Uniting democracies has been the key international political trend of the last hundred years. Understanding this trend and enabling it to continue is the key to world political development.
New Book by Streit Council Advisory Board Member Kenneth Weisbrode
In Old Diplomacy Revisited: A Study in the Modern History of Diplomatic Transformers, historian Kenneth Weisbrode asserts that Old Diplomacyis not really that old—many of its concepts and methods date to the mid-nineteenth century—while the practices of New Diplomacy emerged only a couple of generations later. Moreover, "Diplomacy 2.0" and other variants of the post-Cold War era do not depart significantly from their twentieth-century predecessor: their forms, particularly in technology, have changed, but their substance has not. In this succinct overview, Weisbrode reminds us that to understand diplomatic transformations and their relevance to international affairs is to see diplomacy as an entrepreneurial art—and that, like most arts, it is adapted and re-adapted with reference to earlier forms. Diplomatic practice is always changing, and always continuous. To read more about this book, click here.
Kenneth Weisbrode, Ph.D., joins the Streit Council's Advisory Board. He is an Assistant Professor of History at Bilkent University, Turkey and has written and edited several books, including Old Diplomacy Revisited: A Study in the Modern History of Diplomatic Transformers; Churchill and the King: The Wartime Alliance of Winston Churchill and George VI; and The Atlantic Century: Four Generations of Extraordinary Diplomats who Forged America's Vital Alliance with Europe. He is also the co-founder of the Toynbee Prize Foundation's Network for the New Diplomatic History, and holds a Ph.D. in History from Harvard University.
New Book by Streit Council Board Member Richard Rosecrance
In The Resurgence of the West: How a Transatlantic Union Can Prevent War and Restore the United States and Europe, Richard Rosecrance calls for the United States to join forces with the European Union and create a transatlantic economic union. A U.S.-Europe community would unblock arteries of trade and investment, rejuvenate the West, and enable Western countries to deal with East Asian challenges from a position of unity and economic strength. Through this great merger the author offers a positive vision of the future in which members of a tightly knit Western alliance regain economic health and attract Eastern nations to join a new and worldwide international order. To read more about this book, click here.
At the Washington D.C. Summit on Cross Continental Cooperation, held by the Institute for Cultural Diplomacy from November 4-7, Streit Council President Richard Conn Henry reviewed the history of the Streit Council, starting with Clarence K. Streit's self-publication of Union Now just prior to World War II, and continuing with the passing of the Atlantic Union Resolution in 1964. Henry also expounded his idea on a possible Amendment to the U.S. Constitution that, if adopted, would lead to a federal union with the European Union. His proposal can be found here.
Brendan Simms, Ph.D., joins the Streit Council's Advisory Board. He is a Professor of the History of European International Relations at the University of Cambridge, and is the founder and Chairman of the Board of the think tank Project on Democratic Union, which supports a full political union of the Eurozone. He also founded and is the President of the Henry Jackson Society, a think tank dedicated to fostering a strong British and European commitment to liberty; constitutional democracy; human rights; governmental and institutional reform; a robust foreign, security, and defense policy; and the transatlantic alliance. His publications include Three Victories and a Defeat: The Rise and Fall of the First British Empire 1714-1783 (2008) and Unfinest Hour: Britain and the Destruction of Bosnia (2001).
Transatlantic Relations and Global Governance News
Oil price slide and sanctions “cost Russia $140bn”
24 November 2014 – BBC News
Russian Finance Minister Anton Siluanov estimated that dwindling oil prices and Western sanctions are costing Russia $100 billion and $40 billion respectively. Russia could attempt to increase the price by reducing its production by 300,000 barrels a day. Last week Russian Energy Minister Alexander Novak said the government is considering, but had not decided, to cut production. OPEC will discuss the decline in prices this week in Vienna. “It’s far from guaranteed that sanctions, the steep fall in oil prices, and the loss of value of the national currency will lead to negative results or catastrophic consequences only for us,” Russian President Vladimir Putin said on Sunday. While some OPEC members such as Libya, Venezuela, and Iran also want to cut production, Saudi Arabia has been unwilling to do so. On Monday, U.S. crude fell to $76.41, and Brent crude fell eleven cents to $80.25 a barrel. Relative to the U.S. dollar and euro, the ruble has declined by nearly 30% this year.
