The Standard

Strong Words From Russia and Iran

Putin and Ahmadinejad Meet in Iran

Russian President Vladimir Putin and his Iranian counterpart Mahmoud Ahmadinejad met at a summit of Caspian nations on Tuesday in Tehran.

The five-nation summit also included leaders from Turkmenistan, Kazakhstan and Azerbaijan.

The summit has been watched closely for signs from Russia regarding the debate in the UN Security Council over tougher sanctions against Iran.

Western members of the UN Security council plus Germany favor stronger UN sanctions to deter the Iranian nuclear enrichment program.

China and Russia have delayed a council decision by wielding veto threats over tougher proposals.

Caspian Security

Ahmadinejad and Putin called for stronger political unity among Caspian countries.

The Russian president urged publicly that no Caspian state should aid outsider nations in staging military strikes on another state in the region.

This was widely regarded as a direct response to speculation that the US may launch a military strike on Iran from military bases in Azerbaijan.

The European Card

Mr. Putin's remarks are also a response to France.

Both the French president and French foreign minister have suggested publicly that France would pursue military solutions against Iran if negotiations over its nuclear enrichment program ultimately broke down.

France also recently urged that the EU enact a set of tougher sanctions against Iran outside of the UN framework.

On Monday EU foreign ministers instructed experts to draft reports on new sanctions.

Officials have stayed mum on whether these reports are intended for independent EU sanctions or whether they will inform negotiation at the UN after Iran has reported (late) on its nuclear activities to the IAEA later this year.

Democratic Nations to Address Sovereign Wealth Funds

Sovereign Wealth Funds Spark Government Action

The US, France and Germany are reported to be acting separately to address the political threats of sovereign wealth funds both within their respective borders and across the globe.

Sovereign wealth funds are pools of foreign capital acquired and invested by governments.

They are a relatively new occurrence and there are few mechanisms in place for regulating how they invest.

China, Russia, Venezuela and Kazakhstan (among others) hold such funds.

The funds' assets are enormous.

They are currently estimated to control $1.5 to $2.5 trillion dollars.

Morgan Stanley has estimated that this number will balloon to $12 trillion by 2015.

Concern in the US and Europe

US, French and German lawmakers have all expressed concern that the funds will position themselves to take over companies in strategic sectors of western economies.

The fact that the funds are controlled by governments means that their goals will not merely be business-oriented, but motivated largely by geopolitical interest.

The US will call for tight IMF regulations on the funds at the G7 conference in Washington, DC later this week.

France is reported to be working on legislation that would give the French government power to protect French industrial giants from take over.

The German chancellery has two large groups working on legislation would require increased transparency and give the government power to block deals after a review.

Sources also say that Japan will come out as an ardent supporter of the US proposal at the G7.

Week In Review

Climate Change, A French Hard Line on Iran, and Kazakh Oil

**** Former US President Bill Clinton said that bold investment in technologies for combating global warming  would help US growth.

Mr. Clinton called for US companies to mobilize economic resources on a level not seen since World War II.

****Secretary General Ban Ki-Moon opened the UN Conference on Climate Change with calls for world leaders to take responsibility for reducing carbon emissions.

US President George W. Bush was notably absent.

****France reiterated its tough stance on Iran's nuclear program.

French President Nicolas Sarkozy told the UN General Assemnly that the possibility of an Iranian nuclear weapon was an  "unacceptable risk" that threatens international stability.

****Western companies cringed as Kazakhstan looked set to pass a law that gives the government authority to change or break contracts with foreign energy firms unilaterally.