The ESADEgeo Daily Digest, 28/07/2017

Financial Times—M. Strothard & J. Politi / Macron nationalises shipyard to defend French ‘strategic interests’

  • President Macron made the decision to temporarily nationalize the STX France shipyard (the only one in France with facilities large enough to build aircraft carriers) to stop it from falling into Italian hands.
  • Bruno Le Maire, the French economy minister, said that the decision was aimed at defending “France’s strategic interests in shipbuilding” and guaranteeing that jobs remain in the country.
  • Italian state-owned shipbuilder Fincantieri earlier this year struck a preliminary deal to buy two-thirds of STX France.
  • The Italians declined Macron’s offer of a 50/50 split this week, with the Italian economy minister saying that Macron was failing to live up to the “pro-Europeanism and liberal values” he espoused in his presidential campaign.

Project Syndicate—J. E. Stiglitz / Why tax cuts for the rich solve nothing

  • Senate procedures dictate that to enact tax reform with a simple majority, rather than the 3/5 supermajority required to defeat an almost-certain filibuster by opposition Democrats, the reform must be budget-neutral for 10 years.
  • If corporate tax reform happens at all, it will be brokered behind closed doors. More likely is a token across-the-board tax cut: the losers will be future generations, out-lobbied by today’s avaricious moguls.
  • There is simply no theoretical or empirical basis for the claim that lower tax rates spur growth, especially in big countries like the US.

The New York Times—D. E. Sanger / Trump seeks way to declare Iran in violation of nuclear deal

  • President Trump has instructed his security aides to find a rationale for declaring that Iran is violating the terms of the nuclear deal.
  • American officials have already told allies they should be prepared to join in reopening negotiations with Iran or expect that the US may abandon the agreement.
  • Trump: “It’s easier to say [Iran complies]. It’s a lot easier. But it’s the wrong thing. They don’t comply.”
  • The chairman of the Senate Foreign Relations Committee, Bob Corker, called for a more nuanced approach. “Radically enforce it,” he said of the deal, demanding access to “various facilities in Iran.” ”If they don’t let us in,” Mr. Corker said, “boom.”
  • The State Department complained that an Iranian launch of a missile into space yesterday violated the spirit of the nuclear accord. Such tests of what are essentially carrier rockets are not prohibited by the agreement.

The New York Times—J. Horowitz / Italy plans naval mission off Libya to stop migrant boats

  • Italy’s prime minister Paolo Gentiloni convened top cabinet ministers on Thursday to discuss a plan to send Italian warships into Libyan territorial waters to combat smugglers.
  • The step came a day after Italy struck a long-elusive deal with Libyan authorities to give it a freer hand along the African coast.
  • The strategy needs the approval of parliament, which is scheduled to begin debating the potential deployment next Tuesday.
  • Issues pending clarification include what Italian warships would do if they encountered hostile human traffickers in foreign waters; whether they can stop arms and oil smugglers as well as human traffickers; and whether the migrants they might have to rescue should be returned to Libya.

The selected pieces do not necessarily reflect the views of Javier Solana and ESADEgeo. 

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