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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.

What's New

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

Malaysia-EU FTA will provide growth impetus
19 October 2014 – New Straits Times
Despite global financial crisis, the EU remains a major source of foreign direct investment and transfer of knowledge and technology to Malaysia. Malaysia is interested in seeing Germany further expand its investment presence in the country, as German multinational corporations have been in the Malaysian investing space for a couple of decades now, including Infineon, Q-Cells, Osram, Siemens, B.Braun and BASF. In addition to these large companies, Malaysia is hoping to bring in small and medium sized enterprises. Both large and small multinationals are keen to grow the services sector and toward this end, the Malaysia-EU free-trade agreement, which is being negotiated, will likely provide the impetus.
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Credibility meets compromise in Europe's bank stress test
19 October 2014 – Reuters
When Europe announced its latest health check of top banks early last year it promised a "comprehensive assessment" of how well prepared they were to withstand another financial crisis. A series of interviews with officials, bankers and others involved in the European Central Bank's financial inspection of the Eurozone biggest banks shows that in the seven months since it began, the ECB has had to shoot down countless pleas from banks and national supervisors for special treatment, although certain compromises were negotiated. The ECB will announce on Oct. 26 which of Europe's 130 biggest banks have valued their assets properly and which have not, as well as whether banks need more capital to withstand another economic crash. One of the first compromises of the process came when the ECB privately acknowledged that there were "real dangers" of negative consequences if the banks were kept in the dark about how they were faring right up until the results were announced. The auditors were then allowed, for the first time, to begin sharing information with the banks they were reviewing.
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Germany’s tough economic medicine risks killing off the European project
18 October 2014 – The Guardian
Beppe Grillo, founder of the Italian euroskeptic “Five Star Movement,” has called for a petition to remove Italy from the Eurozone to “defend the sovereignty of the Italian people from the European Central Bank.” This comes as the Eurozone endured a week of challenges, from soaring borrowing rates for Greece, to the row between France and Germany over deficit limits. The austerity measures championed by Germany have kept growth rates low and threatened to push the Eurozone into recession. The French have pushed for stimulus measures, but it seems unlikely that these will be approved at the EU level. Much faith has been placed in central banks to keep the world economy afloat; however, most economists believe the impact of central bank money is waning. Continued economic stagnation has fueled the rise of skeptics like Grillo, and their influence promises further instability.
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ECB’s Visco urges common EU budget for defense, research
18 October 2014 – Reuters
European Central Bank Governing Council member Ignazio Visco called on Saturday for EU countries to create a common budget for defense, security, research and infrastructure. He further said that the pooling of budgets in these key areas should be a step towards the eventual creation of what he described as “political union” in the region, without elaborating on what such a union would entail. In a question and answer session with students, Visco also said many of the Eurozone’s economic problems were still connected to investors’ concerns that the Eurozone could break up. “How do we eliminate these fears? By making people understand that this union is not reversible,” he said. In his presentation, Visco also criticized the EU goal of increasing the role of manufacturing in the economy as unrealistic, instead pointing to the increasing role of the service sector.
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Hungary questions EU sanctions on Russia
16 October 2014 – Financial Times
Hungarian foreign minister Péter Szijjártó has criticized the EU’s policy of sanctions against Russia, questioning their effectiveness in influencing Moscow’s behavior while warning that central European exports were suffering the consequences. “These sanctions have not given us the result we hoped for in Ukraine – the conflict is clearly not de-escalating. Meanwhile, Europe’s economy is suffering and central Europe has suffered the most,” he said. Mr. Szijjártó insists Hungary is pursuing growth by other means – particularly its “Eastern opening” pitch for Asian investment. While the Czech and Slovak prime ministers have also criticized sanctions against Russia, Poland and the Baltic states have urged a hard line against Moscow.
