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.
Former Speaker of the U.S. House of Representatives Jim Wright (Dem. of Tex.) died in Fort Worth, Texas on May 6, 2015. An 18-term U.S. Representative, Wright was a close personal friend of Clarence K. Streit and a decades-long member of the board of Federal Union, Inc., the predecessor of The Streit Council. He was a longtime supporter of Atlantic Union and Streit's call for federal institutions first articulated in his book UNION NOW, to solidify the Atlantic Alliance in World War II and later with NATO. While in the U.S. House, Wright was a supporter of U.S. Sen. Estes Kefauver's (Dem. of Tenn.) "Atlantic Union Resolution" and, later, the similar efforts of U.S. Rep. Paul Findley (Rep.of Ill.). For many years, Wright was often a spokesperson for the concepts of Clarence K. Streit in the U.S. Congress. The photo to the left is of Wright at the 2008 Democratic National Convention in Denver with D. Bruce Shine, Chairman of the Board of The Streit Council, where both were convention delegates.
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
UN chief says “other ways” than military to tackle migrant crisis
28 May 2015 – AFP
On Wednesday UN General Secretary argued that “there are other ways” than military force to stop migration across the Mediterranean. This statement was issued in response to EU plan against the smugglers from Northern Africa which involves the use of European warships and air surveillance to gather information about smuggler boats and then proceed to their destruction, even in Libyan territorial waters. To do so, however, the EU is waiting for a UN resolution which appears extremely unlikely considering the UN General Secretary’s statements. Despite this, Ban Ki-moon has expressed his approval for the EU’s recent plan of reallocating thousands of migrants, which is seen as an act of compassion and a policy that will effectively contribute to their resettlement.
Russia, Putin still stirring up fight in Ukraine, independent report says
28 May 2015 – UPI
Although observers argue that the evidence is overwhelming and undeniable, President Putin continues to deny Russian involvement in Ukraine. Putin has uninterruptedly dismissed such argument as Western rhetoric and has denied any territorial mire toward Ukraine. International investigators have used satellite photos, media channels, and modern technologies to prove the involvement of Russian troops in the Crimean region. In addition, the investigation has clearly shown that Moscow is providing military support to the separatists. These findings are unveiling Putin’s aggressive strategy in Ukraine and further confirming its expansionist goals.
U.S., South Korea, Japan Coordinate Trilaterally on North Korea
28 May 2015 – The Diplomat
Following North Korea’s announcement of a new plan to test a submarine-launched ballistic missile (SLBM) and its miniaturization of a nuclear device, the United States, South Korea, and Japan have claimed they will increase sanctions on North Korea. Although Japan and South Korea have a long and positive record of bilateral relations with the U.S., the current territorial diatribe over the Dokdo/Takeshima Islands is tensing their relations. However, the U.S. has pushed toward trilateral relations and recently signed a trilateral defense cooperation agreement. As shown in the recent trilateral meeting, the common intent to defy North Korean nuclear ambitions is pulling the two Asian countries together.
TTIP faces critical EU test
27 May 2015 – Politico
The European Parliament’s International Trade Committee is set to vote on non-binding recommendations for EU negotiators in the TTIP talks. The ISDS mechanism in various global trade agreements has been heavily scrutinized, and the committee has come up with its own structure to settle disputes between injured parties. The committee’s recommendations will potentially be voted on in the EU’s next plenary session in June. Members of European Parliament also expressed concerns about genetically modified foods, health, data privacy and public procurement.
Spain risks euro split over radical ECB mandate
27 May 2015 – Telegraph
Madrid hopes that the ECB will expand its powers to battle macroeconomic balances and become more like the Federal Reserve in the U.S. It can accomplish this, Madrid says, by adopting a common budget in emergency situations and issuing debt in the form of Eurobonds. Madrid’s blueprint states the EU is too exposed to adverse economic shocks which requires a more powerful ECB to combat economic crises.
ECB might ease Greek restrictions if aid deal likely
27 May 2015 – Reuters
If Greece reaches agreement with its creditors, the ECB is set to ease the restrictions on the amount of Greek treasury bills that banks are allowed to hold. The restrictions have limited the “government’s main borrowing channel.” Furthermore, an agreement with creditors would allow the ECB to purchase Greek debt under the central bank’s quantitative easing program. Jens Weidman, head of the Bundesbank, accused the ECB of directly financing the Greek government.
