in Bergsten's opinion, three great risks to the United States: 1) if the world will finance the American debt, the conditions that led to the present crisis will replicate themselves; 2) if the world will not finance it, a collapse of the dollar (hard landing) will take place before 2030, 3) if the government will succeed in preventing any crisis, the debt service will impoverish the American people. It is therefore necessary to rapidly change the course.

“The United States should encourage two eminently feasible changes in the current international monetary order. The first is the further evolution of a multiple-currency system in which other monies increasingly share the international position of the dollar in private markets… Currently the dollar represents 65 percent of national reserves and the euro 25 percent. Those figures are likely to become much more balanced… The United States should not only accept a more varied currency regime as an inevitable reality, but actively encourage such a development as part of its effort to recalibrate its own international economic position. Second, in order to increasingly supplement national currencies in official monetary reserves, the International Monetary Fund can issue SDRs… This will enable countries to build up their reserves without having to run large trade and current account surpluses, thereby reducing pressure on the global trading system… The G-20 took a major step in this direction by agreeing in April 2009 to create $ 250 billion in SDRs, which were then allocated by the IMF in August. This took SDRs’ share of global reserves from a previous level of under one percent to about five percent. The G-20 and the IMF should now go beyond this step… to start a process of distributing SDRs annually, perhaps totalling $1 trillion over the next five years. In addition, the IMF should create a substitution account into which monetary authorities could exchange unwanted dollars (and others currencies) in return for SDRs without affecting global markets”⁴.

Certainly Bergsten does not ignore two fundamental critical points of the system that I define multi-basket. The first concerns the euro, which will experience an appreciation not justified by its underlying assets and by the European balance of payments, as it is the only real alternative to the dollar (besides the SDRs) until the renmimbi too will be convertible. The second concerns replacing the dollar with the SDRs. Denominating the new debts in SDRs instead of dollars would force the United States to observe a balance discipline like all the other countries. A recent study estimates that the possibility to underwrite debts in dollars (at low cost because they can always be printed and depreciated) and to invest in other currencies (with much higher gains) represents a benefit equivalent to 2.5% of GDP every year (the “exorbitant privilege”). On the other hand, replacing the dollar stocks (the old debt) with SDRs would imply an unfair advantage for the US creditors, to the disadvantage of the other countries contributing to the IMF (because for sure the US will not take upon itself the exchange risk). For these very reasons, in order to make the proposal more credible, Bergsten complements it with recommendations of economic policy, aimed at re-balancing the American public budget (reduction of expenditures for health-care and pensions, and tax increases on consumptions) and at bringing back the current expense balance deficit to not more than 3% of GDP, which Bergsten considers tolerable (probably because partially compensated by the persistence of the “exorbitant privilege” on the part of the debt that continues to be denominated in dollars).

Other American economists believe that the dollar will continue to be the Sun of the monetary system due to the absence of alternatives: the euro is a currency without State, the renmimbi is not convertible and will not benefit for many years from a well-developed financial market, the yen is the currency of an economy plunged for many years into a long stagnation, the gulfo will never be done, other currencies cannot even be seen, the SDRs are not liquid, there is no agreement on how to distribute them, and they have become the banner of the Chinese just because the Governor has to repel the domestic criticism of an excessive accumulation of dollars and has to communicate abroad in a symbolic fashion that China is in favour of a “rules-based multilateral system”. Barry Eichengreen's⁵ word, a well-respected economist and one of the most serious and less emphatic supporters of such a position.

Eichengreen is right in thinking of a world monetary system with one centre, but I believe he is deceiving himself, due perhaps to a reflection of a not-only-methodological nationalism, in believing that the dollar may any longer fulfill that function. The system I think of, as a European and a world federalist, has one Sun, a supra-national currency (initially an international basket), around which planets like the dollar, the euro, the gulfo, the renmimbi, the yen will rotate. Every planet will in turn stabilize a certain number of satellite currencies (the regional monetary areas).

The first step towards the creation of a world currency is the creation of one basket, similar to the ecu in the preparatory phase of the creation of the euro. The Governor of the People's Bank of China, Zhou Xiaochuang, is proposing to use an already existing instrument, the SDRs at the IMF, modifying their composition as well as the quotas and the voting rights at the IMF; and making the SDRs conversion in other currencies possible; promoting their use in international trade, in the quotation of raw materials and in the accounting of trans-national enterprises; allowing to issue bonds denominated in SDRs; endowing the IMF with a pool of reserves in order to strengthen the market's confidence in their value.