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Borrowing costs jump for fragile Eurozone states
16 October 2014 – Reuters
Borrowing costs for some of the Eurozone’s most highly indebted southern states shot higher on Thursday, as fears of slowing economic growth wounded confidence that the European Central Bank could avert another debt crisis in the bloc. ECB President Mario Draghi helped to calm the last Eurozone crisis by promising to do whatever it takes to save the euro. This brought down borrowing costs of "peripheral" Eurozone countries such as Greece, which had been bailed out by the European Union and IMF, and Spain, which took EU aid to rescue its banks. Further worrying investors is the Greek plan to ditch its unpopular bailout program with the EU and International Monetary Fund, which demanded severe austerity, and return to relying on markets to raise funds. Referring to the potential of buying government bonds, one bonds trader noted that "[t]he ECB only has one card left to play and it doesn't look imminent."
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Single market “key” to boosting EU growth
16 October 2014 – The Parliament Magazine
"A well-run single market can be the key to unlocking prosperity, innovation and greater competitiveness in Europe, which will benefit businesses and consumers. Misdirected, it can stifle entrepreneurship and create a clipboard culture in business," notes EU MEP Vicky Ford. "The single market is meant to help people trade easily across 28 countries and sell to more than 500 million consumers," she stresses; "it is not meant to add more red tape, costs and bureaucracy." Ford further points to the “digital single market” as a key reform that will save consumers billions of euros. While noting that there are varying, effective forms of regulation across the EU, she hopes to focus on the "implementation of existing legislation and the encouragement of better sharing of best practice between member states." In her capacity as chair of parliament's internal market and consumer protection committee, she hopes to convey her view that better regulation does not always mean more regulation.
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China, EU vow to speed up investment treaty talks
16 October 2014 – XinhuaNet
Leaders of China and the European Union agreed Wednesday to put their investment treaty negotiation on a faster track so as to further cement bilateral economic ties. China, Premier Li noted, attaches great importance to its relations with the EU, which is China's largest trade partner. "We are each other's opportunities for development," he added, urging the implementation of the China-EU partnerships for peace, growth, reform and civilization. Li noted that the European integration process is accelerating and pointed to the importance of euro stability, which, as a major international currency, will play a positive role in promoting world multi-polarization and the diversification of international reserve currencies. Van Rompuy and Barroso pledged that the bloc will maintain close dialogues and cooperation with China to implement the EU-China 2020 Strategic Agenda for Cooperation, properly handle trade frictions, and sign with China the investment treaty at an early date to create a better environment for Chinese investors.
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What should there be in a SME TTIP chapter?
16 October 2014 – EurActiv
The Transatlantic Trade and Investment Partnership (TTIP) has the potential to benefit small and medium enterprises (SMEs) considerably if it is tailored to their real needs, writes Arnaldo Abruzzini, Secretary-General of Eurochambres. Reforms that could help SMEs should include not only the elimination of tariffs, the simplification of customs procedures, or an overall reduction of regulatory barriers but also changes to make rules of origin easier, so that all companies can benefit from zero duties, not just transnational. Such restructuring should also mean facilitating the movement of workers in areas crucial to SMEs, for instance by making it easier for them to send a representative to the U.S., or by transferring technicians for installation works, or setting up machineries. According to the author, further gains to SMEs can be realized from streamlining regulations and ensuring these firms have access to information about operating in the transatlantic market.
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Putin guest of honor at Serbia military parade
16 October 2014 - BBC News
While attending Serbia's first military parade in decades, commemorating the 70th anniversary of liberation from the Nazi party, Putin emphatically stated his support for Serbia's position on Kosovo. In his acceptance speech for the Order of the Republic of Serbia, Serbia's highest honor, Putin said "Russia, just as in the past, will always see Serbia as our closest ally." Along with the parade, an air show, and reaffirmations of close ties, a statue of Tsar Nicholas II was erected in Belgrade. Serbia and Russia are commemorating their ties at an interesting time, as Serbia formally began talks to join the EU in January. Interestingly, the celebration was four days earlier than the actual 70th anniversary, angering many Serbs who see it as a show meant to fit Putin's schedule.
