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
Sweden officially recognizes Palestinian state, Israel recalls ambassador
30 October 2014 - RT News
Sweden is the first West European nation to officially recognize Palestine. Foreign Minister Margot Wallstrom argues that the decision is supposed to bring a new dynamic to the stalled peace process. While Palestinian leader Mahmoud Abbas called it a historic move, Israel's Foreign Ministry decided to recall its ambassador to Sweden. Moreover, the Israeli Foreign Minister called it a "deplorable decision which only strengthens extremist elements and Palestinian rejectionism." For the moment, this is a temporary measure in order to give the ambassador guidance, but if made permanent it would officially downgrade Israel's relationship with Sweden. While no other EU member has recognized Palestine, Bulgaria, Cyprus, Malta, Romania, Poland, and the Czech Republic have done so.
UN Chief Condemns Planned Separatist Election іn E. Ukraine
29 October 2014 – Voice of America
On Wednesday, UN Secretary-General Ban Ki-moon condemned an election being organized by pro-Russian separatists in eastern Ukraine, stating that the vote would violate the country's constitution. The November 2 vote would be held in defiance of Ukrainian national elections last Sunday in which pro-Western parties, dedicated to holding the former Soviet republic together and negotiating a settlement to the conflict, triumphed. Russia has said it will recognize the election results, an announcement that the Kyiv government said could destroy the chance of bringing an end to the conflict.
American and European trade negotiators must embrace transparency
29 October 2014 – The Irish Times
The EU and U.S. are currently negotiating an innovative free trade agreement known as the Transatlantic Trade and Investment Partnership (TTIP). Past trade deals sought to lower tariffs; these barriers to trade are already low, so the TTIP hopes to harmonize product regulations to make it cheaper for businesses to manufacture goods for the overseas market. Many regulations needed to be harmonized to create a single European market. In the past corporations protested trade deals that ended their protection from foreign competition, but now many consumers fear that product standards could be lowered by the TTIP. Former WTO Director General Pascal Lamy calls for the negotiations to be more transparent to mollify these concerns. The German public’s distrust of the U.S. has increased in recent years. Of those regulations that are harmonized, negotiators should agree to the strictest of the present regulatory standards. Future expansion of the TTIP to other countries should be provided for.
First BOE Hike Still Seen In First Quarter but Economists Less Sure: Reuters Poll
29 October 2014 – Reuters
A rise in British interest rates in the first quarter of 2015 is now much less certain, according to a Reuters poll in which almost half the economists questioned thought the hike would come later in the year. British rates have been at an all-time low of 0.5 percent since the depths of the financial crisis in early 2009, but with the economy exhibiting some of the healthiest growth rates among developed nations, economists in Reuters polls since June have been targeting the first three months of 2015 for the first rise in the Bank Rate. Markets have likely paid attention to recent speeches from members of the Bank's Monetary Policy Committee that have highlighted their wish to see increased inflationary pressures before voting for a UK rate rise. Inflation in Britain fell to 1.2 percent at its latest measure, well below the BoE's 2.0 percent target.
Federal Reserve Caps Its Bond Purchases; Focus Turns to Interest Rates
29 October 2014 – The New York Times
The Fed said on Wednesday that the economy no longer needed help in the form of quantitative easing (QE). It is the third time since 2008 the Fed has announced such a move, but this time officials and analysts say the decision is more likely to stick, signaling an important milestone in the nation’s painfully slow recovery from the Great Recession. The central bank still plans to keep short-term interest rates near zero for a “considerable time,” it said in a statement after a two-day meeting of its policy-making committee. And it said it would replace maturing bonds to keep its holdings at about $4.5 trillion. Opinions among economists are split as to the degree of QE’s effectiveness and how the Fed will proceed from here on out. Carl R. Tannenbaum, chief economist at Northern Trust, emphasized the importance of the Fed’s being explicit in its timeframe for raising rates so as not to cause panic in the markets.