Commission proposes draft EU budget 2016
27 May 2015 – Financial
The European Commission sent a draft budget proposal to the European Commission and member states totaling 143.5 billion euros for fiscal year 2016. Approximately half of the budget will be used to stimulate employment, growth and competitiveness through investments in research and innovation, education and training, and business investment. The budget will also send assistance to member states in the south who are overwhelmed with migrants. In addition, the budget sets funds aside for responses to security issues and humanitarian aid in countries outside of the bloc.
U.S. Urges European Leaders to Solve Greek Crisis Quickly
27 May 2015 – New York Times
Jacob Lew, U.S. Treasury Secretary, urged EU leaders to compromise on terms of a Greek bailout at the G7 meeting in London. A failure to compromise would lead to great uncertainties for the global economy, says Lew. U.S. officials are worried that a Greek default and exit from the Eurozone would force Greece closer to countries like Russia, and harm America’s burgeoning economic recovery.
Fractured EU Parliament seeks unity on U.S. trade deal
27 May 2015 – Reuters
The European Parliament is divided on TTIP. Recent parliament elections have sent members of the far right and left to Brussels who are vehemently opposed to the idea of free trade or the EU as an institution and governing body. The most divisive issue is the ISDS mechanism and the European Commission is pushing the Parliament to support a deal that contains arbitration. Washington says any deal that does not have an arbitration mechanism is non-negotiable.
Emboldened in Syria and Iraq, Islamic State may be reaching limits of expansion
27 May 2015 – Reuters
Recent Islamic State victories in Iraq and Syria are forcing Washington to re-think its strategy. Despite this, it appears that there is little room for further expansion. The recent military successes have proven extremely costly both in terms of men and weapons. Moreover, IS will now need to invest energy and resources in controlling and managing the conquered territory. In addition, Iran backed Shiite militias have been deployed in Iraq and also rival Sunni Arab insurgent groups are taking the fight to Syria. Finally, the Islamic State is also being confronted by Kurdish fighters. Thus, the expansion of the Islamic militants appear extremely unlikely. However, when comparing Iraq and Syria, it appears that IS has more chances of success in the latter, predominantly inhabited by Sunni Muslims. Moreover, the sectarian nature of this community is offering an alternative to the Islamic State and both the U.S. and Saudi government are increasingly backing Sunni rebel groups that oppose both the IS and Assad’s regime in the country.
Obama, Stoltenberg Discuss NATO Meeting Highlights
26 May 2015 – DoD News
While discussing current challenges to NATO, President Obama and NATO Secretary Stoltenberg also addressed issues such as Ukraine and Afghanistan. They both agreed on the role of NATO as the cornerstone to global security. The New Readiness Action plan for NATO will ensure security near and in Europe. Obama also confirmed U.S. support for the EU-Ukrainian partnership as well as America’s commitment to work closely with NATO in Libya and Iraq. Both leaders reasserted the necessity of expanding defense capacity building with countries like Iraq or the Gulf partners. Stoltenberg confirmed the importance of U.S. leadership at a time marked by multiple crises around the globe.
Russia Digs Ditches to Slow Inflow of Arms and Men from Ukraine
27 May 2015 – Bloomberg
Russia is now digging trenches and ditches to halt munitions moving to the east across its western frontier. Groups of rebels in the North Caucasus are greatly profiting from the traffic of weapons through the region and Moscow is increasingly concerned. Since the beginning of the war in Ukraine smugglers have been trying to maximize their profits through the black market, ultimately fueling Russian political internal unrest.
Japan broadening its meaning of exercising collective self-defense
27 May 2015 – The Hankyoreh
After revising its defense guidelines with the U.S., the Japanese government is re-thinking its right to self-defense in terms of preemptive strikes against possible external threats, for example North Korean missile bases. In case of a North Korean attack on the United States, the new agreement allows Japan to attack North Korea as it poses a correlated threat to the security of Japan itself. This concept was laid out from a General of the Japanese Army in a press conference about ten days ago.
