BERLIN/BEIJING (Own report) – At this week’s Asia-Europe Meeting in Brussels, the EU will introduce a new “connectivity strategy” to counter China’s “New Silk Road.” As outlined by the EU’s head of foreign policy in September, the strategy is aimed at improving transportation infrastructure as well as digital and energy networks linking Asia and Europe. Beijing is also active in these domains in connection with its Silk Road initiative. Recently, Germany’s Ministry of Foreign Affairs launched an initial thrust in this project. At the time, Minister of State Niels Annen (SPD) declared in Uzbekistan that social standards and human rights are “priorities” for Brussels. “This is what makes our offer different from China’s Belt and Road initiative.” For years, Germany had supported – even with military assistance – the Uzbek regime that was applying torture. Washington has also launched a new infrastructure initiative in Asia, to which US Secretary of State Mike Pompeo declared that the USA is committed to “honest accords” and would “never seek dominance over the Indo-Pacific.” Continue reading
The dollar has long been the world’s reserve currency. But some countries, angered by sanctions, are challenging that status, potentially undermining one of the US’s most influential tools for shaping global policy.
For average Russians, a small personal hoard of US dollars has always represented a place of safety amid the wild ups-and-downs that continue to beset the country’s national currency, the ruble.
So it triggered a touch of panic among them when the Russian government confirmed long-standing rumors that it is working on a plan to insulate the economy from escalating US sanctions through “de-dollarization.” Continue reading
If there were ever any doubts that the leaders of the Euroskeptic coalition that now runs Italy has a plan to defy the European Union its proposed budget should quell them. Both Deputy Prime Ministers, Luigi Di Maio of Five Star Movement and Matteo Salvini of The League, were adamant about locking horns with European Union leadership over all issues of sovereignty between now and May’s European Parliamentary elections.
Their budget proposal which included both tax cuts and universal income blew past the EU budget limit of 2.0% of GDP, coming in at 2.4%. It has put their Finance Minister, Giovanni Tria, in a difficult position because Tria doesn’t want to negotiate this budget with Brussels, preferring a less confrontational, read more pro-EU, approach. Continue reading
The European Central Bank (ECB) will aid Italy with an EU rescue program if the country or its banks are in financial turmoil because they are taking the view that Italy has become an “occupied” country and that Germany has conquered Europe imposing austerity and its view of inflation upon the whole of Europe without firing a shot. While the spin is that the ECB is making Italy a test case to demonstrate that Europe and its mechanisms work, in reality, it is a realization that the ECB cannot save Italy’s financial institutions because austerity has created the greatest economic depression perhaps in economic history. Continue reading
With the Washington Post stepping up to put a floor under US stocks Thursday afternoon by reporting that President Trump would meet Chinese President Xi Jinping at next month’s G-20 summit (while the headline soothed the market, it doesn’t change the fact that, as with everything involving the Trump administration, this too remains subject to change), investors have apparently overlooked the latest ominous headlines out of Italy. To wit, Reuters reported that the ECB won’t come to Italy’s rescue if its government or banks run out of cash unless the Italian government first secures a bailout from the European Union. Of course, this would almost certainly require that the populist coalition end its ongoing game of fiscal chicken with Brussels and abandon its dreams of lowering the retirement age and extending a basic income to the Italian people – policies that would effectively secure a political future for M5S and the League.
In effect, the ECB’s latest trial balloon is tantamount to blackmail: Either the Italians agree to fall back in line and obey European budgetary guidelines, or the central bank will sit back and watch as bond yields surge, providing the ratings agencies even more ammunition to cut Italian debt to junk – effectively guaranteeing a Greece-style banking crisis as the liquidity taps are turned off. Continue reading
BERLIN/PRISTINA (Own report) – The EU is discussing redrawing borders in Southeast Europe. The Kosovo leadership could thus cede control over its Serbian-speaking North to Belgrade, in exchange for the Albanian-speaking Preševo valley of Southern Serbia. Obviously backed by France, the EU’s High Representative for Foreign Affairs and Security Policy, Federica Mogherini, is promoting this exchange, against Germany’s rejection. The plan, in fact, is redrawing borders in accordance with the ethnic criteria pursued by the German government in Southeast Europe, in particular during in the 1990s and early 2000s. After having been stationed in Kosovo for nearly 20 years, the Bundeswehr is preparing a major withdrawal. Its focus will now be on training and arming Kosovo’s armed forces, which have begun cooperating with NATO, while Kosovo’s population continues to languish in poverty, after nearly two decades of western occupation. It is the second poorest region in Europe. Only military cooperation with NATO is flourishing. Continue reading
New plans to strengthen Europe’s border force
Europe must dramatically expand its European Border and Coast Guard force, European Commission President Jean-Claude Juncker stated during his State of the Union address on September 12.