“… The acceptance of credit-based national currencies as major international reserve currencies, as is the case in the current system, is a rare special case in history… The Triffin Dilemma, i.e., the issuing countries of reserve currencies cannot maintain the value of the reserve currencies while providing liquidity to the world, still exists… The price is becoming increasingly higher, not only for the users, but also for the issuers of the reserve currencies. Although crisis may not necessarily be an intended result of the issuing authorities, it is an inevitable outcome of the institutional flaws… The desirable goal of reforming the international monetary system, therefore, is to create an international reserve currency that is disconnected from individual nations and is able to remain stable in the long run, thus removing the inherent deficiencies caused by using credit-based national currencies… Keynes had already proposed to introduce an international currency unit named “Bancor”, based on the value of 30 representative commodities. Unfortunately, the proposal was not accepted… The IMF also created the SDR in 1969, when the defects of the Bretton Woods system initially emerged, to mitigate the inherent risks sovereign reserve currencies caused. Yet, the role of the SDR has not been put into full play due to limitations on its allocation and the scope of its uses. However, it serves as the light in the tunnel for the reform of the international monetary system… A super-sovereign reserve currency managed by a global institution could be used to both create and control the global liquidity… This will significantly reduce the risks of a future crisis and enhance crisis management capability… The reform should be guided by a grand vision and begin with specific deliverables. It should be a gradual process that yields win-win results for all… In the short run, the international community, particularly the IMF, should at least recognize and face up to the risks resulting from the existing system, conduct regular monitoring and assessment and issue timely early warnings… Special consideration should be given to giving the SDR a greater role. The SDR has the features and potential to act as a super-sovereign reserve currency… This will require political cooperation among member countries… The scope of using the SDR should be broadened, so as to enable it to fully satisfy the member countries’ demand for a reserve currency… Compared with separate management of reserves by individual countries, the centralized management of part of the global reserve by a trustworthy international institution with a reasonable return to encourage participation will be more effective in deterring speculation and stabilizing financial markets. The participating countries can also save some reserve for domestic development and economic growth… The centralized management of its member countries’ reserves by the Fund will be an effective measure to promote a greater role of the SDR as a reserve currency. To achieve this, the IMF can set up an open-ended SDR-denominated fund based on the market practice, allowing subscription and redemption in the existing reserve currencies by various investors as desired. This arrangement will not only promote the development of SDR-denominated assets, but will also partially allow management of the liquidity in the form of the existing reserve currencies. It can even lay a foundation for increasing SDR allocation to gradually replace existing reserve currencies with the SDR”⁶.

It is not necessary to resort to game theory to assert, without any doubt, that the cooperation Zhou is calling for is indispensable for governing globalization and prevent it, if left to market forces alone, from threatening democracy, free exchanges and peace.

Cooperation is in China's interest, that's why it is proposing it, to reduce the cost of its own “investment in reserves” with the same achieved security; it is in the US interest, as its very strategic independence is threatened by an unceasing indebtedness to a few countries; it is in Europe's interest, as it can be driven to pay the highest price for the redressing of fundamental unbalances it is not responsible for, through the appreciation of the euro, the loss of competitive margins, the rise of unemployment.

Only Europe, among the big players, even though it has got the experience of the creation and the success of a supra-national currency, does not pursue with suitable initiatives its own interest in cooperation, the highest for the first trading power of the planet. On the contrary, Commissioner Almunia spoke a few months ago against Zhou's proposal, due to an old and misunderstood reflex of subjection to the United States. We wait and see what the new President of the Council Van Rompuy will do, hoping that he will be able to make full use of the message that the former Commission President Delors is sending him⁷: “The dollar remains indispensable and corrosive at the same time. We should be thinking of a global monetary system based on a basket of currencies. Because the dollar is a yo-yo and the Americans have taken advantage of that to borrow more than is reasonable. Now they are somehow in the hands of the Chinese. Those responsible for the European economic and monetary union must take responsibility not with a view for the euro to replace the dollar, but to help create a more balanced global monetary system… The legal priority in our international order is the UN. So I think it is necessary that [an embryo of global economic regulation] be established between the United Nations, which holds the maximum of legitimacy, and the economic and financial G-20”. And concludes: “We [Europeans] are making no proposals… If Europe does not take care, within ten years we may well have a world run by two powers: the United States and China.”


1 The Gulf Cooperation Council sanctioned the birth, at the beginning of 2010, of a monetary council based in Riyadh, the embryo of a common central bank. At the moment Saudi Arabia, Kuwait, Bahrain and Qatar have joined, but in the future also other Emirates could join
2 C. Fred Bergsten, “The Dollar and the Deficits. How Washington can prevent the Next Crisis”, in Foreign Affairs, November/December 2009. He is Director of the Peter G. Peterson Institute for International Economics and was Assistant Secretary of the Treasury for International Affairs from 1977 to 1981 and Assistant for International Economic Affairs to the National Security Council from 1969 to 1971
3 Ibid., page 21
4 Ibid., pages 25-27
5 Barry Eichengreen, Reports of the Dollar’s Death are Exaggerated, Seventh Luca d’Agliano Lecture in Development Economics, Turin, December 2009
6 Zhou Xiaochuang, Reform the international monetary system, 2008
7 Jacques Delors, “Si Europa no se integra, mandaràn EE UU y China”, interview by Xavier Vidal-Folch, in El Pais, 6/12/2009

The SDRs (special drawing rights) were born with big ambitions. Created in 1969 by the IMF to support the Bretton Woods fixed exchange system the initial expectations were that it would become a major component of global reserves, while gold and reserve currencies were regarded to have only a minor incremental role in official reserves.

Notwithstanding the initial intentions, until now the SDR has had only a limited use as a reserve asset and its main function has been to serve as the unit of account of the IMF and some other international organizations. Volumes speak for themselves: at the beginning of 2009 the cumulative allocations of SDRs amounted to only 21.4 billion¹.