Grexit little threat for French Banks
26 May 2015 – Reuters
According to the ECB’s Christian Noyer, French banks would not suffer from a Grexit because they have reduced their exposure to the country’s financial system. The biggest problem for Greece, he said, is reviving growth as nobody wants to keep it dependent on foreign assistance.
EU cannot give military responses to political problems
26 May 2015 – The Parliament
The EU is currently facing three main problems in its common security and defense policy. First, the EU needs to cope with the complex demand for pooling and sharing of resources among its member states. The development of a military industrial complex as well as the merging of civilian and military research represent two of the key nodes in this area. Second, EU members are required to contribute to common security with a minimum of 2% of their GDP in addition to the deployment of EU battle groups in case of crisis management. Third, the EU needs to handle the issue of possible tax breaks for the defense and armament industry. Although these measures pave the way to an increase in terms of military expenditures and capabilities they are short in addressing the cause of the current political problems that the EU is facing: poverty in neighboring countries.
Europe's immigration crisis
26 May 2015 – The Baltimore Sun
A month after the death of immigrants crossing the Mediterranean, the 28 members of the European Union finally agreed to deploy naval forces to better cope with the humanitarian crisis in its southern flank. Still, the plan seems to do little to respond the current crisis and effectively prevents mass of migrants from fleeing their countries. The plan is a three-pronged operation aiming to seize the vessels carrying the migrants, repatriate the passengers, and ultimately destroy the boats. Though, destroying the boats will hardly discourage smugglers from replacing them with new ones. Due to the high economic profits deriving from the human trafficking, smugglers will most likely continue their current operations and leave the passengers themselves to navigate the crossing. Although the EU is waiting for an approval from the UN to destroy the boats along the shores of countries such as Libya, the absence of a central political authority in the country and the presence of its two self-declared governments undermine this option.
Russia and NATO launch rival war games
26 May 2015 – The Telegraph
In response to NATO’s current exercises in the Arctic, Russia launched mass surprise drills over the Urals Mountains and Siberia. The two-week NATO exercises see the involvement of NATO key members as well as non-NATO allies such as Sweden, Finland, and Switzerland. These exercises are further testing the relationship between Russia and the North Atlantic Alliance which claimed the exercises intended to reassure its eastern patterns in a time of crisis stemming from the war in Ukraine. While joking that “tanks do not need visas,” the Russian deputy prime minister with responsibility for defense claimed that Russia does not pose any threat to the West which is rather collapsing under the attacks of “ISIS and gays.”
House GOP Split Jeopardizes Trade Deal
26 May 2015 – Politico
Democrats and Republicans in the House will be a bigger obstacle than their Senate counterparts in passing fast-track legislation. At most, Politico predicts that only 25 democrats will vote “yes” while up to 45 Republicans are already opposed to the Senate bill. Democrats are most concerned about the impact of free trade on blue collared workers and unions, but the Republicans oppose any piece of legislation that grants too much power to the president. The ability of the U.S. president to negotiate the TTIP and TPP agreements will be diminished without fast track authority.
Nirmala Sitharaman-EU trade commissioner meeting next week on FTA
26 May 2015 – Economic Times
The EU’s trade commissioner and India’s Commerce Minister will meet next week to jumpstart progress on a free trade agreement. It is the first time in two years that senior officials from both sides will meet regarding the FTA. The FTA could lead to a doubling of trade between the EU and India to 200 billion euros in two years. European companies have expressed concern over India’s tax regime and its minimum alternative tax, and are hoping for reassurances from India’s Commerce Minister.
David Cameron takes hit as France and Germany agree closer ties
26 May 2015 – The Guardian
Angela Merkel and Francois Hollande have agreed to increase the integration of Eurozone members without requiring changes to current EU treaties. The agreement will be presented at an EU summit next month with the goal of preventing any changes to the Lisbon treaty. France is seeking to increase investment, while the Germans hope to promote more monetary stability with the new pact. David Cameron will also present his list of items needed to keep Britain in the EU at the same summit.
UN agency urges truce in Syria fighting during harvesting
26 May 2015 – Reuters
A UN agency called for a truce in Syria to let local farmers harvest their crops and avoid mass starving in the next few coming months. The need for unhindered access to food and opening up of corridors for its transport is extremely urgent, an official said. Despite the death of more than 200,000 people and the loss of any property or house for about a third of the Syrian population, the opposing factions won’t most likely agreed to a truce of arms. Despite UN limited influence, however, Iranian and American pressure on both the Assad’s regime and different groups of rebels could make the truce possible.
