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The ESADEgeo Daily Digest, 26/05/2017

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Financial Times—A. Beesley, A. Barker, & D. Sevastopulo / Donald Trump fails to endorse Nato’s mutual defence pledge

  • Trump’s remarks at the opening of NATO’s new headquarters stopped well short of the public endorsement of Article 5 his European allies had expected. The omission was even more remarkable given that Trump unveiled a memorial to 9/11 and to Article 5, which was invoked for the first and only time after the 2001 attacks.
  • Thomas Wright, expert on US-Europe relations at the Brookings Institution: “[it] is a devastating blow to America’s NATO allies”.
  • Sean Spicer, White House press secretary, played down the omission, arguing that “the entire ceremony was called an Article 5 dedication”. Jens Stoltenberg, NATO secretary-general, also said that Trump was committed to the security guarantee.
  • Trump urged other NATO member states to contribute more to the organization financially. “I have been very very direct […] saying that NATO members must finally contribute their fair share and meet their financial obligations”.
  • Yesterday, Trump also had a meeting with French President Emmanuel Macron, which was “extremely direct and very frank”, in Macron’s words.
  • Trump had met earlier with Donald Tusk, president of the European Council, and Jean-Claude Juncker, chief of the European Commission. After the meeting, Tusk said that “I’m not 100 per cent sure [...] that we have a common opinion about Russia, although when it comes to the conflict in Ukraine it seems we were on the same line”.

POLITICO—Z. Sheftalovich / Trump calls Germans ‘bad, very bad,’ vows to curb car imports: report

  • German newspapers reported that Trump said during a meeting with EU leaders yesterday that “the Germans are bad, very bad”.
  • “See the millions of cars they are selling in the U.S. Terrible. We will stop this”, said Trump according to Der Spiegel.
  • European Commission President Jean-Claude Juncker responded by supporting Germany.
  • EU officials believe their U.S. counterparts still do not understand the fact the EU negotiates trade agreements as a bloc, not on a country-by-country basis.

Project Syndicate—S. S. Roach / Rethinking the next China

  • China now appears to be changing from an adapter to a driver of globalization. President Xi’s “China Dream” is taking shape as a concrete plan of action, centered on China’s Belt and Road plan.
  • China’s economic transition is far from complete. Chinese leaders have conceded that a consumer-led growth strategy is tougher to pull off than originally thought. A porous social safety net continues to foster high levels of fear-driven precautionary saving, which is inhibiting the growth of discretionary consumption.
  • Furthermore, China’s global push has many of the features of the old producer model. Consumer-led growth has been deprioritized.
  • In short: the “Next China” is shaping up to be more outwardly focused, more assertive, and more power-centric than could be expected in 2010.

Foreign Affairs—A. M. Tabatabai / Iran after the election

  • After the Iranian elections, the battle is not over: hardliners are now seeking to oppose Rouhani more forcefully by creating a shadow government.
  • Raisi and his principalist allies, who believe in self-reliance and returning to the core values of the revolution, see the result as a source of legitimacy and political capital to push back against Rouhani’s ambitious agenda.
  • Saeed Jalili—Ahmadinejad’s chief nuclear negotiator and a presidential candidate in 2013—announced he’d be creating a shadow government. Jalili is a fringe figure in Iranian politics, but the move is consequential, as it builds on calls by principalists to make use of the large bloc of votes cast for Raisi.
  • Khamenei tends to favor stability. If the shadow government can function to limit Rouhani’s ability to move forward with his ambitious agenda without rocking the boat too much, Khamenei will likely be on board.

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

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The ESADEgeo Daily Digest, 25/05/2017

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Project Syndicate—Guy Verhofstadt / Confronting Europe’s Illiberals

  • European leaders too often shout from the sidelines when they should be on the field, acting to defend common European interests.
  • By shifting the burden of managing refugee flows to frontline countries, European solidarity has been eroded.
  • What is more, illiberal values have taken root in the EU itself, as proved by Poland and Hungary. In those countries, EU money is effectively being used to stoke Euroskepticism.
  • There appears to be a paradox in the EU: once a country has gained entry into the bloc, there is little that can be done to ensure that it maintains democratic standards and upholds European values.
  • The EU’s only option now is to invoke Article 7 of the Treaty of Lisbon, which could ultimately remove Hungary’s voting rights within the EU. And, after Orban, we must turn our attention to Kaczyński.
  • We need to restore the values-based community that once helped us face down dictators like Francisco Franco.