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Russian gas less mighty than it looks, EU says
16 October 2014 – EU Observer
On Thursday, the European Commission released a study addressing the union’s ability to cope with a total shutoff of Russian energy exports for the next six months. A complete cessation of Russian energy exports is “unlikely,” European Energy Commissioner Gunther Oettinger said. He believes an agreement on prices can be reached between Russia and Ukraine “by next week.” “We can show to our Russian partners there is no point in using gas as a political strategy because we’re ready for it,” Oettinger said. A few member states would be greatly affected. However, if “we work together, show solidarity and implement the recommendations of this report, no household in the EU has to be left out in the cold,” Oettinger said. Storage facilities are near capacity across Europe, and liquefied natural gas can be transported to where it is needed. Norway could also increase production, and alternatives such as biomass could be employed. Bulgaria, Estonia, and Finland are among the most vulnerable countries.
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Europe could save up to $80 billion in energy imports as prices plunge
15 October 2014 – Reuters
Global energy prices have fallen significantly over the past number of months, lowering the cost of Europe’s energy imports. Oil has fallen by a quarter since mid-2014 to $85 per barrel, the lowest price it has been since 2010. The EU spent over $500 billion in energy imports in 2013. Over $375 billion of this was spent on the import of oil alone. The EU could spend about $485 billion this year on energy imports if prices remain low. Reuters predicts that the EU could spend about $425 billion on energy imports in 2015 if the cost of oil remains under $90 a barrel. This would be about $80 billion less than the over $500 billion spent in 2013. Low energy prices are contributing to low inflation. Inflation in the U.S. and UK has declined to 1.7% and 1.2% respectively. The Eurozone has been on the verge of deflation for months. Lower energy costs allow businesses to invest more. Increased oil supply in North America and a decline in demand in China are the primary reasons for the fall in price.
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France defies Brussels over 2015 budget
15 October 2014 – BBC News
In defiance of European fiscal rules, France is refusing to reduce its budget deficit for 2015 to within 3% of its GDP. The European Commission is currently reviewing Eurozone countries’ budgets to make sure they comply with the rules of the Growth and Stability Pact. According to the pact, Eurozone countries cannot spend 3% of their GDP more than the revenue they take in. Next year, France’s budget deficit is anticipated to be 4.3% of GDP. France’s Socialist Government believes spending is necessary to promote growth and job creation, which it prioritizes over fiscal discipline. This will be the third consecutive time that France has failed to bring its deficit into line. French Finance Minister Michel Sapin said the “Commission doesn’t have the power to ‘reject’ or ‘censure’ the budget.” However, the Commission could seek to enforce the rules in a number of ways. The most punitive would be to impose a fine amounting to 0.2% of GDP or €4 billion; however, this would only further fuel anti-EU movements across Europe. While Sapin hopes to find a compromise, many leftist members of the National Assembly are sick of austerity.
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EU/U.S. free-trade talks to enter critical phase in 2015
15 October 2014 –Reuters
The United States and the European Union should take advantage of a lack of major U.S. elections next year to seal an ambitious free-trade deal covering half the world's economic output, top trade officials say. Progress has slowed partly because of stiff resistance from environmental groups and Germany to the trade pact's Investor-State Dispute Settlement Clause (ISDS), which allows companies to take cross-border legal action against governments. De Gucht recognized that ISDS is a problem, but said that Germany was operating a double standard. It has concluded 14 ISDS deals with 14 other EU members, notably in the east of the region, while resisting similar protection for U.S. or Canadian investors. Pointing to the strategic aspects of TTIP, De Gucht noted that both sides viewed TTIP as a blueprint for other deals and it would be hard to imagine China accepting an investor protection clause if there was none in the EU/U.S. accord.
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Free trade needs a champion
15 October 2014 – Chicago Tribune
Despite having set TTIP talks in motion, President Obama has failed both to rally the support of the Democratic Party for the agreement and to persuade Congress to grant him fast-track negotiation authority. Meanwhile, Europe needs free trade with the U.S. more than ever. Growth is slowing across the EU, even as it is picking up in the States. European leaders rightly see a deal with the world's No. 1 economic engine as a means to boost their domestic business climate and create jobs. The latest evidence supporting the idea that trade creates jobs comes from the Brookings Institution, which has found that in the U.S., every increase of $1 billion in exports supports 6,000 jobs. In addition, Brookings found, those jobs in export-related sectors pay 10 percent to 18 percent more than other jobs. The president needs to make the point, forcefully, that while some jobs disappear as markets get pried open, many more jobs are created.
