ESADEgeo Daily Digest, 18/06/2019

The Washington Post – Karen DeYoung / Iran threatens to surpass uranium limits as tensions with the U.S. continue to grow

  • Iran said Monday that its stockpile of enriched uranium will surpass limits set by the 2015 international nuclear deal 10 days from now, unless European partners in the agreement do more to help it circumvent U.S. sanctions — a step by Tehran likely to add to growing U.S.-Iran tensions.
  • The Iranian uranium threat was followed by an announcement by the American acting defense secretary Patrick Shanahan that he was sending approximately 1,000 additional troops to the Middle East “for defensive purposes to address air, naval, and ground-based threats.” President Trump has said repeatedly that his goal in Iran is “no nuclear weapons” and that he does not want war. But events seem to be quickly moving in the opposite directions on both counts.
  • European allies, partners in the nuclear agreement that Trump dropped out of last year, remain stuck in the middle. They want to stay in the deal and continue trading and investing in Iran. But efforts to persuade their own business communities, while avoiding sanctions and the U.S. dollar, have proved difficult.
  • In Washington, Trump has derided the nuclear deal with Iran as a failure of the Obama administration, and said that his own pressure is designed to bring Tehran to the negotiating table to forge a new agreement.

The Guardian – Emma Graham-Harrison / Sound of Hong Kong’s defiance reverberates in Beijing

  • The most obvious casualty of Hong Kong’s extraordinary uprising against chief executive, Carrie Lam, and her campaign to tie the city more closely to China, will be her own career. The city’s protests are also a major challenge to Lam’s boss, Xi Jinping.
  • “(Protestors) have forced Xi to back down, for the first time since he took power seven years ago, from a major policy platform”, said Willy Lam, professor at the Centre for China Studies at the Chinese University of Hong Kong.
  • The show of political power by Hong Kong’s population, and Lam’s humiliating climbdown over a controversial extradition law, are a major headache for Xi, a ruler who has pursued an increasingly nationalist, autocratic agenda since becoming premier of China.
  • “The protests in Hong Kong have exacerbated Beijing’s existing challenges. China is already embroiled in a trade war, and protests could strengthen Beijing’s critics in Taiwan as the election approaches,” said Zhixing Zhang, senior east Asia analyst at Stratfor.


The Economist / Muhammad Morsi, Egypt’s only democratic ruler, dies in court

  • Egyptian liberals, who split their vote during the election’s first round, did not share Mr Morsi’s Islamist politics, but he seemed the democratic choice, a break from the old regime. Many held their noses and voted for him in the run-off in June 2012 against Ahmed Shafiq, Mr Mubarak’s last prime minister.
  • The goodwill was short-lived. Mr Morsi and his allies never got a grip on Egypt’s factious state. From the start the army undermined him, while the intelligence services worked to bring him down. The Mubarak-era courts became a major source of opposition: judges dissolved parliament, in which the Muslim Brotherhood —Morsi’s political party— held a plurality.
  • In November 2012 the president issued a decree that shielded his decisions from judicial review. Anti-Morsi protesters who surrounded his palace were soon attacked by Brotherhood supporters. The edict and the subsequent violence prompted a rupture with the revolutionaries that helped him to reach the office. When the army removed him in July 2013, many were happy to see him go.
  • Mr Morsi was a poor president. But he was the only popularly-elected one in Egypt’s long history. It is a tragic coda for Egypt’s revolution that he spent his final years rotting alone in a cell, his death almost a footnote in a country that long ago slid back into dictatorship.


The New York Times – Jane Perlez & Mark Landler / Xi Jinping will make first visit to North Korea ahead of meeting with Trump

  • President Xi Jinping plans to make his first state visit to North Korea this week, a surprise move that could rattle his relationship with President Trump, who has made his nuclear diplomacy with Mr. Kim a signature foreign policy project.
  • By going to Pyongyang, the North’s capital, Mr. Xi is injecting himself into the middle of Mr. Trump’s negotiating efforts, which have languished since February when he and Mr. Kim failed to agree on a disarmament deal.
  • Mr. Xi’s move risks sidelining Mr. Trump in the diplomatic undertaking that he views as one of his biggest legacies. And it suggests the Chinese leader is willing to strike out on his own, as China’s broader relationship with the United States continues to fray.
  • Relations between China and North Korea are scarcely less tense. Mr. Xi’s visit would be the first by a Chinese leader in 14 years. After the North staged successful missile and nuclear tests, China voted at the United Nations in favor of tougher economic sanctions.
  • Still, China remains North Korea’s most important ally — one on which Pyongyang has long relied to intercede for it on the world stage. China has sometimes helped Mr. Kim by looking the other way when ships deliver oil to the North in violation of international sanctions.