Financial Times—A. Chassany, G. Chazan & J. Politi /  EU leaders seek to charm Trump over climate deal

  • European leaders will try to collectively persuade President Trump, during his first visit to Europe, to stick with the Paris agreement.
  • French President Emmanuel Macron will lead a charm offensive during a lunch with his U.S. counterpart in Brussels today.
  • Germany’s strategy will be to insist on the idea that “when it’s done properly, climate protection is compatible with economic growth — they are not mutually exclusive”.
  • Secretary of State Rex Tillerson told reporters on his way to Brussels that the U.S. “hasn’t made a final decision”, and was not likely to “until after we get home”.
  • Yesterday, Pietro Parolin, the Vatican secretary of state, urged the U.S. to stay in the Paris accords.

South China Morning Post—S. Jiangtao / US warship sails to within a few miles of island built up by China in Spratlys

  • Under a so-called “freedom of navigation operation”, a U.S. navy warship has sailed within 12 nautical miles of one of China’s man-made islands in the disputed South China Sea—specifically, in the Spratly Islands.
  • This is the first such challenge to Beijing since President Donald Trump took office, and the first operation near a land feature which was included in a ruling last year against China by an international arbitration court in The Hague.
  • Bonnie Glaser, Asia-Pacific security expert at the Centre for Strategic and International Studies: “US-China relations are now stabilized. China fully expects that freedom of navigation operations will continue, so they are not surprised”.
  • These operations were conducted regularly in the South China Sea under the Obama administration, with US navy vessels sailing within 12 nautical miles of China’s artificial islands at least 3 times in the past 18 months.
  • Speculation has been rife that the Trump administration wants to scale back the operations, in what would be seen as another concession to China.

The Economist / How Islamic State clings on in Libya

  • ISIS’ branch in Libya, considered the most lethal outside the Levant, was pushed out of its coastal stronghold in December and hit hard by American bombers in January.
  • The jihadists are down, but not out. Many of the fighters have regrouped in a swathe of desert valleys and rocky hills south-east of Tripoli.
  • There are thought to be around 500 ISIS fighters operating in Libya, but perhaps 3,000 jihadists of all types. ISIS is now said to be receiving support from local al-Qaeda fighters, despite feuding between the groups’ leaders abroad.
  • ISIS has fed on the Libyan chaos—and added to it, lately by attacking water pipelines and pumping stations.
  • It is difficult to attack ISIS targets in Libya either from the ground or from the air, and Libya’s neighbors are growing concerned.
  • British police are probing links between Salman Abedi, the Manchester suicide-bomber, and ISIS in Libya.

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

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The ESADEgeo Daily Digest, 24/05/2017

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Foreign Affairs—Z. Haider / Can the U.S. pivot back to Asia?

  • China is leveraging its resources to build multilateral institutions and initiatives with significant global support.
  • In his opening remarks at the first Belt and Road Forum last week, Chinese President Xi Jinping called upon the attendees to “build an open platform of cooperation and uphold and grow an open world economy,” echoing the speech he gave at Davos in January.
  • China is signaling that it is ready to assume to mantle of global economic leadership. According to Xi, the Belt and Road Initiative is “the project of the century”.
  • Washington must push back against China’s attempt to create its spheres of influence, trade, and investment across Africa, Asia, and Europe. But it must also carve out areas for cooperation with Beijing (through open discussions), since there are opportunities for Belt and Road to serve U.S. interests.
  • One way or another, the Trump administration must find its way back into the TPP, and aggressively promote U.S. investment and infrastructure-building in Asia.

The New York Times—D. E. Sanger & M. Haberman / Trump Praises Duterte for Philippine Drug Crackdown in Call Transcript

  • In a phone call last month, President Trump praised President Duterte for doing an “unbelievable job on the drug problem”, according to the Philippine transcript of the call. A senior administration official confirmed on the condition of anonymity that the transcript was an accurate representation of the call between the two leaders.
  • The program has been widely condemned by human rights groups around the world because extrajudicial killings have taken thousands of lives without arrest or trial.
  • About North Korea, Trump tried to reassure Duterte. “We have a lot of firepower over there,” Trump noted. “We have two submarines — the best in the world. We have two nuclear submarines, not that we want to use them at all.”
  • Trump discussed with Duterte China’s potential influence, and called President Xi “a good guy”.
  • The U.S. President twice invited Duterte to “come to the Oval Office.”

