ESADEgeo Daily Digest, 16/09/2019

Bloomberg – Serene Cheong & Dan Murtaugh / Oil Prices jump most on record after Saudi Arabia strike

  • Oil posted its biggest ever jump to more than $71 a barrel after a strike on a Saudi Arabian oil facility removed about 5% of global supplies, an attack attributed to Iran, as the United States have claimed.
  • In a remarkable start to trading on Monday, London’s Brent futures leapt almost $12 in the seconds following the open, the greatest in dollar terms since they were launched in 1988. Prices have since pulled back about half of the initial surge of almost 20%, but are still heading for the biggest increase in two decades.
  • The attacks exposed the vulnerabilities of Saudi Arabia, the world’s most important exporter, and added further political risk to oil’s prices. The attack has also threatened more American retaliation against Iran. Saul Kavonic, an energy analyst at Credit Suisse Group AG stated that “we have never seen a supply disruption and price response like this in the oil market. Political risk premiums are now back on the oil market agenda.”
  • The disruption surpasses the loss of Kuwaiti and Iraqi petroleum output in 1990 after the Iraqi invasion of Kuwait. It also exceeded the loss of Iranian oil production in 1979, during the Islamic Revolution.
  • Bloomberg – Zainab Fattah / Its lifeblood attacked, what are Saudi Arabia’s options now?

Brookings – Samantha Gross / Campaign 2020: What candidates are saying on climate change

  • Climate change is becoming a top-tier issue in the Democratic primary process, along with economic, healthcare and immigration questions as a major topic among candidates. This marks a notable shift from the 2016 presidential election cycle when the issue was little discussed. This is mainly the result of Trump’s rollbacks of climate regulation, with the notable intention to withdraw from the Paris Agreement. Moreover, extreme weather events like wildfires in California or hurricanes in the Southeast have focused public attention on the issue.  
  • Climate change, along with many other environmental harms, tends to impact disadvantaged communities the most. As a whole, candidates are speaking about how to help communities disproportionately affected by a changing climate and workers displaced by the transition to a low-carbon economy. These candidates are discussing resilience and preparedness, through the development of infrastructure investments and disaster response.
  • Candidates differ in their emphasis on carbon taxes, which are economists’ preferred method for reducing greenhouse gas emissions, since it would require action from Congress, a heavy lift in today’s polarized environment. Alongside carbon taxes, candidates are focusing on punishing the fossil fuel industry, which is not productive. Punishing companies for past misinformation efforts might make sense, but holding these companies responsible for the entirety of climate change is misguided.
  • If the world will continue to need some fossil fuels for decades, should the politicians rule out producing fuel in the United States, where regulation and monitorization is possible? The answer is negative, since the USA could be a leader in how to produce fuels with minimal pollution and greenhouse gas emissions, and in how to wind down the industry when the time comes.

The Washington Post – Shibani Mahtani & Timothy McLaughlin / Hong Kong police disperse protesters with tear gas and water cannon, stinging blue dye in 15th weekend of unrest

  • Riot police, water cannons and tear gas spraying stinging blue dye sent protesters fleeing Sunday following another massive, unauthorized but initially peaceful march through Hong Kong, as authorities intensified their efforts to quash the unrest that has gripped the city for months.
  • It was the 15th weekend of large demonstrations in the region. Despite growing police crackdown, limited concessions from the Hong Kong government and the exhaustion of many protesters, the unrest shows no signs of abating as a sensitive political anniversary for China — the 70th anniversary of the founding of the Chinese Communist Party on Oct. 1 — draws closer.
  • The protests have sparked growing ambitions within Hong Kong, such as a revival in the long-held aspiration for universal suffrage and the direct election of Hong Kong leaders. These demonstrations have underscored how Beijing has lost support among Hong Kong’s youths and even older groups — contrary to expectations during the 1997 handover.
  • Protesters are marching under an intensifying threat of arrest and prosecution. Police said Thursday they had arrested 1,365 people so far between the ages of 12 and 76 since the start of the protests. More were arrested over the weekend.