There are many reasons that can explain why the initial expectations on the SDR were not fulfilled. In the first place, the rationale behind its creation (mainly the possibility and fears of liquidity shortage) soon disappeared with the end of the Bretton Woods fixed exchange system and the shift to floating rates. Also the minimal amount of SDRs allocated and the limitations on its scope and use are to be blamed. The SDR is not a currency, as the IMF itself remarks: “The SDR is neither a currency, nor a claim on the IMF. Rather, it is a potential claim on the freely usable currencies of IMF members. Holders of SDRs can obtain these currencies in exchange for their SDRs in two ways: first, through the arrangement of voluntary exchanges between members in a managed market; and second, by the IMF designating members with strong external positions to purchase SDRs from members with weak external positions”. Then, the SDR circulates only in the official circuit: it can be held by governments, central banks, the IMF and a narrowly defined group of other “official holders”. But it cannot be used in the other transactions in which central banks and governments engage. Furthermore, the SDR is not a market-based asset: it has always been administratively controlled by the IMF in every respect, from its valuation and yield to who may hold it and what it may be used for. Also the efforts to promote the SDR use in private markets have been largely ineffective. A limited market in private SDRs emerged in the mid 1970s when some banks began to accept time deposits in SDRs and some companies began issuing long-term debt securities in SDRs but these attempts did not prove to be successful. They did not gain the scale needed for a new market to open and be attractive and, above all, could not face and overcome successfully US dollar supremacy.

A sudden change of course for the SDR occurred when, in March 2009, the Governor of the People’s Bank of China, Zhou Xiaochuan, underlined the presence of the Triffin dilemma and put forward a proposal with a number of actions to promote the use of the SDR as a supra-sovereign reserve currency stating that, even if until now SDR’s role has been restrained by limitations “it serves as the light in the tunnel for the reform of the international monetary system”. In his proposal he also underlined the need for an enlargement of the SDR basket of currencies and suggested that part of the IMF member countries’ reserve be entrusted to the centralised management of the IMF through the establishment of an open-ended SDR denominated Fund which would allow subscription and redemption in the existing reserve currencies by various investors.

The decisions taken at the G20 Summit held shortly afterwards in April 2009 in London were supportive of a strengthening of the IMF and of its resources and allowed as well for an increase of the total SDRs stock. In particular, the commitments taken by the G-20 included the implementation of two allocations of roughly $283 billion SDRs, which allowed the outstanding stock to increase nearly ten-fold to about $316 billion².

The relationship between China and the US represents an emblematic example of what is usually referred to as global imbalances. On the one side there is China which registered a number of consistent and repeated surpluses with a simultaneous building up of foreign exchange reserves: China’s reserves stood at $2.13 trillion in June 2009. A good portion of these reserves has been invested in US Treasury bonds considered as a “safe haven”3. On the other side there is the US whose recent economic history has been characterised by persistent current account deficits and growing foreign debt. External debt, in particular, has experienced a frightening growth in the past quarter century and it has changed in nature (from US investment in the rest of the world to financing of domestic demand)⁴. This means that developing countries were, and still are, transferring reserves to the industrialised countries, mainly the US, that issue the reserve currencies, lending to them at very low interest rates, and, in effect, making it possible for them to live beyond their means. This situation cannot continue as it is. On the one hand, the Chinese authorities are worried about the value of their investments denominated in US dollars, for possible further and future value losses but, at the same time, do not have alternatives presenting the same liquidity as US bonds. On the other hand, the US, being an indebted country, is ceding some power and needs to change course. The “exorbitant privilege” the US enjoyed is presenting its bill: it may be convenient for it as well to move forward⁵. From the Obama administration arrive signs that the US will not continue to be the world's consumer and importer of last resort. As recently argued⁶, there is a recognition that US influence can be compromised if it is dependent on foreign investors to bail out its financial sector (as in the early part of this crisis) or to finance its fiscal profligacy (as China and other surplus countries have been doing for a long time).

The proposal of the People’s Bank of China Governor about the use of SDR as a supra-sovereign reserve currency was followed by a number of different reactions. The Chinese point of view is backed by other countries, in particular by the other BRIC countries (Brazil, Russia and India). On the contrary, the US – through the words of Timothy Geithner (Treasury Secretary) and Ben Bernanke (Chairman of the Fed) – have rejected the idea but, considering the amount of Chinese central reserves, accounted to include at least some US dollar 1 trillion, the US cannot discard as not important the remarks coming from China.

Apart from official reactions, in general, a debate on a possible new role for the SDR aroused after Governor Zhou comments⁷. The debate focused on a number of questions: is the Chinese proposal feasible? What has to be done to effectively use the SDR as a supra-national reserve currency? Which problems remain to be solved?