POLITICO—B. Smith-Meyer & R. Heath / Eurogroup confronts own deficit: governance

  • Leo Hoffmann-Axthelm, advocacy coordinator with the NGO Transparency International: “The Eurogroup should be institutionalized, with proper rules of procedure, document handling and a physical address with actual spokespeople. We can no longer be governed by an informal club.”
  • Emily O’Reilly, the EU’s ombudsman, is among those calling for reform. “It is obviously difficult for Europeans to understand that the Eurogroup, whose decisions can have a significant impact on their lives, [isn’t] subject to the usual democratic checks and balances.”
  • However, some of those who participate in Eurogroup meetings argue that its informality is precisely what makes it useful. The last thing they want is another bureaucratic EU institution.
  • The Eurogroup’s future is likely to depend on increasing the levels of trust and transparency. Dijsselbloem, the Eurogroup President, has moved in that direction, including issuing annotated agendas and written statements after its meetings.
  • France’s President Emmanuel Macron has floated a much more ambitious reform of the Eurozone that envisions a cross-border finance ministry.

Brookings—B. Bernanke / Some reflections on Japanese monetary policy

  • Bernanke argued in the past that, if the Bank of Japan (BOJ) showed more resolve, it could overcome the problem of deflation. But, since Shinzo Abe’s election in 2013, the Bank has shown great resolve, and while the results have generally been positive, deflation has not been decisively vanquished.
  • Some features of the Japanese economy and the legacies of past policies are interacting to prevent faster progress towards the BOJ’s inflation objective. These are factors outside the BOJ’s control.
  • The BOJ shouldn’t stop its determined pursuit of its inflation target.
  • If more stimulus is needed, the most promising direction would be through fiscal and monetary cooperation, in which the BOJ agrees to temporarily raise its inflation target as needed to offset the effects of new fiscal spending or tax cuts on the debt-to-GDP ratio. Such coordination could help generate the extra aggregate demand the BOJ is seeking.

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

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The ESADEgeo Daily Digest, 23/05/2017

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Financial Times—J. Brunsden / Greek creditors fail to reach deal in 7 hours of talks

  • The Euro area is locked in a race against time to finish the negotiations about the next stages of the Greek bailout before Athens faces repayment deadlines (amounting to 7 bn euros) in July.
  • Eurozone finance ministers had hoped their meeting would bring the IMF into the bailout.
  • The next attempt to conclude a deal will take place in mid-June.
  • The IMF believes Greece’s debt is unsustainable and a substantial easing is needed. Some European countries such as Germany are reluctant to open the door to far-reaching debt relief.

POLITICO—D. M. Herszenhorn & J. Barigazzi / EU dusts off forgotten body for Brexit big time

  • The General Affairs Council (GAC), once one of the most powerful formations of the Council of the European Union but in recent years largely irrelevant, has received a new lease of life because of Brexit.
  • The GAC’s prominence ended in 2009 with the Lisbon Treaty, which created a separate Foreign Affairs Council.
  • Now, the GAC is expected to act as a gatekeeper, formally approving crucial decisions through the Brexit negotiating process and standing in for EU27 leaders, who do not want to go into the obscure details of the negotiations.
  • Any divisive issue that might arise from Brexit negotiations will first be dealt with by high-profile ministers in the GAC, with an eye toward presenting EU27 leaders with a compromise. Major decisions will still be made by the European Council.
  • The GAC will not be able to overrule Michel Barnier, the EU’s chief Brexit negotiatior, on when to start trade talks with the UK.

The Guardian—P. Beaumont & S. K. Dehghan / Donald Trump focuses fire on Iran’s support for “terrorists and militias”

  • On his visit to Israel and the West Bank, President Trump escalated his war of words against Iran.
  • Throughout his Middle East trip, Trump’s anti-Iran rhetoric has overshadowed his alleged intent to make a breakthrough in the Israeli-Palestinian peace process.
  • “The United States and Israel can declare with one voice that Iran must never be allowed to possess a nuclear weapon—never, ever—and must cease its deadly funding, training and equipping of terrorists and militias, and it must cease immediately,” said Trump in a meeting with Israeli president Reuven Rivlin.
  • Trump added that he had detected “a growing realization among [Israel’s] Arab neighbors that they have common cause with [Israel] in the threat posed by Iran.”
  • About the Iran nuclear deal, Trump said that “it was a terrible thing for the United States to enter [it].”
  • Rouhani responded by claiming that stability in the region cannot be reached without Iran.

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

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The ESADEgeo Daily Digest, 22/05/2017

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The Economist / Donald Trump’s reset on Islam

  • President Trump delivered a speech to dozens of Sunni muslim leaders in Riyadh, Saudi Arabia.
  • Trump’s appeal to fight extremism, which he now says is “not a battle between different faiths”, but “between good and evil”, seemed to go down well in Riyadh.
  • Trump did not push his audience on their generally poor human rights record. “We are not here to lecture,” said Trump. “We are not here to tell other people…what to do.”
  • The U.S. President then proceeded to ask Muslim nations to “drive out the terrorists and extremists.”
  • In his speech, Trump blamed Iran for most of the region’s problems.

