Link back to the discussion thread.
- Euro hits 20-year low against US dollar over recession fears Al Jazeera
The European Union’s single currency has sunk to its lowest level against the US dollar since 2002 as data pointed to a growing recession risk in the eurozone.
The euro also dived on Tuesday as investors eyed aggressive interest rate hikes by the US Federal Reserve in its fight against inflation, in contrast with the European Central Bank which plans more modest increases.
- EU power prices hit all-time high RT
Electricity prices in Europe have hit their highest level on record, the Financial Times reported on Tuesday, citing the rising cost of natural gas amid the uncertainty over Russian supplies.
German baseload power for delivery next year, which is the benchmark European price, traded at €325 ($334) per megawatt hour (MWh) on Monday, thus surpassing the previous record set in December, the newspaper writes. Last July, the price stood at just over €81 ($83) per megawatt hour. The equivalent contract in France has doubled to €366 ($377) per MWh since the start of the year, the FT adds.
Electricity prices are influenced by the cost of natural gas, which is used to generate power. Gas prices in Europe exceeded $1,800 per thousand cubic meters for the first time since early March on Tuesday, as oil and gas workers in Norway have gone on strike over pay, affecting output.
According to the FT, the situation has been exacerbated by maintenance problems at a large number of France’s nuclear plants, due to which neighboring countries have been burning additional gas to generate electricity for France.
Also, the Nord Stream 1 gas pipeline between Russia and Germany is scheduled to close for maintenance next week. Moscow already had to reduce the flow via the pipeline by 60% last month over technical issues caused by Western sanctions, but many in the EU fear that after the planned shutdown the gas flow will not be switched back on.
Germany triggered the second stage of its three-level emergency plan last month. The third stage would require the rationing of gas to households and industrial sites. A housing cooperative in Saxony has already reportedly introduced hot-water rationing, with similar warnings issued in Hamburg as well.
- Spain and Portugal suffering driest climate for 1,200 years, research shows The Guardian
- Ukraine says link restored to Zaporizhzhia nuclear station EU Reporter
Ukraine’s nuclear power operator said on Friday it had re-established its connection to surveillance systems at the Zaporizhzhia nuclear plant, Europe’s largest, which is occupied by Russian forces.
The International Atomic Energy Agency (IAEA), the UN’s atomic watchdog, has said it wants to inspect the plant in southern Ukraine urgently, but Ukrainian authorities oppose any such visit while Russian forces remain in control.
- Russia Announces 82-Million-Ton Arctic Oil Discovery Oil Price
Russian state-run Rosneft has confirmed an 82-million-ton oil discovery in the Pechora Sea in the Arctic.
Rosneft discovered the field thanks to a drilling campaign in the Medynsko-Varandeysky area. “During the tests, a free flow of oil was obtained with a maximum flow rate of 220 cubic meters a day,” the company’s statement read on Wednesday, noting that the “oil is light, low-sulfur, low viscosity,” Rosneft said, describing the drilling campaign in the Medynsko-Varandeysky area, as reported by Russian RT.
The discovery announcement comes after Rosneft head Igor Sechin, a close ally of Russian President Vladimir Putin, told an economic forum on Friday that Western sanctions are illegal, warning of a coming biblical-style cataclysm.
In mid-June, Rosneft said it was going ahead with its Vostok Oil project in the Arctic, which Sechin has described as “the only project in the world that can bring a stabilizing effect on the oil market.”
According to Rosneft, Vostok will produce up to 115 million tons of oil per year by 2033. That volume of oil is said to be equivalent to 20 percent of Russia’s total oil production for 2021.
- Russia’s Medvedev says oil could top $300-$400 if Japan’s price cap idea implemented Reuters
Russia’s former president Dmitry Medvedev said on Tuesday a reported proposal from Japan to cap the price of Russian oil at around half its current level would lead to significantly less oil on the market and could push prices above $300-$400 a barrel.
Commenting on the proposal, which was reportedly put forward by Prime Minister Fumio Kishida, Medvedev said Japan “would have neither oil nor gas from Russia, as well as no participation in the Sakhalin-2 LNG project” as a result.
President Vladimir Putin last week signed a decree that seizes full control of the Sakhalin-2 gas and oil project in Russia’s far east, a move that could force out Shell as well as Japanese companies Mitsui & Co and Mitsubishi Corp.
In order to stay in the new firm which is set to replace the existing operating company, Sakhalin Energy Investment Company, foreign shareholders need to ask the Russian government for a stake within one month.