1. The composition of the basket of the SDR
The SDR basket now comprises only four currencies: the US dollar, the euro, the Japanese yen and the pound sterling⁸. The weights of the four currencies are revised every five years on the basis of the value of the exports of goods and services and the amount of reserves denominated in the respective currencies held by other members of the IMF. To ensure that the currencies included in the SDR valuation basket are among the most widely used in international transactions they need to be “freely usable”⁹. The next review of the basket is due in late 2010: that could be the right opportunity to revise the basket to better reflect the changes in the world economy, together with the increasing role played by some countries. In fact, a number of countries, whose currencies are now excluded from the basket, have auspicated an enlargement of the number of currencies in the basket. The Governor of the People’s Bank of China in particular has declared his support for an enlargement of the basket “to include currencies of all major economies, and GDP may also be included as a weight”. A number of issues need to be addressed and agreed upon in view of the next review:
-    how many currencies should be included in the new basket? The trade off is between the need to enrich its current composition providing more diversification on the one hand against the risk of getting back to a too crowded basket, which could be difficult to replicate. In this regard, the presence of regional currencies in the SDR basket would help in the review with the trade-off between not too crowded and not sufficiently representative;
-    which criteria are to be followed to select the currencies and their amount in the basket? As previously mentioned the use of the GDP has already been put forward. Perhaps the weight of the different currencies in the basket could be fixed in the Agreements in function of a valuation of each currency based on “economic fundamentals which also include elements which are not today counted as economic, such as human development, ecological sustainability, the concentration/diffusion of assets and incomes, the demographic composition of the population and their tendencies”¹⁰.
-    do commodities, such as gold, need to be included in the basket as some have suggested?
-    is the five year review timing now in place appropriate? Does it match the stability required from the SDR to become a reserve currency?

2. Reform of the IMF
After years of neglect, the IMF has recently received international support for a revived activity. In line with this idea various suggestions have been put forward in order to strengthen its activities. Also to support the market of the SDRs, a reform of the IMF is needed. This reform would involve the activities to be carried out by the IMF, the funds at its disposal (currently inadequate), governance both in terms of governing bodies and majorities required for its activities to be carried out and of quotas and representation.

3. Change and increase in SDR allocations
Until now SDR allocations have been rare and the required 85% voting power majority has given some countries an effective veto power. The decisions taken at the April 2009 G20 Summit show that a general consensus about the need to push forward on this issue has been reached but, apart from individual actions, other reforms are needed. In this respect the Commission of experts of the President of the UN General Assembly (also known as the Stiglitz Commission) puts forward some proposals, regarding the opportunity to: 1) make SDR issues automatic and regular, 2) adjust total issues in a counter-cyclical way; 3) allocate SDRs with criteria based on need and not merely on quotas. The IMF should also be able to provide additional liquidity in case of shortage¹¹.

4. Issue of SDR denominated securities
The issue of SDR denominated securities would be a good starting point to increase the appeal of the SDRs. One can make the hypothesis that initially the IMF itself, some Governments and special international financial institutions such as the World Bank could issue SDR denominated securities, which could then be followed by banks and non-financial firms. In fact, in those markets where global imbalances emerged, there is the more impelling and greater need to have debt securities in a supra-sovereign reserve currency. If the positions of the various parties concerned in the issue are considered, this feature could also allow for the achievement of considerable volumes and a possibly adequate level of liquidity. Among the Governments, the US could provide a good example for other countries: if it agrees that a shift towards a more stable and globally balanced international monetary system is desirable it could issue part of its bonds not only in US dollars but also denominated in SDRs. They should encounter a warm welcome from world investors. If recent events have diminished the credibility of the US as a supplier of high-quality financial assets, the possibility to focus its policies on the internal side, and its support for the introduction of a global reserve currency not linked to the US economy would help in re-establishing it and rebalancing the world monetary system. The importance of such a step would constitute a good example to be followed by other countries. However, considering the current US resistance to these proposals, it is unlikely that the US opens the market for SDR-denominated securities. The remarks made by the Governor of the People’s Bank of China are supportive of a market for the SDR denominated assets. It has been suggested that therefore they could issue SDR denominated bonds and encourage other G-20 members to follow their example¹². This would be important because it would foster market liquidity for SDR denominated securities, and it would be more important than buying IMF SDR denominated bonds – which they are already doing – since the IMF bonds cannot be traded according to current rules.

The market for SDR denominated securities is institutional. A number of countries want to increase and/or diversify their reserve holdings: such countries have been looking for high quality financial assets to invest into and have, until now, acquired large amounts of US dollar denominated bonds. They share common fears about the value of their investments and it is believed they would be available not only to diversify their investments (which they already can do with euro bonds whose international role has surged but whose market is still fragmented) but to switch to a supra-sovereign global currency. China is already investing in the SDR denominated securities now available. In fall 2009, the IMF and the People’s Bank of China signed an agreement under which the People’s Bank of China would purchase up to SDR 32 billion (around US$50 billion) in IMF notes. The note purchase agreement is the first in the history of the Fund, and follows the endorsement by the Executive Board in July 2009 of the framework for issuing notes to the official sector. Also other countries have expressed this intention: Russia, Brazil and India have indicated their willingness to invest in notes issued by the IMF, US dollar 10 billion respectively. It has been argued¹³ that pension funds and insurance companies are generally on the demand side for government bonds as they match the maturity of their obligations and they would be interested in SDR denominated bonds as well. However, a problem persists in that SDR denominated bonds would not match the currency denomination of their liabilities.

Apart from being one of the issuers of the SDR bonds, it has been suggested¹⁴ that the IMF should also act as market maker to support the market in an initial phase. A deep and liquid market in SDRs requires a critical mass of SDR issuance and a critical mass of trading; aside liquidity it requires also return rates comparable to those of the US dollar debt securities in order to make them attractive. The IMF should stand ready to buy and sell SDR claims to all new comers, private as well as official, at narrow bid/ask spreads competitive with those of the dollar, subsidizing the market in a start-up phase until private market-makers would be able to provide those services at comparable costs. This action by the IMF implies a cost on which the members should agree.