Iran hopes sanctions will be lifted by December
26 May 2015 – Ynet
Experts believe that the lifting of economic sanctions contemplated in the nuclear deal will allow Iran to attract billions in the national oil and gas sectors. The removal of sanctions could inject over $200 billion in the energy sector in the next six years. In exchange for an easing of the sanctions, Tehran will stop developing nuclear weapons. The text of the agreement should be drafted in Vienna on Friday.
Russia is using mobile crematoriums to hide Ukraine's dead
26 May 2015 – Bloomberg View
U.S. lawmakers claim that Russia delivered mobile crematoriums to Ukraine to destroy the bodies of its war dead and, therefore, removed any evidence of its involvement in the conflict. This information, gathered from Ukrainian forces, has been also confirmed by U.S. intelligence. Both Russian and Ukrainian bloggers and activists have been compiling lists of dead Russian soldiers, ultimately challenging Putin’s public narrative about Russian involvement in the war. Informants claim that about 8-10 bodies are burnt every day. Due to European resistance, the U.S. administration is holding back from providing weapons to Ukrainian forces in the east yet military support appears to be the only leverage to force Putin out of the conflict. Obama, however, fears that providing weapons could only escalate Russian involvement and its retaliatory actions.
Spanish Stocks Sink on Rajoy Setback
25 May 2015 – Financial Times
The victory of anti-establishment parties in regional elections roiled Spanish markets. It was the worst defeat for the ruling People’s Party in the last twenty four years and it prompted a decline of 2.1 percent in Madrid IBEX 35 index. Political risk analysts fear the election results will alter the ability to negotiate a deal with Greece since Spanish representatives will not “vindicate the rebellious approach of the Syriza coalition.”
IS recruiting militants in Afghanistan and Pakistan: NATO General
25 May 2015 – Dawn
According to NATO’s commanding general in Afghanistan, the Islamic State is recruiting fighters in the country but these forces are not yet operational. Not only in Afghanistan but also in Pakistan, the Islamic State is recruiting men, the general added. After 13 years of fighting militants, the Taliban is rebranding itself against both the Western sponsored government and the Islamic State itself. Although some Taliban switched allegiances, the two groups still frequently clash in the south of the country. Moreover, both extremist groups are militarily advancing and Afghan forces are now confronting the new offensive without the support of U.S.-led foreign troops for the first time.
Colreavy says U.S./EU Trade Agreement could be Dangerous for Ireland
25 May 2015 – Leitrim Observer
Michael Colreavy, Sinn Fein’s spokesperson on Energy, Communications, and Natural Resources, believes the TTIP will have a negative impact on Irish trade, and could reduce intra-EU trade by 30%. He also voiced concerned about the ISDS mechanism particularly as it relates to Ireland’s fracking moratorium. He cited Canada’s experience where the country is being sued under the ISDS mechanism for $250 million in lost profit related to fracking.
Greece rules out capital controls if bailout talks fail
25 May 2015 – Associated Press
Greek government spokesman Gabriel Sakellaridis ruled out any impositions of controls on capital if negotiators with creditors break down. He quelled speculation over capital controls after a conservative lawmaker suggested they could be implemented to stave off financial ruin. Many economic experts believe Greece will have to impose capital controls if savings are hastily withdrawn. Depositors have already withdrawn $33.5 billion from Greek banks since Syriza took power at the end of last year.
Portugal, like Europe, loses hunger for reform
25 May 2015 – Reuters
ECB President Mario Draghi praised Portugal’s reform efforts over the last few years and encouraged other EU member states to similar measures to promote growth and opportunity. Despite his positive feedback, Portugal faces headwinds on its reform program as cuts to state salaries have been overturned by the country’s highest courts. Furthermore, a fall election has tempered any drive to implement more structural changes and the country has the third highest unemployment rate in Europe.