The selected pieces do not necessarily reflect the views of Javier Solana and ESADEgeo. The summaries above may include word-for-word excerpts from their respective pieces.

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ESADEgeo Daily Digest, 17/06/2019

Al-Monitor – Ben Caspit / US, Israeli, Russian security chiefs to meet in Jerusalem

  • National security advisers John Bolton of the US, Nikolay Patrushev of Russia and Meir Ben-Shabbat of Israel will convene June 24 in Jerusalem to discuss the post-war order in Syria.
  • There is rare consensus in Israel about the summit being a tremendous achievement for Prime Minister Benjamin Netanyahu and a strategic Israeli message to Iran and the rest of the Middle East. Israeli raids in Syria have made Israel an essential player in regulating the situation.
  • According to various assessments, one possible deal would entail US and Israeli recognition of the regime and a lifting of American sanctions on Damascus. In return, the Russians would have to press Syrian President Bashar al-Assad and Iran to bring about an Iranian pullout from Syria.
  • Russian Foreign Minister Sergey Lavrov said a year ago that any expectation that Russia could get the Iranians out of Syria was “unrealistic.” Nonetheless, Russia has no problem discussing it. The Russians stopped viewing Iran as a strategic partner long ago.
  • As the reasoning goes, Assad knows the Iranians have done their part and can now leave. If they do, he will rid himself of his Israeli headache and can then apply himself to his country’s rehabilitation with Russian and American help. 

Foreign Policy – Ray Kwong / China is winning the solar space race

  • According to some reports, China is leading the race for the development of space-based solar power. Space solar farms would be located in the geosynchronous orbit, about 22,000 miles above sea level. This would allow the technology to collect energy 24 hours a day, 7 days a week, 365 days a year.
  • The Chinese Communist Party plans to have a space-based solar power demonstrator online next year. If it were successful, this cheap, emissions-free power would be hard for many countries to turn down. China would thus advance its goal of creating the world’s first global electrical grid.
  • Aside from China, the space agencies of Japan, the EU, and India are working to get their own space-based solar power programs off the ground. However, for a variety of reasons—most, if not all, having to do with a lack of money—there are no active space-based solar power missions on NASA’s books.
  • The country that first harnesses the power of the sun from space wins. While earthbound renewable energy is largely a private sector thing, space-based solar power is set to become a single-source, state-based game-changer that could easily be exploited for geopolitical gain.

Euractiv – Alexanda Brzozowski / US ambassador: Europe should forget Huawei, embrace Western tech

  • Gordon Sondland, US ambassador to the EU: “We can’t risk being interconnected with someone who has vulnerable technology. So we’re telling [our friends] ‘this is our perspective, we don’t want you to put yourself in a position where we can’t continue to be closely tied as we are today because you made the wrong technology choice’”.
  •  “The EU is by nature quite protectionist. The EU has a different philosophy on trade than the US does and that some countries do. And in fact, a lot of the member countries themselves, were they able to operate on a bilateral trade basis … would probably have a view more closely akin with that of the US than the EU itself does.”
  • “We are the center of sustainable innovation … Most innovation that occurs, that will create green energy, comes from the US. So we’d rather focus on the results, than clinging to a failed agreement [the Paris climate agreement] that disadvantages certain countries and advantages others.”
  • “If you’re a [NATO] member country and you haven’t hit your 2% but somehow you’re able to find money to do a European project, first pay your bill that you owe and then, if there is money leftover, then go ahead and do it … And once you do spend money on non-NATO types of things, make sure they’re NATO compatible and compliant.”
  • “We received signals that third country participation … in European projects is going to be very problematic … We want our companies to be treated the same way in Europe as European companies are treated in the United States – no better no worse.”