President Niinistö: Joining NATO now would harm relations with Russia
24 November 2014 - Yle Finnish News
Commenting on statements made by Finnish Prime Minister Alexander Stubb, Finland's President Niinistö has announced that no formal discussion has taken place regarding NATO membership, and added that now would not be the time to do so. He stressed that Finland shares a 1,300km border with Russia that is highly porous, and recent unauthorized Russian military overflights have demonstrated their keen desire to be present and influential. He did note that recent Russian encroachments, as well as the Ukraine crisis, has galvanized the population into reviving a highly polarized debate. Interestingly, Niinistö admitted that he did see NATO membership as possible, and agreed it was a missed opportunity twenty years ago.
Cameron to Ban Immigrants Claiming Benefits in UK
24 November 2014 – The Nigerian Tribune
British PM David Cameron is set to announce plans to ban European migrants from claiming any benefits for two years after moving to Britain, the Mail on Sunday reported. During an immigration speech scheduled for later in the week, Cameron is also expected to call for a ban on unemployment benefits for new migrants. The aim of the move is to make Britain a less attractive destination and ultimately curb the flow of migrants. Despite warnings from German Chancellor Angela Merkel that she would veto any proposal to end the free movement of labor in the EU, Cameron has not abandoned his goal of capping the number of migrants allowed into Britain each year.
Topic: Eurozone Inflation
23 November 2014 – Reuters
Eurozone inflation is anticipated to drop from 0.4% last month to 0.3% in November when official figures are released on November 28th, putting further pressure on European Central Bank President Mario Draghi to introduce additional measures at the ECB’s December 4th policy meeting. “We now think an explicit announcement that the ECB is prepared to undertake a large-scale asset purchase programme—including sovereign debt—is likely at the ECB meeting on Dec. 4,” Credit Suisse said. However, Germany staunchly opposes quantitative easing. Decreased demand in China and Europe coupled with an oil boom in the U.S. has caused a sharp drop in oil prices, prompting OPEC members to meet in Vienna on Friday to discuss whether or not they should cut oil production. Monetary policy must be coupled with a looser fiscal policy if it is to be effective. Draghi wants Germany to relax its fiscal policy and invest more in infrastructure. Germany, the Eurozone country most able to afford increased spending, is fixated on balancing its budget.
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Europe-U.S. Trade Talks Delay Upsets Italy
23 November 2014 – Financial Times
Carlo Calenda, Rome’s trade envoy and vice-minister for economic development, warned that negotiations for the Transatlantic Trade and Investment Partnership (TTIP) agreement are moving too slowly and called for a new start to ensure the conclusion of the trade deal by the end of next year. Calenda was alarmed that the two sides have not yet agreed on the topics to be covered by the deal, which he noted was unusual given the number of negotiations that have already taken place. Some in the EU have complained that the U.S. seemed more interested in concluding the Transpacific Partnership (TPP) with eleven states in the Pacific region rather than the agreement with Europe. Despite U.S. prioritization of the TPP, European politics have also contributed to the U.S.-EU trade deal’s delay. Mike Froman, the U.S. trade representative, has recently reiterated the U.S. commitment to seeing the TTIP through to completion and will be meeting with EU counterpart, Cecelia Malmström in Washington on December 8 and 9.
Radical Left Is Right About Europe’s Debt
23 November 2014 – Financial Times
Among Eurozone states, citizens supportive of public sector investment and debt restructuring would have to look to far-left political parties to hear their voices echoed. One party that has recently gained noteworthy support is Podemos in Spain. A senior member of the party’s economics team notes that the Spanish debt burden is unsustainable and needs to be reduced, perhaps via lowered interest rates or debt rescheduling. While in most Eurozone countries these left-wing parties are minority voices, Greece’s leftist Syriza party stands a significant chance of assuming power after the next general elections. Besides those two countries, Eurosceptic parties have emerged or gained strength in Italy (Five Star Movement), Germany (Alternative für Deutschland) and France (National Front).
