"Overwhelmed?"

While foreign affairs remains a specialist interest in overall voter priorities, the G-8 and NATO summits will place international issues front and center of the current national debate. Normally, presidents are able to draw political advantage from international gatherings. Now, however, White House officials are concerned that the lead issues themselves – notably the Euro crisis, Syria, Iran and Afghanistan – are so intractable that they may give the impression that, rather than being in charge of events, the Administration is overwhelmed by them. To counter this possibility, President Obama is focusing on what Treasury officials are calling “changing the conversation” about economic policy. He is hoping to use his newly forming relationship with French President Hollande to pressure German Chancellor Merkel to switch to a more expansionary monetary policy in the Eurozone. As one Treasury analyst commented bluntly to us: “The takeaway we want from the G-8 is to bury the idea that fiscal austerity works.” Behind this thought is the fear that contagion from Europe may is endanger the US recovery and thus raise new question marks over Obama’s prospects in November. Additionally, within the G-8 format US officials expect to reach broad agreement on the P5+1 approach to the next round of nuclear talks. Given fierce opposition to any concessions to Tehran in the House of Representatives, Obama will tread carefully, but officials are telling us privately that they are cautiously optimistic that the diplomatic track – in parallel with tough sanction – is showing signs of promise. Based on their meetings with Israeli Defense Minister Barak on May 17^th, Secretary of State Clinton and Secretary of Defense Panetta believe that Israel is not on the point of military action. On Afghanistan, few surprises are expected. With public support for the war continuing to sag, US officials have few other ambitions other than to manage a stable endgame. The situation in Syria is potentially much more serious. US intelligence experts tell us that there is increasing evidence to support the UN assertions of Al-Qaida operations there. With arms flowing to the opposition from Saudi Arabia and others with occasional US logistical assistance, there is a danger that the US may be incrementally drawn into a more direct role in Syria. Finally, the new Pentagon report on military developments in China is worth reading for the delicate line it traces between conciliation and confrontation.