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India has until Oct 21 to back global trade deal: EU
15 October 2014 – ZeeNews
India has until next Tuesday to support a global trade deal struck last year or risk being left out of the agreement to ease worldwide customs rules, the chairman of EU trade ministers said on Wednesday. India in July blocked what would have been the first global trade reform in two decades, which according to some estimates would add $1 trillion and 21 million jobs to the world economy. Italy’s deputy industry minister Carlo Calenda said India was being given until the meeting of the World Trade Organization’s general council on Oct. 21 to back the customs deal. Failure to do so would mean one of two things. "One is to start again with multilateral discussions but not many countries are willing to do that, the other is to say let’s consider this binding for those that have the willingness to go ahead," Calenda said. Trade experts have said that the failure is likely to end the era of trying to cobble together global trade agreements and to accelerate efforts by smaller groups of like-minded nations to liberalize trade among themselves.
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OSCE to conduct monitoring on Armenian-Azerbaijani contact line
15 October 2014 - Multiple Sources
U.S. Ambassador to the OSCE, Daniel Baer, notes that there has been no real progress in the implementation of the Minsk Memorandum, which is the de-facto title of the September 5th ceasefire between Ukraine and the separatists. Meanwhile, as the OSCE receives greater funding and materials to conduct operations in Ukraine, it will begin a monitoring mission on the Armenian-Azerbaijani border tomorrow. This is especially noteworthy because the two nations endure a frozen territorial war over Nagorno-Karabakh, a situation which might represent the future of the Donetsk and Luhansk People's Republics.
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U.S., Russia to Share IS Intel
14 October 2014 – Washington Post
U.S. Secretary of State John Kerry said Tuesday after meeting with Russian Foreign Minister Sergei Lavrov that the United States and Russia will share intelligence on Islamic State militants in Syria and Iraq and work together to combat the threat of terrorism that hangs over the region. Kerry added that Russia has agreed to “explore” whether to provide more weapons and training to Iraqi security forces fighting Islamist extremists. The U.S.-Russian willingness to work jointly on the two fronts marks the first sign of a thaw after seven months of grinding dispute over Russia’s actions in Ukraine. Although Russia recently withdrew some troops from its border with Ukraine, Kerry said Western economic sanctions will not be lifted unless Russia pulls back its heavy weaponry from the frontier and allows observers from the Organization for Security and Cooperation in Europe to monitor and secure the border.
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Berlin and Paris set up group to avert policy clash
14 October 2014 – EurActiv
The German and French economy ministers have asked experts in Berlin and Paris to come up with reform recommendations for both countries in an apparent attempt to avert a full-blown clash between the Eurozone heavyweights over economic policy. The ministers have asked Henrik Enderlein, head of the Jacques Delors Institut in Berlin and a professor at the Hertie School of Governance, and Jean Pisani-Ferry, a French government adviser and former head of the Brussels-based Bruegel think tank, to compile a report by mid-November with concrete reform proposals. Both of the leading Eurozone economies have come under fire lately – France for not meeting budgetary deficit requirements, and Germany for refusing to increase investment spending to stimulate the economy. The economics experts are also asked to outline possible joint Franco-German initiatives that could enhance competitiveness, structural convergence, integration and growth in Europe.
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Kenya to access duty free EU markets after trade agreement
14 October 2014 – The Star
Kenya can continue to access the European Market duty-free after an agreement following successful negotiations for fresh Economic Partnership Agreements between the East African Community and the EU on Tuesday. Kenyan exports risked import duties in the EU, which is the largest market for its horticulture produce. The EU accounts for about 90 percent of cut flower exports from the country. Key issues that had delayed the agreement from their original September target included export taxes and export subsidies.
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In Court, Lawyer Calls ECB. Bond Plan "an Egregious Extension" of Powers
13 October 2014 – New York Times
Europe’s highest appeals court heard arguments on Tuesday on a suit that aims to block a European Central Bank bond-buying program that has never been deployed — but whose mere announcement two years ago was widely credited with helping rescue the Eurozone from market forces that could have destroyed it. Germans would never have approved EU treaties if they had known they would allow the sharing of debt among member states, the court was told by Mr. Murswiek, who represents Peter Gauweiler, a member of the German Parliament. The plaintiffs have argued that bond buying would violate a provision in the European Central Bank charter that prevents it from financing governments. The legality of bond buying by the central bank remains an issue because of expectations it will soon buy large quantities of government bonds to stimulate the flailing Eurozone economy.
