EsadeGeo Daily Digest, 29/05/2020

File:Protest against police violence - Justice for George Floyd, May 26, 2020 11.jpg

The Guardian – Chris McGreal et al. / George Floyd killing: fires erupt in Minneapolis as US rocked by third night of protests

  • Cities across the US were convulsed by protests on Thursday night over the police killing of George Floyd, a 46-year old black man, as demonstrators stormed the police headquarters of the officers involved in his death in Minneapolis and Trump threatened to use violence to suppress the unrest.
  • As demonstrations against police brutality against black Americans spread to other parts of the US including New York, Denver, Chicago and Oakland, dozens of businesses were burned and looted in the Midwestern city. Floyd died in police custody after a white officer handcuffed him but then kneeled on his neck for several minutes as Floyd pleaded that he “could not breathe”.
  • “These THUGS are dishonouring the memory of George Floyd,” Mr. Trump wrote of the demonstrators, “and I won’t let that happen” adding, “any difficulty and we will assume control but, when the looting starts, the shooting starts.”
  • Trump has previously avoided commenting on incidents of police brutality against black people. Twitter hid Trump’s post, saying that it violated their policies “regarding the glorification of violence based on the historical context of the last line”.
  • The Washington Post – Holly Bailey et al. / Chaotic Minneapolis protests spread amid emotional calls for justice, peace

Foreign Policy – Keith Johnson and Robbie Gramer / Hong Kong ensnared in U.S.-China showdown

  • The Trump administration’s declaration on Wednesday that the United States no longer considers Hong Kong  autonomous from China, given Beijing’s increasingly aggressive policies there, could pave the way for reprisals from Washington and a potentially dramatic reshaping of Asia’s economic geography.
  • The American position raises two major questions: Will the Trump administration seek to hammer Hong Kong as a way to pressure Beijing, and who will ultimately pay the price for such measures? Bristling at what it sees as continued Chinese aggression, the administration aimed to deter Beijing from undermining what had been Hong Kong’s special status. 
  • Hong Kong isn’t quite as important economically to China as it was when the British handed over the former colony in 1997, when it alone accounted for more than 16 percent of greater China’s GDP. The number today is less than 3 percent. But it still plays a crucial role in giving Chinese banks and companies access to financing in dollars, and enabling the inflow of foreign investment to China. 
  • Hong Kong, in other words, is potentially a soft underbelly for a Chinese regime that desperately needs economic stability to shore up its political support. Other experts believe that the United States isn’t trying to use Hong Kong to open up a new front in the showdown against Beijing; it is merely trying to preserve Hong Kong’s independence and relative freedoms as best it can. 
  • Politico – Stuart Lau et al. / EU won’t follow Trump into a trade war over Hong Kong

Financial Times – David Keohane / Renault to slash 14,600 jobs in €2bn cost-cutting plan

  • Renault plans to cut 14,600 jobs, shrink production and restructure some of its French factories as the carmaker looks to slash €2bn in costs amid falling demand. With profits almost wiped out last year and sales slumping, Renault is trying to achieve more than €2bn in savings over the next three years while cutting global production capacity from 4m vehicles in 2019 to 3.3m by 2024.
  • Before his arrest on charges of financial misconduct in Japan, former Renault chief Mr Ghosn had targeted selling more than 5m vehicles by 2022. Now, as part of its turnaround plan, Renault said it was launching discussions with unions to repurpose plants in France, some of which could stop making cars altogether, and which would involve job cuts.
  • The group has not made final decisions about the future of six sites in France, including at Flins and Dieppe, as it faces both political and union opposition. The 14,600 planned job cuts across the group will be “based on retraining, internal mobility and voluntary departures” and include a reduction of 4,600 staff in France. Renault employs more than 180,000 globally.
  • Renault’s cost-cutting plan, which will cost roughly €1.2bn to implement, will lean on a new strategy outlined by its alliance with Nissan and Mitsubishi on Wednesday which will see the three groups carve up responsibilities across the partnership. It will also put each company in charge of specific markets: Europe and Russia for Renault; China, the US and Japan for Nissan; and south-east Asia for Mitsubishi.
  • Bloomberg – Tara Patel / Renault to cut 14,600 jobs worldwide in race to slash costs