- Gazprom Demands Rubles For LNG Oil Price
Gazprom is proposing to extend the rubles-for-gas scheme to liquified natural gas (LNG), a senior executive said on Monday, days after Russia moved to take full control over the Sakhalin-2 LNG project.
The proposal for demanding payments in rubles for LNG came from Kiril Polous, who is in charge of Gazprom’s long-term development programs, during a parliament energy committee meeting, Russian news agency Interfax reported today.
- Finland seizes hundreds of Russian freight cars as EU sanctions bite Reuters
Finland has seized nearly a thousand freight cars belonging to Russian companies as a result of European Union sanctions, according to Finnish state-owned rail operator VR and a letter from Russia’s rail monopoly seen by Reuters.
As Finland’s VR moved to reduce railway traffic with Russia after the EU sanctioned Russian coal supplies in April, 865 rail cars from Russia were seized by bailiffs, according to the June 6 dated letter from Russian Railways to the Ministry of Transport.
- Norway pledges €1bn to support Ukraine EU Reporter
Norwegian Prime Minister Jonas Gahr Stoere addressed a news conference in Kyiv with Volodymyr Zelenskiy the Ukrainian President. He stated that Norway wants to show solidarity with Ukraine’s struggle for survival.
“I am here to tell you that Ukraine’s fight for independence is not just for Ukraine. It is about the fundamental principles of the world that we will offer our children. He said that this was about European security, but also about the fates of our neighbours.
He said: “We will promise €1bn to support your country and your citizens for the remainder of 2022 and 2023. This war is against international law. … You have the legal right to defend yourself, and we have the right help you defend yourselves.”
- Bank of England tells lenders to brace for economic storm Reuters
The Bank of England warned on Tuesday that the economic outlook for Britain and the world had darkened and told banks to ramp up capital buffers to ensure they can weather the storm.
“The economic outlook for the UK and globally has deteriorated materially,” the BoE said as it published its latest Financial Stability Report, adding that developments around the war in Ukraine would be a key factor.
- UK Gasoline Prices Surge To Record Highs Oil Price
Gasoline prices in the UK hit an all-time high this week, with a liter averaging over $2.30, Bloomberg has reported, noting that this makes UK gasoline the costliest in the five biggest European economies.
That is $8.71 per gallon.
- UK new car sales fall to lowest level in June since 1996 amid chip shortages The Guardian
Sales of new cars in the UK fell by almost a quarter last month, the worst June since 1996, as global chip shortages hammered the industry.
Global shortages of components such as semiconductors, exacerbated by Covid restrictions in China, continue to hamper manufacturers’ ability to keep up with demand, the Society of Motor Manufacturers and Traders (SMMT) said. Drivers are waiting more than 12 months to take delivery of some models.
The SMMT reported that 140,958 new cars were registered last month, 24.3% fewer than in June 2021. Large corporate fleets recorded a 27.6% drop in sales, while private consumer volumes dropped by 21.%. So far this year, 802,079 new cars have been registered, down almost 12% from this time last year – the second-weakest first-half performance in 30 years.
Mike Hawes, the SMMT chief executive, said: “The semiconductor shortage is stifling the new car market even more than last year’s lockdown. Electric vehicle demand continues to be the one bright spot, as more electric cars than ever take to the road, but while this growth is welcome, it is not yet enough to offset weak overall volumes, which has huge implications for fleet renewal and our ability to meet overall carbon reduction targets.
“With motorists facing rising fuel costs, however, the switch to an electric car makes ever more sense and the industry is working hard to improve supply and prioritise deliveries of these new technologies given the savings they can afford drivers.”
- UK says to strengthen internet laws to fight Russian disinformation Reuters
Britain is proposing a new law that will require social media companies to proactively tackle disinformation posted by foreign states such as Russia, the government said on Monday.
The law would tackle fake accounts on platforms such as Meta’s Facebook and Twitter that were set up on behalf of foreign states to influence elections or court proceedings, the government said.
The law is likely to be passed during this parliamentary session through an amendment to link the National Security Bill and Online Safety Bill, both of which are in the government’s current programme.
Digital Secretary Nadine Dorries said on Monday the invasion of Ukraine has shown how Russia uses social media to spread lies about its actions.
“We cannot allow foreign states or their puppets to use the internet to conduct hostile online warfare unimpeded,” she said. “That’s why we are strengthening our new internet safety protections to make sure social media firms identify and root out state-backed disinformation.”
- UK to host 2023 Ukraine recovery conference EU Reporter
The Ukraine Recovery Conference (URC2022) will begin Monday in Lugano and discuss how to rebuild Ukraine. It will bring together representatives from other countries as well as international organisations and civil society.