Euractiv – Euractiv with AFP / Israel approves new settlement 2 days before polls 

  • Israeli Prime Minister and conservative party Likud leader’s Benjamin Netanyahu approved a new settlement in the occupied West Bank on Sunday, two days ahead of a closely fought election as he seeks to boost turnout among his right-wing base. Even if all Israeli settlements are illegal under international law, Israel distinguishes between those that have been approved and those that have not.
  • Palestinian president Mahmud Abbas’s spokesman Nabil Abu Rudeineh called on the international community to “stop the Israeli madness aimed at destroying all the foundations of the political process”. Moreover, Peace Now, an Israeli NGO has stated that “the government continues to show blatant disregard for reaching a two-state conflict-ending agreement with the Palestinians.” The European Union and the United Nations — in addition to the Palestinians — condemned Netanyahu’s Jordan Valley announcement last week.
  • Netanyahu is locked in a tough re-election battle with ex-military chief Gantz and his Blue and White centrist alliance, and right-wing nationalist votes are key for his Likud. Netanyahu, prime minister for a total of more than 13 years, is seeking to overcome one of the biggest failures of his political career following April elections, where Likud and the right-wing and religious allies won the majority of seats, but failed to form a coalition government and opted for a second election as a result.
  • Financial Times  – Mehul Srivastava / Israeli election: Lieberman challenges Netanyahu’s hold on the right

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, 29/07/2019

BBC / Talks held in Vienna to salvage Iran nuclear deal

  • Talks to try to save the Iran nuclear deal (JCPOA) were held yesterday in Vienna amid rising tensions over tankers in the Gulf. After meeting officials from Britain, France, Germany, Russia and China, Iran’s Deputy Foreign Minister Abbas Araghchi said the atmosphere had been “constructive”.
  • Arriving at the meeting, Araghchi said he considered the UK’s seizure of an Iranian oil tanker in Gibraltar to be in breach of the JCPOA, and Iran also described as “provocative” British proposals for a European-led mission to escort tankers through the Strait of Hormuz.
  • London alleged the Iranian oil tanker was carrying oil to Syria in breach of EU sanctions, a claim denied by Iran. Several days later the British-flagged Stena Impero was impounded by Iran, which said it had been “violating international maritime rules”.
  • Britain sent a second warship on Sunday to escort its ships sailing through the Strait of Hormuz.

Euractiv / Assuming EU will not budge, Britain ramps up preparations for no-deal Brexit

  • Leading Brexit supporter Michael Gove, who British PM Boris Johnson has put in charge of “no deal” preparations, wrote in the Sunday Times newspaper that the government would undertake “intensive efforts” to secure a better deal from the EU. However, “planning for no deal is now this government’s no. 1 priority,” he said, adding “every penny needed” for no deal preparations would be made available.
  • Johnson has set up a “war cabinet” of six senior ministers to make decisions on Brexit and is preparing for a no-deal emergency budget in the week of 7 October, the newspaper added.
  • Although Johnson has been adamant he will not hold an election before Brexit, his Conservative Party does not have a majority in parliament, is divided over Brexit and under threat of a no-confidence vote when parliament returns in September.
  • Speculation of an early election to break the deadlock is likely to be fuelled by a YouGov opinion poll in the Sunday Times, which showed the Conservatives had opened up a 10-point lead over Labour since Johnson took over.

The Economist / Partnership is much better for China than it is for Russia

  • Though the burgeoning China-Russia alliance has left America out in the cold, the price of this strategic maneuver is falling chiefly on Russia. China dominates every aspect of the two countries’ partnership, and Russia is evolving into a Chinese tributary.
  • China is a vital market for Russian raw materials, the yuan is becoming a bigger part of Russia’s foreign-currency reserves, Beijing supplies vital components for Russia’s advanced weapons systems, and China is the source of the networking and security gear that President Putin needs to control his people.
  • America does not suffer from the Xi-Putin alignment today as it would have done in the Cold War. Although Russia and China do indeed undermine the West’s notion of universal values, with President Donald Trump in the White House that doctrine is hardly being applied universally in any case.
  • Rather than railing against Russia or trying to woo it back, the West should point out its subordination and wait. Sooner or later, a President Alexei Navalny or someone like him will look westwards once again. That is when Russia will most need Western help.