Falling Inflation a Worry for Europe but Also the World
23 November 2014 – Reuters
Low growth and inflation numbers from Europe have plagued the region for years, but risks are now emerging of its malaise spreading globally. One key aspect has been the sharp drop in oil prices. It is unclear whether Saudi Arabia will maintain or cut its production following an OPEC meeting in Vienna on Thursday. Though given U.S. production and low demand in China and Europe, the price is not expected to rise any time soon. Adding pressure on the global economy, China has recently cut interest rates given falling inflation there, Japan has entered recession and the ECB is unable to further lower interest rates. Even if the ECB does start quantitative easing, it may not bring long term interest rates much lower. Given the numerous countries engaging or planning to engage in easing, it is increasingly unlikely that the U.S. Fed will raise rates by the middle of 2015.
EU and ECB Urge Ireland to Continue Austerity
21 November 2014 – Reuters
The EU and European Central Bank on Friday urged Ireland to continue to cut its budget deficit, weeks after the government signaled to voters that the austerity era was over. Ireland was the first country to exit its bailout program and is projected to have the highest growth rate in the Eurozone this year. The EU and ECB have expressed concern over Ireland’s relatively high debt to GDP ratio of over 110 percent. The joint statement from the two institutions also noted that Ireland was at risk due to weakness in other EU countries as well as the potential unsustainability of its exports. To maintain recovery, they urged Irish banks to pass on low interest rates to Irish consumers, who currently pay some of the highest mortgage rates in Europe.
Russian appeal for Kiev-rebel talks rebuffed
20 November 2014 - Al Jazeera
In an address to Moscow's lower house of parliament, Russian Foreign Minister Sergei Lavrov called for the establishment of stable contact between the Ukrainian government in Kiev and Donbass representatives. This was harshly rebuffed today when Ukrainian Prime Minister Arseniy Yatsenyuk told Russia to stop "playing games aimed at legitimizing bandits and terrorists." This comes after a recent decision in Kiev to stop giving budgeted money for state support to rebel-held areas and NATO's notification that fresh Russian troops, munitions, and supplies have crossed into Eastern Ukraine. Yatsenyuk added that if Russia truly wants peace, it should honor the Minsk agreement and fully withdraw all support to the rebels.
Britain says not optimistic about Iran nuclear deal by deadline
19 November 2014 – Reuters
British Foreign Secretary Philip Hammond doubts an Iranian nuclear deal can be reached by the November 24 deadline, but suggested the deadline could be extended. Tehran claims to be enriching uranium only to make fuel for nuclear power plants, but the other six representatives, including France, China, Germany, Russia, the U.S. and Britain, want Iran to scale back its capacity to enrich uranium in order to lessen the chance of a nuclear bomb breakout. Hammond argues that no deal is better than a bad deal, and in order to get a good deal Iranian representatives must show considerable flexibility.
The Curse of Weak Global Demand
19 November 2014 – The Irish Times
Last week, U.S. Treasury Secretary Jack Lew noted that the world is far from achieving the “strong, sustainable, and balanced” growth, promised at the 2009 summit in Pittsburgh. He noted that while in the U.S. and Britain domestic demand is now higher than before the 2008 crisis, in the Eurozone demand is about 4 percent below the pre-crisis level. The story’s author, Martin Wolf, points to three sets of explanations for the lack of demand despite massive central bank intervention: the post-crisis overhang of private debt and the damage to confidence caused by the sudden disintegration of the financial system; the unsustainability of pre-crisis demand levels (and therefore a failure to return to them) due to global imbalances, shifts in income distribution, and structurally weak investment; and a slowdown in potential growth, due to some combination of demographic changes, slowing rises in productivity and weak investment. Wolf concludes that ultimately each economy has a different combination of ailments hindering a return to healthy growth levels.
ECB Entering “Very Dangerous Territory” Warns S&P
18 November 2014 – The Telegraph UK
The European Central Bank’s plans for €1 trillion of monetary stimulus is fraught with risk and is likely to fail without full-blown bond purchases, Standard & Poor’s has warned. The agency said the ECB’s blitz of ultra-cheap loans to banks (TLTROs) cannot generate more than €40bn of net stimulus once old loans are repaid, given regulatory curbs imposed on lenders. The ECB previously announced that it will expand its balance sheet by €1 trillion largely by expanding TLTRO loans and asset purchases. The agency also said the Bank of England has greatly under-estimated the degree of slack in the British economy and risks killing the recovery by tightening too soon. Standard & Poor’s said the ECB will have to launch radical stimulus to head off a deep deflationary slump in the end, despite potential resistance from Germany. Due to a case pending in the European Court, however, the ECB will have to hold off on any radical stimulus for the time being.