Serbia is the “Best Pupil in Class” For EU Accession, Says Former Austrian Chancellor
29 October 2014 – International Business Times
The former chancellor of the Republic of Austria revealed that Serbia's plan to become part of the EU is on track and it is ahead of other countries that are trying to become part of the bloc. Seven countries are currently waiting to become part of the EU: Serbia, Macedonia, Albania, Turkey, Montenegro, Iceland, and Kosovo. The former chancellor also noted that "Serbia has made some progress in public administration reform. It adopted a comprehensive strategy and strengthened coordination and planning…However, continued efforts are needed to ensure an effective, independent judiciary. Key pieces of legislation remain to be adopted, such as the law on free legal aid, the law on whistleblowers, and the law on conflicts of interest.” EU accession negotiations began in January 2014, but memberships are not expected until 2020.
New EU foreign policy chief's first destination: Israel
29 October 2014 - Times of Israel
Succeeding Catherine Ashton on November 1st, Federica Mogherini will spend her first visit as EU's high representative for foreign affairs and security policy in Israel. Italy's current foreign minister, Mogherini is historically very firm on closer EU-Israeli ties and a vocal critic of the Iranian nuclear regime. She will meet with both leaders from Israel and Palestine and hopes to establish a new, cooperative tone in dialogue. Interestingly, she will not inherit responsibility in the West's negotiations with Iran over its nuclear program; that will remain with Catherine Ashton because she has been leading the EU's efforts on that front since 2010. Mogherini supports the November deadline for a resolution to the talks, but has acknowledged complications may arise.
EU Won’t Reject French, Italian Budgets
28 October 2014 – The Wall Street Journal
EU authorities said they have decided not to raise serious objections to next year’s French and Italian budgets, defusing an immediate standoff that could have led to swift fines against Paris and Rome. The new commissioners may still seek more austerity measures from Paris and Rome to hit budget targets that the governments agreed to in July, but any additional spending cuts or tax increases sought by the EU will likely be minor, European officials say. Though the rules allow budgets to miss their mark because of unexpected economic weakness, EU officials argued that the French and Italian budgets as first proposed were too far off track to qualify for that flexibility. While the outgoing commission has decided not to take action against the French and Italian budgets, the new commission is likely to follow up on the matter after a meeting next month.
EU Warns Hungary Over Internet Tax Plan
28 October 2014 – The Wall Street Journal
The Hungarian government has said it will introduce a tax on internet use on the January 1st next year. Service providers would be required to pay the tax. Many businesses heavily use the internet, so any tax would hinder economic growth. Ryan Heath, speaking on behalf of European Commissioner Neelie Kroes, strongly criticized the proposal. Tens of thousands protested across the country, forcing Fidesz, Hungary’s ruling party, to temper the proposal, but Heath said this was a common strategy of the government to placate the public. This tax would set a bad example for the rest of the EU and should not be adopted, Heath said. Hungary already passed a law in 2012 requiring telecommunication companies to pay a tax on text messages and phone calls. Foreign companies make up most of the telecommunications market. Heath said Hungary has probably avoided recession largely because of the digital sector, which is still behind the EU mean.
Coalition Partners Trade Blame for Collapse of EU Referendum Bill
28 October 2014 – Financial Times
An attempt by a Conservative MP to legislate for a referendum in 2017 on Britain’s membership in the EU has fallen apart, with both sides of the coalition accusing the other of killing it. Bob Neill had planned to bring an EU referendum bill before the Commons later this year in an attempt to force the government to enact a law promising to hold such a plebiscite. But the Liberal Democrats have refused to grant a resolution of the House of Commons allowing it to proceed. The collapse of the bill means that in the event of a hung parliament after the next election, David Cameron, Conservative leader, will have to agree to a referendum with any prospective coalition partner. Senior Lib Dems have already told the FT they are likely to allow such a move in return for a grand package of constitutional change.
EU 2030 Energy and Climate Framework to Tackle Rising Energy Prices
28 October 2014 – Daily Sabah
Rising energy prices and volatile energy markets is threatening economic stability in Europe and inevitably weakening its competitiveness. Generally speaking, EU industry currently pays gas prices three times higher than industry in the U.S., India or Russia. Likewise, EU industrial electricity prices are more than twice those in the U.S. and Russia. In the new energy framework for 2030, the EU plans on 27 percent of its energy coming from renewables. For the carbon emissions target, the EU Commission set higher standards calling for a 40 percent emissions reduction for 2030 compared to 1990 levels. Strong reforms are also projected in the framework for the EU Emissions Trading Scheme (EU ETS) to make this EU market mechanism aimed at reducing carbon emissions more resilient and effective. EU Commission President Jose Manuel Barroso described the 2030 framework as "a kind of marriage between industry and energy and the environment."