Financial Times – The Editorial Board / Spain’s political gridlock is stalling further reform

  • Two unsuccessful confidence votes last week give PSOE’s Pedro Sánchez until September 23 to form a government in Spain. If this deadline is missed Spain will go back to the polls in November marking the fourth general election since 2015. This should be avoided.
  • Catalonia’s illegal independence referendum in 2017 has increased political polarization in Spain, which was already high. Without this issue, where Ciudadanos adopted a hard stance and pivoted to the right, common ground in Spanish politics would be easier to achieve.
  • Spain’s economy is growing faster than the eurozone average, at a projected 2.3 per cent this year, but for this outperformance to be maintained pro-business reforms must continue.
  • Ciudadanos should rethink its opposition to a coalition. An agreement would give Sánchez a stable majority and the country the government it needs. If a new coalition were to proceed with political reform by allowing greater regional autonomy, while keeping the sovereignty of the Spanish state intact, tensions over Catalan independence might dissipate.

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, 26/07/2019

Financial Times – Kim Darrah / EU and Canada agree on interim alternative to WTO appeal court

  • The EU and Canada have agreed a new trade dispute resolution system as a temporary substitute to the WTO’s appeal court. The Trump administration has blocked replacements for retiring judges, and the body is just months away from being unable to take on new cases — a minimum of three judges are needed.
  • The agreement will be based on existing WTO rules but will only apply to disputes between Canada and the EU. Once the official WTO court collapses, appeals will instead be heard by retired appellate body judges. Individual judges for each case will be chosen by the WTO’s director-general from a pool of available former judges. 
  • As it stands, the court is still processing appeals, but its diminished roster of judges face a growing pile of delayed cases. According to WTO rules, appeals must take no longer than 90 days and judges must submit an explanation in writing if they cannot keep within this timeframe. Over the past two years, the average ruling has taken more than a year to complete, far exceeding this official deadline. 

Project Syndicate – Kemal Derviş / Which way now for the EU?

  • Several commentators say the EU’s new leaders should seek to strengthen Europe’s “strategic sovereignty” through greater pooling of member states’ resources and much closer policy coordination. This is certainly much needed, not least on eurozone matters.
  • But calls for increased strategic sovereignty often imply that a more integrated EU should become the third pillar of a “G3” world alongside the US and China. The EU should not aim for a world of constant G3 geostrategic rivalry, but rather one that upholds the values enshrined in the Universal Declaration of Human Rights and the Sustainable Development Goals.
  • Europe should use its hard and soft power to cooperate with all actors seeking to promote a rules-based global order. If, on the other hand, the EU’s new strategy makes it sound as if Europe just wants to become a pure power player in a transactional game of realpolitik, Europe’s soft power will weaken.
  • If the bloc is unable to enforce its values within its own borders – as is currently the case, for example, with Hungary – then it will not be able to promote them convincingly on the world stage.

Washington Post – David Ignatius / Instead of thanks, a critical US ally faces only more threats

  • The Kurdish-dominated Syrian Democratic Forces made enormous sacrifices in the obliteration of ISIS in Syria: it is estimated that 11,000 fighters were killed, 24,000 were wounded, and many thousands of civilians perished or were driven from their homes. US dead in the ISIS fight were fewer than 10.
  • And yet, President Trump announced last December that he wanted to quickly withdraw US troops from their support of the SDF and turn security in the area over to Turkey. Fortunately, Trump was talked out of that profoundly unwise move by his military and civilian advisers.
  • A new danger for the SDF is emerging because of Turkish President Recep Tayyip Erdogan’s threat this month to invade the Kurdish area in Syria, to crush what he claims is the Kurdish terrorist threat.
  • According to Gen. Mazloum Abdi (the commander of the SDF), if Turkey invades his fighters won’t be able to guard the prisons — which means that thousands of ISIS terrorists could be loosed on the world. Mazloum said he’s ready to support a US proposal for joint US-Turkish patrols in northeast Syria — if it will forestall the Turkish attack.
  • Foreign Policy – Keith Johnson / Turkey’s big energy grab

The Economist / Greenhouse-gas emissions are increasing the frequency of heatwaves

  • When, in 2003, tens of thousands of people in Europe died prematurely as a result of a two-week heatwave, it was deemed to be a once-in-1,000-years event. Twelve years later, a study led by Nikolaos Christidis of the Hadley Centre found that heatwaves of this severity had become once-in-100-years events, and would be commonplace by the 2040s.
  • For years, the semi-official line was that no single weather event could be blamed on climate change, only trends. That began to change in 2004, with the publication of the first “attribution” study. By comparing simulations of a world with and without greenhouse-gas emissions, Peter Stott at the Met Office and his colleagues found that climate change had made the 2003 record-breaking heatwave at least twice as likely as it would otherwise have been.
  • Floods, storms and cold spells also carry a climatic fingerprint. Since 2012, the Bulletin of the American Meteorological Society has published an annual compendium of attribution studies. Roughly 70% of events scrutinized show some influence from climate change.
  • Brookings – John Podesta / The climate crisis, migration, and refugees

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, 25/07/2019

The Guardian – Cas Mudde / Is Boris Johnson really Britain’s Trump?