Abbott, Hollande Back Australia-EU Trade Deal
19 November 2014 – Leadership Newspaper
French President Francois Hollande and Australian Prime Minister Tony Abbott on Wednesday backed the proposed free trade deal between the EU and Australia. Hollande saw the deal with Australia as a way by which the EU can gain further access to the Asian markets. The French President also pointed to the role that the two countries’ cooperation in technology would play into the future. Australian Prime Minister Tony Abbott noted that he had received support from other EU leaders as well and expects negotiations to begin relatively quickly. The Australians for their part concluded on Monday a free trade agreement with China during a visit of the Chinese president to the country.
Stronger Indonesia-EU Relations Will Boost Trade In "Win-Win Scenario"
19 November 2014 – The Jakarta Post
Indonesia and the EU have complimentary economies in which a deepened trade relationship between the two entities will increase trade overall in a “win-win” scenario, instead of causing a surge in imports, a European Council top envoy has said. During the opening of the fifth Europe-Indonesia Business Dialogue, European Council President Herman Van Rompuy praised the contributions by European companies active across a wide range of sectors in Indonesia and added that there is potential for even greater cooperation. Van Rompuy called for an expansion of relatively small trade volumes and noted the benefits that further European foreign direct investment in Indonesia can bring.
Will U.S.-EU trade deal dissolve the EU-Turkey Customs Union?
18 November 2014 – Al Monitor
Turkey may suspend its custom union with the EU if it is excluded from the Transatlantic Trade and Investment Partnership (TTIP), a free trade agreement currently being negotiated between the EU and the U.S. Negotiations on the TTIP started in July 2013 and are not anticipated to be concluded until late 2016 at the earliest. In granting Turkey access to the single market, the customs union requires Turkey to open its economy to countries the EU signs free trade agreements with. If Turkey retains its customs union with the EU, the U.S. will be able to export its goods to Turkey tariff free, but tariffs will still be imposed on Turkish exports to the U.S. A study by the Turkish central bank in 2013 estimated that Turkey would lose $4 billion if it is excluded from the TTIP, but gain $31 billion if included. The TTIP will also have negative consequences for Canada, Mexico, and Switzerland if they are not included in the deal. On November 17th, Turkish Economics Minister Nihat Zeybekci said the TTIP amounted to a “redrawing of the global economic map” and would make Turkey’s customs union “unsustainable.”
Poland, Romania Eye Intensified Cooperation With United States
18 November 2014 – DefenseNews
The governments of Poland and Romania have become increasingly interested in establishing the U.S. Aegis Ashore missile defense system in order to provide ballistic missile coverage against Russia for eastern and southern NATO members. Poland, due to its location on NATO’s eastern flank, is particularly interested in the rapid deployment of the missile defense system on its soil to enhance its own defense and strengthen the alliance’s presence in Eastern Europe. Russia's actions in intervention in eastern Ukraine and annexation of the Crimean peninsula have accelerated efforts by the two countries to secure a U.S. military presence on their soil and implement missile defense capability.
France Warns EU Investment Fund Will Flop Without “Real Money”
18 November 2014 – Financial Times
France says the EU must inject up to €80bn of “real money” into the flagging European economy, warning that a big investment plan being drawn up in Brussels risks flopping if enough hard cash is not used to stimulate demand. In an effort to prop up the European economy, the European Commission is expected to unveil a €300bn investment program to span the next three years focused on infrastructure and other projects. French economy minister, Emmanuel Macron, proposed a new independent entity to oversee what some are calling a “New Deal.” The overseer would increase the fund’s firepower by raising debt on the markets to fund investments in projects such as fiber optic networks and renewable energy. The economy minister is also leading the way in France, proposing an array of structural reforms including some targeting the labor market as well as retail opening times.
ECB Trains Its Sights on Banks' In-House Risk Models
18 November 2014 – Reuters
The European Central Bank (ECB) plans to inspect the internal models that banks use to calculate their risks to ensure that these systems behave consistently, a senior policymaker said on Tuesday. The ECB wants to ensure that banks are not underrepresenting their risk in order to reduce the amount of capital they keep in reserves. The ECB's attention to these models as part of its newly expanded role of financial regulator is part of a wider push to impose order on the sector, which could lead to changes in the way banks do business. Also as a part of its new role, the ECB is taking charge of regularly checking that banks have viable business models, something that has not been done consistently in all the Eurozone states.
