ESADEgeo Daily Digest, 29/11/2017

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CNN—James Griffiths / North Korea missile launch: The most important things to know

  • North Korea’s state media declared the Hwasong-15 missile that was tested was “the most powerful ICBM” which carried a “super-large heavy warhead” to unprecedented heights of almost 4,500 kilometers.
  • “Such a missile would have more than enough range to reach Washington, DC, and in fact any part of the continental United States,” said David Wright, an expert with the Union of Concerned Scientists. However, that range probably wouldn’t be possible if the missile were fitted with a heavy nuclear warhead, and re-entry vehicle capabilities remain unclear.
  • “They have been developing their nuclear capabilities faster than expected,” South Korean Unification Minister Cho Myoung-gyon said. “We cannot rule out the possibility of North Korea declaring the completion of their nuclear program next year.”
  • The use of mobile launchers and quick fueling stymies the ability of the US or South Korea to launch a pre-emptive strike against any planned North Korean attack, and increases their effectiveness as a deterrent.
  • The South’s army, navy and air force jointly fired three missiles (a ground-to-ground missile, a ship-to-ground missile and an air-to surface missile) and hit the same target around the similar time to show its ability to target North Korea’s origin of provocation.
  • A North Korean official said following Wednesday’s launch that Pyongyang was not interested in diplomacy with the US until it had fully demonstrated its nuclear deterrent capabilities. An above-ground nuclear detonation or “large-scale hydrogen bomb” test may follow soon.

The Guardian—Daniel Boffey & Jennifer Rankin /  Brexit divorce bill: UK could pay £50bn after bowing to EU pressure

  • Negotiations have led to a broad agreement by the UK to a gross financial settlement of £89bn (€100bn) on leaving the EU, although the British expect the final net bill to be half as much.
  • While EU sources have spoken in recent months of £53bn to £58bn (€60bn to €65bn), both sides are trying to avoid talking numbers to help the British government deal with the potentially toxic political fallout.
  • Sources made clear that the discussion at the meeting of the Brexit cabinet subcommittee did not include agreeing to a particular figure, but instead to signing up to a method by which the bill could be calculated.
  • For EU diplomats the moment of truth will come at a meeting between Theresa May and Jean-Claude Juncker on 4 December, when all three Brexit divorce issues will be on the table: the Brexit bill, the Irish border and protecting EU citizens’ rights. The signs of agreement over money have left the Irish border as the most uncertain issue hanging over the talks.

Financial Times—Jim Brunsden & Mehreen Khan / Socialist pair emerge as favourites to lead eurogroup

  • Two southern European socialists – Mário Centeno, Portugal’s finance minister, and Pier Carlo Padoan, his Italian counterpart – are in the running to succeed Jeroen Dijsselbloem at the helm of the eurogroup of finance ministers, ahead of Monday’s vote.
  • The race for the presidency has been shaken up by this week’s decision by the European People’s party not to put forward a candidate. This has set up the possibility that its ministers will throw their weight behind a single centre-left candidate.
  • Peter Kazimir is considered to have less support in Europe’s socialist family, but the Slovak is popular on the right and could still emerge as a compromise candidate.
  • Dijsselbloem is set to stand down from the eurogroup’s Presidency in January.

The New York Times—Stanley Reed / OPEC leader cites ‘new optimism’ with oil prices on the rise

  • Fast-rising oil prices in the last two months leave OPEC members – which are gathering tomorrow in Vienna – with a quandary: Do they again extend production cuts first announced a year ago? What had seemed to analysts to be a foregone conclusion now looks to be more complex.
  • Potential developments could send oil prices lower again, from the impact of shale oil producers in the United States to a collapse of the agreement on production cuts.
  • American shale companies, in particular, are seen as the swing producers in the market, able to ramp up output to meet rising demand and take advantage of rising prices. Current prices could lead to a surge in drilling.
  • Higher prices could also strain an agreement between Saudi Arabia and Russia to hold down production. Russia has been rapidly drilling recently and could add up to one million barrels to its daily output over the next five years.
  • Still, most analysts expect OPEC and Russia to extend their production cuts. While OPEC has often moved to stem price declines, it has less of a track record of constraining price increases.

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

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