EsadeGeo Daily Digest, 20/05/2020

The New York Times – Ronen Bergman and David M. Halbfinger / Israel hack of Iran port is latest salvo in exchange of cyberattacks

  • Israel was behind a cyberattack on May 9 that disrupted operations at a major port in Iran, according to high-ranking intelligence officials and experts in the Middle East who are kept informed of covert Israeli actions in the region.
  • The attack on the computer systems at the Shahid Rajaee port in the strategically important Strait of Hormuz was limited in scope, creating traffic jams of delivery trucks and some delays in shipments, but causing no substantial or lasting damage.
  • Israel and Iran have recently been engaged in an exchange of attempted and successful cyberattacks, and the purpose of Israel’s relatively small-scale effort at the port, according to intelligence officials, was to send a message to Tehran: Don’t target Israeli infrastructure.
  • The incident that prompted the Israeli attack on the port happened on April 24, when a pump at a municipal water system in the Sharon region of central Israel stopped working. The attack and its quality were described by intelligence official as “miserable.”
  • Haaretz – Amos Harel / With cyberattack on Iranian port, Tehran gets a warning: civilian installations are a red line

The Guardian – Daniel Boffey / Brexit talks: Britain accuses EU of treating UK as ‘unworthy’ partner

  • Britain’s chief negotiator, David Frost, has accused Brussels of treating the UK as an “unworthy” partner by offering a low-quality trade agreement that he says would force the country to “bend to EU norms”. the prime minister’s envoy says Brussels’ proposal that EU state aid rules be part of British law is “egregious” and “simply not a provision any democratic country could sign”.
  • He further accuses Barnier of demanding unprecedented oversight over British laws and institutions through “novel and unbalanced proposals”, in an intervention that will heighten fears that the talks are now destined to fail. The letter, sent shortly after the publication of the UK’s draft trade and security treaty, highlights the tension at the heart of the negotiation.
  • Frost says the EU demands would tie the UK to Brussels’ labour, environmental and social standards while offering a trade deal that fails to match those signed with others in reducing barriers to trade in animal products, motor vehicles, medicinal products, organics and chemicals.
  • He writes that the UK government’s proposed free trade deal is very close to that signed with Canada. The draft fisheries proposal is akin to that between the EU and Norway, he claims, and on aviation he says the UK is not seeking more than that given to other non-EU countries.
  • The Washington Post – Pan Pylas / As EU talks stall, UK outlines tariffs for post-Brexit world

Financial Times – Richard Milne / Sweden’s death toll unnerves its Nordic neighbours

  • Denmark, Finland and Norway are debating whether to maintain travel restrictions on Sweden but ease them for other countries as they nervously eye their Nordic neighbour’s higher coronavirus death toll. Sweden has the highest mortality rate per capita at this stage of the epidemic, according to a Financial Times tracker that uses a seven-day rolling average of new deaths.
  • It has overtaken the UK, Italy and Belgium in recent days. Last week, the Baltic states joined forces to create a “travel bubble” allowing for free movement between Estonia, Latvia and Lithuania. But Maria Ohisalo, Finland’s interior minister, said a similar Nordic bubble would be tricky because of Sweden’s higher infection rate.
  • Sweden’s no-lockdown approach to the virus has attracted international scrutiny and some criticism but it still enjoys significant public support at home. But in recent weeks, as the death toll has fallen significantly in other European countries such as Spain, Italy, France and the UK, Sweden’s has remained stubbornly high.
  • Sara Byfors, a leading specialist at Sweden’s public health agency, said she was not aware of the tracker’s numbers. She added: “We are concerned about people dying from the disease. It’s not something we take lightly . . . We keep on working on our strategy. And also in Sweden we see that the epidemic is slowing down.”
  • Politico – Charlie Duxbury / Sweden won’t dodge economic hit despite COVID-19 light touch

Foreign Affairs – Henry M. Paulson Jr. / The future of the dollar

  • The enduring dominance of the dollar is remarkable—especially given the rise of emerging markets and the relative decline of the U.S. economy, from nearly 40 percent of world GDP in 1960 to just 25 percent today. But the dollar’s status will be tested by Washington’s ability to weather the COVID-19 storm and emerge with economic policies that allow the country to manage its national debt and curb its structural fiscal deficit.
  • The dollar’s role as the primary global reserve currency makes it possible for the United States to pay lower rates on dollar assets than it otherwise would. Equally significant, it enables the country to run larger trade deficits, reduces exchange-rate risk, and makes American financial markets more liquid. 
  • Beijing still has major hurdles to overcome before the RMB can truly emerge as a primary global reserve currency. Among other transformative measures, it needs to make more progress in moving to a market-driven economy, improve corporate governance, and develop efficient, well-regulated financial markets that earn the respect of international investors.
  • The United States should maintain its lead in financial and tech innovation and preserve the conditions that created the dollar’s primacy in the first place. In short, sustaining the dollar’s status will not be determined by what happens in China. Rather, it will depend almost entirely on the United States’ ability to adapt its post-COVID-19 economy so that it remains a model of success.
  • Bloomberg – Cagan Koc / Turkey turns to Gulf ally again with $15 billion Qatar swap line

Today’s long read:

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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