Swedish Central Bank Cuts Interest Rate to Zero to Fight Deflation Risk
28 October 2014 – Reuters
Sweden's central bank cut interest rates more than expected to zero on Tuesday to ward off prolonged deflation risk, and said it would delay tightening policy until the middle of 2016. Like the neighboring Eurozone, Sweden is grappling with persistently low inflation and wants to avoid slipping into a deflation spiral that would hit the economy as falling prices would encourage consumers to delay purchases. "The Swedish economy is relatively strong and economic activity is continuing to improve. But inflation is too low," the Riksbank said in a statement. With rate cuts exhausted, the next step for the Riksbank would be unconventional measures such as offering cheap long-term loans to banks and private sector asset purchases, as the European Central Bank has done.
World Bank: EU-U.S. Trade Talks Should Include Turkey
28 October 2014 – World Bulletin
Turkey needs to take part in parallel negotiations with the U.S. in order to prevent adverse effects from the Transatlantic Trade and Investment Partnership, said the World Bank’s Turkey director Martin Raiser on Monday. “I am not sure that the U.S. government is currently in a position to offer this to Turkey,” Raiser added, referring to political realities in the U.S. Congress. According to Brookings Institute’s report, if Turkey is not included into the Transatlantic Partnership, the economic cost for Turkey could reach $20 billion and 95,000 jobs. Turkey's lack of progress in its EU bid, the change in world trade structure, and free trade deals negotiated between Brussels and third-party countries are but a few of the reasons cited to promote the renegotiation of the customs agreement with the EU.
Lithuania Offers Example of How to Break Russia's Grip on Energy
28 October 2014 – New York Times
A fully operational floating natural gas terminal has arrived in Lithuania. The result of $800,000 from the U.S. since 2008 and official government support since 2010, the Independence delivered its first shipment of liquified natural gas from the Norwegian company Statoil. Starting at 60 million cubic meters of natural gas, the Independence should reach an annual 540 million cubic meters within the next five years; a fifth of Lithuania's energy needs. In the past, Lithuania has been forced to pay more than its Baltic neighbors for Russian energy because Latvia has gas storage facilities and Estonia has shale oil reserves. Lithuanian President Dalia Grybauskaite declared that "nobody else from now on will be able to dictate to us the price of gas, or to buy our political will, or to bribe our politicians."
France to Decide on Russian Warship Deal in November
28 October 2014 – Voice of America
French Defense Minister Jean-Yves Le Drian said on Tuesday that France will wait until next month to decide whether to deliver the first of two Mistral helicopter carriers to Russia. Although French President Francois Hollande had for months resisted pressure from Washington and other allies to scrap the 1.2 billion euro ($1.58 billion) contract before choosing last month to push back the original end-October delivery date, Hollande then announced he would only hand over the first carrier - the Vladivostok - if there was a lasting cease-fire and a political settlement in Ukraine. Moscow has warned that it will seek damages if it is canceled or suspended. Russia's Mistral purchase would give it access to advanced technology, alarming some of France's NATO allies who consider Paris to be blindly strengthening Moscow militarily. A central concern for Paris is what impact the cancellation of the contract would have on future defense export deals and on a defense industry that employs 40,000 people.
Under Full Capital Rules, 36 EU Banks Would Have Failed Test
27 October 2014 – Reuters
Some 25 European banks failed a health check of whether they could withstand a recession, and another 11 would have failed if the full Basel III rules had been applied, according to data from the European Banking Authority released on Sunday. The Eurozone is lagging behind countries outside the bloc in implementing the Basel III capital rules that are due to come into full force in 2019, potentially adding another challenge for the European Central Bank (ECB) when it takes over supervision of euro zone lenders next month. Compared to the ECB, the U.S. Federal Reserve applies a stricter standard – holding banks to the Basel III capital requirements and other qualitative measures as well. There has been considerable variation in EU countries’ adoption of the Basel III requirements, between those who have not made significant strides in compliance and on the other side, Sweden, Denmark, Norway, Britain, Poland and Hungary, which have already largely adopted the rules.