Bruegel – Maria Demertzis, André Sapir & Guntram B. Wolff / A strategic agenda for the new EU leadership

  • The next presidents of the European Commission, Council and Parliament will inherit a relatively healthy European economy, but will face three formidable challenges in the next five years.
  • First, the incoming presidents must define Europe’s place in an increasingly bipolar world driven by a geostrategic rivalry between the US and China. They should avoid protectionism but must strengthen Europe’s technological, financial and security capacities. They should also continue to support multilateral institutions and stand ready to retaliate against trade aggression.
  • Second, global warming is a reality and temperatures appear to be rising faster than forecast. The new incumbents need to impose higher prices on greenhouse-gas emissions, guide a deep transformation of our economies, minimize the resulting social fallout, ensure border carbon adjustment and globalize the EU’s decarburization.
  • Third, the three presidents need to manage the economy and EU cohesion. The main worry is a deep recession or even a new crisis. By guiding European policymakers on the use of pro-active fiscal policy, the presidents can reform the governance of the euro area and address tax fraud and evasion.

The selected pieces do not necessarily reflect the views of Javier Solana and ESADEgeo. The summaries above may include word-for-word excerpts from their respective pieces.

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ESADEgeo Daily Digest, 14/06/2019

Al-Monitor – Staff / Khamenei to Abe: Iran will not negotiate under pressure

  • After meeting with US President Donald Trump in the United States, Japanese Prime Minister Shinzo Abe traveled to Tehran in order to meet with Iranian officials, including Supreme Leader Ayatollah Ali Khamenei, becoming the first Japanese leader to visit Iran since the Islamic Revolution of 1979.
  • Abe had sought to mediate talks between Iran and the United States after the Trump administration exited from the Joint Comprehensive Plan of Action (JCPOA), a nuclear deal between Iran, the European Union and the five permanent members of the United Nations Security Council plus Germany (P5+1).
  • Khamenei, nonetheless, has remained firm in his position that after the United States violated the JCPOA, it can’t be trusted to negotiate another settlement. “The Islamic Republic of Iran has no trust in America,” Khamenei explained to Abe. “And the bitter experience of negotiations with America under the framework of the JCPOA will in no way be repeated because no free and reasonable country would accept negotiations under pressure.”
  • Regarding the issue of nuclear weapons, Khamenei noted, “We are opposed to nuclear weapons and there is my fatwa that developing nuclear weapons is forbidden. But know that if we had intentions to build nuclear weapons America would not be able to do anything and America not giving permission would be no obstacle.”

Financial Times – Robert Shrimsley / Boris Johnson takes a step towards becoming UK prime minister

  • Boris Johnson has one foot over the threshold of Downing Street. No one looks close to catching him, and given his undisputed popularity with Conservative party members, it would be a brave person who bet against Mr Johnson becoming the next prime minister.
  • During the first ballot of Tory MPs, he secured nearly three times as many votes as his closest rival, Jeremy Hunt, current foreign secretary. Mr Johnson is likely to pull in more support as his status is confirmed and hardline Brexiters like Esther McVey, who has been eliminated, and, eventually, Dominic Raab, leave the race. Mr Johnson’s safety-first strategy of lying low and offering as few hostages-to-fortune as possible is paying off.
  • The battle, however, is still on the second lot on the final ballot paper. Mr Hunt will be disappointed since his pitch to be the establishment, realist candidate helped him sweep up support from most of the big cabinet names, even across the party divides, from Leavers and Remainers. But the result shows he has not established himself as the undisputed alternative to Mr Johnson. Mr Hunt and the environment secretary, Michael Gove, are within six votes of each other.
  • Tory moderates now face a real big dilemma. Do they pile in behind Mr Hunt despite fears he offers little more than Theresa May by way of solutions to the Brexit puzzle? Mr Gove, as one of the figureheads of the 2016 Brexit referendum campaign, has more credibility with Brexiters and can, therefore, attempt to make the run-off against Mr Johnson a vote on competence and ability to deliver.

