World

Correction Appended: May 24, 2012

NATO Meets Under a Cloud

1 | U.S.

As thousands of protesters marched in the streets of Chicago, the North Atlantic Treaty Organization held its largest summit ever, drawing leaders from 28 member countries, including U.S. President Barack Obama and U.K. Prime Minister David Cameron as well as delegations from some 30 other partner states. The hottest topic: NATO’s Afghanistan exit strategy. With European nations facing shrinking budgets and war-weary publics at home, Obama and his NATO counterparts confirmed their intent to wrap up the decade-long mission by the end of 2014. Confounded by the stubbornness of the Taliban insurgency and Pakistan’s complex game in the region, NATO talked up the steady transition of security responsibilities to Afghanistan’s once woefully unready army. The alliance also committed to supporting the Afghan government for at least a decade after 2014, to the tune of $4 billion–plus in annual aid. Taken together, though, it’s hardly a resounding declaration of victory in Afghanistan. Many no longer care: the protesters outside the summit called for an end to military adventures abroad at a time of increasing hardship and inequality at home. Scuffles and clashes with police led to nearly 100 arrests.

Will They or Won’t They?

2 | GREECE

From now until June 17, when Greece holds general elections, all euro-zone eyes will be on the struggling nation, whose future with the monetary union–voluntary exit? stay? forced removal?–could affect the entire global economy. For the time being, it’s unclear which path Greeks will choose: while most favor the euro, they still oppose austerity terms. Here’s how some possible moves could play out.

[The following text appears within a chart. Please see hardcopy or PDF for actual chart.]

START HERE

GREECE KEEPS THE EURO

STAY THE COURSE

March austerity deal remains intact

Greek citizens unhappy; social unrest deepens

Greek economy dips, but global impact is minimal, amounting to less than 1% of world GDP

European markets stabilize; reforms continue

Euro zone saved

NEW TALKS

New government negotiates new bailout with troika of E.U., ECB and IMF

Portugal and Ireland demand similar concessions; reforms undermined in Spain and Italy

Borrowing costs for those nations rise

Panic spreads; global credit markets freeze and transatlantic banking crisis begins

Possible double dip in the U.S.

Euro zone collapses

GREECE LEAVES THE EURO

PLANNED

ECB has time to lend to other struggling euro-zone countries to stem panic

Germany, France and others work together on a short-term rescue plan

Banking crises are prevented from spreading through Europe; regional investment continues

SUDDEN

Greece rejects austerity measures and defaults

Greece creates new currency, which declines immediately

The drachma is cheap; tourism spikes; Greek economy gets stronger

Inflation spikes; unemployment rises; social unrest is rampant

From the Square to the Ballot Box

3 | EGYPT

On May 23, a year after mass protests brought down Hosni Mubarak’s regime, Egyptians voted for a new President. Among the leading contenders were Egypt’s former Foreign Minister, the official candidate of the once outlawed Muslim Brotherhood and Mubarak’s last Prime Minister, a figure now closely allied with the military. Here, in Cairo’s Tahrir Square, graffiti denounces the country’s interim military rulers.

Al-Qaeda Leaves Its Mark

4 | YEMEN

One day before the nation marked its National Unity Day, a suicide bomber killed nearly 100 Yemeni soldiers rehearsing for celebrations in the capital, Sana’a. Al-Qaeda in the Arabian Peninsula, the Yemeni wing of the terrorist outfit, claimed responsibility for the attack, the worst in Sana’a since Yemen’s 1994 civil war. The strike is yet another sign of al-Qaeda’s resurgence in a fractious, impoverished country still emerging from months of unrest spurred by the three-decades-long authoritarian rule of former President Ali Abdullah Saleh. Unbowed by a U.S. drone campaign, al-Qaeda and its allied militia now control mini-fiefs in Yemen’s lawless south and have set about sabotaging oil pipelines and kidnapping foreigners. Yemen’s new President, Abd Rabbuh Mansur al-Hadi, vowed to wage war on terrorism “until it is uprooted and annihilated completely.”

Sectarian Contagion

5 | LEBANON

The turmoil in Syria spilled over into Lebanon, long the terrain of Middle East proxy wars. Sunni militants linked to the 14-month rebellion against Syrian President Bashar Assad kidnapped a dozen Lebanese Shi’ite pilgrims, while gun battles between Sunni militia fighters and Lebanese troops in the northern city of Tripoli and in Beirut led to at least nine deaths. The Shi’ite group Hizballah, which has a place in government, has long had ties to the Assad regime.

AZERBAIJAN

‘We are hosting a song contest, not a gay parade.’

ALI HASANOV, Azerbaijani government spokesman, after critics in neighboring Iran questioned the morality of the popular Eurovision song contest–which Azerbaijan is hosting this year–and claimed it would be accompanied by a “gay parade”

Trade Secrets

6 | U.K.

JPMorgan’s $2 billion (and counting) trading loss occurred in its London office–not all that surprising, since the City hosts the most trades of any global financial center. (It also hosted trouble at AIG, UBS and Credit Suisse.) Here are the traders who allegedly caused JPMorgan’s major damage.

CULPRIT NO. 1

BRUNO IKSIL

“THE WHALE”

Risky business: His derivatives positions were so large, they could drive prices in a $10 trillion market. In this case, he lost a very big bet and made a series of bad, panicked trades trying to reverse course.

Personal profile: His trading brashness belies a low-key persona. Iksil, a Frenchman in his 40s, doesn’t even have a Facebook profile.

CULPRIT NO. 2

ACHILLES MACRIS

“THE FIREBRAND”

Risky business: The veteran supervisor spearheaded Iksil’s strategy; insiders say the duo could do what they wanted because of their prior success.

Personal profile: Macris holds Greek and US citizenship and is said to be hot-tempered. Once, he reportedly shouted down a New York–based colleague who questioned his trading.

The original version of this article incorrectly stated that Iksil’s “derivatives positions were so large (up to $10 trillion), they could actually shift markets”.