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
Ruble Drops to Record as Central Bank Intervention Level Nears
29 September 2014 – Bloomberg
The ruble fell 0.8% over the weekend to 44.245 against the central bank's basket of U.S. dollars and euros. The exchange rate drops against the dollar and euro individually were 0.7% and 1%, respectively. Damaged by sanctions, capital loss, and declines in investment, Russia's central bank policy is to begin buying rubles when it reaches 44.4 against the currency basket. Meanwhile, capital outflows have reached $74.6 billion in the first half of the fiscal year, significantly greater than the $61 billion of 2013. Russia's financial woes are not likely to end in the short-term, and EU sanctions have only intensified over the Ukraine crisis and $35 billion of debt will mature in December.
EU to Decry Apple’s Irish Tax Deal
29 September 2014 – BBC News
The European Commission is investigating tax policies in the Netherlands, Luxembourg, and Ireland. The Commission suspects that these countries granted preferential tax arrangements to Starbucks, Fiat, and Apple respectively. Starbucks has said it will move its headquarters from Amsterdam to London as a result of the row. Ireland’s corporation tax is 12.5%. Other EU member states have long been irked by Ireland’s low corporate tax rate, claiming the country’s tax laws undermine their revenues. Apple uses subsidiaries to reduce taxes on profits. Joaquin Almunia, the Commission’s Vice President for competition policy, said strict EU laws on state financing of corporations should be applied to corporate tax arrangements when the Commission’s tax inquiry was launched in June. “Under the EU’s state aid rules, national authorities cannot take measures allowing certain companies to pay less tax than they should if the tax rules of the member state were applied in a fair and non-discriminatory way,” Almunia said. Apple CFO Luca Maestri said: “There’s never been anything that would be construed as state aid.”
Germany Unable To Meet NATO Readiness Target
29 September 2014 – AP
On Monday, officials announced that Germany's military will be unable to meet its medium-term readiness target in the event that NATO calls on its members to mobilize against an attack. The revelation came after days of embarrassing reports about equipment failures that included German army instructors being stranded in Bulgaria en route to Iraq when their plane broke down, and delays in sending weapons to arm Kurdish fighters because of another transport problem. Asked about a Der Spiegel report that Germany at this juncture wouldn't be able to offer the appropriate number of military aircraft within 180 days of an attack on the NATO alliance, Defense Ministry spokesman Jens Flosdorff confirmed that was the case. The military's former chief of staff, Harald Kujat, told rbb-Inforadio the equipment failures show the country needs to spend more on defense. Germany this year reduced defense spending by about 800 million euros to 32.44 billion euros ($41.30 billion) — far below NATO's recommended level of two percent of GDP.
EU-U.S. Free-Trade Talks May Drop Controversial Investor Protection Rule
29 September 2014 – NASDAQ Dow Jones Business News
At a confirmation hearing in the European Parliament, Cecilia Malmström said she could not rule out removing the investor-state dispute settlement clause from the proposed Transatlantic Trade and Investment Partnership with the U.S. The clause would allow investors to apply directly to a tribunal for arbitration in disputes in which it believes governments have breached agreements. The ISDS is a common clause in free trade deals, but is threatening to derail trans-Atlantic trade talks amid claims by campaigners that it constrains governments and leaves policy makers vulnerable to proceedings from overseas investors. Malmström did however concretely indicate that audiovisual services – the so-called cultural exception – would be excluded from TTIP.
Why Europe Must Look to Emerging Export Markets
29 September 2014 – Business Review Europe
The Baltic Dry Index (BDI) – a rough shorthand of commodity-driven international trade – peaked at 11,793 in May 2008. Today, however, given the economic crises and dismal recovery, the benchmark is hovering around 810. In order to revitalize trade in Europe and set it on a path to long-term growth, the EU should look to emerging markets, such as the BRICS countries. Exports of the BRICS expanded more than six-fold between 2000 and 2012 but only three-fold for the world as a whole. According to WTO projections, emerging economies are likely to outpace advanced countries in terms of both export and GDP growth by a factor of two to three in future decades.