France and Italy Offer to Trim Deficit Further to Win EU Clemency
27 October 2014 – Reuters
France and Italy unveiled plans on Monday to trim their deficits more than previously planned in last-minute pitches to get clemency from the European Commission on their 2015 budgets. The EU’s executive arm has until Wednesday to decide whether to reject France and Italy's 2015 draft budgets for failing to make sufficiently large improvements in their public finances. To meet the EU budget requirements, Italy scrapped proposed tax cuts, while France will see extra funds from lower than expected liabilities and cracking down on tax fraud while ending a range of tax deductions from which some companies have been able to benefit. Despite the additional deficit reductions, the French still will not meet the 3 percent target.
ECB Says 1.7 Billion Euros of Covered Bonds Bought Last Week
27 October 2014 – Bloomberg
The European Central Bank said it settled 1.704 billion euros ($2.2 billion) of covered-bond purchases last week as it started its latest effort to revive the euro-area economy. This represents the third time in six years that the ECB has made such efforts in an attempt to revive the Eurozone and avoid deflation. Later in the year, the Bank is expected to purchase asset-backed securities (ABS) as well in an attempt to expand its balance sheet by as much as 1 trillion euros. German opposition to sovereign-bond purchases means officials have chosen covered bonds and ABS as the latest tools to help expand the balance sheet. Purchases will be announced weekly, starting the 27th. Current estimates show the pool of eligible covered bonds is about 600 billion euros, while there are about 400 billion euros of ABS assets eligible to buy, ECB Vice President Vitor Constancio said.
Would UKIP’s plan to quit the EU really cut immigration?
27 October 2014 – The Telegraph
The United Kingdom Independence Party (UKIP) says the UK would be better off if it was not a member of the EU but had a free trade agreement with the organization. The only problem is that the countries that have such deals—Switzerland and Norway—had to agree not to restrict freedom of movement. Thus, the party would be unable to implement its restrictive immigration policy. While the Swiss voted in February to introduce quotas on EU migration in 2017, the EU has said it will consider rescinding its trade deals with the country. EU migration to Switzerland is currently much larger than EU migration to the UK. Switzerland has no more power than the UK to restrict migration. Three EFTA countries—Switzerland, Norway, and Liechtenstein—have some of the highest immigration rates in Europe.
NATO: Russia Ramping Up Military Probing in Baltics
26 October 2014 – Voice of America
NATO says Russia has increased provocative military actions in and around the Baltics in recent months, including the reported incursion of a Russian spy plane into Estonian airspace earlier this week. Estonia said a Russian Ilyushin-20 surveillance aircraft violated its airspace on Tuesday for about one minute during which it penetrated about 600 meters. NATO said it scrambled jets to escort the Russian plane out. Russia has denied Estonia’s claim. Last month, Russia abducted an Estonian intelligence officer in a cross-border raid. Russia claimed the officer was apprehended spying in Russian territory. Both Sweden and Finland have also seen increases in provocative Russian activity; Sweden on Friday called off a search for what it suspected was a Russian submarine in its territorial waters.
Reality Check: Eurozone Debt Looks Unsustainable
26 October 2014 – The Economist
Around the middle of this year, the troubled economies of Europe's "periphery" were beginning to turn around, it seemed, and the European Central Bank (ECB) would do whatever it took to keep the Eurozone together. This trend seems to have faltered and even reversed since the global sell-off on October 15-16. Despite some improvement, worries that slow growth in the Eurozone will be a serious drag on the world economy are increasing. Against the current background of deflation and fears of ECB inaction, some Eurozone debt - both public and private - looks unsustainable. A recent analysis by Fitch, a credit rating agency, suggests that it will be very hard for any highly indebted Eurozone government to reduce its debt-to-GDP ratio by 20 percentage points over the next eight years, still less return it to its pre-crisis level.
Ukraine elections: Pro-Western parties set for victory
27 October 2014 - BBC News
With over half the votes counted, President Poroshenko's mandate seems renewed as he pushes for greater cooperation and partnerships with European nations. Originally set for 2017, the parliamentary election was moved to 2014 in order to better represent the post-Maidan changes in Ukraine and strengthen the administration's legitimacy. President Poroshenko's Solidarity Party and Prime Minister Yatseniuk's People's Front Party are tied with an estimated 21% of the vote. If these results hold, and the likely coalition forms as expected, President Poroshenko may claim a two thirds majority and lead a second revolution in Ukraine; one that finalizes Ukraine's push to join the West.