He aims to spend €1.3 billion to add an additional 10,000 border guards by 2020. Continue reading
A little more than one year after becoming the first “far-right” party to win seats in the Bundestag in more than 50 years, the AfD is now officially the opposition to Merkel’s “grand coalition,” which required alliances with not only Bavaria’s Christian Social Union and the Social Democratic Party to hold a majority of seats. A new poll has placed AfD one point ahead of the SDP in terms of generic support. Continue reading
BERLIN/WASHINGTON (Own report) – German Foreign Minister Heiko Maas has once again reaffirmed that the German government insists on continuing with the highly controversial Nord Stream 2 gas pipeline. Despite persistent pressure from Washington, there will be no interference in the construction of the pipeline – which has long since begun – reiterated Maas at this years annual UN General Assembly in New York. At the same time, US efforts to promote the sale of US liquefied gas to Germany are stagnating. If the liquefied gas would be priced closer to the currently much cheaper pipeline gas, it could certainly be considered, according to the Uniper company (formerly EON). Uniper is currently contemplating the construction of a liquefied gas terminal in Wilhelmshaven. However, it would not even have one-fifth of the import capacity of Nord Stream 2. Plans for constructing a terminal in Brunsbüttel, which currently have the best chances of implementation, envisage the importation of only half as much LNG – primarily to fuel ships and trucks. Continue reading
In the aftermath of Italy’s defiant announcement that it would expand its 2019 budget deficit to 2.4% of GDP, above both the initial proposal from finmin Tria which was 1.6%, and also higher than the European “redline” of 2.0%, the question was how would Europe respond to this open mutiny by Italy.
The answers started to emerge on Friday, when European Parliament head Antonio Tajani said that fiscal targets set by Italy’s eurosceptic government were “against the people” and could hit savers without creating jobs.
“I am very concerned for what is happening in Italy,” said Tajani, who is a center-right opposition politician in Italy and close ally to former Prime Minister Silvio Berlusconi. The budgetary plans “will not raise employment but will cause trouble to the savings of the Italians,” Tajani said. Continue reading
BERLIN/ANKARA (Own report) – Turkish President Recep Tayyig Erdoğan’s arrival in Berlin on a state visit amid media reports of arms cooperation with his country and of state-sponsored denunciation, using a smartphone app of those – also in Germany – critical of his government. Erdoğan will be received with all protocolary state honors, since the German government wants to strengthen its ties to Ankara at all costs. There is a growing risk that Ankara will turn its back on the West. Germany seeks to strengthen these ties because of Turkey’s contribution to warding off refugees and particularly for geostrategic motives. Turkey is regarded as the indispensable isthmus to Germany gaining the much-coveted influence in Central Asia and the Middle East. Ankara is also facilitating the participation of Berlin in achieving an alignment in Syria, together with Moscow – but with the exclusion of Washington. Expansion of German-Turkish cooperation involves contracts in the billions for German companies and German participation in the development of Turkey’s own arms industry.
The UN general assembly in New York, the world’s largest diplomatic event, turned into a show of EU solidarity with Russia and China against the US on Tuesday (25 September).
The development, which came about over Iran, symbolised a world-turned-upside-down by US leader Donald Trump’s unilateralism.
It left Mike Pompeo, Trump’s foreign policy chief, “disturbed and indeed deeply disappointed”. Continue reading
China doesn’t plan to cease conducting commercial espionage that benefits the central government, even as the U.S. is rolling out new, proactive cyber strategies to counter threats from Beijing, a new report by an Australian think tank says.
Furthermore, China’s hacking capabilities have gotten more sophisticated, with the intention of making the hacking harder to detect, according to a new report by the Australian Strategic Policy Institute. Continue reading
To keep nuclear deal intact, EU establishes legal mechanism to keep trade with Iran, including in oil
The remaining parties to the Iran nuclear deal said on Monday that they agreed to continue work to create a special mechanism to maintain trade with Iran, including in oil, following the US withdrawal from the 2015 pact.
The United States is the only major economy in the world to get an “improving” score in the latest CNBC survey of corporate executives.
The latest quarterly score marks the fifth quarter in a row that the economy under President Donald Trump has been viewed as “improving” in the CNBC Global CFO Council survey. Continue reading