The Guardian—M. Safi / Kashmir conflict shifts with top militant vowing fight is for an Islamic state

  • Zakir Musa, the 22-year-old commander of Kashmir’s largest anti-India militia, has distanced himself from the traditional goals of the independence movement in the valley, stating that his fight is “exclusively for Islam, so that Sharia [Islamic law] is established here”.
  • Musa: “I see that many people in Kashmir are engaged in a war of nationalism, which is forbidden in Islam […]
  • Musa is part of a new generation of anti-India fighters whose numbers are small, but receive considerable social media attention. In a video shared recently by the group, a militant says that “anyone who waves the Pakistan flag will be our enemy.”
  • The All Parties Hurriyat Conference, an alliance of Kashmiri separatist groups comprising the traditional leaders of the movement, issued a press release claiming that “our movement has nothing to do with these world level groups [Islamic State and al-Qaida] and practically they are non-existent in our state.” Muse then proceeded to threaten the leaders of the alliance.
  • Ayesha Siddiqa, expert in Pakistan military policy: if Musa’s views gain popularity, they “will completely change the character of the Kashmir struggle, which was secular, to something that a lot of people would not want.”

Foreign Affairs—O. Cass / Catastrophe and the climate

  • Science is clear that climate change is happening, but climate catastrophists underestimate humanity’s capacity to cope with change.
  • Increased wealth and resilience will improve society’s ability to deal with natural disasters, reducing such disasters’ disruptive force faster than climate change can increase it.
  • Gains in agricultural productivity and water management will outpace the stresses that climate change might impose.
  • Michael Mann disagrees with these views, arguing that “the fact that inaction on climate change costs far more than action does betrays Cass’ claim that economic growth will more than compensate for the harms of environmental damage.”

World Bank / Innovate4Climate: Finance and Markets Week

  • The World Bank Group is supporting the “Innovate4Climate – Finance & Markets Week” in Barcelona, Spain from May 22-26, 2017.
  • The first edition features a forum with high level government representatives, finance and business leaders focused on unlocking private sector investment needed to scale up national climate plans and to accelerate the global transition to a low-carbon, climate-resilient future.
  • Greening the finance sector; de-risking investments; driving low-carbon pathways through transformative policies and carbon pricing; and supporting the implementation of NDCs around the world are a few of the topics of this new global platform to advance the post-2015 framework.

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

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ESADEgeo Daily Digest, 18/05/2017

POLITICO - P. Briançon / 4 takeaways on Emmanuel Macron’s first cabinet

  • Macron’s cabinet is made up of 11 men and 11 women.
  • Half of the cabinet are new to politics and have never held elected office before.
  • The cabinet is politically diverse and includes representatives from all political stripes apart from the National Front, although Macron does not expect his platform’s policies to become watered down as a result of this. In light of the Socialists’ meltdown, Macron’s goal is now to erode the Républicains.
  • The choice of the conservative Bruno Le Maire as Minister of Economy can be interpreted as a signal that Macron is serious about fiscal restraint.
  • The appointment of Hulot, an environmental activist, as environment minister seems designed to counter-balance Prime Minister Philippe’s stint as an executive at Areva, the nuclear plant builder.
  • This cabinet should be viewed as a transition team until the results of the parliamentary election. Meanwhile, Macron has hinted that a law on moralizing politics will be the first on the agenda.

Brookings – S. Maloney / On Iran’s Presidential election and the future of U.S.-Iran elections

  • There has been a change in the frame of reference for U.S. policy towards Iran.
  • Rather than using the nuclear deal as the driving impetus of U.S. policy, the Trump Administration has chosen to focus on containing Iran’s behaviour in the region.
  • Trump’s trip to Saudi Arabia, which will address Iran, will initiate just as Iranians go to the polls.
  • If Raisi were to win, the nuclear deal would likely be eroded in the long term, and the U.S. would apply greater pressure on Iran (e.g., via sanctions, stepped up U.S. presence in the region, etc.).
  • Raisi would be a “gift” for Trump, as much as Ahmadinejad was a gift for George W. Bush.