EU's Malmstroem Attempts To Revive U.S. Trade Talks
18 November 2014 – AFP
European Trade Commissioner Cecilia Malmstroem attempted on Tuesday to breathe new life into transatlantic trade talks that have been hobbled by opposition to one of the deal’s most controversial components, namely the investor-state dispute settlement (ISDS) clause. “The challenges facing Europe today are serious and TTIP is a serious response to those challenges,” Malmstroem said in a European parliament debate. At the G20 summit in Brisbane this weekend, European leaders and U.S. President Barack Obama threw their weight behind the talks, in a fresh commitment to achieving the blockbuster deal. In a conciliatory statement regarding ISDS, Malmstroem said the Commission negotiators would remain vigilant when it came to protecting a government's ability to protect consumers and indicated that the reach of any ISDS would be limited.
Trade Protectionism Still on the Rise, EU Research Finds
18 November 2014 – EU Observer
A total of 170 new measures increasing trade protectionism were slapped on goods and services from the EU, according to new research. Russia, China, India and Indonesia were the main culprits, the European Commission’s report claims, adding that only 12 pre-existing trade barriers were struck down between June 2013 and 2014. More than 850 separate trade defense measures, ranging from new import duties and tariff barriers to taxes and procurement rules favoring domestic firms have been adopted across the world since the 2008-2009 financial crisis sparked a sharp rise in trade restrictions as governments sought to protect their own firms. Russia was guilty of imposing the most import duties on EU products, the report found, while the U.S. was most likely to tailor its rules on public procurement to shut out foreign companies from public tenders.
Finland back on red alert over expansionist Russia
18 November 2014 - The Guardian
Finnish-Russian relations have severely plummeted over the past six months due to numerous unauthorized military airspace incursions, sanctions by and against Russia, the question of a potential Russian submarine invading Swedish waters, and the general Ukraine crisis. Alexander Stubb, Finland's Prime Minister, says the West has been overly idealistic in hoping Russia would "become a normal, liberal market democracy that relies on international institutions." Consequently, Finland is increasingly supportive of sanctions against Russia, despite their self-harming nature for the Nordic nation. A key Finnish concern is energy supplies, as 71% of its oil, 66% of its coal, and 100% of its gas comes from Russia. Nevertheless, the Finnish population seems determined to avoid repeating the Finlandization of the 20th century and will no longer kowtow to Moscow.
Georgian Leader Tells EU, NATO He Remains on Pro-Western Path
17 November 2014 – Voice of America
During a visit to Brussels, Georgia's prime minister, Irakly Garibashvili, told the EU and NATO on Monday that his country remains firmly committed to integrating with both organizations, even after his dismissal of a pro-Western minister that sparked a political crisis this month, including the resignation of his foreign minister and the walkout of one of the six parties in his coalition. Garibashvili reassured senior NATO and EU officials that Georgia remained "firmly set on a pro-Western course" and a path towards integration with Europe was "irreversible." Georgia's ambition of joining NATO puts it at odds with Russia. After the 2008 war, two breakaway provinces, Abkhazia and South Ossetia, declared independence with Russian backing. Moscow has proposed a new treaty with Abkhazia, which is viewed in Tbilisi as a step toward full Russian annexation.
Bosnia's New Three-Member Presidency Pledges to Push the Country toward EU Membership
17 November 2014 – Star Tribune
Newly-elected members of Bosnia's tripartite presidency pledged Monday to end the years-long political stalemate and revive reforms that would bring the country closer to EU membership. The three presidents – representing Bosnia’s Serbs, Croats and Bosniacs – promised during the inauguration ceremony more "agreements and cooperation" that will end the political quarrels which have resulted in economic stagnation, unemployment and brain drain. Bosnia’s path to EU membership has been challenging as it has struggled to form more inclusive and functional institutions. Despite hopes for progress, there may be a difficult path ahead for the country’s EU accession due to opposition from Russia, which has close ties to the country’s Serbian population.