Europe steps up fight over cheap steel imports
25 May 2015 – Financial Times
The European Commission could impose anti-dumping measures on foreign steel producers in Russia and China. Russia’s weaker ruble coupled with China’s weak domestic demand have pushed exports higher in both countries resulting in hardships for EU steel producers. At the beginning of the month, the EU imposed anti-dumping charges on certain types of electrical steel imported from China, Japan, Russia, the U.S., and South Korea. Analysts, however, believe there is significant overcapacity in the global steel market that will require a re-balancing of production at some point in the future.
As Russia growls, EU goes cool on Eastern promises
24 May 2015 – Reuters
The Eastern Partnership Summit proved European uneasiness on directly confronting Moscow. The summit was filled with rhetoric about democracy and economic cooperation yet Russia was barely cited. Interestingly enough, it was during this meeting about 18 months ago that Ukraine’s rejection of an agreement with the EU triggered the current East-West crisis. Not only European members but also the six former Soviet Republics are increasingly distancing themselves from each other on issues such as membership and human rights, which is further complicating possible partnership in the short-term. Current issues in the Mediterranean are also making any tough stands against Russia more unlikely and further weakening confidence from the former Soviet republics on EU commitments to their security and independence.
Syria regime to “accept de facto partition” of country
24 May 2015 – Defense News
As proven by the retreat of governmental forces last week from Palmyra, Assad’s regime is increasingly leaning to accept the de facto partition of the country. The victories of both ISIS and Al Qaeda in different parts of Syria are used by Assad’s government as evidence that opponents to the regime are extremists. Although Assad has lost about three-quarters of the territory, his regime still controls 50-60% of the population. Despite this, the partition appears inevitable and is largely supported from leading figures of Assad’s regime. Damascus as well as coast cities such as Latakia and Tartus represent the strongholds of the regime and are densely populated from the Alawite community to which Assad adheres. The strategic shift of the regime, still enjoying Iranian and Russian support, is also related to the significant losses that the Army experienced. It decreased from 300,000 to 175,000 men yet it still has enough military power to hold on the southeastern part of the country,
Jobs data update: UK, Switzerland, and Eurozone
24 May 2015 – FX Street
The Eurozone jobless rate remained steady at 11.3% in March, an improvement from the March 2014 reading of 11.7%. Germany registered the lowest unemployment rate at 4.7% while Greece had the highest jobless rate at 25.7%. Productivity increased from 101.8 to 102. In the UK, the unemployment rate decreased by 0.1% to 5.5%, but Switzerland’s jobless rate ticked up by 0.1% to 3.3%.
EU and Ukraine sign Memorandum of Understanding for €1.8 billion in financial assistance
22 May 2015 – European Commission
Today in Riga the European Commission and Ukraine signed an agreement for a loan of 1.8 billion of euros. This Memorandum of Understanding covers six main areas to implement structural reforms of the Ukrainian economy. The agreement also complies with other programs from the World Bank and the IMF which also support the current reform commitments of the Ukrainian government. The package will be disbursed in three major payments and is expected to boost financial reforms, economic growth, as well as governmental transparency in the short-term. It parallels other European contributions in humanitarian aid and technical assistance.
EU wants framework for free trade deal with U.S. by end-2015
21 May 2015 – Economic Times
Angela Merkel is pushing for a deal that establishes the political framework for a transatlantic free trade agreement between the U.S. and EU by the end of 2015. The agreement could lead to new jobs and generate over $100 billion annually for the transatlantic area.
EU commitment to Pacific Trade despite EPA stall
21 May 2015 – Radio New Zealand
The EU reaffirmed its commitment to the Economic Partnership Agreement (EPA) between the bloc and Pacific countries. Cecilia Malmstrom, the EU’s Trade Commissioner, has proposed a three year deferral of negotiations so Pacific countries can determine the best course of action. The trade negotiations have been ongoing for the last eleven years and Ambassador Andrew Jacobs describes the current state of negotiations as “going in circles” for the past few months.
Draghi: “Growth is too low everywhere” in Europe
21 May 2015 – Business Insider
Though he acknowledged the modest recovery in Europe, European Central Bank President Mario Draghi stated that growth and inflation readings in Europe are too low, and citizens are becoming frustrated at the lack of robust growth. Federal Reserve board member Stanley Fischer expressed his praise of new banking supervisory institutions within the EU that will be able to unwind large banks without costly bailouts. That said, he believes that the monetary union “will not survive unless it also brings prosperity to its members.”