The Atlantic – Rachel Donadio / The coming setback for women in the workplace

  • An executive at a major French cosmetics company told me she’s been running a team of 70 and overseeing her kids’ schooling while her husband, a nurse, works long hours treating coronavirus patients in a Paris hospital. Another executive, at an energy company, has been working full-time—as well as doing all the cooking and cleaning, and making sure her kids take their online classes—because her husband doesn’t pull his weight.
  • With women still the default caregivers for young children and aging parents, a disproportionate number of women might stay at home while men go back to work. The problem extends beyond France—a recent United Nations study warned that COVID-19 risked reversing decades of progress concerning gender equality in the workforce.
  • Governments play a huge role in shaping the labor market, through enforcing labor laws, providing paid time off, and requiring that workplaces offer parental leave. Yet policy makers must now consider another issue that affects whether women are able to go back to work: child care and reopening schools. The lack of attention given to the links between child care and levels of female employment is partly due to the fact that most decision makers in government and at the top levels of business are men.
  • The situation is far worse in Italy. Traditional gender roles and a lack of state child-care support weigh on Europe’s fourth-largest economy, and will hinder its economic recovery. Barely half of Italian women work with a legal employment contract, one of the lowest levels in Europe, compared with 68 percent in France and 80 percent in Sweden.
  • The Guardian – Kate Connolly et al. / ‘We are losers in this crisis’: research finds lockdowns reinforcing gender inequality

Further reading for the weekend:

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, 28/05/2020

The New York Times – Keith Bradsher / China approves plan to rein in Hong Kong, defying worldwide outcry

  • China officially has the broad power to quash unrest in Hong Kong, as the country’s legislature on Thursday nearly unanimously approved a plan to suppress subversion, secession, terrorism and seemingly any acts that might threaten national security in the semiautonomous city.
  • Early signals from Chinese authorities point to a crackdown once the law takes effect, which is expected by September. Activist groups could be banned. Courts could impose long jail sentences for national security violations. China’s feared security agencies could operate openly in the city.
  • Even Hong Kong’s chief executive this week appeared to hint that certain civil liberties might not be an enduring feature of Hong Kong life. “We are a very free society, so for the time being, people have the freedom to say whatever they want to say,” said the chief executive, Carrie Lam, noting, “Rights and freedoms are not absolute.”
  • The Trump administration signaled Wednesday that it was likely to end some or all of the U.S. government’s special trade and economic relations with Hong Kong because of China’s move. The State Department no longer considers Hong Kong to have significant autonomy, Secretary of State Mike Pompeo said, a condition for maintaining the trade status.
  • The Guardian – Lily Kuo / Chinese parliament approves controversial Hong Kong security law

Financial Times – Sam Fleming, Jim Brunsden and Michael Peel / EU recovery fund faces prodigious hurdles to reach consensus

  • Brussels faces a critical few weeks for corralling member states to fall in behind an unprecedented boost to EU spending, betting that its proposal for € 750bn of borrowing will unblock talks on the bloc’s next budget. But while a number of capitals indicated that they saw the commission proposal as a workable basis for negotiations, there is a widespread recognition that prodigious hurdles remain in the way of a consensus.
  • Ms von der Leyen’s plan fuses the recovery fund with the EU’s next seven-year budget, which she has said should total € 1.1tn. National leaders have been trying and failing to agree on the spending pot for two years, but Brussels has argued that it is the only sound and available way to pump money into crisis-hit regions. The budget, or multiannual financial framework (MFF), needs to be ready for the end of this year, when the EU’s existing spending plans expire.
  • Among the traps lying in wait for governments as they resume negotiations are the size of the recovery fund, the share of money set to be distributed in the form of grants as opposed to loans, the conditions attached to handouts for member states, the formulas governing how the money is allocated between countries, and the vexed question of how the EU will repay its debts.
  • Even if they do compromise on some mixture of grants and loans, northern states will want to see tougher reform conditions imposed on states that receive EU funding than those proposed by the commission. Countries that do not receive a budget rebate will fight richer countries’ attempts to preserve the refunds. 
  • Politico – David M. Herszenhorn and Lili Bayer / Ursula von der Leyen’s big gamble with borrowed money

The Economist / Eastern Europe’s covid-19 recession could match its post-communist one

  • Europe has  so far been hit the hardest of any continent by covid-19. Gaps between neighbours can be striking: Spain’s excess mortality per person is more than triple that in Portugal, and France’s quadruple that in Germany. Economically, too, the impact is uneven. As forecasts of the pandemic’s economic damage emerge, central and eastern Europe look especially precarious.
  • Eastern Europeans did well in part because they knew they were vulnerable: fearing that the pandemic could quickly overwhelm their creaky health-care systems, they locked down hard and fast and contained the virus quickly.
  • Yet the economic pain may be worse in much of the east than in the west. Eastern European countries are vulnerable for three reasons. First, their economies are export-dependent, leaving them at the mercy of demand in other countries.
  • A second reason is that eastern European governments have less capacity to finance rescue packages. They cannot run large deficits because investors are wary of lending to them. Finally, many countries in the east rely heavily on one of the industries hardest hit by the pandemic: tourism. In Croatia, for example, it generates 25% of GDP.
  • The Atlantic – Nina Jankowicz / Estonia already lives online–Why can’t the United States?