New EU Trade Chief Seeks Reset in U.S. Trade Talks
29 September 2014 – ABC News
Sweden's Cecilia Malmström, the incoming EU trade chief, called for greater transparency in TTIP negotiations to alleviate public concern. Opponents worry that health and food safety standards could be lowered and that controversial investment rules will hand multinational companies a tool to manipulate governments. Analysts do not believe that a deal will be achieved during President Obama’s term in office. His successor will most likely face obstacles in Congress since lawmakers, fearing job losses in some sectors, have proved reluctant to embrace another free trade agreement since the North American Free Trade Agreement 20 years ago. The greatest sticking point is as the investment rules (the investor-state dispute settlement clause in particular), which the U.S. insists must be in the deal.
Rosneft and Exxon Discover Artic Oil
28 September 2014 – BBC News
In spite of environmental activists’ long opposition to drilling in the Artic, Exxon and Rosneft have now found oil and natural gas there. Western sanctions have targeted Rosneft CEO Igor Sechin, and Exxon said it would discontinue its project due to the sanctions. Sechin believes there are 100 million tons of oil and 338 cubic meters of natural gas. U.S. sanctions prohibit cooperation between American companies and Russian state-owned energy companies. Rosneft said it “successfully completed the drilling of the northernmost well in the world—the Universitetskaya-1 well in the Arctic.” “This is our united victory—it was achieved thanks to our friends and partners from Exxon Mobil, Nord Atlantic Drilling, Schlumberger, Halliburton, Weatherford, Baker, Trendsetter, FMC,” Sechin said.
EU to continue U.S. trade talks, with its Canada deal notched
28 September 2014 – Europe Online Magazine
On Friday, leaders of the EU and Canada celebrated in Ottawa the conclusion of five years of negotiations on the Comprehensive Trade and Economic Agreement (CETA). The agreement must still be ratified by the Canadian and EU member Parliaments. CETA is widely considered to be a model for the TTIP treaty still under negotiation between the EU and U.S. It can also shed light on how long these negotiations may last, given the contentious nature of some of the provisions – notably the investor-state dispute settlement clause. The U.S. Congress has also still failed to grant fast-track authority to the president, which would allow the treaty to be submitted without amendment for passage or rejection by simple majority vote from both the Senate and House of Representatives. As chief U.S. negotiator, Dan Mullaney, put it, completing the pact "will require a lot of creativity and a lot of persistence."
ECB to unveil details of new liquidity programs
28 September 2014 – Business Insider
The European Central Bank will this week unveil details of its plans to inject cash into the moribund Eurozone economy, though analysts express doubt about the effectiveness of the anticipated measures. At its meeting last month, the ECB surprised the markets by cutting its key interest rates to new all-time lows and unveiling an ABS (asset-backed securities) program and a covered bond program to ward off deflation in the single currency area. Given the need for further ECB action due to the dismal results of actions thus far taken, analysts anticipate the bank may embark on a much wider program of quantitative easing, or the purchase of unlimited amounts of bonds.
Revealed - the Troika threats to bankrupt Ireland
28 September 2014 – Independent
Irish Central Bank governor, Dr. Patrick Honohan, revealed that ECB officials agreed to threaten Ireland with bankruptcy if the government tried to burn bondholders. "The Troika staff told [former Irish government minister Brian Lenihan] in categorical terms that burning the bondholders would mean no program and, accordingly, could not be countenanced," Dr. Honohan writes. This lends legitimacy to some claims that Ireland was “bullied” into taking the bailout loans from the ECB. A banking inquiry is set to be launched to unveil events surrounding the bailout.
Britain faces multi-million pound bill from Eastern Europe over EU migrants
27 September 2014 – Express
EU rules require a member state where a foreign worker has paid National Insurance Contributions to reimburse the person’s home country for certain benefits, mostly Jobseeker’s Allowance, paid when they return. A key point of contention revolves around the differing rules in the EU member states that qualify a person for the benefits. A group of Eastern European countries - namely the Czech Republic, Hungary, Slovakia and Poland - has signaled they will work together to step up pressure on the UK to bow to a non-legally binding recommendation from an EU committee that states should reimburse each other regardless of their own rules. Jonathan Isaby, chief executive of the TaxPayers’ Alliance, said: “Britain must meet its legal requirements but it must also push Brussels to change the law, so no more taxpayers’ money is wasted on this bizarre arrangement.”
Turkey wants to upgrade trade ties with U.S.: Top businessman
26 September 2014 – Hurriyet Daily News
The head of Turkey’s top business group openly advocated for Turkey’s inclusion in the TTIP treaty negotiations or for a separate free trade agreement with the U.S. during a meeting with the U.S. Chamber of Commerce and the Investments Promotion Agency. Many Turkish businesses are afraid that they will be negatively affected by the potential EU-U.S. agreement, forcing them to compete against American and European firms on terms in which they have had no voice. Representatives at the meeting pointed to the geographic benefits of the Turkish market as well as its inviting investment environment.