The New Yorker – Robin Wright / A Tanker war in the Middle East—again?

  • The Trump Administration charged that Iran was responsible for the two attacks on Thursday, and also attacks on four other tankers, on May 12th. All six ships were struck in the Gulf of Oman, the body of water between Oman and Iran, just beyond the Strait of Hormuz.
  • Secretary of State Mike Pompeo told at the State Department that: “This assessment is based on intelligence, the weapons used, the level of expertise needed to execute the operation, recent similar Iranian attacks on shipping, and the fact that no proxy group operating in the area has the resources and proficiency to act with such a high degree of sophistication”.
  • In Tehran, the Islamic Republic denied responsibility. Foreign Minister Mohammad Javad Zarif tweeted, “Suspicious doesn’t begin to describe what likely transpired this morning.” He noted that the attacks on a Japanese-owned tanker occurred while Japanese Prime Minister Shinzo Abe was meeting with Iran’s Supreme Leader, Ayatollah Ali Khamenei, “for extensive and friendly talks.”
  • Some experts defended that both countries share some blame, with the world shouldering the costs. “If Iran is the culprit, the Trump Administration has only itself to blame for pushing Tehran to take aggressive steps that it has eschewed since the worst days of the Iran-Iraq War,” Ali Vaez, the director of the International Crisis Group’s Iran program, stated. “If Iran wasn’t behind it, it’s being framed by those who want to see a war between Iran and the U.S.”
  • In an ominous sign for the prospects of diplomacy deescalating the Gulf crisis anytime soon, Trump responded with his own tweet. “While I very much appreciate P.M. Abe going to Iran to meet Ayatollah Ali Khamenei, I personally feel that it is too soon to even think about making a deal,” he wrote. “They are not ready, and neither are we.”
  • The New York Times – Robin Wright / Pompeo Says Intelligence Points to Iran in Tanker Attack in Gulf of Oman

Financial Times – Tim Harford / How the US is weaponising the world economy

  • The US seems unlikely to abandon the aggressive tweaking of the nerves and sinews under the skin of the world economy. Henry Farrell and Abraham Newman — political scientists at George Washington and Georgetown Universities, respectively — have popularised the term “weaponised interdependence”, the title of a forthcoming article in the journal International Security.
  • Henry Farrell and Abraham Newman defend that supply chains and digital networks can be used both as a “panopticon” to see everything that happens and as a “chokepoint”, denying access to some vital service. Both approaches require a certain bureaucratic apparatus. Therefore, there is more going on here than the whim of “Tariff Man”.  
  • That very temptation, of course, risks over-reach. The US is not the first global superpower to consider the use of financial and communication networks as a weapon of war. In the early 20th century, modern economies were increasingly underpinned by complex financing. Britain viewed the central role of London in the world’s banking, telegraph and marine insurance system as potentially decisive when coupled with the power of the Royal Navy. Should war break out with Germany, these networks could be used to sustain the UK economy while crushing that of Germany.
  • Two questions arise: would the US be wise to use its economic leverage more sparingly? And should other nations be building alternative networks beyond the hegemon’s gaze and grip?

The selected pieces do not necessarily reflect the views of Javier Solana and ESADEgeo. The summaries above may include word-for-word excerpts from their respective pieces.

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ESADEgeo Daily Digest, 13/06/2019

File:Pedro Sánchez We must protect Europe, so Europe can protect its citizens (45848802885).jpg

Politico – David M. Herszenhorn, Diego Torres & Maïa de la Baume /Madrid’s Moment

  • Spanish Prime Minister Pedro Sánchez and his Socialist Party have made no secret of their ambition for the country to take a central role on the EU stage, replacing the U.K. and Italy as the swing vote between Germany and France.
  • Madrid’s assets are evident. The Spanish economy has stabilized. Politically, Spain is the largest country with a pro-EU government, after Germany and France. Sánchez also controls the largest delegation in the Socialist group in the European Parliament, and he is one of six leaders charged with negotiating how to fill the EU’s top positions.
  • Some obstacles exist for Pedro Sáchez nonetheless. In Brussels, some of the biggest Spain-focused headlines were about how two recently elected Catalan secessionists, including the region’s leader-in-exile Carles Puigdemont, were blocked initially from entering the Parliament building and denied temporary credentials. Moreover, Sánchez is having problems to form a coalition in Spain, since Ciudadanos party has vowed not to work with him and favors partnership with the conservative Popular Party.
  • Spain’s muscle in Brussels comes from its strength across the three main, pro-EU political groups — the Socialists, Liberals and conservatives — that are expected to form the core of a majority coalition in the European Parliament. Spain has the largest socialist delegation, Germany the biggest conservative bloc and France the largest liberal representation. Spain also has more conservatives than France and more liberals than Germany, making it a force in those groups as well.