Bloomberg – Laura Millán Lombraña and Ewa Krukowska / Here’s how Europe plans to fix the climate and the economy

  • The European Union proposed making its climate-neutrality strategy a key pillar of a 750 billion-euro ($824 billion) recovery plan in a bid to boost economic growth and create new jobs.
  • The unprecedented stimulus program – along with a revised budget for the next seven years – aims to accelerate the transition to clean transport, increase energy savings and boost the production of renewable energy. The blueprint also promises more funds to help the regions most affected by the environmental clean-up.
  • The package, the world’s greenest stimulus plan to mitigate the economic effects of the coronavirus crisis, needs to be approved by the bloc’s 27 member states in difficult negotiations that may take months. 
  • Recovery efforts by individual European governments have so far had a mixed record when it comes to climate. Among the few financial details unveiled on Wednesday was a 30 billion-euro boost for the Just Transition Fund, which will now have 40 billion euros at its disposal to help the most affected regions alleviate the impact of transitioning toward eliminating emissions. 
  • Project Syndicate – Henrik Poulsen, Mads Nipper and Lars Fruergaard Jørgensen / Climate targets and industry participation in the recovery

Today’s food for thought:

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, 27/05/2020

The New York Times – Kate Conger / Twitter refutes inaccuracies in Trump’s tweets for first time

  • Twitter added information to refute the inaccuracies in President Trump’s tweets for the first time on Tuesday, after years of pressure over its inaction on his false and threatening posts. The social media company added links late Tuesday to two of Mr. Trump’s tweets in which he had posted about mail-in ballots and falsely claimed that they would cause the November presidential election to be “rigged.”
  • The links — which were in blue lettering at the bottom of the posts and punctuated by an exclamation mark — urged people to “get the facts” about voting by mail. Clicking on the links led to a CNN story that said Mr. Trump’s claims were unsubstantiated and to a list of bullet points that Twitter had compiled rebutting the inaccuracies.
  • The warning labels were a minor addition to Mr. Trump’s tweets, but they represented a big shift in how Twitter deals with the president. For years, the San Francisco company has faced criticism over Mr. Trump’s posts on his most favored social media platform, which he has used to bully, cajole and spread falsehoods. 
  • But Twitter has repeatedly said that the president’s messages did not violate its terms of service and that while Mr. Trump may have skirted the line of what was accepted under its rules, he never crossed it. That changed Tuesday after a fierce backlash over tweets that Mr. Trump had posted about Lori Klausutis, a young woman who died in 2001 from complications of an undiagnosed heart condition while working for Joe Scarborough.
  • Financial Times – Hannah Murphy and Kiran Stacey / Twitter puts fact-check label on Trump tweets for first time

Project Syndicate – Mark Leonard / The end of Europe’s Chinese dream

  • A paradigm shift is taking place in relations between the European Union and China. The COVID-19 crisis has triggered a new debate within Europe about the need for greater supply-chain “diversification,” and thus for a managed disengagement from China. That will not be easy, and it won’t happen quickly. But, clearly, Europe has abandoned its previous ambition for a more closely integrated bilateral economic relationship with China.
  • Three factors have altered Europe’s strategic calculus. The first is a long-term change within China. The EU’s previous China policy was based on the so-called convergence wager, which held that China would gradually become a more responsible global citizen if it was welcomed into international global markets and institutions. nstead, the opposite has happened. Under President Xi Jinping, China has become more authoritarian.
  • Second, the United States has increasingly adopted a more hawkish view of China, particularly since US President Donald Trump entered the White House. Well before the pandemic, a broader “decoupling” of the US and Chinese economies seemed to be underway. This change came rather abruptly, and was a shock to Europeans, who suddenly had to worry about becoming roadkill in a Sino-American game of chicken.
  • But the third (and most surprising) development has been China’s behavior during the pandemic. After the 2008 global financial crisis, China seemed to rise to the occasion as a responsible global power, participating in coordinated stimulus efforts and even buying up euros and investing in cash-strapped economies. Not this time. China has been using the cover of the COVID-19 crisis to pursue politically controversial economic deals, such as a Chinese-financed Belgrade-Budapest railway plan.
  • Foreign Policy – Edward Alden / No, the pandemic will not bring jobs back from China