EU chief warns Ireland on need to reduce debt
21 May 2015 – Irish Times
The Vice President of the European Commission, Jyrki Kyrtainen, is pushing Ireland to continue with necessary economic reforms, and paying down debt. He criticized Ireland’s most recent budget and stressed the importance of reduce public expenditures over increased spending. Currently, Ireland is the fastest growing country in the EU with a growth rate of 3.5 percent. The European Commission is concerned that public sector pay raises will create negative spillovers for the country’s private sector.
ECB says QE working, but government reforms needed-minutes
21 May 2015 – Reuters
The ECB believes firmly that its Quantitative Easing program is working, and plans to maintain it stimulus measures through September 2016. Fears over the potential scarcity of bond market supply due to ECB asset purchases have been overstated, according to the minutes. Furthermore, the easing program signaled to governments that they should strive to implement more structural reforms, and improve conditions for businesses.
Irish Unemployment Rate Falls to 6 year low of 9.8 Percent
21 May 2015 – New York Times
Ireland’s unemployment fell to 9.8 percent, a decline from 10.1 percent in January. It is the first time in six years that unemployment is in the single digits. In 2008, Ireland was hit hard by the financial crisis as its economy suffered after a credit-fuelled boom. Ireland is now forecast to have the strongest growth in the EU in 2015.
Parliament urges EU Member States to gear up for new security challenges
21 May 2015 – European Parliament News
Current threats to European security, including yet not limited to terrorism and cyber-attacks, are increasingly demonstrating the need to enforce a more effective common policy on security and defense for EU’s member’s states. The EU Parliament approved a motion calling for substantial progress in the EU operational capabilities to face international threats to security and instability on its borders. The upcoming meeting of June 25-26 represents a unique opportunity to offer some concrete response to critics of EU’s security policies. The Parliament also discussed a revision of current market regulations to boost technological innovation, especially in defense.
NATO troops needed for long term to contain Russia, Estonia says
21 May 2015 – SWI
Estonia’s Defense Minister appealed to NATO to send more troops to the country to guarantee its national independence and security from Moscow’s aggressive and expansionist policies. However, NATO’s secretary confirmed that the presence of troops in the Baltic states has already increased over the last few weeks. Although the news of Russian bases along the Estonian border is raising Tallinn’s concern, NATO confirmed that its response time to a Russian attack has been virtually reduced to zero. Estonia also confirmed the enhancement of its military capabilities including mid-range defense systems and tanks.
Obama on Iran deal: “Personal interest in locking this down”
21 May 2015 – NBC News
In a recent interview President Obama confirmed that, in addition to security interests, he has a personal interest in securing the nuclear deal with Teheran. Obama also highlighted that, although Ayatollah Ali Khamenei’s statements have been deeply anti-Semitic, this does not preclude him from reaching an agreement with the U.S. In addition, Obama denied that relieving economic sanctions on Iran will allow Teheran to further pursue its military build-up. Obama added that a specific process will prevent this from happening.
EU says Riga summit “not anti-Russia beauty contest”
21 May 2015 – BBC News
One of the leaders of the six former Soviet Republics participating the Riga meeting claimed that the summit “is not a beauty contest to distance them from Russia”. European Council President Tusk argued that Russia’s aggressiveness and bullying tactics is adversely affecting the relations between the Kremlin and its former partners. He also added that Moscow’s pressure on its neighbors and threats of war will not intimidate the EU. German Chancellor Merkel further reiterated European criticism of Moscow stating that the EU’s Eastern partnership is not expansionist in its scope, differently from Moscow. She also excluded any possibility for Russia to join the G7 until Moscow accepts the group’s core values. Although Ukraine membership won’t be discussed during the meeting, Ukrainian President Poroshenko reaffirmed Ukraine’s European aspirations. Meanwhile, Moscow firmly criticized military training in Georgia and Ukraine with U.S. troops, labeling it as a Western instrument to exert pressure on former Soviet states to join the Western camp.