French government will not sign TTIP agreement in 2015
17 November 2014 – EurActiv
French Secretary of State for Foreign Trade Matthias Fekl said France would not sign the Transatlantic Trade and Investment Partnership (TTIP), an agreement currently being negotiated between the EU and U.S., if it includes a controversial investor state dispute settlement (ISDS) provision. ISDS permits corporations to sue foreign governments in international tribunals in certain circumstances. U.S. negotiators and officials are becoming increasingly irritated by widespread opposition to ISDS in Europe. “France did not want the ISDS to be included in the negotiation mandate,” Fekl said. “We have to preserve the right of the state to set and apply its own standards, to maintain the impartiality of the justice system and to allow the people of France, and the world, to assert their values,” he told the French Senate. German Economics Minister Sigmar Gabriel, though supportive of the TTIP in general, also has concerns about ISDS. Anthony Luzzatto Gardner, the U.S. Ambassador to the EU, said the exclusion of ISDS from the TTIP would be a “very bad signal” and would “clear the way for the removal of other chapters of the negotiations.” Negotiators will meet in December for the next round of negotiations.
Russia orders out Polish and German diplomats in tit-for-tat expulsions
17 November 2014 – EurActiv
Russia expelled four Polish diplomats and one German diplomat, following recent expulsions of Russian diplomats from Poland and Germany. The Russian Foreign Ministry said: “The Polish authorities have taken an unfriendly and unfounded step.” “In connection with that, Russia has undertaken adequate measures in response and a number of Polish diplomats have already left the territory of our country for activities incompatible with their status,” the foreign ministry added. One employee in the political section of the embassy and three military attaches were given 48 hours to leave Russia; they left on Sunday. A Russian diplomat was recently expelled from Germany amid media reports of spying. Der Spiegel reported that the diplomat had been monitored by the German government for a number of months. Russia responded by expelling a German diplomat over the weekend. “We regret this unjustified action and expressed that to the Russian government,” a German bureaucrat told Der Spiegel. Poland has been one of Russia’s most vocal detractors since the beginning of the crisis.
G20 Leaders Pledge Economic Reforms to Boost Growth
17 November 2014 – Irish Times
Coming out of the G20 conference in Brisbane, world leaders committed to open up their economies to generate extra growth of more than 2 percent by 2018. In total, more than 800 reform measures were agreed to in order to meet this goal. Some of the measures included the Transatlantic Trade and Investment Partnership (TTIP), reforms to increase competition, and a push to increase infrastructure investment. The U.S. also nudged EU leaders to spur demand through increased spending and expressed some skepticism over a seemingly too modest €10 billion German infrastructure investment plan. In an attempt to hold participants to the agreed-upon measures, the summit approved a new regime, run by the IMF and the OECD, to hold countries to account if they do not deliver. In light of recent and speculated central bank moves, the G20 communiqué introduces a new promise that members will avoid manipulating their currencies to gain competitive advantage.
EU Report Laments Lack of Free Trade
17 November 2014 - United Press International
The EU’s trade commissioner said Monday she regretted global trade was restricted, where road blocks exist even in the U.S. market. With the European economy struggling to emerge from the global economic recession, EU Commissioner Cecelia Malmstrom said such restrictions were fueling uncertainty in the world economy. "The tendency to restrict participation of foreign companies in public tenders remains strong, in particular in the United States," an EU report said. Some in the EU are looking to the U.S. to export natural gas from shale, which could help break the region’s dependence on Russian sources. Companies looking to send shale gas from the U.S. in the form of liquefied natural gas need a special permit to do so from the federal government if they seek to target economies without a free-trade agreement. There are presently, however, no free-trade agreements in place between the U.S. and European countries.
TTIP: Cameron Pledges to Fire "Rocket Boosters" Under Controversial EU-U.S. Trade Deal
17 November 2014 – International Business Times
David Cameron said that EU and U.S. leaders agree that the Transatlantic Trade and Investment Partnership (TTIP) is a "deal they all want," and that he is "hopeful of progress." Despite projections that the deal will lead to significantly expanded GDP, critics continue to express concerns over the privatization of Britain’s NHS, lower food standards as well as an investor-state dispute settlement program. Cameron largely dismissed many of the criticisms, insisting that the deal could enhance rather than weaken food and environmental standards. He further called for activism on the part of advocates of the agreement and said the pact was supported by the "classic free trade argument for growth and jobs and investment."