Britain stated that it is working with Ukraine and other countries to host the conference next year. It would also sit on a supervisory committee to coordinate efforts between Ukraine’s allies and help them in recovery. London will have an office.
“We have been a leader in support of Ukraine during wartime and will continue to be a leader in supporting the Ukrainian Government’s Reconstruction and Development Plan,” Liz Truss, Foreign Secretary, said in a statement.
“Ukraine’s victory over Russia’s aggression in the war will be a symbol for democracy and not autocracy. It will demonstrate to [Russian President Vladimir] Putin, that his efforts to destroy Ukraine have only led to a stronger and more united nation.
- Ireland boosts budget package to fight inflation Reuters
Ireland can increase its budget package for 2023 to help to fight soaring inflation, the finance ministry said on Monday after forecasting a small budget surplus rather than a deficit this year.
As a result, ministers have 6.7 billion euros ($7 billion) available for spending increases and tax cuts next year, up from 4.5 billion euros previously, though almost half of that has already been allocated to spending plans.
- Germany Weighs How Much Consumers Will Shoulder Uniper Rescue Bloomberg
German officials are wrestling over how much of the cost of rescuing troubled energy giant Uniper SE they can pass onto consumers as they rush to put together a bailout package for the company squeezed by Russia’s gas war.
Ministers are set to approve legislation as soon as today that will enable government bailout packages of failing energy companies – including taking stakes. While that’s the prime option, the bill will also create a tool to allow part of the cost of surging energy prices to be distributed among all consumers, according to a government official.
It’s not clear yet how the burden will be shared between consumers and taxpayers as officials estimate the size of the hole to be plugged at Uniper alone to about 9 billion euros ($9.3 billion).
Shares in Uniper, whose business model depends on the Russian gas flows that Moscow is now curtailing, rose as much as 11% on Tuesday after losing more than a quarter on Monday. They pared gains to stand 5.2% higher at 11:20 a.m. in Frankfurt.
Economy Minister Robert Habeck has said the crisis in the energy industry risks triggering a Lehman Brothers moment, or a domino effect in the market. Russia has already curbed its gas flows to Germany and officials are bracing for more cuts that threaten the fabric of the German economy.
- The Netherlands Calls On Large Energy Users To Reduce Consumption Oil Price
The Netherlands said on Monday that large energy consumers would need to cut back on their usage beginning at the start of next year, Reuters has reported.
The restrictions are coming as part of the government’s desire to scale back CO2 emissions as well as reduce its reliance on Russian energy products.
Under the new rule, large energy consumers will be forced to invest in all possible energy savings measures, provided the investment can be recouped within a five-year span. The government will fund regulations to aid in the enforcement of such a plan.
The government said the measures would save 19 petajoules of gas and 7 petajoules of electricity per year within the first 7 years. This is the equivalent of 4 million barrels of crude.
- UniCredit is Considering a Russia Exit That It Can Reverse After the War Bloomberg
UniCredit SpA is considering selling its Russian unit through a structure that would allow the bank to repurchase the subsidiary if the geopolitical situation stabilizes, according to people familiar with the matter.
Italy’s second-largest lender is looking at several possible deal arrangements, including one that would give it the option of buying back the unit depending on market and political conditions, said the people, who asked not be named because the matter isn’t public.
UniCredit already took 1.85 billion euros ($1.9 billion) of charges on its Russia unit and Chief Executive Officer Andrea Orcel is seeking a deal that would limit any further pain whatever the outcome of the war in Ukraine. Orcel’s slower approach contrasts with peer Societe Generale SA, which took a roughly 3-billion-euro hit when agreeing to sell its business in Russia earlier this year.
Asia and Oceania
- China’s Assault On European Electric Car Market Gathers Momentum Forbes
China’s long-term plans to conquer the European electric car market aren’t causing many headlines yet but they are gathering strength and advancing under the radar.
When the pace accelerates, expect Chinese auto makers to attack the cheaper, mass market end of the market, which Europeans neglect at their existential peril.
- China plans $75 billion infrastructure fund to revive economy Reuters
China will set up a state infrastructure investment fund worth 500 billion yuan ($74.69 billion) to spur infrastructure spending and revive a flagging economy, two people with knowledge of the matter told Reuters on Tuesday.
China’s economy has started a slow recovery from the supply shocks caused by extensive lockdowns since the second quarter, although headwinds to growth persist, including from a still subdued property market, soft consumer spending and fear of any recurring waves of infections.