Hungary suspends gas flows to Ukraine
26 September 2014 - BBC News
Ukraine has been receiving gas imports from Hungary, Poland, and Slovakia since Russia cut off supplies in June in a dispute about unpaid bills. Hungary's gas pipeline operator, FGSZ, just announced that due to an unexpected increase in domestic demand it is cutting off exports to Ukraine. This move comes three days after a meeting in Budapest between the head of Russia's gas giant Gazprom, Alexei Miller, and Hungary's Prime Minister, Viktor Orban. The meeting was followed by a promise from Gazprom to increase exports to Hungary. There are to be talks today between Russia and Ukraine about gas exports, moderated by EU representatives, but Russian Energy Minister Alexander Novak has announced that re-exporting gas to Ukraine would be illegal.
Eastern Europe Caught in ECB's Currency War Crossfire
25 September 2014 – The Wall Street Journal
The European Central Bank has a weaker euro in its sights, and is finally getting its way. But that could have significant consequences in Eastern Europe. In the third quarter, the Polish zloty, Hungarian forint and Czech koruna have fallen by about 7.5% against the dollar. The currencies of Central and Eastern Europe are historically more sensitive to moves in the euro's exchange rate against the dollar than other emerging-market currencies. Polish interest rates could be cut by 0.5-0.75 percentage point according to Deutsche Bank. That would add to pressure on the zloty, which is also vulnerable to geopolitical risk from Russia. If the ECB manages to lift the Eurozone's economic prospects, then ultimately these forces should dissipate in Central and Eastern Europe, too.
Ukraine Crisis to Weigh on Bulgarian Economy
25 September 2014 – Bloomberg BusinessWeek
Bulgaria is suffering huge losses in terms of tourism, natural-gas shipments and overall investment, noted former Prime Minister Boyko Borissov. The fighting in Ukraine is curbing Eastern Europe’s growth prospects, the European Bank for Reconstruction and Development stated. If elected once again as prime minister, Borissov will probably have to sell debt worth billions of euros to cover a widening budget deficit and repay deposits of the failed Corporate Commercial Bank AD. Borissov looks hopefully to the South Stream natural gas pipeline intended to ship Russian fuel under the Black Sea across the Balkans to Europe bypassing Ukraine. The EU executive arm, however, sent a letter in June asking for work to be suspended because of concern Bulgaria may have broken the bloc’s public procurement laws by favoring local and Russian bidders.
WTO forecasts reduced growth rate in world trade
25 September 2014 – Business Standard
The downgrade comes in response to weaker-than-expected GDP growth and muted import demand in the first half of 2014, particularly in natural resource exporting regions such as South and Central America. WTO economists have reduced their forecast for world trade growth in 2014 to 3.1% (down from the 4.7% forecast made in April) and cut their estimate for 2015 to 4.0% from 5.3% previously. “This is a moment to remind ourselves that trade can play a positive role here. Cutting trade costs and broadening trade opportunities can be a key ingredient to reversing this trend” noted Director-General Roberto Azevedo. Risk factors such as the tension between the West and Russia, fighting in the Middle East and the Ebola outbreak lend to uncertainty in the forecast.
Chicago Fed President warns of risks if central bank raises rates prematurely
25 September 2014 – Star Tribune
A Federal Reserve policymaker said that the central bank should be "exceptionally patient" before raising interest rates, even if it means overshooting the Fed's inflation target for a time because the risks of moving too quickly remain sizable. He said that history shows that central banks have often moved to tighten credit too quickly and made it more difficult to recover following a deep recession, such as the 2007-2009 downturn. He said the Federal Reserve in the 1930s, the Bank of Japan over the past two decades, and more recently the European Central Bank have all made mistakes in raising rates prematurely, resulting in setbacks for fledgling recoveries.