Another issue regarding SDR denominated securities that needs to be addressed is linked to the adoption of a closed or open basket. In short: should the definition of the SDR change through the maturity of the securities in line with the official definition reviewed by the IMF or remain the one valid at the time of the issue notwithstanding the periodic reviews? The experience with the ecu bonds shows that to maintain closed baskets the risk was to have not a single, growing and transparent market but to end up with many sub-markets linked to many different ecus. Therefore, as a general rule all different types of ecu business turned to the open basket formula (the same basket at any given time, even if different from the one adopted at the time of the issue), providing for an automatic and instantaneous following of any official decision to change the ecu. Would it be reasonable to apply the same criteria nowadays for the SDR denominated bonds?

5. The set-up of a clearing system
The experience with the ecu has clearly shown that the setting up of a clearing system is a crucial point. The establishment of a clearing system for the ecu facilitated its use and the growth of the market, proving to be the best way to build up liquidity. The Bank for International Settlements was called to act as clearing house. Similarly, but considering the different nature of the market of SDRs (public rather than private), it can be said that the setting up of a clearing system for central banks investing in SDRs would constitute a step of great importance.

Until now the US and China seem to be the main actors on the stage. However, Europe has an important role to play on the issue of a reform of the global monetary architecture. The initial reaction from the EU to the Chinese proposal was negative. The European Economic and Monetary Affairs Commissioner, Joaquín Almunia, in response to the Chinese proposal has reaffirmed the US dollar’s role as the world reserve currency, which “will continue to be there for a long period of time.” It is true that a weakening of the US currency, which is an implication of central banks’ shifting away from the US dollar, would be unwelcome to policy makers in the euro-zone, worried about the possibility of stronger pressure on the euro and on their exports. However, taking into consideration these common fears and studying the possible solutions to prevent further pressure on the euro, with the goal of achieving a more stable financial background in mind, Europe should support the Chinese proposal. Its experience with the creation of the common currency and the path followed – from the European unit of account to the ecu and then to the euro – and with the establishment of the European Central Bank constitute valuable items and important contributions to the international debate and to the construction of a supra-national reserve currency. The success of the euro in terms of stability and its affirmation worldwide should constitute a good example and not the reason for being attracted by the temptation of replacing with the euro the US dollar’s role as international reserve currency. To play an important role in this task the EU has to speak with one voice. This would also imply the consolidation of its IMF seats into one (or two, one for the euro-zone countries and the other for other EU countries). Such a move would enhance EU influence and at the same time free up seats for emerging countries, giving more legitimacy to the institution.

Recently the consensus on the need to regulate the creation of global liquidity and to correct the present sources of global imbalances has risen. As said by the Governor of the People’s Bank of China “the creation of an international currency unit, based on the Keynesian proposal, is a bold initiative that requires extraordinary political vision and courage”.

Time is ripe for discussion and decision: the debate has now to focus on concrete solutions.



1 As of 15 January 2010 1 SDR = 1.571 US $.
2 The allocations allowed to take account of the fact that those countries which joined the Fund after 1981 (more than one fifth of current membership) never received an SDR allocation and were aimed at providing liquidity to the global economic system and meeting the long-term global need to supplement IMF members’ existing reserve assets.
3 China does not release the currency composition of its reserves, but the dollar is thought to make up around 65% of the portfolio.
4 A. Iozzo, A. Mosconi, “The foundation of a cooperative global financial system. A new Bretton Woods to confront the crisis of the international role of the US dollar”, in The Federalist Debate, XIX, June 2006, no.2, pp. 6-11.
5 See F. Bergsten, “U.S. policymakers, therefore, must recognize that large external deficits, the dominance of the dollar, and the large capital inflows that necessarily accompany deficits and currency dominance are no longer in the United States' national interest. Washington should welcome initiatives put forward over the past year by China and others to begin a serious discussion of reforming the international monetary system.” “The dollar and the deficits”, in Foreign Affairs, November/December 2009.
6 See F. Bergsten and A. Subramanian, “America cannot resolve global imbalances on its own”, in Financial Times, August 20 2009.
7 See for example the Report of the Commission of experts of the President of the United Nations General Assembly (known as the Stiglitz Commission) on Reforms of the international monetary and financial system, draft version, May 2009.
8 As of 15 January 2010 the weights are as follows: 38% euro, 40% US $, 9% pound sterling and 13% Japanese yen.
9 A currency is freely usable if the IMF Executive Board determines that it is widely used to make payments for international transactions and is widely traded in the principal foreign exchange markets.
10 The suggestion is made by A. Iozzo and A. Mosconi, in their proposal of a world currency unit (wcu). Since the measurement of these values is today still rough and can lead to discussions, a procedure would have to be designed to revise the Agreement to modify the weights. In the future, when reliable and shared measurements are available, the revisions could become automatic. The authors suggest one could think about an evolution from SDRs to the wcu like the one which took place from the European unit of account to the ecu. See A. Iozzo, A. Mosconi, “The foundation of a cooperative global financial system. A new Bretton Woods to confront the crisis of the international role of the US dollar”, in The Federalist Debate, XIX, June 2006, no.2, pp. 6-11.
11 See B. Eichengreen, Commercialize the SDR, Project Syndicate, 2009.
12 B. Eichengreen Commercialize the SDR, Project Syndicate, 2009.
13 B. Eichengreen, “The dollar dilemma”, in Foreign Affairs, September/October 2009.
14 B. Eichengreen, Out of the Box Thoughts about the International Financial Architecture, IMF Working Paper, May 2009.