The fund is expected to be set up in the third quarter, the sources said.
China has unveiled a raft of economic support measures in recent weeks, although analysts say the official gross domestic product target of around 5.5% for this year will be hard to achieve without doing away with its strict zero-COVID strategy.
Much of the economic support has come from fiscal stimulus to counter the impact from COVID-19 this year, with the central bank steadily easing liquidity conditions to lower financing costs.
Authorities are doubling down on an infrastructure push, dusting off an old playbook to revive the economy, pledging 800 billion yuan in new credit quota and 300 billion yuan in financial bonds for policy banks to support big projects.
Sources told Reuters that China will issue 2023 advance quota for local government special bonds in the fourth quarter, with the new quota likely bigger than 1.46 trillion yuan for 2022.
- South Korea’s inflation hits 24-year high Al Jazeera
South Korea’s inflation last month hit the highest since the Asian financial crisis more than two decades ago, adding to signs of building strains on the open, trade-dependent economy and fanning expectations of a big rate hike by the central bank.
Data showed on Tuesday the consumer price index grew a slightly faster-than-expected 6 percent in June over a year earlier – the highest since November 1998 – while other data showed foreign exchange reserves shrank by the most since late 2008.
Economists and market experts dismissed any immediate risk of Asia’s fourth-largest economy falling into a crisis as it has several times in the past, thanks to significant improvements in its international balance of payment and debt profile.
But some warned the government and the central bank were facing a difficult period.
- Russia condemns ‘air aggression’ on Syria Reuters
Russia’s foreign ministry on Monday called strikes on Syria that have been blamed on Israel unacceptable, and demanded an unconditional cessation of the attacks.
Syria on Saturday accused Israel of launching an “air aggression” from the Mediterranean west of Lebanon’s second city Tripoli, with several missiles targeting an area to the south of Tartus.
The Israeli military declined to comment on the strikes, which would be the first since Israeli Prime Minister Yair Lapid took office as the head of Israel’s interim government ahead of a Nov. 1 election.
U.S. incompetent to comment on human rights: Iran’s Gharibabadi Tehran Times
Iran, Nicaragua confer on boosting economic ties Tehran Times
Iranian Deputy Industry, Mining, and Trade Minister Manouchehr Manteghi and Nicaragua’s Minister of Transport and Infrastructure Oscar Mojica Obregón stressed the need for expanding economic cooperation between Tehran and Managua in a meeting on Tuesday.
During the meeting, the two sides called for a deepening of economic relationships and expansion of industrial cooperation in various fields including railway, steel, and cement, IRNA reported.
- Tunisia struggles to grow more wheat as Ukraine war bites Africa News
Tunisia’s wheat production has suffered from years of drought and a decade of political instability, with 10 governments since the country’s 2011 revolution.
That has exacerbated its reliance on imports. Last year, it bought almost two-thirds of its cereal from overseas, much of it from the Black Sea region.
Those supply chains have been rocked first by the coronavirus pandemic and then by the war in Ukraine, which last year provided around half of Tunisia’s imports of the soft wheat used in bread.
While it still plans to import soft wheat, the country is pushing for self-sufficiency in durum wheat by the 2023 harvest.
That would be a valuable contribution to the national diet: the average Tunisian eats 17 kilogrammes (37 pounds) of pasta per year, second only to Italians.
- EU rolls out $1.3 billion to help Nigeria diversify its economy Reuters
The European Union (EU) and its development finance institutions will provide Nigeria with 1.29 billion euros ($1.3 billion) to help Africa’s most populous country diversify its economy away from oil, a document from the bloc showed on Monday.
Nigeria has been trying to broaden its economy and exports outside the oil sector, which accounts for about 7% of Nigeria’s gross domestic product and 90% of its foreign currency earnings.
The funding will be provided until 2027 under the EU’s “Green Deal” initiative and will, among other things, focus on enhancing access to renewable energy and boosting the development of the agricultural sector.
- Threat of US Recession Mounts Bloomberg
There’s a roughly one-in-three risk of a US recession over the next year. That’s the call from Bloomberg Economics, which uses a probability model incorporating a range of factors including housing permits and consumer surveys. Its estimate of a 38% risk compares to a zero chance just a few months ago.
The rise in recession odds can largely be traced to two factors: a moderation in the corporate profit outlook and a significant deterioration in consumer sentiment.
Both are taking place as the Federal Reserve turns increasingly aggressive in its campaign to restrain inflation.
- If the U.S. Is in a Recession, It’s a Very Strange One WSJ
The U.S. economy has experienced 12 recessions since World War II, and each one included two features: Economic output contracted and unemployment rose.
