ESADEgeo Daily Digest, 11/10/2017

Financial Times—T. Barber / Catalan concession is not enough to overcome Madrid’s mistrust

  • Yesterday, Catalan PM Carles Puigdemont stepped back from the brink, but almost certainly did not step back far enough for the Spanish authorities to consider it a turning point in the crisis.
  • In the short term, Mr Puigdemont may have shown just enough restraint to persuade the Spanish government not to crack down on the separatists harder than it has already done.
  • Madrid’s extra options range from arresting the ringleaders, or imposing heavy fines on them for disobeying the law, to declaring a state of emergency or suspending Catalonia’s autonomy.
  • For the present, Mr Rajoy may decide that no such drastic action is necessary.

Brookings—S. Maloney / To certify or not to certify? That’s not the question

  • Instead of re-litigating the well-traveled turf surrounding the JCPOA (whose primary advantage has always been the absence of a compelling alternative), what Washington needs now is a credible, bipartisan strategy for addressing the unresolved question of how to persuade Tehran to play a more constructive role at home and abroad.
  • The mechanism that President Trump has seemingly chosen—refusing to certify Iranian compliance with the deal in a period report to Congress, while counseling against the re-imposition of sanctions—is entirely a domestic political gesture. Congressional action to re-impose the nuclear-related sanctions on Iran appears highly unlikely.
  • In light of Iran’s compliance with the JCPOA, de-certification would have to be predicated on the dubious proposition that the deal does not serve American national security interests, a position Trump’s own defense secretary, James Mattis, refuted only days ago.
  • Even if de-certification did not have immediate implications for the deal itself, it would have a significant and almost certainly disastrous impact for American diplomacy. Over time, the Iranians would be tempted to edge away from their own obligations, under the expectation that most of the blame would remain directed toward Washington as the first mover.
  • The consequential uncertainty surrounding the Iran deal flies beneath the radar of the hype around de-certification: Will Trump continue to waive the nuclear-related sanctions as required by the JCPOA? The next decision point there does not come until January.

Foreign Affairs—A. Borshchevskaya / Will Russian-Saudi Relations Continue to Improve?

  • Whether the Russia-Saudi Arabia rapprochement will last is unclear. What is certain, however, is that Russia’s new Saudi ties show Putin’s sway in the Middle East remains on the upswing.
  • Back in 2007, Putin was the first Russian head of state ever to visit Riyadh, against the backdrop of Saudi frustration over the U.S. war in Iraq and Washington’s support for the Shiite government in Baghdad. Yet the outbreak of the Syrian Civil War in 2011 stymied any real development in bilateral ties.
  • Now, Moscow is looking to strengthen its economic relationship with Riyadh. Putin knows that Russia’s stagnating economy needs foreign investment, and there are also shared oil interests with Saudi Arabia. In addition, Putin continues to seek to peel the United States away from its allies.
  • Saudi Arabia recognizes that Assad is not leaving power soon, and so seeks to open the door to reconciliation through Moscow. Riyadh also likely hopes that by offering economic incentives, it can induce Russia to distance itself from Iran, even in the Yemen war.
  • However, driving a wedge between Russia and Iran is a far greater challenge than many analysts acknowledge.

Financial Times—A. Ward & D. Keohane / BNP to cut links with shale and tar sands groups

  • BNP Paribas is to stop doing business with companies whose primary activity involves oil and gas extracted from shale deposits or tar sands.
  • BNP also ruled out involvement in oil and gas exploration and production in the Arctic.
  • The move expands an earlier commitment by the bank to stop financing coal mining and coal-fired power projects.
  • The immediate impact of the new policy is likely to be limited because BNP Paribas has relatively little exposure to the resources it is blacklisting, most of which are concentrated in North America.
  • However, BNP’s new policy demonstrates mounting scrutiny from financial institutions of “climate risks”.

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

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