European policy responses

Until September 2008, European policy measures were limited to a small number of countries (Spain and Italy). In both countries, the measures were dedicated to households (tax rebates) reform of the taxation system to support specific sectors such as housing. The European Commission proposed a €200 billion stimulus plan to be implemented at the European level by the countries. At the beginning of 2009, the UK and Spain completed their initial plans, while Germany announced a new plan.
On September 29, 2008 the Belgian, Luxembourg and Dutch authorities partially nationalized Fortis. The German government bailed out Hypo Real Estate.
On 8 October 2008 the British Government announced a bank rescue package of around £500 billion[74] ($850 billion at the time). The plan comprises three parts. The first £200 billion would be made in regards to the banks in liquidity stack. The second part will consist of the state government increasing the capital market within the banks. Along with this, £50 billion will be made available if the banks needed it, finally the government will write away any eligible lending between the British banks with a limit to £250 billion.
In early December German Finance Minister Peer Steinbrück indicated that he does not believe in a "Great Rescue Plan" and indicated reluctance to spend more money addressing the crisis.[75] In March 2009, The European Union Presidency confirms that the EU is strongly resisting the US pressure to increase European budget deficits.[76]

Global responses

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Responses by the UK and US in proportion to their GDPs
Most political responses to the economic and financial crisis has been taken, as seen above, by individual nations. Some coordination took place at the European level, but the need to cooperate at the global level has led leaders to activate the G-20 major economies entity. A first summit dedicated to the crisis took place, at the Heads of state level in November 2008 (2008 G-20 Washington summit).
The G-20 countries met in a summit held on November 2008 in Washington to address the economic crisis. Apart from proposals on international financial regulation, they pledged to take measures to support their economy and to coordinate them, and refused any resort to protectionism.
Another G-20 summit was held in London on April 2009. Finance ministers and central banks leaders of the G-20 met in Horsham on March to prepare the summit, and pledged to restore global growth as soon as possible. They decided to coordinate their actions and to stimulate demand and employment. They also pledged to fight against all forms of protectionism and to maintain trade and foreign investments. They also committed to maintain the supply of credit by providing more liquidity and recapitalizing the banking system, and to implement rapidly the stimulus plans. As for central bankers, they pledged to maintain low-rates policies as long as necessary. Finally, the leaders decided to help emerging and developing countries, through a strengthening of the IMF.

The recently concluded U.S.-Russian agreement on nuclear arms reduction signed April 8 in Prague, literally a stone's throw from the proposed radar location of the scrapped Third Site, enshrined the strategic role of missile defense.

In a somewhat flowery preamble to the new treaty, both countries recognized the "interrelationship between strategic offensive arms and strategic defensive arms," but noted that "current strategic defensive arms do not undermine the viability and effectiveness of the strategic offensive arms of the parties."

Is this the return of the Anti-Ballistic Missile (ABM) treaty through a back door?

The issue of missile defense, and particularly the Bush administration plan to deploy a missile defense site in Europe - the so-called Third Site - was a bone of contention between Washington and Moscow. When President Barack Obama scrapped the Third Site with its large intercontinental ballistic missile (ICBM)-busting interceptors and replaced it with the phased adaptive approach (PAA) plan, with its much lighter Standard Missile-3 interceptors, it was first hailed (or condemned) as a conciliatory step toward Russian sensitivities.

Later, however, when details of the PAA were gradually fleshed out, Russian officials reacted angrily. Sergey Ivanov, Russia's deputy prime minister, called it "just as bad or even worse" than the Third Site plan. In a recent Moscow conference on nuclear proliferation, Russia's deputy national security adviser, Gen. Yuri Baluevsky, complained that "the U.S. did not abandon the old plan, it just replaced older missiles with more modern and more mobile missiles."

Later comments by Russian Prime Minister Vladimir Putin hinted at Russia's concern not merely over the PAA, but over U.S. national missile defense at large.

The issue of missile defense was reportedly a major stumbling block in finalizing the Prague agreement. According to The New York Times, it took a "take it or leave it" phone call from Obama to Russian President Dmitry Medvedev to break the logjam and bring the negotiations to fruition.

The preamble, with its somewhat contorted language, is an obvious compromise between the sensitivities and aspirations of the parties.

Being a preamble, its wording does not oblige the United States to any specific course of action, nor does it put legal fetters on U.S. missile defense policies and programs, including the PAA. Obama can be justly proud for achieving the first significant breakthrough in his nonproliferation agenda without sacrificing any of the current U.S. missile defense programs - neither the already deployed global missile defense system (GMDS) nor the planned deployment of Aegis Ashore in Europe are affected. On the face of it, Russia blinked first.

But did it? Reading carefully through the preamble's wording, one senses a potential time bomb hidden beneath its politically elegant phrasing. It refers to "strategic missile defensive arms" at large, regardless of where they are deployed, implying that Russia no longer minds the deployment of U.S. missile defenses in Eastern Europe.

On the other hand, the GMDS sites in Alaska and California obviously contain "strategic defensive arms," which are the subject matter of the preamble, indirectly hinting that Russia might be concerned over the deployment of missile defense even on U.S. soil.

More significant, the preamble notes that "current" strategic defensive arms do not undermine the effectiveness of offensive arms - i.e., Russia can live with them. But what about future ones? What happens if the United States decides to deploy more ground-based interceptors on its own territory? What happens when the United States proceeds to implement Phase 4 of the PAA, deploying more powerful interceptors in Eastern Europe to thwart U.S.-bound ICBMs from the Middle East?

The 1973 ABM treaty froze the embryonic U.S. homeland missile defense program and prevented further development of modern, safer systems for nearly 30 years. The preamble of the new nuclear reduction treaty is at this time just that - a preamble. But it serves notice that the gap between Russia and the United States over missile defense has been barely papered over.

If and when the need for better defenses against emerging long-range missiles becomes dire, the United States may find out that its acceptance of the principles embodied in the preamble might serve to shackle it to a new ABM-like treaty.

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Uzi Rubin is president of the Rubincon consulting firm and founder of the Israel Missile Defense Organization.