Regionalism in East Asia is in fact a vast subject on a vast area. In dealing with this topic, some would start from the ASEAN and the so-called ASEAN+3 (Japan, China, South Korea) around which, traditionally, the regional organisations in East Asia have been structured. Yet, the ASEAN is, if you will, like the Benelux. One would need bigger powers in constructing a region. In this light, instead of describing the general stuff on those traditional organisations, we may rather be allowed to start from a specific diplomatic initiative by Japanese Prime Minister Yukio Hatoyama in recent months for the East Asian Community (EAC).

As is well known, Japanese politics has – finally – renovated itself with the change of government after the last August general elections. The new premier Hatoyama can be seen as a peculiar person, and barring a financial misconduct he is likely to be in power for some time to come, and may deserve some attention.

He proposed the creation of the EAC as part of the electoral manifesto, and a goal now shared by Chinese and Korean leaders, albeit as a long-term one. On the domestic front, too, he presented local and regional sovereignty as one of his priorities, with which he intends to increase autonomy at those levels. Thus, he is a man of some sort of multi-level governance.

His peculiarity is visible in his opinion to give electoral rights to long-term foreign residents in Japan, not only for local and regional elections but also for national and general ones. Hatoyama was criticised (by right-wingers) for his remark that the soil of Japan does not only belong to the Japanese people, but also to long-term resident foreigners. For the moment, even the local and regional electoral rights for foreigners are stuck in the legislative process, which means no possibility to give those rights for national elections, yet that is the measure of his peculiarity.

He bases his political stance on the vague philosophy of fraternity, an idea which apparently came from his grand-father, Ichiro Hatoyama, also a Prime Minister, who was influenced by Comte Richard Coudenhof-Kalergi. As some may know, Coudenhof-Kalergi was the leading ‘Pan-Europa’ proponent and Austrian aristocrat, whose mother, Mitsuko, was Japanese. This Prime Minister Hatoyama reads and knows on the construction of Europe, and explicitly refers to that experience when proposing the EAC.

Is this just a dream of a strange man, influenced by an obscure ‘founder’ of Europe?

While, quite clearly, the Prime Minister’s talks on EAC are still at a quite early stage of concrete policy formulation, it should not be dismissed too lightly, as it is founded on a few factors accumulated over the past several years.

Economically speaking, intra-regional trade interdependence in East Asia has risen rapidly: in 1980, the trade figure in East Asia (ASEAN, NIES, China, Japan) represented 33.6%, as opposed to the EC’s 52.6%. In 2003 (before the EU’s Eastern enlargement), EA with the figure of 54.5% approached quite closely the EU’s 58.1%. Also the figures of regional GDP are more or less balanced: NAFTA has 14.3 trillion dollars, the EU 13.3 and EA 10 (with the most rapidly growing economies).

Politically, too, the East Asia Summit has been instituted since 2005, amongst the ASEAN 10 countries plus Japan, China, South Korea, Australia, New Zealand, and India.

Of course, there is a number of differences between Europe and East Asia: the latter has no unified currency, no solid legal institution, a huge gap between the rich and the poor. Yet, something is going on. After pointless confrontations between Japan and its Asian partners under the previous LDP governments, Japan is heading for a pro-Asian diplomacy.

If East Asia is to build a common space, with reference to the European experience, it should do so with a number of cautions.

First, East Asia should maintain good diplomatic relations with the US. Historically, Europe was built in parallel with some military-security arrangements, notably the NATO. European integration was promoted by the US, with which it aimed to run counter to the Communists, inside and outside.

Second, while keeping good relations with the US, East Asia should jointly enhance its own three P’s: Peace, Prosperity, and Power, just like Europe did. It is not just about reconciliation between Germany and France, but about power and influence.

Finally, this East Asian common space should be equipped with a sort of human-rights umbrella, à la CSCE, so that the peoples under oppression by their own government could have recourse to an alternative channel to defend their human rights. Here too, the European experience may well have a referential power. ‘Europe’ is not only about the European Union. Just as it was long supported militarily by the NATO during the Cold War, it was also sustained by the Council of Europe where human rights and other concerns (such as minority rights) could be jointly discussed. Within such a framework, there has been the European Court of Human Rights, whose role is to safeguard peoples’ rights if unprotected by their own national governments. It is hoped here that the vertical division of powers will have something to do with the expansion of human rights, precisely as it pluralises the channels of protecting rights.

It is far from sure that such a regional construction will take place in East Asia in the foreseeable future. The Hatoyama government badly handled its relations with the US, a cornerstone of prosperity and peace in the region. Yet, suppose, for a moment, that a region is in the process to be formed.