Germany wants investment clause scrapped in EU-Canada trade deal
25 September 2014 – Multiple sources
Economic Affairs Minister Sigmar Gabriel said Thursday that Germany would not sign the Comprehensive Economic and Trade Agreement (CETA), a free trade pact negotiated by Canada and the EU, unless investor protection provisions are removed. Canadian and European leaders will not sign the agreement in Ottawa on Friday. The deal is considered a model for a free trade pact between the U.S. and Europe known as the Transatlantic Trade and Investment Partnership (TTIP). The investor state dispute settlement (ISDS) provision allows Canadian corporations to file lawsuits against European governments in international tribunals and vice versa. Under the ISDS provision in the NAFTA, the Canadian government has paid $170 million to corporations, the Canadian Centre for Policy Alternatives said. More cases are pending. Gabriel said Canadian and European law already adequately protects investors. “It is completely clear that we reject these investment protection agreements,” Gabriel said. The German government will be fighting an uphill battle, however, against the European Commission. Karel De Gucht, the European Trade Commissioner, warned that “the deal will be dead” if the EU attempts to renegotiate it.
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Ukrainian President Sets Sights on Closer EU Ties
25 September 2014 – The New York Times
“Events in Kiev and Brussels gave us a firm hope, a belief, that we will soon get the prospect of EU membership,” Ukrainian President Petro Poroshenko said. The “most dangerous part of the war is already in the past.” Poroshenko wants to abolish a law passed in 2010 barring the Ukraine from joining any political or military bloc. Russia has not responded to Poroshenko’s comments on future EU membership for the Ukraine. A ceasefire negotiated in Belarus on September 5 has so far held. A new law granting limited autonomy to the eastern regions of Luhansk and Donetsk sets local elections for December 7, but the pro-Russian separatists that control the regions have said they will hold elections on November 2. The Ukrainian parliament ratified a free trade agreement with the EU on September 16. However, the EU and Ukraine agreed to postpone most of the treaty until 2016 to appease Russia.
Lukashenko: Ukraine's conflicting sides realize there can be no winners in war
25 September 2014 - ITAR-TASS
Belarusian President Alexander Lukashenko, currently on a state visit to Moldova, stated that "the division of Ukraine into the West and the East has been dictated from outside." He highly commended the Contact Group, a group of representatives from Russia, Ukraine, the OSCE, and the Donetsk and Luhansk People's Republics, which signed a memorandum outlining the current ceasefire on September 5. Lukashenko told journalists there will be no war in Ukraine because nobody wants it and nobody will win it, neither the Ukrainian army nor the army of resistance "which someone calls separatists." When asked about Russia's involvement in the Ukrainian conflict, Lukashenko merely said "Russia never fought there." In contrast, he claims the United States has actively destabilized Ukraine in order to threaten Russia and Belarus.
Japan steps up sanctions as tensions rise with Russia
24 September 2014 – BBC
Amid signs of tension between Moscow and Tokyo over a territorial dispute over islands near Hokkaido, Japan has imposed additional sanctions on Russia for its involvement in the Ukraine crisis meant to curtail the activities of Russian banks in Japan and step up controls on arms exports. Japan had initially adopted lighter sanctions than the U.S. and its allies for fear of derailing improved relations with Russia, which Japanese Prime Minister Shinzo Abe has made considerable efforts toward. Japan is anxious for allies in Northeast Asia, given tense relations with China and the two Koreas. Japan also has an interest in Russian natural gas reserves, and hopes for an eventual negotiated settlement to the dispute over the islands. Chief Cabinet Secretary Yoshihide Suga said the new measures put the emphasis on Japan's cooperation with other members of the G-7, whose foreign ministers meet on the sidelines of the UN General Assembly in New York this week. His statement came shortly after he had protested to Moscow over the visit by a senior Russian official to disputed islands seized by the Soviet Union at the end of World War Two.
German Economy "No Longer Running Smoothly" Amid Flat Eurozone Growth and Russia Sanctions War
24 September 2014 – International Business Times
The Ifo Business Climate Index for industry and trade in Germany fell in September to 104.7 points, its lowest level since April 2013. As the largest economy in the Eurozone, Germany powers much of the growth in Europe, so any downturn threatens to ripple out to the currency bloc's 17 other member states. The Eurozone as a whole has struggled with declining output growth, public sector austerity programs and financial sector reforms that have seen bank lending to businesses and consumers slashed. On top of these ongoing problems, given its significant trade relationship with Russia, Germany stands to be among the worst affected by the tit-for-tat sanctions war.