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Irish unveil growth budget, end 6 years' austerity
14 October 2014 – Associated Press
Ireland unveiled its first expansive budget Tuesday since the collapse of its economy six years ago, ending an era of austerity earlier than expected thanks to the return of Europe-leading growth. The U-turn follows seven hard-cutting budgets that, when combined, took nearly 30 billion euros annually — representing nearly a quarter of previous domestic demand — out of a shell-shocked economy. Even with the new budget and remarkable economic growth relative to the other Eurozone nations, Ireland is still expected to post a 2015 deficit of 2.7 percent of GDP. Many other reforms were also introduced Tuesday, including the elimination of a corporate tax loophole and changes to the income tax structure.
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Germany Seen Close to Recession
14 October 2014 – The Wall Street Journal
Clemens Fuest, the president of Germany’s Centre for European Economic Research (ZEW), said the German economy may contract in the third quarter. The economy contracted by 0.6% in the second quarter on the previous quarter. Two consecutive quarters of contraction would signal the start of a recession in Germany. If Germany enters a recession, it will be brief, Fuest said. The Centre released a survey that showed that economic sentiment fell to -3.6%. The measure last fell below zero in November 2012. The survey is the most recent development in a string of souring economic indicators. In August, exports suffered their sharpest decline since 2009, and the International Monetary Fund said last week that it thinks there is a 40% chance of a Eurozone recession.
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Turkey Denies Deal With U.S. on Anti-IS Strikes
13 October 2014 – Defense News
On Monday, the Turkish government denied a deal with Washington allowing U.S. forces to use Turkish air bases for bombing raids against Islamic State (IS) militants inside Syria but confirmed it had agreed to help train Syrian rebels. A senior U.S. defense official said Sunday that Turkey had granted the U.S. forces access to its air bases, including Incirlik, for the bombing campaign against IS. Located in southern Turkey in Adana province a short distance from the Syrian border, Incirlik would be an ideal start point for U.S. forces to launch air strikes against IS inside Syria. The U.S. air force currently uses the Incirlik base for logistical and humanitarian purposes but would need additional authorization from Ankara to launch bombing raids.
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Italy’s Renzi announces tax cuts as EU scrutinizes budget
13 October 2014 – Reuters
Italian Premier Matteo Renzi said he wants to drastically cut taxes by €18 billion next year to stimulate growth and employment. At the same, the European Commission is reviewing Italy’s budget proposal, which may be rejected for failing to reduce the debt quickly enough. Renzi plans to cut taxes for low income workers and firms that hire new employees. Italy has the second largest public debt to GDP ratio of any Eurozone country at above 130% of GDP. Nonetheless, the government plans to borrow €11 billion in 2015. France was originally supposed to bring its budget deficit below 3% of GDP in 2013, but the government said in September it would not do so until 2017.
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Vietnam's PM looking to boost trade ties with the EU
13 October 2014 – Deutsche Welle
Vietnam's PM Nguyen Tan Dung is visiting the EU and in a bid to reduce the over-reliance of his country's economy on China, the premier aims to push forward the EU-Vietnam free trade deal. According to the European Commission data, the EU is Vietnam's second largest trading partner and over the past decade, bilateral commerce has increased from around five billion euros to more than 26 billion euros. The EU-Vietnam free trade agreement (EVFTA) aims to reduce tariffs and other trade barriers, in addition to providing legal certainty and protecting investment as well as intellectual property. Proponents of the deal claim that it will spur economic growth and create jobs for both parties. Legal issues, however, are likely to be the main obstacle for the conclusion of the deal.