The Washington Post – Alkhatab Alrawhani /
Yemen’s peace process is almost dead. Here’s how to revive it

  • Nearly six months since the so-called Stockholm agreement was signed by Yemen’s warring parties in an effort to prevent a deepening humanitarian crisis, any semblance of progress is almost dead. Mediators from the United Nations ignored the imbalance of power between the warring parties. The government of Yemen was subjected to regional and international pressure, while the Houthis were positioned on equal footing with the legitimate government, giving them a victory simply for showing up.
  • As a result of this recognition, the Houthis have no incentive to implement the agreement and, having learned from their experience with the international community during the years of war, do not fear the repercussions for violating it.
  • For any stability, future peace efforts must begin at home, rebuilding the legitimate government. This, of course, will not happen unless genuine pressure is exerted on the Saudi-led coalition, to cease their financing and arming of non-state militias, many of which are directly at odds with the legitimate government they ostensibly support.
  • The failure of the Stockholm agreement to hold the parties to any sort of accountability should be a lesson. If the international community fails to strengthen the state’s institutions and help the Yemeni government to regain its sovereignty, the underlying reasons for the conflict will remain — and the world’s worst humanitarian crisis will likely continue without respite.


Foreign Policy – Milia Hau /
Britain failed Hong Kong

  • Hong Kong is awash with protest—and facing a dangerously uncertain future, as Beijing looks to extend mainland law’s grip on the territory. The region, once a rare shelter for dissenting voices in China, is seeing protections for freedom of speech stripped away one by one. That leaves Britain, once Hong Kong’s colonial master, with a particular obligation to the Hong Kongers it has let down in the past.
  • The legal obligations come because the United Kingdom is one of the two signatories of the Joint Declaration, an international agreement registered at the United Nations, which promises the ways of life in Hong Kong—including the freedom of expression, guarantee of human rights, and rule of law—would be unchanged for 50 years, until 2047, under the principle of “one country, two systems.”
  • The moral obligations, because Britain handed over the whole of Hong Kong: not only the New Territories that were leased from the Qing empire for 99 years, but also Hong Kong Island and the Kowloon Peninsula, which were permanent British territories. Along with them came all the people, subjects of the Queen who called Hong Kong their home. Some of these people were refugees who risked their lives to escape Communist rule in the People’s Republic of China (PRC).
  • Hong Kong is not a democracy. It is led by Chief Executive Carrie Lam, who, like her predecessors, was prescreened by a nominating committee before being elected by a 1,200-member electoral college of the city’s political elite, then appointed by Central People’s Government.


The New York Times – Julianne Smith /If Trump wants to take on China, he needs allies

  • With the prospect of a trade deal between China and the United States all but dead, the Trump administration is no doubt weighing its next steps in its quest to rein in Beijing’s rise. President Trump should try something he hasn’t yet: call Europe.
  • Just five years ago, that suggestion would have raised eyebrows, especially for Germany. Over the last few years, however, Germany and other European countries, have experienced a strategic awakening, becoming much more vocal about China’s predatory trade practices.
  • This should make the countries of Europe well placed to work with Washington to confront China over trade, its destabilizing policies in Asia, and the authoritarian political model it is promoting around the world. Instead, Europe and the United States are consumed by cyclical arguments over military spending, trans-Atlantic trade imbalances and the Iran nuclear deal. The best way for the United States and Europe to compete with China would be to resolve their own bilateral trade disputes. 
  • Working with Europe will not be easy, and the two will never be in perfect lock step on China, especially when it comes to security issues. Europe doesn’t have anything resembling America’s forces in Asia nor does it share America’s security commitments. Even inside Europe, there will continue to be different approaches to China. Nonetheless, the smartest thing for Europe and the United States to do would be to find areas where they can come together

The selected pieces do not necessarily reflect the views of Javier Solana and ESADEgeo. The summaries above may include word-for-word excerpts from their respective pieces.