German industry calls for "investment offensive" to boost the economy
24 September 2014 – EurActiv
Germany's BDI industry association is calling not only for an "investment offensive" from the federal government, saying that strengthening business confidence should be a top priority amid the economic downturn, but also for progress on TTIP, calling it a "historic opportunity." To reinvigorate the economy, the president of BDI has recommended that Germany introduce research promotion through the tax system. Along with BDI, Chancellor Merkel is also trying to garner support for TTIP, noting, in an attempt to calm fears, that “neither chlorine-treated chicken, nor genetically modified foods will be able to be imported into the European Union.” The German federal government is making efforts as well to resolve widespread criticism of the planned agreement.
EU, Canada to Hail Draft Trade Pact That May Take Effect in 2016
24 September 2014 – Bloomberg
Leaders will sign the Comprehensive Economic and Trade Agreement (CETA), a free trade agreement recently negotiated between Canada and the EU, in Ottawa on Friday. However, before the European Parliament, Council of Ministers, and national parliaments can vote on the agreement, the text will be subject to a nine month legal review, so the pact is not expected to come into force until 2016. The deal will dismantle 98% of all tariffs on coming into effect and 99% after seven years. The EU said the pact could increase the bilateral goods and services trade by 23%. The European Union’s 12th largest trading partner is Canada. The EU and Canada will both remove over 99% of their industrial tariffs. Canada and the European Union will eliminate 92% and 94% respectively of their agricultural tariffs within seven years of the treaty’s implementation. European beef, pork, and sweetcorn duties will continue as well as Canadian tariffs on dairy goods, eggs, and poultry. Canada will be allowed to export 46,000 tons of beef and 75,000 tons of pork to the EU free of tariffs in exchange for duty-free, European exports of 17,700 tons of cheese.
Europeans are still obsessed with chlorine-washed chicken
24 September 2014 – Quartz
Many Europeans fear that the Transatlantic Trade and Investment Partnership (TTIP), a free trade agreement currently under negotiation between the U.S. and EU, will permit American exports of chlorine-washed chicken. While most Germans support the TTIP, this issue has received a lot of attention. German Chancellor Angela Merkel, a strong advocate of the TTIP, has promised not to permit one chlorine-washed chicken into Germany. However, advocates of the free trade agreement say chlorinated chickens are safe. “Scientific studies of the German Institute for Risk Assessment show that the chlorine bath is an effective way to kill germs and that treated in this way chicken is no risk to the health of consumers,” a recent report from the Cologne Institute for Economic Research read. “Swimming pool water is comparable.” Chicken washed with chlorine could be identified as such, allowing consumers to decide. Agricultural goods account for only 1.2% of all U.S. exports to Germany.
Ukraine Crisis: NATO sees “significant” Russian troop pullback
24 September 2014 - BBC News
Since the September 5 Minsk Memorandum, the title of the shaky ceasefire in Ukraine, a large number of Russian conventional forces have left Russia. While many thousands remain in the vicinity of the border, Canadian Lt. Col. Janzen notes that Russian special forces continue to operate within eastern Ukraine. Moreover, Ukrainian military journalist Dmytro Tymchuk has said that Russian forces are increasing in Crimea and new air defense systems are being installed. The current ceasefire holds, albeit with sporadic clashes continuing, in the face of the coming elections. Ukraine's parliamentary elections are set for October 26, and Kiev has announced elections in December will determine the leadership of Luhansk and Donetsk. In spite of this, rebel leaders have claimed that they will hold their own elections on November 2 in a show of defiance.
Cameron to Nail “Myths” About Transatlantic Trade and Investment Partnership (TTIP) Leading to NHS Privatization
23 September 2014 – The Huffington Post
Prime Minister David Cameron said there was an "enormous economic prize" to be gained on both sides of the Atlantic in jobs, investment and lower prices if negotiations on the Transatlantic Trade and Investment Partnership (TTIP) are brought to a successful conclusion. Despite the economic promise of the deal, unions have warned that TTIP will allow U.S. healthcare groups to use the law to force further privatization of NHS services, while campaigners have raised concerns that it will undermine food safety standards and environmental protections in the EU. Speaking to a group of business leaders, including representatives of IBM, Morgan Stanley and Chevron, Cameron said the business community needs to make the case for TTIP and challenge its critics.
