0 NATO shifts to help an elusive Afghanistan peace

President Barack Obama and NATO allies declared Sunday that the end of the long and unpopular Afghanistan war is in sight even as they struggled to hold their fighting force together in the face of dwindling patience and shaky unity.

From his hometown and the city where his re-election operation hums, Obama spoke of a post-2014 world when "the Afghan war as we understand it is over." Until then, though, remaining U.S. and allied troops face the continued likelihood of fierce combat.

Gen. John Allen, the top commander of U.S. and NATO forces in Afghanistan, offered a stern warning Sunday that the plan to give Afghan forces the lead in fighting next summer won't take coalition troops out of harm's way. "It doesn't mean that we won't be fighting," Allen said. "It doesn't mean that there won't be combat."

The fate of the war is both the center of this summit and a topic no one is celebrating as a mission accomplished. The alliance already has one foot out the Afghanistan door, Obama has his ear attuned to the politics of an economy-driven presidential election year and other allies are pinching pennies in a European debt crisis.

As NATO powers and other nations contributing to the war effort gathered, the alliance's top officer, Anders Fogh Rasmussen, asserted that "there will be no rush for the exits" in Afghanistan. "Our goal, our strategy, our timetable remain unchanged," he said.

In fact, the strategy has shifted many times over the course of more than 10 years of war, and the goal narrowed to objectives focused on the long-term security of the mostly Western nations fighting there. The timetable has also moved, despite the overall commitment to keep foreign forces in Afghanistan into 2014.

Tension over newly elected French President Francois Hollande's pledge to end his country's combat mission two years early infused the meeting. German Chancellor Angela Merkel pointedly cited the credo of the allies in the Afghanistan war, "in together, out together," and her foreign minister cautioned against a "withdrawal competition" by coalition countries.

Hollande said he was merely being pragmatic in keeping a campaign pledge to pull combat troops this year but this still would "let the alliance continue to work."

While France's new posture obviously rattled the leaders, Allen betrayed no concern about the coalition's common purpose coming unglued. "The mantra of this particular mission has been in together, out together," he told reporters. "And I'm not seeing, frankly, many voices being raised that would oppose that."

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0 Cameron Takes Eurozone Demands To US Summit

David Cameron is set to step up his demands for action to tackle the eurozone crisis as he heads to the United States for a two-summit weekend with world leaders. 

The Prime Minister travels first to a gathering of G8 leaders at the US President's country retreat at Camp David before attending a Nato summit in Chicago.

The G8 talks will be dominated by the eurozone crisis and the threat posed to world economies, initernational currencies and markets by the financial collapse and political vacuum in Greece.

Before leaving Downing Street, Mr Cameron took part in a 45-minute video conference, described by Number 10 as "constructive", with the other European leaders attending the G8.

Taking part were German chancellor Angela Merkel, new French president Francois Hollande, Italian premier Mario Monti and EU Commission chiefs Manuel Barosso and Herman Van Rompuy.

"He discussed with the others their priorities for G8; the Eurozone - including Greece, growth, and the importance of expanding trade relations between the US and the EU," said a Downing Street spokesperson.

"On the eurozone, the Prime Minister emphasised the importance of Greece and the Eurozone taking decisive action to ensure financial stability and prevent contagion."

Mr Cameron was said to have repeated the stark warning he issued in a speech in Manchester earlier yesterday: "That there is a need for monetary action to stimulate growth; for structural reform to increase competitiveness in the EU; that the right governance arrangements had to be in place; and that countries throughout the Eurozone should take the necessary action to tackle unsustainable deficits."

In that speech, the Prime Minister said he would do "whatever it takes to keep Britain safe from the storm", but made clear that the UK would not be immune to the consequences of a euro collapse.(Google)

And he insisted he would not ditch the Coalition Government's deficit-reduction strategy in the face of demands from Labour for a shift in focus from austerity to growth.

Before leaving Camp David for the Nato summit in Chicago, Mr Cameron will hold his first one-to-one meeting with Mr Hollande - whom he snubbed when the Socialist presidential candidate visited London earlier this year - at the British ambassador's residence in Washington.

The Prime Minister will urge the new president to rethink his pledge to pull 3,400 French troops out of Afghanistan two years ahead of Nato's planned timetable of 2014.

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0 Bond Market Shrugs Off France's Presidential Vote

The arguments for growth policies as opposed to austerity are taking center stage in Europe after the results of the French and Greek elections.

His rhetoric aside, France's President-elect Francios Hollande is not rejecting austerity. In fact, he pledged to balance France's budget by the end of his five-year term, just one year later than his opponent outgoing President Nicolas Sarkozy.

That's one reason the bond market reaction to Hollande's victory was a yawn. Jacob Kirkegaard, a fellow at the Peterson Institute for International Economics, says the market correctly perceived that the president-elect is not going to embark on some huge stimulus program in France.

Kirkegaard says that's likely to disappoint many of Hollande's supporters.

"Because he has led them to believe that he is going to usher in this new era of spending and the end of austerity through his rhetoric, but I think the reality is very, very different," Kirkegaard says.

Never-the-less, Kirkegaard says Hollande will push Europe to add a growth component to its strategy.

"Which is something that in recent weeks Angela Merkel and other German leaders have been positive about," he says.

Strategies For Solvency

The growth strategies being considered, however, don't involve boosting government spending at the member state level. Rather, they involve growth-friendly moves like reforming labor regulations, to make it easier for workers to cross borders and work anywhere in the EU.

Other strategies include expanding the European Investment Bank, and funding infrastructure projects with bonds backed jointly by all EU countries, but most importantly Germany.

"What I agree with is that Europe cannot solve its problems through austerity alone," says Mohamed El-Erain, CEO of the giant bond fund PIMCO. He's concerned about too little growth in Europe, but also about too much debt.

"What bond investors are looking at in order to put in more capital is a set of policies that addresses too little growth and too much debt," he says.

Bond investors apparently felt Hollande's victory was a move in that direction. Interest rates on France's 10-year bond fell to a seven-month low following the vote.

Reaction In Greece

There was greater market discomfort with the results of parliamentary elections in Greece. Moderates there lost ground to fringe parties on the right and left amid demands to renegotiate the Greek bailout package with its tough austerity measures. The Greek stock market fell and its banks were especially hard it.

Jacob Kirkegaard says the results in Greece raise the odds it may leave the eurozone, but he says the country's fortunes are unlikely to affect the world in same the way they did last summer.

"This is really a fight between the taxpayers of Greece and the taxpayers in the rest of the euro-area," he says. "This will be volatile, but I don't think it will have the huge contagious effect that we saw last year."

Kirkegaard says that's because under the most recent bailout package the big losses on Greek debt where already distributed, and Europe's banks are in better shape now than they were last year.

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