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Eurozone needs “grand bargain” of QE, fiscal easing
13 October 2014 – Reuters
The Eurozone needs a "grand bargain" between Germany and France to pave the way for substantial new fiscal and monetary stimulus to revive its economy, the head of Poland's central bank said on Monday. Marek Belka said that even maximum estimates of around one trillion euros ($1.3 trillion) attached to the ECB's current plans for new targeted cheap loans and purchases of packaged debt would not suffice. "Doing more would mean buying government bonds. Maybe it could be possible as part of a bigger package, a 'grand bargain'. The French defy French identity, French tradition, the Germans do the same and we save the euro," he said. Belka also commented on the “stress tests” being conducted on European banks, the results of which will have a big impact on the region if Eurozone parent banks that need to improve their finances opt to sell their Eastern European subsidiaries.
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ECB report details structural changes in the euro area banking sector
13 October 2014 – European Central Bank
The European Central Bank has published the Banking Structures Report 2014, which reviews the main structural developments in the euro area banking sector to the end of 2013. The report shows that the on-going consolidation of the euro area banking system continued in 2013, with the number of credit institutions decreasing from 6,690 in 2008 to 5,948 in 2013. Profitability continues to be challenged across the sector, affected by the low interest rate environment, the continuing deterioration in asset quality, and in some cases by restructuring and litigation costs. The Vice President of the ECB noted that banks continued to deleverage, but that there has been a marked increase in “shadow banking” activity, which requires further investigation.
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Putin Orders Pullback of Russian Troops on Ukraine Border
13 October 2014 – Bloomberg
Over the weekend, Putin ordered the withdrawal of about 17,600 Russian soldiers who were temporarily posted on the Ukrainian border. Nominally conducting pre-planned drills, the force comprised of infantry, artillery, armor, and special operations soldiers and is now being dispatched to their permanent bases. This announcement comes as Ukrainian President Petro Poroshenko dismissed Ukraine's fourth defense minister since the toppling of former President Viktor Yanukovych. Meanwhile, fresh clashes over the weekend have brought the civilian death total to an estimated 330 since the September 5th ceasefire was signed. Though the pullback signals a degree of de-escalation, Putin has a history of ordering strategically timed withdrawals followed by re-engagements.
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Schaeuble Says Germany Will Shift Spending to Investment
11 October 2014 – Bloomberg
German Finance Minister Wolfgang Schaeuble said Germany’s response to a “clear weakening” of the economy will be a shift in public spending toward investments and away from government consumption. Germany’s economy is stalling as exports slow and Chancellor Angela Merkel’s domestic policies hold back growth, four economic institutes which advise the government said in an October 9th report. During a meeting in Luxembourg on October 14th, ministers will call on the EU to identify projects “that could be realized in the short and medium term and lay the foundation for a credible and transparent pipeline of projects.”
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Eurogroup head proposes new growth deal for Europe
11 October 2014 – Business Recorder
The chairman of Eurozone finance ministers, Jeroen Dijsselbloem, proposed on Friday a new growth deal for Europe that would reward governments reforming their economies with cheap European funds for investment and leeway on budget deficit targets. The plan would link the ECB's monetary policy, the evaluation of budget policy of Eurozone governments, progress on structural reforms, and investment plans. Because of weak growth in France and a recession in Italy, the Eurozone’s second and third-largest economies have been pushing hard for more leeway on the budget targets set by EU finance ministers, arguing that cutting government spending would hurt growth even further.
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ECB - Banks stress tests to be revealed in two weeks
11 October 2014 – Independent
The results of the so called comprehensive assessment of bank balance sheets - commonly known simply as stress tests - will be published at midday on October 26th, the European Central Bank said on Friday. The stress tests are reviewing asset valuations across the Eurozone's 128 most important lenders, ultimately in an effort to assess their ability to withstand any future crises. Banks that fail their stress test will have two weeks to come back with plans to plug any funding shortfalls, but will have longer to actually executive those schemes. It is hoped that this round of stress test, unlike the previous, will be sufficiently in-depth to spot dangerous financial weaknesses to stave off or at least lessen the severity of future crises.
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WTO head says “world is watching” as Canada, EU iron out trade-deal kinks
11 October 2014 – CTV News
WTO chief Robert Azevedo said obstacles in Canada-EU negotiations are to be expected, plus he believes they can provide learning moments for trading nations around the globe. When asked about certain obstacles, namely Germany’s hesitance about including an investor-state dispute settlement clause and Romania and Bulgaria’s visa requirement concerns, Azevedo said hurdles like these are common in trade talks, particularly when negotiations involve so many countries. One international trade consultant said the reason the world is watching Canada and the EU so closely is actually because of another much bigger deal: the proposed U.S.-EU trade pact. Laura Dawson, president of Ottawa-based Dawson Strategic, said the U.S.-EU deal has even replaced the WTO’s Doha Round as the trade agreement the world is paying attention to.