Algeria Hunts for Kidnapped Frenchman, Paris Says No Deals
23 September 2014 – Voice of America
Algerian military and police set up checkpoints and sent troops into mountains east of Algiers on Tuesday to look for a Frenchman kidnapped by militants who threatened to execute him over France's intervention in Iraq. The Caliphate Soldiers, a splinter group linked to Islamic State militants in Iraq and Syria, on Monday published a video claiming responsibility for the abduction and showed a man identifying himself as Herve Gourdel, a tourist from Nice. The militants warned Paris they would kill Gourdel unless France halted its military intervention against Islamic State. French Prime Minister Manuel Valls has said that no discussion or negotiations will be possible and that “we will not give in to blackmail.” Gourdel's kidnapping marks one of the first abductions of a foreigner by militants in Algeria since the end of a decade-long war that killed around 200,000 people.
Ukraine Rebels Start Artillery Pullback Under Peace Deal
23 September 2014 – Voice of America
Pro-Russian separatists in eastern Ukraine say they have started to withdraw their heavy artillery from front-line positions, as required by a peace plan aimed at ending five months of conflict with Kyiv. The prime minister of the rebels' self-declared Donetsk People's Republic, Alexander Zakharchenko, said the pullback was in response to a similar move by Ukrainian forces, but added that the withdrawal will only take place in areas where Ukrainian units have done the same, not in areas where they remain. On Monday, Ukrainian officials said they started to pull troops and heavy weapons from the front lines under the terms of the deal that call for the creation of a 30 kilometer buffer zone. While the intensity of the fighting in eastern Ukraine's Donetsk and Luhansk regions has subsided since the signing of a cease-fire deal on September 5, shelling and gunfire have been almost continuous in and around the city of Donetsk, where heavy shelling was reported Tuesday.
Germany's Euroskeptics are on the Rise and They Could Send the Eurozone Back into Crisis
23 September 2014 – Business Insider
A new report from credit ratings agency Standard & Poor's is raising a new concern for the struggling Eurozone: Germany's surging Eurosceptic party, Alternative fur Deutschland (AfD). Though AfD does not currently have mass political support, it is gaining momentum. If they had their way, AfD would have Germany using the Deutschmark again, exiting from the common currency. They are picking up steam by opposing the role that Germany has played in recent years: as creditor to struggling Eurozone economies. The increasing popularity of the AfD may push Merkel’s party, the CDU, further right to prevent additional losses. This increasing euroskepticism may make the German government less cooperative with ECB-planned stimulus projects, potentially hurting the most vulnerable Eurozone states.
Europe must “accept and embrace” disruption or innovation will be “stifled” and startups “strangled,” says Google’s Schmidt
23 September 2014 – The Drum
Writing in a blog post directed at Vice President of the European Commission Neelie Kroes, Google boss Eric Schmidt called for reform in Europe and for the creation of a “truly digital single” market. Schmidt believes that this single market “will give European entrepreneurs…the incentive to invest and the ability to achieve global scale at greater speed.” He further noted that if Europe reformed as a single digital market, the European Union’s GDP could rise by at least 4 per cent by 2020, generating up to 250bn Euros of additional growth. Joining the chorus calling for reform, he noted that Europe needs to create tax incentives and ultimately create a balance between driving growth and taxing capital.
Putin warns Ukraine against implementing EU deal—letter
23 September 2014 – Reuters
Russian President Vladimir Putin threatened Ukrainian President Petro Poroshenko with increased punitive tariffs on Ukrainian exports to Russia in a letter dated September 17 if Ukraine does not make major alterations to its free trade agreement with the European Union. “We still believe that only systemic adjustments of the Association Agreement, which take into account the full range of risks to Russian-Ukrainian economic ties and to the whole Russian economy, will allow [us] to retain existing trade and economic cooperation between the Russian Federation and Ukraine,” the Russian President wrote.
European Commission Denies Reports that Germany is Derailing CETA
23 September 2014 – International Business Times
Contrary to recent reports in Deutsche Welle and other German media outlets, a free trade deal between Canada and the EU, known as the Comprehensive Economic and Trade Agreement (CETA), has not been delayed by Germany or any other EU member state, the European Commission said. The Commission’s trade spokesman, Wojtek Talko, said he was “not aware of any delay in the process of ratification of the EU-Canada trade deal.” The deadline for amendments has passed, and Canadian and European leaders will sign the pact on September 26. Most of the criticism of the CETA and Transatlantic Trade and Investment Partnership (TTIP) focuses on investor protections and the lack of transparency over the negotiations.