  • PM Boris Johnson is being portrayed as a British equivalent of US President Donald Trump. Indeed, both men resort to reckless opportunism and a combination of homophobia, racism and sexism. And while Trump mainly lies about himself, Johnson has built a career on lying about the European Union.
  • However, there are also important differences between the American president and the British premier. While the two share a remarkable flexibility in terms of policy positions, Johnson is much more solidly Conservative than Trump is Republican.
  • Johnson is much more of a professional politician than Trump. Unlike the US president, who is largely a one-man movement that captured an establishment party with an increasingly anti-establishment electorate, Johnson is the voice of both the establishment and the anti-establishment.
  • It is this dependence on both elements of the Conservative party, which he perfectly embodies in his own political career, that will make it more likely he goes down into the history books as the shortest term prime minister rather than the prime minister who delivered Brexit.
  • Politico – Charlie Cooper, Annabelle Dickson & Emilio Casalicchio / Boris Johnson’s Day 1 revolution

Washington Post – Karoun Demirjian & Colby Itkowitz / Trump vetoes Congress’s attempt to block arms sales to Saudi Arabia

  • Yesterday, President Trump vetoed three resolutions that the US Congress passed to stop several arms sales benefiting Saudi Arabia and the United Arab Emirates, which the president pushed through without congressional approval.
  • Earlier this month, bipartisan majorities — but not a veto-proof majority — in the House and Senate voted to block the arms deals, worth more than $8 billion. The sales would replenish part of the Saudi arsenal that lawmakers say has been used against civilians in Yemen’s civil war.
  • “The United States is very concerned about the conflict’s toll on innocent civilians and is working to bring the conflict in Yemen to an end,” Trump said in the veto statement. “But we cannot end it through ill-conceived and time-consuming resolutions that fail to address its root causes.”
  • Congress is unlikely to have the votes to override the veto and does not have a consensus on how to proceed. On a related matter, the Senate Foreign Relations Committee plans to vote today on two competing bipartisan bills to impose sanctions on Saudi Arabia.

South China Morning Post / North Korea launches two short-range missiles, South Korean military says, highlighting anger over military drills

  • North Korea fired two short-range missiles into the sea on Thursday, South Korea’s Joint Chiefs of Staff said, after warnings from Pyongyang over military exercises between Washington and Seoul next month, which were scaled down to try to ease tensions.
  • The North fired the two missiles just after dawn and they flew a distance of around 430km before falling into the East Sea, also known as the Sea of Japan. Tokyo said the launches did not reach Japanese waters.
  • North Korea condemned the joint military exercises as “blatant pressure” and a “violation of the spirit” of the joint statement Trump and Kim signed at their first summit in Singapore last year. The North even hinted it could reconsider its moratorium on nuclear testing because of the drills.
  • Adam Mount, of the Federation of American Scientists, said the latest launch was a clear indication that “North Korea’s nuclear and missile arsenals are now routinely being improved, displayed, and tested … The current bargain is: don’t test nuclear warheads or long range missiles and the United States won’t object or seriously try to stop it.”

Euractiv – Jorge Valero / Spain obstructs agreement on ‘Tobin tax’

  • According to an initial plan put forward by France and Germany, and supported by a majority of the 10 EU countries involved in developing the Financial Transaction Tax (also called “Tobin tax”), revenues will be pooled and shared among the countries, regardless of the revenues amassed by each capital.
  • The FTT would impose a 0.2% levy on shares issued by a company whose market capitalization exceeds €1 billion and its registered office is established in at least one participating member states.
  • After years of negotiations, the agreement looks within reach and could come as early as in October. But Italy and Spain disagreed with the formula to share the revenues, distributed according to the Gross National Income (GNI) of the national economies.
  • Under the original formula, Spain would have been the big loser. While its expected revenues would have reached around €498 by applying the FTT directly on its jurisdiction, the mutualization would have brought down the figure to €406 million.
  • Under a new formula that is being discussed, Spain would cut its loses to obtain €491.52 million (-6.48% less), and Italy would gain €468.86 million (-9.14% less) compared with a direct implementation of the tax on its financial markets. Although Germany and France would now bear the biggest losses, Spain remains unconvinced, and Italy has put forward an undisclosed alternative arrangement.