Eurozone Peripheral Yields Dip On ECB's Draghi QE Comments
17 November 2014 – Reuters
Yields on most lower-rated Eurozone bonds fell on Monday after European Central Bank President Mario Draghi said unconventional monetary policy measures could include buying sovereign bonds. Draghi also said the ECB will continue to do "whatever it takes" within its mandate to save the euro and reiterated the single currency was irreversible. ECB Executive Board member Yves Mersch said the ECB could theoretically extend its asset purchase program, known as quantitative easing (QE), to buy state bonds, gold, shares or exchange traded funds. There is speculation that the Bank could begin buying government bonds in the next six months, but the move is far from certain amid political resistance. ECB easing prospects meant that yields fell despite credit rating agency Fitch revising the outlook on its AA rating to negative from stable on Friday.
Putin Warns He Won't Let Ukraine Defeat Eastern Rebels
17 November 2014 - Bloomberg
In his interview with German television's ARD, Putin announced that he will not allow the Ukrainian rebels' defeat as EU ministers meet to discuss additional sanctions. Returning home from a political berating at the G20 Summit in Australia, Putin claims he is worried about possible ethnic cleansing and Ukraine ending up as a Neo-Nazi state. Kiev is attempting to revoke a law on greater autonomy and is withholding budget payments to rebel-held regions. Meanwhile, companies are pulling out of Eastern Ukraine, and the ruble continued to plummet to record depths.
Putin Admits Russian Troop Role in Crimea Annexation
17 November 2014 – Voice of America
Contradicting previous denials of Russian troop involvement in Crimea, President Vladimir Putin publically admitted that Russia’s armed forces played a role in events leading up to Moscow’s annexation of Ukraine’s Crimean peninsula, but denied direct involvement of his country's military in a referendum that was used to justify the move. Putin also said he was convinced that in the case of Crimea’s annexation Russia did not violate international law, comparing the referendum on the peninsula to the 2008 vote on Kosovo’s independence which, he pointed out, was approved only by the former Serbian province’s parliament. Prior to Crimea’s annexation, Russia already had a troop presence on the Ukrainian peninsula based on a land-lease agreement for its Black Sea fleet, which Moscow had arranged with previous Ukrainian governments.
G20 commits to higher growth, fight climate change
17 November 2014 – Reuters
On Sunday, G20 leaders agreed to a package aimed at boosting global economic growth by 2.1 percent over five years. Overriding Australia’s attempts to keep climate change off the agenda, the grouping agreed to work toward a binding protocol on the issue at next year’s UN climate conference in Paris. The U.S. committed $3 billion to the Green Climate Fund and Japan committed $1.5 billion. Russian President Vladimir Putin left the meeting early, after facing heavy criticism from other leaders for his handling of the situation in Ukraine.
HSBC’s private banking arm accused of tax fraud by Belgium
17 November 2014 – BBC News
Belgian police have charged HSBC of aiding hundreds of wealthy patrons evade taxes by holding their money in overseas tax havens. Hundreds of millions of euros have been lost in revenue as a result, prosecutors said. The bank could face severe repercussions if found guilty. Belgian authorities accused HSBC of “having knowingly eased and promoted fiscal fraud by making offshore companies available to certain privileged clients.” Located in Panama and the Virgin Islands, these companies specialize in tax avoidance. More than a thousand people have sent several billion overseas since 2003. The French government is also investigating the bank for similar reasons. Correspondence published by the Belgian government between HSBC and a few its patrons seems to support the government’s accusations.
Ukraine Crisis: EU mulls Russia sanctions amid fighting
17 November 2014 – BBC News
The EU is considering a new round of sanctions against Russia as foreign ministers meet to discuss the extra measures. Russian President Vladimir Putin claimed that the Ukraine was not accommodating to minorities. “But, you know, there’s just one thing missing: an understanding that to be successful, stable and grow, everyone needs to have a feeling that this is their home no matter what language they speak—whether it’s Hungarian, Russian, Ukrainian or Polish,” he said. U.S. President Barack Obama said Putin violated the Minsk ceasefire and “international law [by] providing heavy arms to the separatists in Ukraine” and that the “economic isolation” of the country would continue until Putin reversed his actions. Ukrainian President Petro Poroshenko said the rebel-held territories would not benefit from the government’s benefits or public services. Following rebel-organized elections, Poroshenko has asked the parliament to repeal a law granting rebel-controlled areas autonomy.