Politico – Lili Bayer / 5 things to watch in Brussels’ crisis recovery blueprint

  • Paris, Berlin and their frugal foes have all made their opening bids. Now it’s Brussels’ turn. European Commission President Ursula von der Leyen will on Wednesday present a two-pronged plan to revive Europe’s economy — consisting of an updated blueprint for the EU’s long-term budget and a new pot of money known as the Recovery Instrument.
  • Von der Leyen’s task is to come up with a proposal that could form the basis of a compromise acceptable to the EU’s 27 member countries and the European Parliament, which must all agree on the budget for it to pass. National parliaments will likely also have to sign off on raising money for the recovery fund — a potentially treacherous path.
  • The biggest battle in the weeks ahead will be over whether recovery funding will involve the Commission raising money on the markets that would be distributed as primarily loans or grants to member countries. One key question is how the EU would pay for extra spending and ultimately repay borrowed funds.
  • Von der Leyen began her term with the aim of making the EU more of a global player — a goal that requires money. The unveiling of the new proposal is likely to reignite one of the most contentious debates in the budget negotiation: whether some wealthier member countries should get a discount on their contributions.
  • The Guardian – Editorial board / The Guardian view on Europe and Covid-19: time for true solidarity

Bloomberg – Christoph Rauwald and Bruce Einhorn / Costly electric vehicles confront a harsh coronavirus reality

  • At a factory near Germany’s border with the Czech Republic, Volkswagen AG’s ambitious strategy to become the global leader in electric vehicles is coming up against the reality of manufacturing during a pandemic. The Zwickau assembly lines, which produce the soon-to-be released ID.3 electric hatchback, are the centerpiece of a plan by the world’s biggest automaker to spend 33 billion euros ($36 billion) by 2024 developing and building EVs.
  • But Covid-19 is putting VW’s and other automakers’ electric ambitions at risk. The economic crisis triggered by the pandemic has pushed the auto industry, among others, to near-collapse, emptying showrooms and shutting factories. As job losses mount, big-ticket purchases are firmly out of reach. Also, the plunge in oil prices is making gasoline-powered vehicles more attractive.
  • Some cash-strapped governments are less able to offer subsidies to promote new technologies. Even before the crisis, automakers had to contend with an extended downturn in China, the world’s biggest auto market, where about half of all passenger EVs are sold. Total auto sales in China declined the past two years amid a slowing economy, escalating trade tensions, and stricter emission regulations.
  • The global market contraction raises the prospect of casualties. French finance minister Bruno Le Maire has warned that Renault SA, an early adopter of electric cars with models like the Zoe,  could “disappear” without state aid. Even Toyota Motor Corp., a hybrid pioneer when it first introduced the Prius hatchback in 1997, is under pressure.
  • Euractiv – Sam Morgan / Macron demands carmakers turn to ‘Made in France’ for €8bn virus aid

Today’s lesson:

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, 26/05/2020

Foreign Affairs – Hamdi Malik / Iraq can now wrest its sovereignty from Iran

  • Mustafa al-Kadhimi, Iraq’s new prime minister as of May 12, has already announced a bold intention. In a short government manifesto he submitted to the Iraqi Parliament, Kadhimi emphasized his plans to “impose the state’s prestige” by bringing armed groups under government control. 
  • Iranian-backed Iraqi militias such as Kataib Hezbollah, Asa’ib Ahl al-Haq, and Kataib Sayyid al-Shuhada, among others, operate outside the jurisdiction of the Iraqi state. They are part of the Popular Mobilization Forces (PMF), an umbrella military organization that is nominally under Iraqi command but that in fact plays an integral part in projecting Iranian power throughout the region.
  • Adel Abdul-Mahdi, who became prime minister in October 2018, increased the PMF’s budget by 20 percent in 2019 and enabled the Iranian-backed militias to expand their presence in strategic regions, including along the Iraqi-Syrian border, across which they have moved almost freely.
  • Kadhimi has indicated that he has plans to end this state of affairs. Recent developments in Iraq and in the wider region suggest that the new prime minister has a much better chance than his predecessors did of curbing the militias’ influence and consequently, that of Iran.
  • The Economist / Egypt chose a looser lockdown. Its economy is still in crisis

Foreign Policy – Keith Johnson and Robbie Gramer / U.S. falters in bid to replace Chinese rare earths

  • Rising tensions with China and the race to repatriate supply chains in the wake of the COVID-19 pandemic have given fresh impetus to U.S. efforts to launch a renaissance in rare earths, the critical minerals at the heart of high technology, clean energy, and especially high-end U.S. defense platforms. 
  • But it’s not going well, despite a slew of new bills and government initiatives aimed at rebuilding a soup-to-nuts rare-earth supply chain in the United States that would, after decades of growing reliance on China and other foreign suppliers, restore U.S. self-reliance in a vital sector.
  • The problem is that, despite years of steadily increasing efforts under the Trump administration, the United States has yet to figure out how to redress the fundamental vulnerabilities in its critical materials supply chain, and America still seems years away from developing the full gamut of rare-earth mining, processing, and refining capabilities it needs if it seeks to wean itself off foreign suppliers.
  • The U.S. Defense Department, meanwhile, is trying to throw money at the problem, putting rare earths at the center of the annual defense acquisition bill three years in a row, with plans this year to massively increase existing Pentagon funding for rare-earth projects. The drive to decouple from China has been thrown into overdrive by the coronavirus pandemic.
  • Project Syndicate – Joschka Fischer / The future of global power