On your marks
27 October 2014 – New Europe
Incoming EU Commission President Jean-Claude Juncker restored a sense of optimism about the future during the presentation of his program to the European Parliament. His plan to resuscitate Europe is not for just an economic recovery: “I want Europe to be dedicated to being triple A on social issues, as much as it is to being triple A in the financial and economic sense,” he told MEPs. Juncker is offering a €300 billion investment package for “Jobs, Growth and Competitiveness” before the end of the year, intended to kickstart Europe’s stalled economy and offer a future to the 26 million unemployed in the EU. It remains to be seen whether member states will supply him with these funds, however. Juncker’s reforms and political tact, including cutting down his own power by delegating responsibility to the vice-presidents, demonstrate he is someone capable of, and dedicated to, making changes the EU’s future may very well depend upon.
ECB Fails 25 Banks as Italy Fares Worst in Stress Test
26 October 2014 – Bloomberg
Twenty-five lenders failed a stress test led by the European Central Bank (ECB), which found the biggest capital hole in the region’s banking system in Italy. The ECB identified a total gap of 25 billion euros ($32 billion) as of the end of 2013, most of which has now been raised by banks. “The capital shortfall is at the lower end of expectations,” said Jon Peace, a banking analyst at Nomura Holdings Inc. in London. Hans-Werner Sinn, president of Munich-based Ifo Institute, said that the simulated scenario was too lenient because it did not incorporate deflation in southern Europe, explaining why the capital shortfall was so small for many banks. Lenders found to be deficient now have as many as nine months to fill gaps identified by the ECB, which is aiming to close the door on half a decade of financial turmoil in the euro region. The results, on first impression, are “very positive” and should benefit some bank stocks tomorrow, JPMorgan analysts wrote in a note.
Britain Defies European Union: Cameron Refuses To Pay 2 Billion Euro to EU Budget
26 October 2014 – International Business Times Australia
The EU Summit in Brussels ended in a row with British Prime Minister David Cameron announcing the UK's refusal to pay a two billion euro bill. The EU request for additional funds from Britain followed a change in accounting rules. It also factored in Britain's economy doing better than others and its ability to pay more money to the bloc's budget. Also during the meeting, Jyrki Katainen, a European commissioner, called on Germany and other industrialized states to pump more investment into their economies to escape a bleak future of stagnation. German Chancellor Angela Merkel, on the other hand, resisted calls for greater spending if it meant larger debts and pointed to other potential sources of growth, such as the Transatlantic Trade and Investment Partnership. The Commission also used the meeting to warn Italy and other states that regarding their budget deficits.
Central Banks Watch: All Eyes on Fed as Tapering Set to End; BoJ, RBNZ, Sweden, Brazil, Hungary, Israel and Mexico to Set Rates
25 October 2014 – International Business Times UK
This week, much of the world will be paying attention to various central banks and particularly the U.S. Fed, looking to see whether it will end quantitative easing as scheduled. The accompanying statement and remarks that could follow will be closely watched for any indications of the next move, which could be the first Fed rate hike since June 2006. The rate has been 0-0.25% since December 2008. Likewise, the central banks of Brazil, Sweden, Hungary, Israel, New Zealand, Japan and Mexico are set to meet this week: Israel on 27 October, with no anticipated change; the Swedish and Hungarian banks on 28 October; Brazil and New Zealand on 30 October; and Japan and Mexico on 31 October, with no anticipated change for Mexico.
Merkel calls on Putin to back Ukraine gas solution
24 October 2014 – Deutsche Welle
German Chancellor Angela Merkel encouraged Russian President Vladimir Putin to come to an agreement with Ukraine on gas exports before the onset of winter in a telephone call on Friday. Russia provides the EU with approximately a third of its gas, half of which passes through Ukraine, making a gas deal between the two countries an imperative for the continent’s energy security. Russia is worried Ukraine will not be able to pay off its large gas debt, the amount of which the two countries actually disagree upon. Merkel also appealed for the “full implementation” of the Minsk peace settlement and said elections in Donetsk and Luhansk “must be conducted according to Ukrainian law.”