Today, something highly unusual is happening. Economic output fell in the first quarter and signs suggest it did so again in the second. Yet the job market showed little sign of faltering during the first half of the year. The jobless rate fell from 4% last December to 3.6% in May.
It is the latest strange twist in the odd trajectory of the pandemic economy, and a riddle for those contemplating a recession. If the U.S. is in or near one, it doesn’t yet look like any other on record.
Analysts sometimes talked about “jobless recoveries” after past recessions, in which economic output rose but employers kept shedding workers. The first half of 2022 was the mirror image—a “jobful” downturn, in which output fell and companies kept hiring. Whether it will spiral into a fuller and deeper recession isn’t known, though a growing number of economists believe it will.
Some companies, especially in the tech sector, have given indications that they’re pulling back on hiring, though across the broad economy the job market has rarely looked stronger.
At the end of June, 1.3 million Americans were collecting federal unemployment checks, substantially fewer than the 1.7 million people collecting them on average each week during the three years before the pandemic, when the economy was considered to be exceptionally strong. The number of people receiving such benefits topped 6.5 million during the 2007-09 recession and exceeded 3 million during the two earlier downturns.
- US proposes up to 11 new offshore oil leases, under industry pressure Climate Home News
The US government has proposed auctioning off up to 11 oil leases in federal waters, after president Joe Biden’s campaign pledge to end new drilling was frustrated by the courts.
On Friday, the US Interior Department opened the leasing programme for 2023-28 to a 90-day consultation.
- Blinken to meet with Chinese foreign minister at G-20 this week WaPo
Secretary of State Antony Blinken will meet with Chinese Foreign Minister Wang Yi this week in Bali on the sidelines of a gathering of ministers representing the world’s 20 largest economies, according to senior State Department officials.
Blinken’s meeting with Wang, their first face-to-face since last October, comes as the Biden administration seeks to dissuade Beijing from deepening its ties to Moscow and U.S. officials weigh lifting tariffs on China to ease inflation.
U.S. officials said they hoped the meeting could bring added stability to the U.S.-China relationship as tensions over the fate of Taiwan raise concerns about an unintentional military escalation between the two powers.
“A key goal of the meeting will be to reinforce guardrails on the relationship so that our competition does not spill over into miscalculation or confrontation,” said one of the officials, who spoke on the condition of anonymity to discuss a meeting prior to its announcement. “I think there’s no substitute for face-to-face diplomacy, and now is the right time.”
Officials said the meeting would focus in part on the war in Ukraine, providing Blinken with a chance to relay U.S. concerns about China’s deepening relationship with Moscow. Beijing has urged an end to the fighting but has not taken part in the global sanctions imposed on Russia following President Vladimir Putin’s Feb. 24 invasion.
The State Department official said it would be a “real imperative just to make sure we do an exchange, a very candid exchange, on Russia-Ukraine.” Among other things, Blinken is expected to underscore the Biden administration’s desire that China continue to refrain from providing arms to Russia or helping Moscow evade sanctions.
- U.S. military’s newest weapon against China and Russia: Hot air Politico
The Pentagon is working on a new plan to rise above competition from China and Russia: balloons.
The high-altitude inflatables, flying at between 60,000 and 90,000 feet, would be added to the Pentagon’s extensive surveillance network and could eventually be used to track hypersonic weapons.
The idea may sound like science fiction, but Pentagon budget documents signal the technology is moving from DoD’s scientific community to the military services.
“High or very high-altitude platforms have a lot of benefit for their endurance on station, maneuverability and also flexibility for multiple payloads,” said Tom Karako, senior fellow for the International Security Program and Missile Defense Project director at the Center for Strategic and International Studies.
The Pentagon continues to invest in these projects because the military could use the balloons for various missions.
Over the past two years, the Pentagon has spent about $3.8 million on balloon projects, and plans to spend $27.1 million in fiscal year 2023 to continue work on multiple efforts, according to budget documents.
Meanwhile, the Pentagon is working on its own hypersonic weapons program, despite Wednesday’s failure of the latest test.
A bright spot for the U.S. is the balloons may help track and deter hypersonic weapons being developed by China and Russia.
Raven Aerostar, a division of Raven Industries, produces the balloons. Raven said they consist of a flight control unit, powered by batteries that are charged using renewable solar panels. They also have a payload electronics package that controls flight safety, navigation and communications, Russell Van Der Werff, engineering director at Raven Aerostar, said in an interview.