Política Internacional | Permalink

ESADEgeo Daily Digest, 12/06/2019

Washington Post – Raphael Tsavkko Garcia / Brazil’s democracy suffers another blow with ‘Operation Car Wash’ leaks

  • The Intercept has disclosed old private messages between Brazil’s now-Justice Minister Sérgio Moro and the task force of “Operation Car Wash,” the corruption probe started in 2014 that led to the conviction and jailing of former president Luiz Inácio Lula da Silva.
  • Moro, a former crusading anti-corruption judge, exchanged messages with members of the attorney general’s office. The messages show clear collusion between a judge and prosecutors to convict those involved in the operation.
  • Beyond the immediate implications — such as the possible reversal of convictions and the political impact to Moro and to President Jair Bolsonaro’s plans to appoint him to the Supreme Court — there’s more at stake for Brazil. The revelations could be a mortal blow to institutional credibility.
  • It’s important to note that no evidence has emerged exonerating da Silva and others convicted by the operation. It’s possible that the prosecutions were flawed, even marked by illegal practices, but serious crimes were still committed.

Financial Times – Martin Wolf / Jens Weidmann casts a shadow over the ECB

  • Who should succeed Mario Draghi as president of the European Central Bank? That is the most important decision European governments will take this year. The next president of the ECB might determine whether there is a eurozone, perhaps an EU, at the end of the term in 2027.
  • Draghi has transformed the ECB from a descendant of the old Bundesbank into a modern central bank. It is doubtful whether any of the candidates to replace him can fill his shoes. The riskiest by far would be Bundesbank President Jens Weidmann, who has opposed many of Draghi’s innovations.
  • Yet the one thing that could reconcile Germans to how the ECB must behave is recognition of that reality by a German president. A realistic and reasonable German president would be a great boon. Unfortunately, Weidmann has so far validated the sceptical German view about the ECB’s policies.
  • Above all, the decision on the next ECB president must not be the product of horse-trading among governments. The question is whether the next president can and will do the job as Draghi defined it. Everything else is noise.

Euractiv / UK-South Korea deal seeks to calm Brexit anxiety in oil markets

  • On Monday, the UK and South Korea agreed to adopt a free trade deal following the country’s exit from the EU that will replicate an existing EU-South Korea deal exempting the country from a 3% import tariff on oil. It is the UK’s first post-Brexit deal struck with an Asian country.
  • The deal follows four months which saw South Korean imports of UK crude fall to zero. South Korea is normally a large buyer of UK crude, but fears over the future status of the exemption after Brexit was causing buyers to back off.
  • The uncertainty around future trade arrangements comes as oil refining margins have been falling in Northwest Europe. According to Bloomberg, three out of seven refining configurations in Northwest Europe are losing money in the face of weak demand for crude.
  • In March, the International Energy Agency warned that “a disorderly Brexit could lead to a reduction in the rate of growth of international trade and oil demand.”

Al-Monitor – Shlomi Eldar / Despite US pressure, expect regional players to phone in Manama meeting

  • Two weeks prior to the opening of the June 25 Bahrain conference, where the US administration plans to unveil the economic component of its Israeli-Palestinian “deal of the century,” Israel is uncertain the event will take place. The Palestinians announced on May 23 that they would boycott the event.
  • Israel hopes that US presidential envoys Jason Greenblatt and Jared Kushner, faced with an event that seems to be sputtering, will delay the meeting at least until the winter months, when the Israeli political picture becomes clearer.
  •  “It is our assessment that even if the conference is held, the really important states such as Egypt and Jordan and even Saudi Arabia will send minor delegates,” said an Israeli official. And they would not attend out of any sense of responsibility, but “because of their egos.”
  • In a New York Times interview on June 8, US Ambassador to Israel David Friedman said Israel has the right to annex parts of the West Bank. His remarks gave Prime Minister Benjamin Netanyahu a boost, but they may chase away those who are still undecided on whether to fly to Bahrain.