Euractiv – Frédéric Simon / Electricity giants join forces on renewable hydrogen

  • Major European electricity groups have issued a joint call urging the European Commission to prioritise renewable hydrogen in its upcoming pandemic recovery plan. The “choose renewable hydrogen” campaign is supported by 10 companies and associations: Akuo Energy, BayWa r.e., EDP, Enel, Iberdrola, MHI Vestas, SolarPower Europe, Ørsted, Vestas and WindEurope.
  • “Hydrogen produced via electrolysis powered by 100% renewable electricity has zero greenhouse gas emissions” and should be Europe’s top priority when supporting a clean hydrogen supply chain, the alliance says in a letter to the Commission. Wind and solar power have become the cheapest source of electricity and are expected to play a major role in decarbonising the economy.
  • But some industrial sectors like steel, chemicals or heavy-duty transport are too expensive or difficult to electrify. “In these sectors renewable hydrogen will play a key role and can be the most cost-effective and sustainable solution for decarbonisation,” the coalition says in the letter, dated 22 May.
  • “Investment in renewable hydrogen has a great potential in terms of jobs and growth creation,” because of existing plans to expand renewable electricity capacity. “When produced by grid connected renewables it offers a real form of sector coupling between the power sector and the other economic sectors,” the coalition says.
  • Financial Times – Richard Milne / Danish groups join forces to deliver green hydrogen project

Bloomberg – Laura Millán Lombraña and Akshat Rathi / These pioneers are already living the green recovery

  • Buildings are responsible for 36% of the EU’s greenhouse gas emissions. There are now more companies doing sustainable construction and renovations than there were when Cubina started out, he says, and architects, builders and contractors are aware of the importance of energy efficient buildings and the use of recycled and sustainable materials. But the changes still haven’t gone deep enough.
  • Cheaper batteries, tough emissions regulation and mass production mean that by later this year some electric vehicles will cost the same as combustion models. Few investors were willing to touch the sector until recently, says Javier Guerra, a Madrid-based managing partner at private equity firm Satif Group.
  • About 25% of all natural gas burned in Europe is used to heat homes. Clean alternatives exist, but technologies such as electric heat pumps are much more expensive and not always viable in dense cities. Although both biogas and natural gas release carbon dioxide when burned, biogas is a lower-carbon alternative when it’s derived from farm waste or energy crops, which have absorbed carbon while growing.
  • Hydrogen burns at very high temperatures and produces only water as a byproduct, making it a possible zero-carbon solution to high-emitting industries such as steel-making, heavy transport, and chemicals manufacturing, none of which can operate on solar or wind alone.
  • Politico – Aitor Hernández-Morales / In COVID-19 Britain it pays to run your washing machine on Sunday afternoon

Today’s perspective:

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, 25/05/2020

Financial Times – Martin Arnold and Olaf Storbeck / European consumers stockpile savings, adding to economic drag

  • Bank deposits are surging across Europe as people respond to the economic and social upheaval of the coronavirus pandemic by saving more, fuelling fears among economists that consumers will not come to the rescue of the continent’s shrinking economy.
  • French savers put aside nearly €20bn in March, well above the long-run average monthly change in bank deposits of €3.8bn. Separate figures from the Banque de France show that by mid-May, the total had risen to more than €60bn since the country’s lockdown began — indicating that the growth of savings accelerated as the crisis deepened. 
  • Italian savers put aside €16.8bn in March, the ECB data show, compared with a long-run monthly average of €3.4bn, while Spanish households saved €10.1bn, up from an average of €2.3bn. UK household bank deposits jumped by £13.1bn in March, a record monthly rise, according to the BoE.
  • Bank deposits in Germany fell sharply, but this was a sign that households had withdrawn cash. Germans tend to prefer to hold their savings in cash during a crisis and a similar phenomenon occurred at the height of the 2008 financial crisis. The German central bank reported that cash in circulation rose by €39.7bn between late January and early May.
  • The Washington Post – Jackson Diehl / The nutrition crisis of covid-19 will be even worse than the disease

Foreign Policy – Sumit Ganguly and Manjeet S. Pardesi / Why we should worry about China and India’s border skirmishes