Wind currents allow the balloon to float along a desired flight path, and the company takes advantage of different wind speeds and directions to move the balloon to the target area.
But that’s not all. Raven Aerostar uses a proprietary machine-learning algorithm that predicts wind directions and fuses incoming sensor data in real time, Van Der Werff said. The company also employs a software program to pilot and monitor its balloon fleet and has a mission operations center manned with trained flight engineers 24 hours a day, seven days a week, he added.
The balloons can supplement work performed by traditional aircraft and satellites, and stratospheric balloons can be built and launched at a fraction of the cost and time. For example, the cost to launch and operate balloons for weeks or months is in the hundreds of thousands of dollars, versus millions — or tens of millions — needed to launch and operate aircraft or satellites.
I can’t wait to see in what special way these balloons fail. Russia or China just hitting them with a missile and thus instantly destroying them is the boring way, so instead I think in a real war, they’ll just all drift off within a few days and in ten years, we’ll find crashed balloons floating on the sea or on Antarctica or something.
- The Canadian Government Will Not Fund New LNG Terminals Oil Price
Canada will not financially support two proposed LNG export projects, although it will help with the negotiations with the prospective buyers in Germany, Natural Resources Minister Jonathan Wilkinson told the Globe and Mail in an interview.
The Ukraine War
- Briton appeals against death sentence in separatist-held east Ukraine Reuters
British citizen Aiden Aslin, sentenced to death by a court in the Russian-backed breakaway Donetsk People’s Republic in eastern Ukraine, submitted an appeal on Monday, the Russian Interfax agency reported on Monday.
- US sending Ukraine two surface-to-air missile systems EU Reporter
The United States is sending Ukraine two NASAMS surface-to-air missile systems, four additional counter-artillery radars and up to 150,000 rounds of 155mm artillery ammunition as part of its latest weapons packages for Ukraine, the Pentagon said on Friday (1 July).
The assistance package, worth around $820 million, was broadly announced by US President Joe Biden on Thursday (30 June) in Madrid following a gathering of NATO leaders that was focused on Russia’s invasion of Ukraine.
Climate and Space
- Wind And Solar Provided A Record 10% Of The World’s Power Generation In 2021 Forbes
Primary global energy consumption grew by 5.5% last year to a new all-time high. This represented the fastest energy consumption growth since the early 1970s, and is a reflection of strong global demand bouncing back from 2020’s Covid-19 energy consumption decline.
Fossil fuels accounted for 82% of primary energy use last year, essentially the same as in 2020, but down from 83% in 2019 and 85% five years ago. The remaining share of primary energy use consisted of hydroelectric power (6.8%), renewables (6.7%), and nuclear power (4.2%).
Global carbon dioxide emissions rebounded from 2020 levels, growing by 5.9% in 2021. However, this is still about 1% below 2019 and 2019 levels.
Dipshittery and Cope
- Why Russia Should Fear Being Declared A State Sponsor Of Terrorism Forbes
Oooo, we were going easy on you before, but just you wait until we add you to the Big Naughty Country List! Then you’ll really feel the pain! It’s time to take the kid gloves off!
“The impacts would be quite severe,” said Jason M. Blazakis, professor of practice at the Middlebury Institute of International Studies at Monterey, in an interview. “It would likely expand the types of materiel that could not go to Russia. Dual-export restrictions are a key aspect of the SST [State Sponsor of Terrorism] regime.
“Second, and perhaps even more important, adding Russia to the State Sponsor of Terrorism regime would have implications for every government that continues to engage in any exchange, especially defense-related, with Russia. The SST listing would have secondary effects for countries engaged in such exchanges and they would become a target of secondary sections unless the President issued a waiver to exempt the activity.”
Blazakis served as director of the U.S. State Department’s Counterterrorism Finance and Designations Office in the Bureau of Counterterrorism from 2008 to 2018. “I know firsthand from experience that this is a reason why countries are not often added to the SST list—it complicates these second-order relations,” he said. “Yet, in the case of Russia, adding it to the list is important for this very reason. The U.S. government should want to complicate every aspect of another country’s relationship with Russia. It is pretty clear to me that the balance has shifted again in Russia’s favor and that they have withstood sanctions to date, and while sanctions require time to have impact, that impact is unlikely to be achieved by the winter unless a much more significant sanction is imposed—the listing of Russia as a state sponsor of terrorism.
“It would also have the added benefit of getting more companies to de-risk from Russia. That would likely include U.S. and non-U.S. companies. Businesses don’t like operating in countries that are state sponsors of terrorism. This is why Sudan pushed so hard to come off of the SST list during the Trump administration.”