Germany’s Merkel dashes Ukraine’s EU membership hopes
21 May 2015 – The Wall Street Journal
German Chancellor Angela Merkel confirmed that the “Eastern Partnership isn't an EU enlargement policy instrument,” anticipating today’s meeting in Latvia. Ukraine, however, has confirmed its expectation for a visa waiver to Ukrainians from next year, making Berlin and Kiev’s diverging views more evident. Berlin, especially, expects greater efforts to fight corruption and improve both the economic and judicial system in Ukraine. Still, Merkel renewed Germany’s criticism of Russia’s aggressive strategy toward the former Soviet Republics and reasserted the importance of the partnership program to ease the transition to democracy and rule of law.
Will Finland join NATO? Russian military activity leads Finns to question neutrality
20 May 2015 – IBTimes
Russian aggressiveness could force Finland to re-think its current neutrality. Although Finland is not a part of NATO, it recently intensified its military drills and cooperation with NATO in response to the current unrest in Ukraine. Still, the majority of Finns oppose entrance into NATO, but also express concern over Russian maritime activity along the Finn shores. Meanwhile, Finland, an EU member state, also supported economic sanctions against Russia. Finland’s increasing role within the Nordic defense framework, however, has provoked Moscow’s criticism. The Kremlin warned Finland not to join NATO and also interpreted its current cooperation as a threat to the constructive relations of the last few decades. Finland, for its part, reasserted its criticism for Crimea’s annexation and the Ukrainian war, yet also restated its effort to pursue peace in the region.
Dollar rises on renewed confidence in the U.S. recovery
20 May 2015 – Wall Street Journal
The release of the Federal Reserve minutes reverberated in financial markets in the U.S. and EU. The minutes revealed the Fed is leaning against a federal funds rate hike in June in favor of an end of 2015 lift-off. Fed officials highlighted the weakness of various economic indicators in delaying its decision to raise interest rates. The dollar fell after initial gains in the trading day but rebounded to finish higher against the euro and Japanese yen. The euro weakened as policy makers continue to struggle to find common ground with Syriza, and the ECB’s front-loaded stimulus proposal. Over the past two months, the dollar has fallen four percent against a basket of currencies in the WSJ Dollar Index. That said, Fed officials expect an economic rebound for the remainder of the year.
Euro under pressure after Greece warns it could fail to meet IMF payment
20 May 2015 – The Guardian
The euro tumbled as Greek officials believe that the country will not be able to repay part of its debt to the IMF by June 5th. Moody’s has warned that Greek banks could face a liquidity crisis as investors and depositors pull capital from banks. Furthermore, Moody’s contends that the banks will need indefinite assistance from the ECB as depositors will continue to lose confidence in Syriza’s ability to carry out a reform program and secure fuds from creditors. To counter capital flight from Greek banks, the Syriza government is proposing a transactions tax on bank depositors. Nikos Filios, Greece’s Parliamentary Speaker, stated the Greeks won’t be able to repay the IMF unless its creditors unlocked bailout funds, and prioritized payments to pensioners, wages, and salaries over paying off Greece’s debts to creditors.
France slammed by IMF for record high spending
20 May 2015 – CNBC
The IMF outlined a series of reforms that France must implement in order to return to higher growth levels. Although France expanded by a surprising 0.6% in the first quarter, unemployment remains high at 10.6% as of March. The IMF attributes the growth to external factors (lower oil prices, a weaker euro, and low interest rates) as opposed to France’s economic fundamentals. The IMF stressed the importance of reducing fiscal spending in order to return confidence to investors and corporations and increase business investment. Furthermore, France must eliminate “structural rigidities” by instituting labor market reforms and business taxes.
Ukraine becomes leading EU trading [artner among Eastern Partnership countries
20 May 2015 – Global Post
In 2014, the Ukraine was the biggest recipient of EU exports and a leading source of EU imports among the EU’s eastern trading partners. 52% of total EU exports to eastern partners (71 billion euros) went to Ukraine. Overall, the EU exports primarily manufactured goods to eastern partners and receives mostly primary goods from the same trading partners.
Russia weighs on EU’s eastern ambitions
May 20 2015 – Financial Times
Following a previous meeting of EU leaders with six former Soviet countries in Lithuania, Ukraine’s refusal to sign an EU integration deal resulted in massive protests in Ukraine and the fall of its government. Within weeks Russia annexed Crimea and violence began. The upcoming meeting will hardly have similar affect, yet Ukraine, Moldova, and Georgia have enthusiastically embraced the idea of European partnership since then. European offers for free trade and cooperation on the reformist path, however, still oppose Russia’s post-Soviet integration project. Thus, Europe has to face the dilemma of deepening integration with former Soviet Republic at the cost of possible military escalation with Moscow. At the same time, people in the region expect Europe to hold its promises as well as security guarantees form Moscow in the short-term.
