ESADEgeo Daily Digest, 05/11/2018

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Financial Times / Europe prepares for US Iran sanctions hit

  • Hours before today’s launch of a US squeeze on Iran’s energy industry and central bank, European diplomats said a planned special channel to safeguard non-US trade with Iran (the so-called Special Purpose Vehicle, SPV) would not be ready in time.
  • “We are now actively working on where the SPV will be located, deciding who will participate, and starting the process of registering it,” a French finance ministry official said.
  • The Trump administration will add more Iranian banks to its sanctions list on Monday, forcing international financial messaging system Swift to choose whether to fall in line with the US and cut the institutions from its global cross-border payment network.
  • The Belgium-based company could face possible punishment under new EU rules if it complies with US orders. Iranian analysts say that — regardless of Swift’s decision — the world’s top banks would be unlikely to handle Iranian transactions for fear of facing massive penalties.
  • European Council on Foreign Relations – Mark Leonard / The new tyranny of the dollar

Al-Monitor – Jack Detsch / Middle East upheaval casts a shadow over ‘Arab NATO’

  • The two-week-long “Shield of the Arabs I” exercise that started in Egypt on Saturday brings together troops and advisers from eight Arab nations (Egypt, Saudi Arabia, the United Arab Emirates, Kuwait, Bahrain, Jordan, Lebanon and Morocco) in a glimpse of the joint strength of the region’s most powerful militaries.
  • The Middle East Strategic Alliance (MESA), Washington’s name for a repeatedly delayed military consortium first floated by Saudi Crown Prince Mohammed bin Salman and aimed at countering Iran, remains slated for a delayed January rollout but could face another postponement.
  • A US official told Al-Monitor that the Trump administration hopes to see a resolution to the diplomatic row between Qatar and its Gulf neighbors before the alliance is formalized.
  • The long-delayed MESA pact may face more trouble getting off the ground in the coming months, as the US administration pushes for a UN-backed cease-fire in Yemen and a full probe into the killing of Saudi journalist Jamal Khashoggi.

South China Morning Post – Minnie Chan / Chinese warship crew says ‘good morning’ to Japanese helicopter carrier sailors in South China Sea

  • The crew of a Chinese warship sent a friendly greeting to Japanese sailors aboard a helicopter carrier they encountered in the South China Sea recently in what analysts said was a further sign, albeit superficial, of the warming ties between the two Asian giants.
  • The sentiment was in stark contrast to that of a message sent in August by the People’s Liberation Army – China’s military – to the crew of a US Navy P-8A Poseidon reconnaissance plane flying over the Spratly Islands in the disputed waterway, which said simply, “leave immediately”.
  • Despite the improvement in relations between Beijing and Tokyo, and the “historic turning point” achieved by the visit to China of Japanese Prime Minister Shinzo Abe last month, naval expert Li Jie said the PLA Navy would continue to keep a close eye on Japanese military vessels in the region.
  • “The Chinese navy only sent the friendly message because the Japanese warship wasn’t in a sensitive area and was not being in any way provocative,” said Song Zhongping, a military commentator for Hong Kong’s Phoenix Television.
  • South China Morning Post – John Power & Catherine Wong / Exclusive details and footage emerge of near collision between warships in South China Sea

Project Syndicate – Interview with Angus Deaton, Barry Eichengreen, Rana Foroohar, Glenn Hubbard & Edmund S. Phelps / Trumponomics and the US midterm elections

  • Following Donald Trump’s surprise victory in the 2016 US presidential election, many economists predicted that he would usher in another global recession, despite having inherited an economy with sound fundamentals. Were those predictions wrong, or simply premature?

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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