“I believe that if Russia is designated a state sponsor of terrorism, that will significantly enhance the ability of aliens to sue Russia in U.S. courts,” said Charles H. Camp, a Washington, D.C.-based international attorney who has represented foreign and domestic clients in international litigation and debt recovery.
“Once the United States finally designates Russia as a state sponsor of terrorism, Russia will be stripped of any immunity under the U.S. Foreign Sovereign Immunities Act,” said Camp in an interview. “This will result, most importantly, in litigants being able to obtain not just compensatory damages, but punitive damages against Russia. In my view, such judgments that will be able to be entered against Russia will be nearly infinite in amount and will cripple Russia’s ability to operate financially outside of Russia for decades to come, inflicting more financial suffering upon Russia than any sanctions currently being imposed or sanctions that would be imposed upon Russia when it is designated as a state sponsor of terrorism.”
There is bipartisan support for the designation. House Speaker Nancy Pelosi (D-CA) and Senate Minority Leader Mitch McConnell (R-KY) agree on one thing: The United States should declare Russia a state sponsor of terrorism. Ukraine President Volodymyr Zelensky concurs, citing a Russian missile striking a shopping mall in Kremenchuk and stating “the Russian state has become the largest terrorist organization in the world.” Leaders of the G7, including U.S. President Joe Biden, called the missile strike on the mall an “abominable attack.”
These people are such fucking morons. I got second-hand embarrassment from this article.
Good Takes that are Dope
- Great Power folly? NATO’s ill-timed turn to China Responsible Statecraft
Usual warnings apply: brainworms ahead, some bad takes, and it comes to some iffy conclusions, but I think it’s broadly some decent coverage and analysis of the current situation with NATO and also its relation to China.
Russia and Ukraine are at war, Europe’s failure to take its defense seriously is evident to all, and the allies finally feel pressure to spend and do more militarily. Why, then, did they treat China as an adversary and invite several Asia-Pacific governments to last week’s NATO summit?
Three years ago Emmanuel Macron described the transatlantic alliance as brain dead. Europe’s response to Russia’s invasion of Ukraine proved his point. The European continent has ten times the economic strength and more than three times the population of Russia. Yet European governments were strikingly ill-prepared for Moscow’s attack.
Although unjustified, Vladimir Putin’s “special military operation” should have come as no surprise. NATO ostentatiously flouted Russia’s oft-stated security concerns and violated a gaggle of allied assurances by extending the alliance ever eastward. Then its members refused to negotiate over Putin’s demand that they go no further. No one believed he would follow up with a broad invasion of Ukraine. When he did, the Europeans engaged in much wailing and gnashing of teeth while turning to Washington.
Successive U.S. administrations asked, pushed, demanded, and begged the Europeans to do more for their own defense, but undercut that message by sending “reassurance” missions and establishing “reassurance” programs to convince NATO members that America would always be there, no matter how little they did. Washington also backed admission of military midgets of no practical security value, such as Montenegro and North Macedonia. Had the Duchy of Grand Fenwick applied, it would have been added as well.
After Russia’s invasion, Gen. Mark Milley, Chairman of the Joint Chiefs of Staff, proposed establishing permanent bases in Eastern Europe (additional forces, weapons, and a headquarters in Poland were announced by Biden during the NATO summit). In Madrid the Pentagon announced multiple new deployments on the continent. Moreover, the Defense Department said it “continues to execute $3.8 billion in European Deterrence Initiative funding (with another $4.2 billion requested in FY23) for rotational forces, exercises, infrastructure (construction of storage facilities, airfield upgrades, and training complexes) and prepositioned equipment.”
Despite President Donald Trump’s ostentatious diatribes during his own tensure, European military efforts still lag badly. According to the latest figures, only one alliance member spent a greater share of its GDP on the military than did Washington — Greece, which is more concerned about fellow NATO member Turkey than Russia. Just seven other European governments met the two percent guideline, which was agreed to 16 years ago. Anyway, given the ferocity of combat in Ukraine, a couple pennies on the dollar seems inadequate for countries, such as Poland and the Baltic States, which claim to fear a Russian Armageddon and constantly lobby for their own US garrisons.
Even the United Kingdom, despite taking a lead hardline role against Moscow, “has refused to increase defense spending this year, as ministers and the head of the army plead for more money to deal with the Russian threat.” This despite “warnings from Ben Wallace, the defense secretary, that the armed forces were surviving on a ‘diet of smoke and mirrors..”