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, 24/07/2019

The Guardian – Heather Stewart & Jessica Elgot / Ambition fulfilled for Boris Johnson. But what next for Britain?

  • Boris Johnson swept to a convincing victory over Jeremy Hunt in the tory leadership race, and will become the next British Prime Minister. Johnson won 66% of the votes – 92,153, to Hunt’s 46,656. Turnout was 87.4% among the Tory party’s 159,320 eligible members.
  • Johnson faces a dilemma about how to deal with his defeated rival. Friends of Hunt said he would not accept any job that smacked of demotion. The result was closer than David Cameron’s victory over David Davis in 2005, after which Davis remained in post as shadow home secretary.
  • In his acceptance speech, Johnson said his task would be to “reconcile two noble sets of instincts – between the deep desire for friendship and free trade and mutual support and security and defense between Britain and our European partners; and the simultaneous desire, equally heartfelt, for democratic self-government in this country.” Johnson insisted he would “get Brexit done by 31 October” with a “new spirit of can-do”.
  • His attempt to strike a moderate tone was dealt a blow by Donald Trump, however. “He’s tough and he’s smart …They’re calling him Britain Trump. And people are saying that’s a good thing. They like me over there,” Trump said.

The New York Times – Helene Cooper / Mark Esper confirmed as Trump’s defense secretary

  • The US Senate overwhelmingly confirmed Mark T. Esper as secretary of defense on Tuesday, ending the longest period by far that the Pentagon had been without a permanent leader.
  • Mr. Esper, an Army infantryman who fought in the Persian Gulf War of 1991 before becoming a lobbyist for the military contractor Raytheon, replaces Jim Mattis, who resigned in December during a dispute over pulling American troops out of Syria.
  • In receiving the lopsided 90-to-8 Senate nod, Mr. Esper succeeded where Patrick M. Shanahan, President Trump’s original pick to replace Mr. Mattis, did not. Five of the eight senators —Democrats — voting against Mr. Esper are presidential aspirants: Cory Booker, Kirsten Gillibrand, Kamala Harris, Amy Klobuchar and Elizabeth Warren.
  • Washington Post – Gerry Shih / China takes aim at US, Taiwan in new military blueprint

Foreign Policy – FP Editors / Why India is mad at Trump

  • Donald Trump has claimed that Indian President Narendra Modi asked him to be a mediator in Kashmir, which has been denied by Indian officials. The opposition, nonetheless, demanded Modi to clarify the conversations between him and Donald Trump at the G-20 summit.
  • Indian diplomats have long made clear to their counterparts that they don’t want international interference in Kashmir. Part of the reason why New Delhi prefers to contain Kashmir as a local issue is that international mediation could lead to adverse outcomes for India, including a potential Kashmiri plebiscite.
  • The president of Pakistani Kashmir explained why Pakistan is in favor of a plebiscite across Kashmir, citing Indian “coercion or state terrorism to subjugate the Kashmiri people.” But, he said, “Brussels, London, Washington—they are silent.”
  • Relations between India and the USA have gotten closer in the last two decades—irrespective of the governments in power on either side, but the two countries have several long-running trade disagreements, including for example about Indian price controls on medical devices. Moreover, the simmering issues boiled over this spring when Trump canceled India’s preferential trade status with the United States.

Euractiv / France, Italy, Denmark back European-led naval mission for Hormuz

  • France, Italy and Denmark gave initial support for a British plan for a European-led naval mission to ensure safe shipping through the Strait of Hormuz, proposed after Iran’s seizure of a British-flagged tanker, three senior EU diplomats said on Tuesday
  • The cautious backing at a meeting of EU envoys in Brussels contrasts sharply with the lukewarm response shown by European allies to a similar American call first voiced at NATO in late June, when countries feared they could make US-Iranian tensions worse.
  • Britain tested the idea to senior EU diplomats at a meeting in Brussels, saying it would not involve the European Union, NATO or the United States directly, the diplomats said. It was the first formal European meeting since British foreign minister Jeremy Hunt outlined the plans to parliament on Monday to protect the Strait.
  • British foreign ministry and defence officials have also discussed a possible mission, which would likely involve not just ships but aircraft too, directly with their Italian, Spanish, French and German counterparts.