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Concerns rise over U.S.-EU Trade Talks
11 October 2014 – BBC News
The European Union and United States are currently negotiating a free trade agreement known as the Transatlantic Trade and Investment Partnership (TTIP) that aims to eliminate tariffs and harmonize certain regulatory standards to facilitate businesses that work on both sides of the Atlantic. However, many Europeans criticize or oppose the talks, and numerous demonstrations took place across Europe on Saturday. Approximately 400 demonstrations took place across 24 countries, and at least 15 British protests were scheduled. Many believe the TTIP will allow American corporations to sue European governments that change regulations, allow for the privatization of government services such as healthcare, and allow the export of chlorine-washed chicken, hormone-injected beef, and more genetically-modified products from the U.S. Amber Rudd, the British minister for climate change, met environmental groups on Monday to assuage their concerns.
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Putin Wants Russian Say in Moldova-EU Trade Agreement
10 October 2014 – BBC
Moldova, Georgia, and Ukraine signed free trade agreements with the EU in June. Ukraine postponed the implementation of its agreement until December 2015 to allay Russian fears that the deal would hurt Russia’s economy. Now, Russian President Vladimir Putin has advised Moldova to delay its trade pact with the EU at a meeting of former Soviet states in Belarus. Putin has long called for greater economic integration in the Eurasian region. In 1992, Russian-supported rebels gained control of the Moldovan region of Trans-Dniester and still hold it today. Some fear that this frozen conflict could be reignited by events in eastern Ukraine. Moldova has strong cultural and economic relations with Romania, an EU member state. Over the past few years, Moldova, one of the most impoverished states in Europe, has seen a number of its exports denied entry into Russia on the pretense health violations.
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UK police arrest 5th suspect in alleged terror plot
10 October 2014 – CNN
Five men, ages 20 and 21, have been arrested in the last few days on suspicion of planning acts of terrorism. This comes only two weeks after British police arrested 10 others on charges of supporting banned organizations and encouraging terrorism. Metropolitan Police Commissioner Bernard Hogan-Howe stated that the arrests are directly linked back to Syria and Iraq, but stopped short of announcing a connection to ISIS. He did, however, say Islamic terrorism was the clear reason for the plots. The warrants for further detention of the five suspects has been extended to October 14, at which time official charges will be laid out in a hearing.
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Asian Infrastructure Investment Bank Opposed by U.S., Seen as Attempt to Boost Chinese Influence
9 October 2014 – International Business Times
The idea of a Chinese bank, known as the Asian Infrastructure Investment Bank (AIID), has attracted the interest of 21 countries in the region, including India, Thailand, Indonesia, South Korea and Singapore, and would receive $50 billion in capitalization from China. The proposed bank's purpose would be to provide financial support for much-needed telecoms, energy and transportation infrastructure projects in the region. With China looking to use its financial muscle to play a more assertive role on the international stage, officials and diplomats privately regard the bank as a challenge to the regional role of the Asian Development Bank, a Manila-based multilateral lender that is dominated by the U.S. and Japan. The Bank would likely deepen China’s trade and strategic ties with its neighbors, much like what China’s investments in Africa have achieved.
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Grand Central: Look Out for Falling U.S. Inflation Expectations
9 October 2014 – The Wall Street Journal
Inflation expectations in the U.S. are sinking. By one measure they have dropped by a greater magnitude in the U.S. than in Europe in the past few months. This may make the Fed wary about increasing interest rates quickly in the near future. In a written commentary, Barclays strategist Michael Pond said the drop can be explained in part by falling oil prices and concerns about slow global economic growth. Central bankers pay attention to expectations because they are believed to play an important role in the inflation that actually occurs. Many Fed officials expect to start raising short-term interest rates by mid-2015, even though the jobless rate has now fallen below 6%.
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