So what does NATO plan on doing in the Asia-Pacific? If European alliance members still are not serious about their defense from Moscow, they aren’t likely to confront an even more formidable power thousands of miles away, one with which many of them have significant economic ties.
They do know the talk, however. The NATO 2022 Strategic Concept released in Madrid devoted two paragraphs to China. The first complained that the PRC’s “stated ambitions and coercive policies challenge our interests, security and values.” China was accused of conducting “malicious hybrid and cyber operations,” seeking “to control key technological and industrial sectors, critical infrastructure, and strategic materials and supply chains, using “its economic leverage to create strategic dependencies and enhance its influence,” and subverting “the rules-based international order, including in the space, cyber and maritime domains.”
Nowhere did the 11-page statement explain how NATO would achieve these objectives after members’ awareness was suitably boosted. No action steps were included. The political leaders of Australia, Japan, New Zealand, and South Korea attended, but received no promises of practical military support if conflict erupted with China. Indeed, South Korean President Yoon Suk-yeol rushed to assure the PRC that the summit was “not about excluding a certain country.”
Nevertheless, NATO’s Pacific diversion did get Beijing’s attention. And China’s response was sharp: “Nato’s so-called Strategic Concept, filled with cold war thinking and ideological bias, is maliciously attacking and smearing China. We firmly oppose it.” The PRC went on to warn: “When it comes to acts that undermine China’s interests, we will make firm and strong responses.”
Beijing needn’t worry. Other than the United States, only France and the United Kingdom can credibly claim to have some combat capability in the region. Efforts by other members to exhibit military reach have been pathetic, enough to irritate China, but little more. What European government is going to invest substantially in its navy and create an expeditionary army, with airpower to match, to fight the PRC, when further investments are desperately needed in Europe?
Again, consider the state of the UK military, one of Europe’s best. Reported the Times of London: “The most likely war British soldiers face now is in Estonia, a 24-hour, 1,500-mile journey. Our ability to move large quantities of equipment and supplies across such distances is untested even in peacetime. When our conventional munitions run out, only the overstretched Americans, or nuclear weapons, stand between us and defeat. If Russia can survive the first week, it wins.” And the UK plans to take on the PRC too?
The transatlantic alliance should focus on expanding Europeans’ capacity to defend themselves from Russia. If they ever complete that process, then they could add Beijing to their potential adversary list. Until then they should stop pretending to be Asia-Pacific powers.
- Spanish lawmaker: NATO subordinates Europe to US, pushes war on China, enriches weapons companies Multipolarista
A Spanish lawmaker has condemned the NATO summit that was held in Madrid this June, denouncing the US-led military alliance for advocating for more war and pushing to enrich the weapons industry while Europeans suffer from inflation and an energy crisis.
On the floor of Spain’s parliament, leftist Deputy Gerardo Pisarello argued that “the NATO summit was not organized to strengthen the cause of peace,” but rather “was organized basically to reinforce the geostrategic priorities of the United States… above all to weaken China.”
“It is evident that Europe needs a new model of security,” Pisarello said. But “that security model has to be an autonomous model, a European model, not a model subordinated to the United States.”
He portrayed Washington as a neocolonial overlord, condemning Spain for offering to “surrender ourselves in vassalage to NATO.”
The US government came to Madrid “to sell us, at a high price, its polluting shale gas, its GMO grains, and above all, the weapons of Lockheed Martin and its war industry,” he declared.
Citing left-wing leaders in Latin America, like Lula da Silva of Brazil and Andrés Manuel López Obrador of Mexico, Pisarello declared, “There is a new multilateral world order that is emerging, which is irreversible, and which no empire, neither old or new, is going to be able to stop.”
Bloomerism and Hope
- Palestine Action Shuts Israel’s Military Drone Factory Popular Resistance
Elbit Systems is met with direct action once more, as Palestine Action activists have taken to Elbit Systems’ (Israel’s largest arms factory) factory in Shenstone and closed the site for the third time in two weeks. The Elbit subsidiary operates as UAV Engines LTD. and is responsible for manufacturing Elbit’s military drone engines. Activists have locked on across the factory gates and hurled symbolic blood-red paint onto the premises, leaving the site inoperable.
On June 22nd, activists took to the roof of UAV Engines LTD., proclaiming ‘2 down, 8 to go’ – a warning to Israel’s arms manufacturers. They caused significant site damage, and successfully shut down the site as did residents of the community on June 28, when a protest forced site closure for the day. As the recent closure of Elbit’s London headquarters will prove, it is direct action that forces weapons companies out, it’s on this basis that activists have today taken action, seeking to end the bloodshed that is British backed.