Financial Times – Martin Arnold and Tommy Stubbington / ECB takes hawkish turn to counter record-high inflation
- Christine Lagarde on Thursday sought to counter concerns that the European Central Bank was doing too little to fight surging inflation, announcing plans to lift interest rates above zero for the first time in a decade by September.
- The ECB surprised markets by signalling that it was likely to raise rates by half a percentage point in September, in addition to a planned quarter-point rise in July — a bigger increase than expected.
- Frederik Ducrozet, head of macroeconomic research at Pictet Wealth Management, said: “They have reversed the burden of proof. Inflation needs to improve for them not to hike by 50 basis points.”
- Critics have accused the ECB of being asleep at the wheel after inflation soared to 8.1 per cent — more than four times the central bank’s 2 per cent target — in the year to May.
- European Central Bank / Monetary policy decisions
Financial Times – James Politi / Former Nato chief calls for economic version of Article 5 defence pledge
- A former Nato chief is calling for the creation of an economic version of the Article 5 mutual defence pledge that defines the transatlantic military alliance in order to thwart commercial coercion by authoritarian states.
- Anders Fogh Rasmussen, the former Danish prime minister who served as Nato secretary-general from 2009 to 2014, will on Friday announce a plan for western allies and other democracies to respond more effectively to economic threats from countries such as China and Russia.
- “Our proposal is inspired by Nato’s Article 5, which states that a military attack on one ally is considered an attack on all,” Rasmussen wrote in a report co-authored with Ivo Daalder, former US ambassador to Nato. “The aim is to produce the same deterrence and solidarity in the economic realm among democracies that Nato produces in the security realm.
- “It’s time to tell the bullies that if they poke one of us in the eye, we’ll all poke back,” they added. The idea is being floated as western leaders prepare to gather this month in Spain for a Nato summit and in Germany for a G7 summit, where they will grapple with how best to confront economic warfare as well as traditional security threats.
- Foreign Affairs – Richard Haass / A Ukraine strategy for the long haul
Politico – Maïa de la Baume / European Parliament presses EU leaders to convene treaty change convention
- The European Parliament is trying to force EU leaders to start a conversation over reforming the treaties underlying the bloc. The Parliament on Thursday overwhelmingly approved a resolution imploring EU leaders to convene a European Convention in order to amend the European Treaties “urgently.” Their goal: Make revisions that would repeal rules requiring EU unanimity on certain decisions, including imposing sanctions. Three hundred and fifty-five Parliament members voted in favor, while 154 were opposed.
- The move adds to the momentum building for the issue to be placed on the agenda for an EU leaders’ summit later this month. During a debate with MEPs prior to the vote, Clément Beaune, the EU affairs minister for France, which holds the rotating Council of the EU presidency, vowed to prioritize the subject during the upcoming summit. Despite his pledge, though, many EU leaders remain skeptical about the topic.
- “The commitment we take is to open the debate without delay,” he said, “even if it is difficult and above all if it is difficult.” A debate over EU treaty change has been percolating for several years across the Continent, with numerous officials and national leaders expressing growing frustration at the ability of a single country to derail even small decisions, such as issuing joint EU statements. Russia’s war in Ukraine has made the debate more pressing — the EU has seen how a country like Hungary can drag out decisions on sanctions even if other countries have mostly gotten on board.
- The resolution passed Thursday proposes that these conversations be hashed out at a European Convention, which would bring together representatives from various parliaments, as well as heads of state and government. Their task, the resolution said, would be to change the EU’s treaties to ensure “the Union has the competence to take more effective action during future crises.”
- European Policy Centre – Andrew Duff / How to trigger treaty change
The Guardian – Lauren Gambino / January 6 hearing: Trump was at heart of plot that led to ‘attempted coup’
- The House select committee investigating the deadly January 6 assault on the US Capitol in 2021 said Donald Trump was at the center of a sprawling conspiracy to overturn the results of the 2020 presidential election that culminated in an “attempted coup”.
- With a shocking new accounting of the worst attack on the halls of Congress in more than two centuries, the committee outlined in gripping detail over the course of two hours on Thursday night the grave threat posed to American democracy then and now by the former president’s actions.
- “The American people deserve answers,” said Congressman Bennie Thompson, a Mississippi Democrat and chairman of the committee. “So tonight, and over the next few weeks, we’re going to remind you of the reality of what happened that day.
- Thompson, the committee’s chair, and congresswoman Liz Cheney, a Republican of Wyoming and its vice-chair, laid out what they described as the “unconstitutional” misconduct of a former president who continues to peddle the lie that the election he lost to Democrat Joe Biden was stolen from him – a lie, they argue, that he knows to be false.
- The Washington Post – Amber Phillips / 6 takeaways from the Jan. 6 committee’s first prime-time hearing
Our longer reads for the weekend:
- Foreign Policy – Andriy Ryzhenko / To avert a global food crisis, arm Ukraine
- Project Syndicate – Shashi Tharoor / The promise and pitfalls of Indian foreign policy
- Foreign Affairs – Ian Johnson / Has China lost Europe?
- Financial Times – Martin Sandbu / Why ending energy imports from Russia remains essential