New Zealand Prime Minister Key: EU Trade Talks Progressing
17 November 2014 – 3 News
New Zealand is making progress toward a potential free trade deal with the EU, Prime Minister John Key says. After Key met with Angela Merkel during a short visit in Auckland ahead of the G20 summit in Brisbane, the German Chancellor expressed Germany's commitment to fostering the trade relationship between the two parties. Key also made his pitch for a free trade deal to French President Francois Hollande during bilateral talks on the sidelines of the G20 meeting during the weekend. While mostly receptive, Hollande did express some concern regarding agriculture exports. Earlier this year, New Zealand and the EU agreed to deepen their relationship and consider the possibility of a FTA.
G20 Leaders Target Trillions in New Economic Growth
16 November 2014 – Channel News Asia
G20 leaders representing the bulk of the world's economy on Sunday committed to reform measures to lift their collective growth by an extra 2.1 percent by 2018, despite evidence of a slowdown in some major nations. The Brisbane Action Plan will “add more than US$2 trillion to the global economy and create millions of jobs,” leaders including U.S. President Barack Obama and Chinese counterpart Xi Jinping said in a summit declaration after weekend talks in Australia. The communique also agreed to a global initiative to help address a $70 trillion gap in infrastructure needed by 2030 to improve productivity, by cutting red tape and matching private investment with capital projects. They also backed a global crackdown on tax avoidance by multinational companies.
European Investors Show Faith in ECB
16 November 2014 – The Wall Street Journal
While economic growth in the Eurozone is flattening, money managers are hoping that the European Central Bank will succeed in propping up markets—and eventually the economy—in the troubled currency bloc. Data on Friday showed the region’s economy grew at a sluggish 0.2% in the third quarter, and the Eurozone continues to grapple with low investment and soaring unemployment. Germany narrowly exited a technical recession, but in Italy GDP contracted 0.1% on a quarterly basis. Investors were reassured by ECB chief Mario Draghi’s comments this month that rate-setters are united by plans to massively expand the central bank’s balance sheet. Many think those plans eventually will involve large-scale purchases of government debt in a U.S. Federal Reserve-style program of quantitative easing. Still, for now, bond and stock investors are signaling that even if the economy struggles to gain a foothold, there is little chance of a rerun of the region’s 2011 debt crisis.(Read More)
U.S., EU Override Australia to Put Climate Change on G20 Agenda
15 November 2014 – Reuters
The G20 communique will include a significant passage on climate change, EU officials said on Sunday, as the United States and other heavyweight nations override host Australia's attempts to keep the issue off the formal agenda. This was somewhat of an embarrassment for Australia, as it argued that climate change was not a clear economic issue. The United States and Europe led the push to have climate change discussed at the meeting, with Obama using a speech on Saturday to warn that Australia's iconic Great Barrier Reef was under threat. Also as part of the G20 meeting, a working group has been seeking agreement on how to improve beneficial company ownership transparency and combat the use of shell companies that can hide ill-gotten money or avoid taxation. The conflict in Ukraine played a significant role in leaders’ discussions with Russian President Vladimir Putin during the meeting as well.
EU Seeks Clear Economic Strategy From Ukraine
14 November 2014 – The Wall Street Journal
The EU will not organize a donors’ conference until Ukraine’s government lays out a clear economic strategy, the bloc’s new enlargement chief, Johannes Hahn, said Friday. The EU has for months said it would organize a conference of donors that could help Ukraine and rebuild parts of the economy shattered by the conflict in the east. Hahn noted that one area in which Ukraine would need assistance is in preparing to fully implement the EU trade agreement at the end of 2015 since the deal will expose Ukrainian companies to tougher competition and higher EU regulatory standards. Ukraine is already scheduled to receive some €1.1 billion in loans from the EU in coming months and Kiev has already sent a request for an additional €2 billion for 2015. In speaking about EU expansion, both regarding Ukraine and in general, Hahn said membership in the bloc isn’t just about detailed legal and political reforms but “about changing culture, mind-set and having evidence that this is a sustainable change.”
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