Then, we would immediately see that this is not an end in itself, as we might well have to face the possibility of excessive rivalries between the regions. Healthy competitions are fine but, historically, we have witnessed too many examples of territorially-organised units, whether nation-states or ethnic entities, fighting with each other.

Though at the risk of historical over-simplification, Europe can be seen to have once exported the political model of the nation-state to the entire world. It may be that now it is exporting the model of regionalism. We need to ensure that this sort of parallel regionalism will not lead to excessive rivalry.

The doctrine of federalism is still valid here. The federalist project is incomplete, as far as it serves only to strengthen a region, i.e. Europe. It should be kept in mind that Europe is considered as a ‘regulatory empire’ – a sort of powerful international actor setting global standards and imposing regulations all over the world, often unilaterally, without properly consulting other regions and nations.

Compared to ‘integral federalism’ à la Proudhon (or Alexandre Marc), the Spinellian type of federalism, influenced by Hamilton, looks more prepared to extend the logic of federalism to other regions and to project it to the global stage.

Europe is already an influential entity. Influence means responsibility. As exporter of regionalism, Europe bears a special responsibility.

In this light Europe must use its influence in a constructive manner, to promote region-to-region cooperation, not fierce rivalries. Without a sensitivity for truly mutual, inter-regional and global cooperation, the construction of Europe may end up replacing the exclusivity of the Nation-States with the same exclusivity of the regions. And for that matter, the Spinellian federalism, a current of federalism open to others, has much to contribute to a certain type of Europe, in favour of global cooperation.

From the very start of the European unification process, it has been the rule that only democratic countries could be considered for membership, yet within the new institutions themselves democratic procedures were slow to develop. The first of these institutions, for example, – i.e. the European Coal and Steel Community established in 1951 – certainly had a sort of parliament known as the Common Assembly, but its members were “delegates” and their role merely advisory. Policy decisions were exclusively in the hands of the member states’ governments.

Successive changes over the past fifty-eight years have seen the Community developing into a highly sophisticated Union of twenty-seven states, whose nationals have the dual legal status of European Union and national citizenship, with the right to vote for their own representatives in the European Parliament which – now that the Lisbon Treaty has been ratified – has considerably increased powers over EU legislation. Moreover, with the scrapping of border controls between most of the member states, EU citizens also enjoy freedom of movement within the Union and now have voting rights in local elections in whichever member state they choose to live.

Yet, despite these changes, many in the EU see the Union and its institutions as intrusive and undemocratic. They identify more easily with their own nation states than with “Europe” and doubt whether democracy is possible at trans-national level. EU politics they often regard as a pastime of the élite. But are they right? Press reactions to the way the new-style European Council President is appointed have certainly high-lighted this problem. The Council consists of representatives of the member states who until now took turns in chairing its meetings, changing every six months. The Lisbon Treaty sought to replace this six-monthly rotating presidency with a two-and-a-half year presidency with a much higher profile, for in addition to chairing Council meetings he or she is now expected to take on the important role of “external representation of the Union on issues concerning its foreign and security policy” – effectively to act as President of the Union, although already there have been signs of rivalry between this new office and the old-style rotating presidency.

This move has aroused considerable public interest, with newspapers and other media already referring to the chosen candidate, the Belgian Herman Van Rompuy, as the “President of Europe” and questioning why such a high-profile appointment should be made by the heads of the member states’ governments meeting in conclave rather than by popular election.

This latest step in the evolution of a quasi-federal political structure yet again draws attention to two inter-related difficulties facing the Union: namely, how to ensure that EU decision-making bodies are at least as democratically accountable as those of member states’ own governmental institutions, and how to foster among its citizens a sense of shared identity.

Greater citizen involvement is one answer, yet how can that be achieved? While the Lisbon Treaty has significantly strengthened the elected European Parliament’s powers, newspapers and other media in the member states seldom report its proceedings. As a result, public participation in European Parliament elections is considerably lower than in national elections.

The EU’s administration – i.e. the Commission – receives even less publicity. The Commissioners themselves are perceived by the public as over-powerful civil servants rather than as “ministers”. In order to achieve a fair balance between the different nationalities, they are not subject to popular election but nominated by their members states’ governments, though subject to appraisal and approval by the Parliament. For the ordinary citizen accustomed to regular parliamentary elections in his or her own national political structure, the EU’s inter-governmental system must seem byzantine to say the least.

In the Lisbon Treaty the “election” of a President of the European Council is certainly a headline-grabbing innovation, yet those who drafted the text missed a major opportunity to inject a dose of democracy into the procedure. Rather than restrict the franchise to the twenty-seven heads of member states’ governments, they could, and should, have extended the vote to include every adult EU citizen.

The Treaty itself states that “the functioning of the Union shall be founded on representative democracy” [Article10]. This means that citizens not only need to know what is being done in their name, but also to share a genuine sense of involvement in the governance of the EU. A Union-wide presidential election on the American model, with primaries to be held in every member state and every citizen having the right to vote, would not only strengthen the EU’s democratic accountability but also foster among the electorate a greater sense of a shared European identity.

As the consolidated treaties are ipso facto the EU’s constitution, an amendment to involve the citizens in their own destiny by providing a legal base for the choice of a European Union President by popular election would of course require at least a mini-treaty. This might be resisted by some member states’ governments but, on the other hand, is it naive to think that the people might be allowed to decide for themselves?