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, 23/07/2019

Politico – Hans von der Burchard / Europe braces for Trump trade war

  • EU trade chief Cecilia Malmström has warned that the US is likely to soon impose retaliatory tariffs on up to $25 billion of European products, as part of a dispute over airline subsidies. Washington has also launched a trade investigation into France’s digital services tax.
  • It could get even worse. Seven Commission officials and EU diplomats said they fear Trump will carry out a long-standing threat to impose painful auto tariffs as early as November. The EU has said it is ready to retaliate with its own tariffs targeting €20 billion of US exports.
  • There is no indication that trade talks will move forward before then. The two sides have published conflicting negotiating directives, with the US demanding the inclusion of agriculture in the talks and the EU categorically excluding any farm products.
  • “My forecast is that by this November, the threats will get more tangible,” said Gary Hufbauer, of the Peterson Institute. “For example, a 10 percent auto tariff starting in February, and then threatening to increase it over the course of the year. That keeps the drum going ahead of the elections.”

European Council on Foreign Relations / Prominent Europeans call for change in approach to EU foreign policy

  • As the world descends into geopolitical competition, Europeans are in danger of becoming hapless playthings in a tussle for pre-eminence between China, Russia, and the US. But this can be avoided if Europeans take their destiny into their own hands.
  • We therefore call on the new EU leadership team, who will take over in late 2019, to understand the challenge that confronts them and receive the tools they need from EU governments to change Europe’s approach to foreign policy.
  • First, they must set out on a quest for strategic sovereignty for Europe. This should have economic and financial elements, security and defense elements, and political diplomatic ones.
  • Second, they must re-operationalize European security and defense. Europeans should take more responsibility for their security and become a better partner for the US by strengthening the European pillar in NATO. They must also consider innovations such as a European Security Council.
  • Third, they must build a stronger link between EU institutions in Brussels and national governments on foreign policy. If EU foreign policy is to be effective, it cannot just rely on the High Representative and Vice President to carry the political burden.

Turkish Minute / Readmission agreement with EU suspended, Turkish FM says

  • Turkish Minister of Foreign Affairs Mevlüt Çavuşoğlu has announced that Turkey’s readmission agreement with the EU has been suspended.
  • Çavuşoğlu said the readmission agreement should have gone into effect simultaneously with a visa liberalization for Turkish citizens that has not been implemented despite being a part of the wider deal Turkey signed with the EU in March 2016.
  • Turkey refused to revise its anti-terror laws, which Brussels insisted were not compatible with European standards, thus deadlocking the visa liberalization part of the deal.
  • Çavuşoğlu’s announcement came soon after the EU adopted several sanctions for Turkey over its hydrocarbon drilling activities off Cyprus, which have led to tensions with Greece. “The EU only takes decisions to satisfy the Greek Cypriots and Greece. Their sanctions have no value,” said Çavuşoğlu.

Al-Monitor – Bruce Riedel / US troops return to Saudi Arabia after 16 years

  • American troops are coming back 16 years after they left Saudi Arabia. According to press reports, hundreds of American troops are deploying to Prince Sultan Air Base outside Riyadh as tensions with Iran spike.
  • Considering the deployment of American troops in the kingdom has never been popular with Saudis, the move underscores how concerned King Salman is about the regional situation. The government-controlled Saudi press has openly called for American military action in response to Iranian attacks on oil tankers.
  • The US Congress has made it clear that it wants the administration to fundamentally review American policy toward the kingdom and especially the crown prince. By sending American troops back to the air base, the Trump administration is acting in the opposite direction.
  • The new deployment makes the US a direct combatant in the Yemen war if Patriot missiles there are used to defend against Houthi attacks. The risk of miscalculation and escalating violence is growing. The crown prince may even believe that he can escape from the toxic consequences of his reckless behavior through a bigger crisis, even a regional conflict.
  • The Guardian – Mohammad Khatami / By punishing Iran, Trump risks a full-scale war between our two countries

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, 22/07/2019

The Guardian – Patrick Wintour / Iran crisis: what are Britain’s options in tanker standoff?