Germany's Eurosceptics broaden their appeal and win regional votes
23 September 2014 - The Guardian
After winning its first regional government seat in Saxony two weeks ago, the Alternative for Germany (AfG) party received 10.6% of the vote in Thuringa and 12.2% in Brandenburg. A conservative party, the AfG was founded 18 months ago by former members of the Christian Democratic Union party disillusioned by Chancellor Merkel's shift to the center. Most of the AfG's votes and seats in regional parliaments have come as a cost to the liberal-leaning Free Democratic Party. The AfG urges southern European nations to leave the EU, supports larger police forces, desires higher curbs on immigration, and promotes traditional family values. Merkel has staunchly denied any possibility of an alliance with the AfG, a stance she may have to rethink if the so-called "Eurosceptic party" has the same success in Germany's west as it has in the east.
The Eurozone Economy Is Turning the Corner
22 September 2014 – Business Insider Australia
Though the ECB’s targeted longer-term refinancing operation (TLTRO) has been somewhat of a disappointment, with only a fraction of the expected funds being picked up by Eurozone banks, other data suggest that the Eurozone may be turning the corner. We are likely to see the ECB explore ways to expand its balance sheet, including ABS purchases and quantitative easing. There have also been calls for the BIS to loosen regulatory capital rules for structured credit issuance, which will likely expand liquidity. An additional benefit to exporters has been the diminished value of the euro, allowing German exports for example to become more competitive internationally.
Topic: Germany Delays EU Free Trade Deal with Canada
22 September 2014 – Multiple sources
Germany has postponed the signing of the Comprehensive and Economic Trade Agreement (CETA), a free trade deal recently negotiated between the European Union and Canada. The text was completed on August 5, and the signing ceremony was supposed to be in Ottawa on September 26. The agreement is seen as a template for another free trade pact between the EU and U.S., the Transatlantic Trade and Investment Partnership (TTIP), which also includes controversial investor protection provisions. Christoph Bautz, an opponent of the CETA and TTIP, credited the treaty’s delay to German Economic Affairs Minister Sigmar Gabriel. Gabriel is the leader of the Social Democrats, the junior partner in Germany’s coalition government. The party is concerned about investor protections. The European Court of Justice (ECJ) may yet have to decide whether the contents of the treaty require ratification by all member states.
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ECB’s Praet: Give Eurozone a Seat at IMF
22 September 2014 – Reuters
European Central Bank Chief Economist Peter Praet said the Eurozone, and not individual European countries, should be represented collectively at the International Monetary Fund (IMF) in Washington, DC. “It would be much better to speak with one voice than what we have today so I’m very much personally in favor of a single euro area constituency in the IMF,” Praet said in Berlin. The IMF has granted loans to a number of indebted, European countries during the financial crisis. Europe agreed to reduce its representation in the IMF to make way for developing countries in 2010, but the reforms have yet to take effect. Europe is currently represented by eight seats. Praet’s idea would likely face resistance in the Eurozone, particularly from larger countries such as France and Germany that wish to maintain their influence.
ECB’s Draghi Keeps Door Open to Quantitative Easing
22 September 2014 – The Wall Street Journal
European Central Bank President Mario Draghi said the bank could implement quantitative easing if it becomes necessary to do so. Addressing the European Parliament, Draghi said: “We stand ready to use additional unconventional instruments within our mandate, and alter the size and/or the composition of our unconventional interventions should it become necessary to further address risks of a too-prolonged period of low inflation.” The ECB reduced its interest rates twice since June. This month it has started to provide low interest loans to Eurozone banks with the aim of increasing the cash flow to the private sector. The bank will also soon implement private sector asset purchases. Draghi said structural reforms were also necessary and that no fiscal or monetary “stimulus can ever have a meaningful effect without such structural reforms.”
Ukraine: Successful Prisoner Exchanges Amid Ceasefire Violations
22 September 2014 – Euronews
Following the agreement reached in Minsk by Russian, Ukrainian, and separatist representatives, prisoner exchanges have been successfully carried out. On Saturday, 76 people, 38 prisoners held by each side, were handed over. The exchanges have been observed by monitors from the Organization for Security and Cooperation in Europe. Additional measures decreed by the ceasefire agreement include establishing a buffer zone between combatants, withdrawing heavy weaponry, and the removal of foreign fighters. Despite relative successes in some of these aspects of the agreement, numerous fresh clashes and artillery attacks have occurred. Each side blames the other but comes short of declaring the ceasefire agreement to be null and void.
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