Foreign Affairs – V. Sivaram & S. Saha / Power outage: cutting funding for energy innovation would be a grave mistake

  • If enacted (which is unlikely), Trump’s budget would strip the U.S. of its position as the world’s leading funder of innovative energy technologies.
  • There is no evidence for the argument that the market can compensate for a smaller public role in applied technology development. Fossil-fuel firms enjoy government subsidies and the advantages of long-standing market presences.
  • China understands this, and will seek to reinfoce its dominance in the clean energy sector. The only way that the U.S. could cut into China’s lead would be through public investment.
  • The cost-effective international programs of the Department of Energy may be the first to be slashed and, if that were the case, Washington’s diplomatic credibility would be damaged.
  • Even if Congress does not pass Trump’s budget, it may meet him halfway, which would still pose a risk.

Foreign Policy – R. Mellen / The Middle East just got its first particle accelerator

  • The Synchrotron-light for Experimental Science and Applications in the Middle East (SESAME) opened Tuesday in Amman, Jordan.
  • While it will operate as a larger research center, SESAME’s crown jewel is its synchrotron accelerator. It will be the world’s first accelerator powered solely by renewable energy.
  • SESAME has paired Israeli and Arab scientists working side by side. “There was never such a facility in the region until now, and this project is a scientific bridge between countries,” said Nasher Sawadi, a Jordanian physicist who plans to work at SESAME.
  • The $90 million facility, founded with UNESCO support, is built on the hope that its “diverse members [can] work together harmoniously,” said Chris Llewellyn Smith, President of the SESAME Council.

 

 

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ESADEgeo’s Daily Digest, 17/05/2017

Financial Times—Katrina Manson / Erdogan and Trump hail ‘new era’ of US-Turkey relations

  • Turkey’s President Recep Tayyip Erdogan hailed a new era in US-Turkey relations in yesterday’s meeting with Donald Trump.
  • Ankara has sought to dampen its criticism of the decision made by the Trump Administration to arm the Syrian Kurds, saying the US had “no choice” but to ally with the Kurds.
  • “We support Turkey in the fight against terror and terror groups like ISIS and the PKK, and ensure they have no safe quarter,” President Trump said.
  • Turkey hopes that the US will help in the extradition of cleric Fethullah Gülen, accused of instigating the July 2016 coup attempt.
  • James Jeffrey, former US ambassador to Turkey: “The administration does have a comprehensive strategy against ISIS although it’s one that disadvantages seriously Turkey [...] The problem is that the administration cannot offer the Turks a fully thought-out regional comprehensive strategy against Iran.”

Project Syndicate—Carl Bildt / Brexit or Breakup?

  • With the Conservative Party poised to win a solid majority in the general election on June 8, the UK will almost certainly stay on the path towards a hard Brexit.
  • Unless a separate agreement is reached on some kind of transitional arrangement, the UK could be heading for a brutal exit in March 2019 that would entail new tariffs, severed institutional relationships, and diplomatic tensions.
  • However, if there is good will on both sides, an agreement that would soften the impact of Brexit through a “deep and special partnership” (resembling the UK-Ukraine arrangement) may materialize by 2021.
  • Given that the UK’s top priority will be to maintain its economic relationship with the EU – no other relationship is as important – the new agencies that it will have to create will need to uphold the standards demanded by the EU.
  • On trade, a UK-USA agreement now seems unlikely, and there is talk that the UK may instead join a USA-EU deal.

ECFR—Mathieu Duchâtel & Mark Bromley / Influence by default: Europe’s impact on military security in East Asia

  • It would be an exaggeration to say that there is an “Asian arms race” going on. However, several Asian states are acquiring asymmetric capabilities to counter China, with the support of European countries and firms.
  • At neither EU or member state level is there a clearly formulated strategic vision to govern Europe’s impact on the military balance in East Asia.
  • Exports and export restrictions should be recognized as an important element of Europe’s influence. The EU can use existing policy coordination institutions to bridge differences between member states on the question.
  • The EU needs to ensure that Britain will remain aligned to European practices on arms transfers and intangible transfers.

The Guardian—P. Wintour / German oil firm accused of withholding $900m from Libya

  • Wintershall, a German oil producer, has been accused by the head of Libya’s National Oil Corporation (NOC) of withholding more than $900m from the Libyan state and colluding with the Lybian government to take over the sale of the country’s oil contracts.
  • The power struggle between both corporations has wide implications, given that more than 80% of Libyan state revenues derive from oil.
  • An appeal court in Benghazi ruled on Monday that the presidency council (the name of the UN-backed government) over-reached when it took over control of decisions on the terms of oil contracts and investments from the NOC.
  • Sanalla, head of the NOC: “[Wintershall] tried to interfere with the Libyan internal politics and to take advantage of the fact that the state is so weak”.
  • Wintershall’s statement: “There is no [valid] claim over money allegedly owed by Wintershall. Wintershall has always met its obligations towards the Libyan state.”

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