  • Tensions between India and China are not new. The two countries—which share the world’s longest unmarked border—fought a full-fledged war in 1962 and have since engaged in several small skirmishes. Not since 1975 has a bullet been fired across their shared border.
  • Recent events, however, suggest that escalations are highly possible. Both sides have substantial—and growing—military deployments along a mostly disputed border. And for more than a decade, the People’s Liberation Army (PLA) has been testing India’s military readiness and political resolve along several strategic areas. 
  • The most recent clashes took place earlier this month. On May 5, Indian and Chinese soldiers clashed near the Pangong Tso lake in Ladakh. Soldiers from both sides came to blows and threw stones at each other mostly in efforts to induce the Indian troops to move back from the areas they were patrolling. 
  • In 1988, India’s gross domestic product was $297 billion compared with China’s $312 billion that year, while India’s defense spending, at $10.6 billion, was also close to the Chinese allocation of $11.4 billion. At $13.6 trillion in 2018, China’s GDP is now more than five times India’s $2.7 trillion. Similarly, China spent $261.1 billion on defense expenditure in 2019, almost four times India’s total of $71.1 billion.
  • The Economist / America is determined to sink Huawei

The New York Times – Steven Lee Myers / Why China’s move to rein in Hong Kong is just the start

  • China’s move to strip away another layer of Hong Kong’s autonomy was not a rash impulse. It was a deliberate act, months in the making. It took into account the risks of international umbrage and reached the reasonable assumption that there would not be a significant geopolitical price to pay.
  • With the world distracted by the pandemic’s devastating toll, China has taken a series of aggressive actions in recent weeks to flex its economic, diplomatic and military muscle across the region. China’s Coast Guard rammed and sank a fishing boat in disputed waters off Vietnam, and its ships swarmed an offshore oil rig operated by Malaysia.
  • Beijing denounced the second inauguration of Taiwan’s president, Tsai Ing-wen, and pointedly dropped the word peaceful from its annual call for unification with the island democracy. Chinese troops squared off again last week with India’s along their contentious border in the Himalayas.
  • Mr. Xi’s move against Hong Kong has nonviolent echoes of President Vladimir V. Putin’s forceful seizure of Crimea from Ukraine in 2014, which was a violation of international law and of Russia’s previous diplomatic commitments. The annexation made Mr. Putin an international pariah for a while, but Russia still remains firmly in control of Crimea.
  • The Atlantic – Timothy McLaughlin / The end of Hong Kong

Euractiv – Jorge Valero / Member states brace for ‘great stimulus’ battle

  • The European Commission’s proposal on the next seven-year budget and the accompanying recovery fund will this Wednesday (27 May) launch one of the most difficult negotiations in the EU history, as member states disagree over the size, the goals and conditions, and primarily whether to give grants or loans. 
  • The proposal made by the ‘Frugal Four’ (Netherlands, Austria, Denmark and Sweden) over the weekend, and seen by EURACTIV, showed how divided national governments remain on how to finance the recovery from the coronavirus crisis. Despite the Franco-German attempt to narrow the differences, Northern and Southern countries are still far apart on issues including the size, the shape, the scope and the conditionality of the ‘great stimulus’ to overcome the deepest recession in the EU history.
  • Size. The consensus is around putting together a €1.5 trillion stimulus. Instrument. The big debate is whether to use grants that member states won’t have to repay, or loans that will further fuel national debt of already ailing economies. Conditionality. As money always comes with conditions in the EU, the question is how strict the requirements will be to access the new financial instrument.
  • Scope. The discussion on how to use the recovery funds will be highly complex as Eastern countries will only add to the north-south division. They have been less affected by the pandemic and do not want to divert funds from big envelopes, such as Cohesion, to finance the recovery. EU institutions and member states agree that Digital and Green agendas should be the priority of the stimulus.
  • Politico – Josef Joffe / How Merkel caved to Macron

Today’s long read:

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, 22/05/2020

The New York Times – Keith Bradsher and Chris Buckley / China, faced with challenges, mounts show of strength at Party congress

  • China’s top leaders on Friday made a show of strength to confront defiance in Hong Kong and the economic damage wrought by the coronavirus outbreak, even as they acknowledged that both had dealt a blow to the ruling Communist Party’s agenda.
  • On Hong Kong, the leadership struck a hard line at the annual meeting of China’s legislature, unveiling a plan to impose sweeping new security laws that would place the territory more firmly under Beijing’s thumb and crack down on antigovernment protests. But the move is likely to incite more unrest and outrage in the semiautonomous territory as well as criticism from abroad.
  • On the economy, the premier, addressing the opening of the National People’s Congress, declared that the government had achieved a “decisive victory” against the coronavirus outbreak and that the country has shown great resilience. But in a break with tradition, China abandoned setting an annual growth target for 2020, recognizing the difficulties in restarting its economy amid a pandemic.
  • Premier Li Keqiang, who is second-ranked in the Communist Party hierarchy behind Mr. Xi, made his speech to nearly 3,000 congress delegates who wore masks as they sat in neat rows in the ornate Great Hall of the People. He pledged to help blunt the impact of the slowdown with goals to limit inflation and unemployment.
  • Financial Times – Hudson Lockett, Nicolle Liu and Joe Leahy / Hong Kong stocks dive on China’s plans for security law