Brits Are Terrified U.S.-EU FTA Will Destroy Their National Health Service
23 October 2014 – Forbes
Some Britons fear that the Transatlantic Trade and Investment Partnership (TTIP), a free trade agreement currently being negotiated by the U.S. and EU, will lead to the privatization of the National Health Service (NHS). “The idea that this will lead to privatization of the NHS is not true,” UK Trade Minister Lord Livingston said. Neither the British or American governments have done enough to assure the public that there fears are unfounded. UKIP’s Nigel Farage and Paul Nuttall have in fact expressed support for the privatization of the NHS, and London Major Boris Johnson labeled opponents of the TTIP as “numbskulls.” Cecelia Malström, the incoming European trade commissioner, said the TTIP would not include public services unless European governments sought this.
German economy minister stands up to U.S. on stimulus
23 October 2014 – Deutsche Welle
“We could double our debt, and it wouldn’t boost Italy’s and France’s competitive abilities,” German Vice Chancellor and Economics Minister Sigmar Gabriel said during his first trip to the United States. He wants to instead encourage greater private investment to increase Eurozone growth. Germany’s coalition government has already planned a $23 billion investment in infrastructure, education, and other sectors but will not engage in stimulus that adds to the debt. Gabriel lauded the U.S.’s fracking boom, calling it the “reindustrialization” of America. Gabriel also discussed the TTIP with Vice President Joe Biden and U.S. Treasury Secretary Jack Lew.
EU To Enhance Trade Relations with the Philippines
23 October 2014 – The Philippine Star
EU Ambassador Guy Ledoux suggested during the Philippine Business Conference and Expo that EU countries are open to enhancing their trade relationship with the Philippines through the Trade Facilitation Agreement (TFA) and the Philippines Customs and Tariff Act. If approved, there would be a full removal of tariffs on two-thirds of the Philippine products exported to the EU. Tariff costs would be reduced as much as 15 percent, which would help in solving the port congestion in Manila. Adopting trade facilitation measures will further help the country to maximize welfare gains from the upcoming Association of Southeast Asian Nations (ASEAN) integration in 2015.
EU Parliament Approves Zero Tariff Extension for Ukraine Exports
23 October 2014 – The Wall Street Journal
To offer swift economic benefits to Ukraine, the EU introduced a zero tariff regime in May for six months before the launch of a planned broader trade and political agreement between the country and the bloc. Due to pressure from Russia, however, the agreement between Ukraine and the EU was delayed until the end of next year. Earlier this week, the European Parliament overwhelmingly approved extending a zero tariff regime for most Ukrainian exports to the bloc, allowing the system to remain in place through the end of next year. The measure could save Ukrainian exporters around €500 million ($634.6 million) a year in export duties.
Eurozone Business Growth Unexpectedly Gains Pace, Prices Still Falling
23 October 2014 – Reuters
Eurozone businesses performed much better than anyone expected this month but did so by slashing prices again, and optimism about the future fell to its lowest level in over a year, surveys showed on Thursday. While increased business performance is a good sign for the economy, falling prices will only reinforce fears of deflation. Data collator Markit said the PMIs (Purchasing Managers' Index) point to a 0.2 percent expansion of GDP in the current quarter, with risks to the downside. Earlier data from Germany showed activity increased in both the manufacturing and services industries, boosted by resurgent growth among factories. Despite an overall upturn in EU services activity, firms hold increasingly gloomy expectations for the year ahead.
War heroes and activists to shape new-look Ukraine parliament
23 October 2014 - Reuters
As the Ukrainian parliamentary elections on Sunday loom ever closer, there is a high chance of a strongly pro-European majority emerging. Notable candidates include Air Force Colonel Yuly Mamchur, who famously refused to leave his Crimean post, and Tetyana Chornoil, an activist who was publicly beaten during the Maidan protests. The loss of Crimea and the prevention of normal voting in the East will decrease the parliament's number of seats to 424, which increases the chances of a pro-European majority forming. While current President Poroshenko benefits from anti-Russian rhetoric, he will face formidable competition in maintaining the pro-Western government against former Prime Minister Yulia Tymoshenko, who leads the Fatherland party, and populist Oleh Lyashko, who leads the Radical party.