The selected pieces do not necessarily reflect the views of Javier Solana and ESADEgeo. The summaries above may include word-for-word excerpts from their respective pieces.

Política Internacional | Permalink

ESADEgeo Daily Digest, 11/06/2019

BBC / Tory leadership: Who will be the next prime minister?

  • Ten MPs will battle it out to be the next Tory leader and prime minister, after gaining support from fellow MPs. The first vote will take place on Thursday, 13 June, as Tory MPs try to whittle down the list to two candidates.
  • Members of the wider Conservative Party will then vote for their preferred choice. The winner is likely to be announced during the week beginning 22 July. According to betting odds, former London Mayor and Foreign Secretary Boris Johnson is widely favored to win the race.
  • Of all candidates, Johnson’s successor as Foreign Secretary, Jeremy Hunt, is the one who has spent more years in government, shadow cabinet and select committee positions. He’s closely followed by prominent Brexiteer Michael Gove.  

Project Syndicate – Olivier Blanchard / Europe must fix its fiscal rules

  • In countries where interest rates are extremely low and public debt is considered safe by investors – making it less costly from both a fiscal and economic standpoint – larger fiscal deficits may be needed to make up for the limitations of monetary policy. The eurozone has now reached this stage.
  • A 60% debt-to-GDP limit is not the right target (if it ever was to begin with). Not only should it be higher, but the requirement that member states that exceed the limit adjust back to it at a certain speed should be loosened. The 3%-of-GDP limit on fiscal deficits should also be loosened.
  • The European Commission should stop micromanaging member states’ fiscal policies. The Commission should intervene only when a government is on a trajectory toward amassing truly unsustainable debt.
  • The eurozone must also improve its fiscal- and monetary-policy coordination. What is needed is either a coordination device through which each country commits to a larger, self-financed fiscal expansion, or, preferably a common budget, funded by euro bonds, which can then be used to finance higher spending in each country when needed.

Foreign Policy – Amy McKinnon / Moldova’s governments go head to head

  • Over the weekend, Moldova was plunged into political crisis. By Monday, the country had emerged with two rival governments that held two separate cabinet meetings, all of it stemming from a February parliamentary election in which no party won a majority.
  • On Saturday, the pro-European Union parliamentary bloc ACUM and the Russian-backed Socialist Party put their differences aside to form a coalition government. Their goal: to keep the Democratic Party of Moldova, which is run by the influential oligarch Vladimir Plahotniuc, out of power.
  • The situation has prompted a rare show of unity between Russia and the West. The Russian Foreign Ministry and the EU High Representative Federica Mogherini have recognized the coalition government. The US State Department stopped short of backing the new government but called for dialogue.
  • However, the Constitutional Court backed a challenge to the coalition government by the Democratic Party and appointed its outgoing prime minister, Pavel Filip, as acting president. Filip then dissolved the Parliament and called for new elections, but the Moldovan Parliament refused to recognize his order.

The Economist / China seems deaf to mass protests in Hong Kong over extradition

  • On June 9th, hundreds of thousands of Hongkongers took to the streets in protest against a proposed law that would allow criminal suspects to be extradited to mainland China. It may have been the biggest demonstration since Hong Kong was handed back to China in 1997.
  • Nonetheless, the government issued a statement saying it would press ahead with its plans for getting the bill adopted by the Legislative Council. Seemingly in response, some of the hundreds of protesters who had gathered outside the government’s headquarters tried to force their way in.
  • Even though the proposed law would not apply to people accused of political crimes, critics of the bill say China’s judiciary could secure the extradition of such people by charging them with other offences, and then not provide them with a fair trial. The bill would apply to anyone physically in Hong Kong.
  • Yet officials in Hong Kong say the bill would comply with Hong Kong’s human-rights standards. Hong Kong’s chief executive, Carrie Lam, denied that she was introducing the legislation at the request of the central government.
  • South China Morning Post – Owen Churchill / US State Department and UK’s Asia minister express support for Hongkongers protesting extradition bill

The selected pieces do not necessarily reflect the views of Javier Solana and ESADEgeo. The summaries above may include word-for-word excerpts from their respective pieces.