The Guardian – Martin Chulov / Lebanon’s cash crisis hits Eid: ‘There is nothing to celebrate this year’

  • For more than a decade, Ahmad Hussein would spend the last few days of Ramadan assembling arrays of sweets in his shop in south Beirut, preparing for the bonanza to follow. Eid al-Fitr, the three-day celebration that capped the monthlong fast, was an annual highlight as customers splurged on sugary treats and shiny new clothes.
  • But not this year. With Lebanon facing an unprecedented economic collapse, much of what Amhad and nearby shopkeepers are selling in one of Beirut’s poorest neighbourhoods is beyond their own means. Here and across the country, prices have at least doubled over the past two months, leaving basic goods outside the reach of more than half the population.
  • Its long-stable currency continues to crumble against the dollar, which is still being used to pay for imports. In a country that produces next to nothing, that means nearly all food, and much of what else is needed to keep societies afloat. The unravelling has revealed a stark reality: that Lebanon’s relative prosperity was built on a financial illusion.
  • Politicians have appealed for foreign aid, and the prime minister, Hassan Diab, has acknowledged that Lebanon is on the brink of an “unimaginable food crisis”. The crisis is likely to devastate already impoverished communities, exert escalating pressure on middle classes and widen a disparity between an affluent elite and the rest.
  • Foreign Policy – Anchal Vohra / The death of Lebanon’s middle class

Euractiv – Alexandra Brzozowski / US withdrawal from Open Skies Treaty takes European allies by surprise

  • Washington announced on Thursday (21 May) it would withdraw from the 35-nation Open Skies Treaty, allowing unarmed surveillance flights over signatory states, the Trump administration’s latest move to pull the country out of yet another major global landmark accord.
  • The accord, signed in 1992 and in force since 2002, allows its signatories to conduct short-notice unarmed surveillance flights to gather information on each other’s military forces and installations, thereby contributing to inspections of conventional arms control and strategic offensive weapons and reducing the risk of conflict.
  • The idea is that the more rival militaries know about each other, the less the chance of conflict between them. Russia and the US, the world’s two biggest nuclear powers, have used it to keep an eye on each other’s activities, but in recent years senior US officials and global non-proliferation experts have warned US President Trump may pull Washington out of the pact.
  • The US “cannot remain in arms control agreements that are violated by the other side, and that are actively being used not to support but rather to undermine international peace and security,” US Secretary of State, Mike Pompeo, said in a statement on Thursday. Pompeo cited Russian restrictions on flights and claimed Moscow has used the treaty as “a tool to facilitate military coercion.”
  • Politico – Bryan Bender / US Democrats warn Trump not to withdraw from the Open Skies surveillance pact

Foreign Policy – Paul Hockenos / Has the coronavirus disappeared climate politics?

  • Climate experts have feared Europe’s climate goals could get drowned out in the cacophony of panicked calls amid the coronavirus pandemic for rekindling conventional industries. When Merkel and Macron proposed that the EU disperse a total of €500 billion ($545 billion) in recovery money, Macron explicitly underscored that the rescue program would buttress the European Green Deal.
  • But the decisive battles are still to be fought, and Europe’s traditional economic forces are not backing down quietly. The economic fallout in Europe is vast—as many as 59 million jobs could be lost and trillions of dollars in revenue and taxes. There’s a broad consensus that economic stimulus of historic proportions will be required to fight recession and put devastated economies back on their feet. 
  • Less certain is to what degree the stimulus and recovery will take climate policy into account. Though the post-financial-crisis measures lifted many European countries out of recession, they did very little to accelerate the transition to more sustainable, climate-friendly economies. In many ways, they did the opposite, rewarding polluting industries that only caused Europe’s carbon footprint to swell.
  • A DIW report on post-pandemic green stimulus efforts argues that the recovery packages must include clearly defined climate targets. The French government’s aid to Air France commits the airline to slashing its carbon emissions for domestic flights by 50 percent by 2025. This time around, it seems, Europe’s recovery funds will be used to transform the economy, not reinforce bad habits.
  • The Economist / The covid and climate crises are connected

Further reading for the weekend:

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, 21/05/2020

The Washington Post – Gerry Shih, Eva Dou and Anne Gearan / As U.S.-China rhetoric grows harsher, new risks emerge with Taiwan drawn into the mix