NATO to Russia: Be transparent on military drills
19 May 2015- DefenseNews
NATO Secretary Stoltenberg invited Russia to guarantee full transparency on its border and to avoid military drills that further increase tension with Ukraine. Although the cease-fire is proving extremely fragile, Russia continues to deny any support to the separatists and refuses to withdraw heavy weapons or allow OCSE monitors access to the region under control from the pro-Russian factions. Despite this, communication between NATO, the United States, and Russian remains open.
Euro Slumps after official says ECB will Front-Load Stimulus
19 May 2015 – Wall Street Journal
Benoit Coeuré, an ECB board member, sent European sovereign bond yields and the euro tumbling after his comments at a private dinner last night. Coueré stated that the ECB will “front-load” its stimulus measures in the short-term until the end of June to avoid injecting excess liquidity in the summer holiday period. Typically, stocks and bonds trading is muted during the summer season. Besides sovereign bonds, Coeuré’s remarks had a positive impact on equity indexes across the EU including the DAX and Stoxx Europe 600. Ian Stewart, Chief Economist at Deloitte, believes that the new stimulus measures will increase the purchasing power of consumers and reduce interest rates in the short-term.
ECB rolls its tanks onto the lawn as Greece’s PM faces a party mutiny
19 May 2015 – Fortune
Benoit Coeuré’s comments have also been interpreted by markets as a sign of the ECB’s willingness to do whatever it takes to contain damage from a potential Greek default or exit from the euro. It is becoming increasingly evident that there are fundamental differences between members of Greece’s governing party concerning the terms on a bailout deal needed to pay off creditors. The fissures within Syriza may prevent any financing agreement between Greece and the EU from being realized. Furthermore, Bank of France Governor, Christian Noyer, claims that the front-loaded stimulus measures will help bring inflation closer to the ECB target of 2%. In April, headline inflation remained at 0% while core prices (stripping out energy and food prices) grew by 0.3%.
National Front joins anti-TTIP lobby
19 May 2015 – EurActiv
Marine LePen, leader of the National Front in France, expressed her opposition to the TTIP trade negotiations at the European Parliament. She argues that the trade deal would cost thousands of French jobs, and she is attempting to mobilize opposition to the deal across the political spectrum. Currently, there are only 60,000 French citizens that have signed a TTIP petition compared to one million German citizens. Worryingly, Le Pen would halt negotiations or nullify the treaty if she wins France’s Presidential election in 2017. Le Pen’s anti-TTIP comments came after a report published by the European Commission showing the expansion of both the U.S. and EU economies if a trade deal is signed.
ECB’s Praet warns Unemployment will Remain High
19 May 2015 – Wall Street Journal
ECB Executive Board member, Peter Praet, underscored the importance of structural forms within European countries to reduce the high unemployment rate across the Eurozone. In March, the Eurozone jobless rate stood at 11.3% which is double the U.S. unemployment rate. While many countries have taken important steps, Mr. Praet believes that further reforms can be implemented in labor laws, justice systems, governance, and diffusion of technologies across borders. Without these reforms, it may be difficult to bring down the structural unemployment closer to the U.S. and UK even with the ECB’s recent monetary policy expansion.
Tailwinds for Eurozone economy may be about to turn
19 May 2015 – Reuters
Although the Eurozone surged past U.S. and UK GDP growth rates in the first quarter, the economic tailwinds propelling this surge may be subsiding. The three key factors in first quarter Eurozone GDP growth are the 60% drop in the price of oil, a weaker euro, and lower sovereign bond yields. Currently, oil has rebounded by 50% since January, German bond yields have risen 10 fold, and a broad category of stocks have fallen. Further volatility in the Eurozone bond markets could shave up to a 0.3 percentage point of nominal GDP growth over the next year if bond yields rise more than 50 basis points. That said, economists at JP Morgan remain bullish on EU growth prospects with forecasts of a 2.5% expansion over the first half of 2015.
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