Topic: EU States Caution Juncker over ISDS and the TTIP
22 October 2014 – Multiple sources
Fourteen member states including the UK, Spain, Ireland, Finland, Denmark, the Czech Republic, and Portugal have sent a letter to incoming European Commission President Jean-Claude Juncker cautioning him not to exclude investor protections from the Transatlantic Trade and Investment Partnership (TTIP). The U.S. will likely demand concessions if investor state dispute settlement (ISDS) is excluded from the TTIP. German Economics Minister Sigmar Gabriel opposes ISDS. The incoming European Commission is divided on the inclusion of ISDS. Cecelia Malström, the incoming trade commissioner, thinks it would be premature to make a definitive decision on ISDS. Malström would normally have complete discretion on the ISDS issue. However, on Wednesday Juncker revoked Malström’s authority over ISDS, saying “[t]here will be no investor-to-state dispute clause in TTIP if [Commission Vice President] Frans [Timmermans] does not agree with it too.” The arrangement is intended to pacify Chief of Staff Martin Selmayr, who opposes ISDS.
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U.S. Treasury Chief Urges EU to Ease Off Austerity
22 October 2014 – Agence France-Presse
European countries should ease off their austerity and adopt more growth-friendly policies, U.S. Treasury Secretary Jacob Lew said Monday as he kicked off a series of meetings with the region's top leaders. The U.S. administration hopes Europe will relent in its focus on debt reduction, which has been hurting growth through spending cuts and tax increases. "Our economy's strength remains sensitive to events beyond our shores and we have an immense stake in Europe's health and stability," Lew said in Brussels. "The Unites States has no bigger, no more important economic relationship that it does with Europe." In remarks after a meeting, EU Council President Herman Van Rompuy defended EU austerity as necessary due to the region’s debts and structural challenges. Secretary Lew also engaged in discussions with EU officials regarding the planned TTIP agreement.
German Economy Minister Stands Up to U.S. on Stimulus
22 October 2014 – Deutsche Welle
While on his two-day visit in Washington, Economy Minister and Vice Chancellor Sigmar Gabriel attended an event Wednesday at the Center for American Progress, where he criticized a demand that the German economy should be stimulated in order to boost the European economy. He said one of Berlin's goals was to create European growth and attract more private investment. To this end he said Germany's grand coalition of Social Democrats (SPD) and Christian Democrats (CDU) already had a stimulus plan drawn out to provide $23 billion (18 billion euros) in investment in areas such as infrastructure and education. Gabriel is expected to take part in additional TTIP negotiations while in Washington.
Alliance: Russian Spy Plane Intercepted in NATO Airspace
22 October 2014 – DefenseNews
NATO fighter jets intercepted a Russian spy plane over the Baltic Sea after it breached Estonian airspace. The Ilyushin IL-20 “intelligence collection aircraft,” was first intercepted by Danish F-16 jets as it approached Denmark, and then flew north towards non-NATO member Sweden, which also sent jets to intercept the plane. Nearly four hours later the plane flew towards NATO member Estonia and was detected in Estonian airspace “for a period of less than one minute, which represented an incursion of about 600 meters (yards) into NATO airspace.” Finally, Portuguese F-16s spotted the Russian propeller plane and escorted it out of NATO airspace, the alliance said.
Russia prepares for ice-cold war with show of military force in the Arctic
22 October 2014 - The Guardian
In recent months, Russia has greatly accelerated its militarization of the Arctic. According to the RIA Novosti state news agency, Russia has discovered a new island, named Yaya, which spans only 500 square meters and stands at a meter above sea level. It will officially become a part of Russian territory. Former Soviet bases are being reactivated: A newly built airbase on Novaya Zemlya can accommodate fighters, two new brigades totaling 6,000 troops will be deployed to the Murmansk area, and new radar and ground guidance systems are being planned. This military expansion is partly a reaction to NATO and EU punishments over Ukraine, but also a ploy to secure influence over vast Arctic natural resources. These developments are a far cry from 2007, when Russia planted its flag in a titanium capsule 4,200 meters under the North Pole.
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