Footnote
But are these purely European problems? Probably China and various other countries would say that they are. On the other hand, the European democratic nation-state model has spread in one form or another to every continent and the EU is often quoted as a possible model for regional associations of states elsewhere in the world. The difficulties experienced in any union of states trying to establish democratic systems reaching down to grass-roots level are certainly relevant to any discussion of global government.

On December 3-4, 2010, the first Symposium on Altiero Spinelli was held in Buenos Aires, with the objective of highlighting the topical significance of the thought of the founder of the European unity movement in other continents and in the whole world. The meeting was promoted by Democracia Global, the movement for South America's Union and a world Parliament, the Argentine branch of the World Federalist Movement, with the support of the Argentine Society for political analysis and the Italian Cultural Institute.

The integration process of South America started in 1991 after the fall of the fascist regimes, with the institution of MERCOSUR which, initiated by four countries of the continent's South Cone ? Brazil, Argentina, Uruguay and Paraguay ?, did show the tendency to extend itself to the rest of South America. Beside promoting economic integration, MERCOSUR has in common with the European Union the goal to consolidate democracy within its member States and to extend it to the regional plane through the direct election of its parliamentary Assembly, to be founded in the near future. In such a context, the birth of a federalist movement in Argentina and the choice of Altiero Spinelli's figure can be explained as being the reference point for a political initiative of a federalist nature aimed at the unification of the South-American continent, in the perspective of world federalism.

The opening of the symposium devoted to Spinelli was held in the Auditorium of the Senate of the Republic, with a speech by Fernando Iglesias, Argentine deputy and founder of Democracia Global, who illustrated the significance and the goals of such an initiative. There were then the speeches by the representative of the Italian Embassy, who read a message by President Napolitano, of the Spanish and European Union's Ambassadors in Argentina, of the MFE President Lucio Levi and the Democracia Global President Fernando Pedrosa.

The following day's session was held in the conference hall of the Argentine Council for international relations, and opened with a conference by Lucio Levi on Altiero Spinelli's figure, followed by two round tables. The first of them, on Assessment, challenges and opportunities of the European Union, saw the participation of the Head of the EU delegation to Argentina, Ambassador Gustavo Martin Prada, Professor Alberto Cimadamore, Secretary of the Latin-American Council of social sciences, Lucio Levi and Fernando Iglesias. In the second, on Integration of South America: problems and opportunities, participated the Chilean Senator Ricardo Nuñez, the Argentine Senator Eugenia Estenssoro, Professor Mariana Luna Pont, coordinator of the Master Course on Latin-American Integration at the 3rd February University in Buenos Aires, and Fernando Pedrosa.

The sessions closed with a meeting with the civil society movements, which showed how much the federalists' initiative has been appreciated for its aspiration to create a coalition of associations with the aim to establish and extend international democracy to both the international and the global level (m.c.).

Jean-Pierre Gouzy
Histoire de l’Europe, 1949-2009
Paris, Editions de Paris, 2009

Jean-Pierre Gouzy, vice-President of the Maison de l’Europe in Paris, where his «Journal parlé» – a monthly editorial – is very popular and appreciated, is, very likely, the last Frenchman alive who attended the founding Congress of the European Movement, which met at the Hague in May 1948, under the chairmanship of Winston Churchill. The former President of the European Journalists Association, he has also been a witness and an actor of innumerable meetings, events, demonstrations and actions to promote European unity. He is a dedicated federalist, and among those who understand that without a transfer of competences and real powers to a European government Europe will remain a beautiful dream without substance.

In fact, his Histoire de l’Europe (i.e. History of Europe) begins just at the end of the Second World War. The book begins with portraits of the first inspirers, pioneers and apostles; from the Dutchman Brugmans to the Italian Spinelli, not to forget the Frenchmen Alexandre Marc and Henri Frenay and the Swiss Denis de Rougemont. These men, whom Jean-Pierre Gouzy often met and worked with, had a common “denominator”, they had associated their fight against Nazism to a federal project whose aim and ambition was to guarantee a European future in reconciliation and union.

This book is, at the same time, an expression of a commitment without concessions for sixty years and a source of vivid, first-hand and valuable information about the battles fought by a small cohort of devoted and clear-sighted militants who were never, at any time, disheartened or discouraged by the advances which were always too slow and incomplete, and far below their expectations.

Thanks to the various inspirers or founding-fathers portraits, Jean-Pierre Gouzy presents an accurate history of Europe, the Europe of the federalists, of Churchill, Monnet, Schuman, Spaak and General de Gaulle, the Europe of the British, of Gorbatchev, of Delors – as many chapters are titled; it is the slow, plodding march towards the political Europe which is described for us. The title of the last chapter is “A low profile for a weak Europe”: the Treaty of Lisbon translates very well the lucid thoughts of a believer who keeps few illusions. A very sad reflection about globalization closes the book: “This globalized world is in the process… of breaking down into a myriad of entities, at a time when the only strategic, macro-economic, geopolitical balances are to be achieved in continental dimensions and cover the areas of different civilizations”.

A detailed chronology and an abundant bibliography are added to the volume, and make it a precious reference work.