  • Rising tensions between the United States and China brought fresh mudslinging Wednesday as a sharp dispute over responsibility for the coronavirus pandemic spills into new forums such as Taiwan.
  • In the span of several hours, the feud swung from Taipei to Beijing to the Internet, where an animated “credibility test” on Chinese state TV’s Twitter feed mocked Secretary of State Mike Pompeo. President Trump then lashed out at China for a “worldwide killing” from covid-19 — part of messages that could become talking points in the presidential election campaign.
  • The White House salvos have sought to keep a focus on China’s early response to the virus and what Trump has called a “China-centric” deference at the World Health Organization. China, in turn, has portrayed itself as a good global citizen willing to work with the United Nations and other countries to defeat the pandemic.
  • But the longer-range Trump strategy appeared aimed at deflecting attention from the U.S. handling of the pandemic — including the sometimes conflicting messages from the Trump administration and health experts and a reported covid-19 death toll that is the highest in the world.
  • Foreign Policy – James Palmer / Why the WHO investigation won’t work

Financial Times – Miles Johnson and Davide Ghiglione / Italy’s record casts shadow over hopes of post-Covid recovery

  • While the Italian economy is expected to regain ground in the second half of the year, its recent history of failing to recover from recessions sets a grim precedent. This week as small businesses across Italy reopened after nearly two months of lockdown, Franco Magliocchetti, a 32-year-old restaurateur in Rome, spent most of his day sat glancing at rows of empty tables.
  • Mr Magliocchetti and his business partner, Fabio Trovato, are crossing their fingers that the lifting of restrictions will see the country bounce back from what is forecast to be the sharpest recession in its modern history. Business is so slow that they do not know how much longer they will be able to stay open unless it improves.
  • As the lockdown eased he and Mr Trovato introduced a takeaway “aperitivo” and vacuum-sealed meals, but they are still struggling. On a normal weekend the restaurant would make around €10,000. Last week they failed to make €2,500. Out of twelve employees, eight remain on temporary leave.
  • Unlike other eurozone countries, Italy’s economy has never recovered from the last crisis, with gross domestic product below where it was in real terms in 2008 even before the coronavirus pandemic began. Italy’s GDP per capita adjusted for price changes remains lower than it was in 2000. While Italy has languished, Germany, France, Spain and the Netherlands have all grown by this measure.
  • The Guardian – Rebecca Smithers / Hundreds of charities in UK added to waiting list for food redistribution

Haaretz – Jack Khoury / Abbas ‘ending agreements’ with U.S., Israel over annexation leaves Palestinians skeptical

  • Palestinians have proved apathetic to President Mahmoud Abbas’ declaration Tuesday that the Palestine Liberation Organization saw itself released from its commitments to the United States and Israel – he has made announcements like that before.
  • Abbas made his statement during a live broadcast of a Palestinian leadership meeting. Some of the officials present complained that Abbas’ position had not been discussed at the meeting or explained to the participants.
  • A Fatah official told Haaretz it’s not clear “if all contact and coordination with Israel really stops now and we give back the keys, or if it was a declaration of the official Palestinian position and there hasn’t yet been a decision to bury the agreements.”
  • Meanwhile, the Palestinians, too, are continuing their battle against the coronavirus. Before Tuesday’s meeting, Prime Minister Mohammad Shtayyeh announced that from Friday, the eve of Eid al-Fitr, a lockdown would be imposed on Palestinian cities, and all stores would be closed except for bakeries and pharmacies until after the holiday.
  • The New York Times – David M. Halbfinger, Adam Rasgon and Mohammed Najib / Abbas, cornered by Israeli annexation, opts for ‘Judgment Day’ scenario

Bloomberg – Ewa Krukowska / Greener farms and healthier food key to EU’s climate plan

  • The European Union is seeking to reduce the environmental footprint of its farming and food production industry, forging ahead with its ambitious Green Deal agenda to make the bloc climate-neutral by the middle of the century.
  • The “Farm to Fork” strategy maps out the ways for the region to halve the use of pesticides and antibiotics, boost organic farming, promote plant-based proteins and make every link of the food system more sustainable. A separate plan on biodiversity lays out steps to restore ecosystems and cut pollution.
  • The EU wants to make environmental cleanup one of the pillars of an economic plan to recover from the coronavirus crisis. “This is the concrete translation of what we had announced in the Green Deal,” said Frans Timmermans.
  • Greening agriculture is one of the biggest challenges in the fight against climate change, with food systems responsible for as much as 30% of global greenhouse-gas emissions and a contributor to the loss of biodiversity. At the same time, extreme weather events linked to rising temperatures undermine farming and seafood production.
  • Euractiv – Frédéric Simon / LEAKED: Europe’s draft ‘green recovery’ plan

Today’s perspective:

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