Política Internacional | Permalink

ESADEgeo Daily Digest, 10/06/2019

Al-Monitor – Ahmad Abu Amer / Is Russia replacing the US in the peace process?

  • Russian efforts to promote ties with the Palestinian Authority (PA) continue, as it seeks to fill the void caused by the rupture of PA-US ties. Russia is now examining a draft convention that would exempt holders of Palestinian diplomatic passports from having to obtain a visa to enter Russia.
  • Most notably, Russia has expressed its willingness to host an Israeli-Palestinian meeting, in an attempt to have the two sides resume peace talks. Moreover, Russia has sought to end the intra-Palestinian split, as it has hosted Palestinian official and factional delegations. So far, these efforts have failed.
  • Palestinian President Mahmoud Abbas is expected to visit Moscow following the Eid al-Fitr holiday. He will discuss with Russian President Vladimir Putin and other Russian officials the political developments relating to the Palestinian cause as well as joint political moves to follow the US presentation of its peace plan.

Financial Times – Martin Sandbu / Italy can no longer afford to play games with Brussels

  • On Wednesday, Brussels issued a formal warning that sets Italy on the path towards the so-called excessive deficit procedure (EDP). In extremis, this could lead to fines or suspended transfers from the EU budget. Although this scenario was avoided last September, now there is less room for compromise.
  • Politically, it seems impossible for Rome to satisfy the European Commission without giving up on its most vocal policy promises, such as cancelling a scheduled value added tax increase, let alone big tax cuts.
  • Investors have come to read Italian defiance of the rules as a signal of lack of fiscal responsibility, reinforced by the outside possibility that some close to or even in power actually want to leave the euro.
  • Last year, any stimulus effect of fiscal loosening was probably offset by the higher cost of borrowing bonds that markets demanded, according to Olivier Blanchard and Jeromin Zettelmeyer of the Peterson Institute for International Economics.

Project Syndicate – Daren Acemoglu / Why Universal Basic Income is a bad idea

  • Universal Basic Income (UBI) is a flawed idea, not least because it would be prohibitively expensive unless accompanied by deep cuts to the rest of the safety net. A more sensible policy is already on offer: a negative income tax, or what is sometimes called “guaranteed basic income.”
  • Rather than giving everyone $1,000 per month (which in the US would cost around $4 trillion per year – close to the entire 2018 federal budget), a guaranteed-income program would offer transfers only to individuals whose monthly income is below $1,000.
  • Instead of building a system where a large fraction of the population receives handouts, we should be adopting measures to encourage the creation of “middle-class” jobs with good pay, while strengthening our ailing social safety net. UBI does none of this.
  • Many current social problems are rooted in our neglect of the democratic process. The solution isn’t to dribble out enough crumbs to keep people at home, distracted, and otherwise pacified. Rather, we need to rejuvenate democratic politics, boost civic involvement, and seek collective solutions.

Vox – Riley Beggin & Eric Kleefeld / The US-Mexico agreement to avoid tariffs is actually months old

  • Officials from the US and Mexico told the New York Times that the concessions made by Mexico (which President Trump used to justify the reversal of his planned tariffs) were not actually new, and had actually been agreed to by the neighbors in March.
  • In talks that took place in Miami weeks ago, Mexico agreed to send members of its newly formed National Guard to its border with Guatemala to help reduce the flow of migrants from South America. That part of the Miami deal was framed as a new development.
  • The only new development that came out of last week’s bilateral talks was that Mexico agreed to send more troops than it had originally pledged, and will now station 6,000 members of the National Guard around the country, with the majority being stationed at the Mexico-Guatemala border.
  • When he announced the tariffs in late May, Trump said they would encourage companies who have left the US for Mexico to return. But economists told Vox the tariffs would have actually sent those companies packing to another country instead of to the US, and that they could have sped up manufacturers’ pivot to automation.

The selected pieces do not necessarily reflect the views of Javier Solana and ESADEgeo. The summaries above may include word-for-word excerpts from their respective pieces.

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