  • As Jeremy Hunt awaits a new prime minister, who will most likely be Boris Johnson and not himself, the British foreign secretary has only the lukewarm support of Europe for the UK’s decision to seize the Iranian-flagged Grace 1 in Gibraltar.
  • Although there is solidarity over Iran’s recent capture of the British-flagged oil tanker Stena Impero, the wisdom (and legality) of the original British move has been questioned. The Royal Marines landing on the vessel was the equivalent of putting a lighted match into a kerosene-laden tinderbox.
  • Hunt also has the unreliable support of an American president whose intentions towards Iran are entirely different to those of the UK and whose actions over the past years have amounted to diplomatic vandalism, according to the outgoing UK ambassador to Washington, Sir Kim Darroch.
  • In this confined space, Britain probably still wants to de-escalate the crisis. Some limited sanctions aimed at individuals in the Revolutionary Guards are inevitable, but they will not at this stage represent a return to the kind of sanctions that existed before the Iran deal, whose joint commission is due to meet shortly to discuss Iran’s suspended commitments.

Financial Times – Robin Harding / Abe fails to win two-thirds majority needed to revise constitution

  • Japanese prime minister Shinzo Abe’s chances of becoming the first man to revise the country’s pacifist constitution have suffered a serious blow after his ruling coalition fell short of a two-thirds supermajority in the upper house of parliament.
  • Final results showed Abe’s LDP winning 57 of the 124 seats up for election, similar to its showing at the last upper house poll in 2016, but down from the 66 it won in 2013 when the same seats were last up for election. Half of the seats in Japan’s less powerful upper house are elected every three years.
  • Komeito, the LDP’s coalition partner, won 14 seats. Adding those seats that were not up for election leaves the government with a comfortable majority of 141 out of the 245 seats in the upper house but short of the 164 needed for a supermajority.
  • “Various polls show that constitutional reform is an extremely low priority for the public,” said Yukio Edano, head of the Constitutional Democratic party, which gained seats and consolidated its position as the main opposition force.
  • BBC / Ukraine election: President Zelensky’s party heads for win

The New York Times – The Editorial Board / What’s America’s winning hand if Russia plays the China card?

  • Until recently, any relationship between Russia and China could be dismissed as a marriage of convenience with limited impact on American interests. But since Western nations imposed sanctions on Russia after it invaded Ukraine, Chinese and Russian authorities have increasingly found common cause.
  • Xi Jinping and Vladimir Putin have met almost 30 times since 2013. Russia recently agreed to sell China its latest military technology, including S400 surface-to-air missiles and SU-35 fighter jets. The two nations often vote alike at the United Nations and have similar positions on Iran and North Korea.
  • President Trump is correct to try to establish a sounder relationship with Russia and peel it away from China. But his approach has been ham-handed. America can’t seek warmer relations with a rival power at the price of ignoring its interference in American democracy.
  • Yet even during the Cold War, the US and the USSR often made progress in one facet of their relationship while they remained in conflict over other aspects. The US needs to explore avenues of cooperation with Russia (e.g., on arms control) and to rally its democratic allies, rather than berate them.

Foreign Policy – Adam Tooze / Why central banks need to step up on global warming

  • Central bankers are beginning to worry about the potential for climate change to trigger financial crisis. But as of yet, the central banks’ response has been defensive, focusing on managing financial risks. The rest of us have no choice but to hope that they move into a more proactive mode in time.
  • Given the increase of catastrophic risk, the insurance industry faces a basic question: who will pay. One likely outcome is that nobody in the market could afford it. Without the ability to insure against catastrophic loss, the global credit system as we know it would simply cease to function.
  • Oil remains too cheap, and ending its consumption will require deliberate government action. That is precisely what fossil fuel interests have been lobbying hard to prevent. By resisting progressive adjustment, they are courting a revolution, which is very bad news for the financial system.
  • Angela Merkel’s decision to end nuclear power generation in Germany after the Fukushima nuclear accident may be a foretaste of what’s to come. This scenario—protracted denial followed by panic-driven decarbonization—is what concerns the central bankers most of all. And it is closest to our reality.
  • Instead of focusing only on financial stability, central banks and financial regulators should be exploring what they can do to alter the course of economic growth so that the world can rapidly decarbonize and thus prevent worst-case climate change—and the related financial fallout—in the first place.
  • Foreign Policy / Who will save the planet?

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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