France hits out at dollar dominance in international transactions

France’s political and business establishment has hit out against the hegemony of the dollar in international transactions after U.S. authorities fined BNP Paribas $9 billion for helping countries avoid sanctions.

Michel Sapin, the French finance minister, called for a “rebalancing” of the currencies used for global payments, saying the BNP Paribas case should “make us realize the necessity of using a variety of currencies”.

He said, in an interview with the Financial Times on the sidelines of a weekend economics conference: “We [Europeans] are selling to ourselves in dollars, for instance when we sell planes. Is that necessary? I don’t think so. I think a rebalancing is possible and necessary, not just regarding the euro but also for the big currencies of the emerging countries, which account for more and more of global trade.”

Christophe de Margerie, the chief executive of Total, France’s biggest company by market capitalization, said he saw no reason for oil purchases to be made in dollars, even if the benchmark price in dollars was likely to remain. Continue reading

A New Grand Strategy

Berlin choosing Moscow over Washington emphasizes the fact that in the real world there is no such thing ‘allies’, but ‘interests’. This article precisely underscores this fact. Although its true regarding the persuit of ‘two global policies’, Germany has historically chosen Russia over America which has ironically lead to two of the bloodiest wars in world history as both have used economic/political/military cooperation to out-maneuver the other for strategic military advantage before an actual war is declared. History is repeating itself and the only difference this time around is the Fourth Reich (German-dominated EU) versus Putin’s neo-Soviet Union.

BERLIN (Own report) – An influential German weekly opened a debate on the call for redefining EU – US relations. The West’s current policy toward Ukraine is diametrically opposed to “European” interests, according to an article published in the online-edition of the German weekly “Die Zeit”. “Europe should not deprive itself of cooperation with Moscow; it should rather be enhanced. At the same time, the EU should intensify its relations with Washington, while pursuing “its own concepts” with more determination. The objective should be a “new and more promising transatlantic grand strategy.” The article was authored by an associate of the Global Policy Institute, a think tank in London, but his standpoint also reflects opinions being expressed within the German foreign policy establishment. Back-stage disputes over Germany’s policy toward Ukraine are slowly surfacing into public view. Continue reading

The Transatlantic Future

In view of this year’s US presidential elections, German government advisors have diagnosed major tensions in relations between Berlin and Washington, which have arisen because of the USA’s grave economic difficulties demanding inevitable drastic austerity measures. It is also uncertain how long the dollar will be able to maintain its exceptional global status. According to an expert of the German Council on Foreign Relations (DGAB), it had already become apparent at the last G-20 Summit that “the enormous power of the US” had “noticeably diminished” because of its economy’s chronic weaknesses. The US government will therefore continue to apply pressure on Germany and the EU to increase the importation of US products and insist on a much stronger participation in military interventions. Because of its harder line toward Beijing, Washington can also be expected to formally or informally seek to expand NATO’s range to Asia – to encircle China.

A Lost Generation

Washington’s chronic economic problems are the cause for the current dislocation in its relations to Berlin. Josef Braml, a scientific advisor to the USA/Transatlantic Relations Program at the German Council on Foreign Relations (DGAP), writes in a recently published analysis that, since 2008, the financial and economic crisis has hit the USA very hard. The unemployment has risen sharply. Because of its insufficient training in “often dilapidated educational institutions,” the younger generation, is incapable “of sufficiently contributing to the GNP.” Apprehension is spreading “that the youth of today could belong to a ‘lost generation’.” A “small elite” takes a “disproportionately large slice of the income pie,” while “very many must be satisfied with very little.” Of all the OECD member countries, only Mexico and Turkey have a wider social gap. Approximately 46 million US-Americans, particularly those in the Afro-American and Hispanic communities are living below the poverty line. “One-third of the Hispanic homes suffer under a lack of food,” reports the DGAP expert Braml. This desolate social situation is also worsening the country’s economic perspective. “If it is true that two-thirds of the US economy is generated by consumer demand, in other words by private consumption, then this social imbalance is very bad for economic recovery.”[1]

Full article: The Transatlantic Future (German Foreign Policy)