Category Archives: Europe

Britain, Defence, Europe, European Union, Government, Islamic State, Military, National Security, NATO, Politics, Russia, Society, United States

NATO requires direction and purpose…

NATO

The two-day NATO summit in Newport, Wales, represents a key and defining moment in the organisation’s 65-year history. More recently it has become apt to question whether the post-war transatlantic alliance even has a future, particularly when NATO ends combat operations in Afghanistan at the end of the year. Defence budgets among the leading European powers have been severely cut and, coupled with the crippling lack of political will to reach consensus on vital security issues, critics of this Western alliance have been able to make a convincing case that the organisation is in real danger of becoming obsolete.

NATO’s future continuity and preservation as a global entity for good will now depend to a large extent on how leaders of the 28-nation alliance respond to the alarming array of new challenges that threaten not only the security of Europe, but the wider world.

The horrific and gruesome murders of two American journalists by Islamic State terrorists in Iraq, and the imminent possibility that a British hostage could soon suffer a similar fate, has highlighted in graphic and disturbing detail the very serious threat to Western security posed by radical militants associated with the self-proclaimed Islamic State – one that has taken root in lawless areas of northern Syria and Iraq. Then there is Russian President Vladimir Putin’s blatant and ruthless military intervention in Ukraine, actions which have led to Russia brazenly supporting rebel and pro-militia groups loyal to the Kremlin in maintaining the tempo over the challenge to Ukraine’s territorial integrity and encroachment of a sovereign state. The true extent of the rebel support was realised earlier this week when a Russian tank column was identified as being in support of capturing Luhansk airport. As if to confirm his disregard for Western attempts to rein in Mr Putin’s new-found spirit of adventurism, Moscow even boasted that it could take Kiev in just two weeks if it wanted to.

When considering too the continuing threats posed by al-Qaeda, the uncertain fate that awaits Afghanistan when the US-led NATO mission completes its withdrawal later this year, and the endemic lawlessness in other parts of the Middle East and North Africa, it is clear that the West is facing its most difficult period since the end of the Cold War.

NATO’s ability to provide an effective response to these multifarious threats will depend ultimately on whether it can summon the collective political will and leadership to take decisive action against its enemies. For an organisation whose decision-making process requires consensual agreement, attempts to find a common policy amongst all the nations of the alliance have all too often been hampered by deep political divisions. Most recently these have surfaced in the way the major European powers have sought to respond to Russian aggression in Ukraine, with countries such as Germany and Italy unwilling to back the more robust stance favoured by Britain and the U.S. But neither has the NATO cause been helped by President Barack Obama’s reluctance to become involved in overseas conflicts. Mr Obama’s detached approach was evidentially confirmed in the last few days when the president admitted ‘we don’t have a strategy yet’ for dealing with Islamic State militants: this, despite their murderous assaults on American citizens.

There are some encouraging signs that NATO is preparing to rise to Mr Putin’s bellicosity in eastern Europe. Anders Fogh Rasmussen, the outgoing NATO secretary-general, has already announced the establishment of a new, 4,000-strong rapid-reaction force capable of reacting to any future crisis in eastern Europe with just 48 hours’ notice. Many European member states will also come under pressure to honour the NATO commitment of spending 2 per cent of their GDP on defence. The decision to establish new logistics centres along the Russian border to enable the rapid provision and requisition of military equipment in the event of a crisis is also another welcome indication that NATO’s members are not prepared to tolerate any further territorial incursions by the Kremlin. Whilst encouraging that there are signs the alliance has rediscovered a real sense of purpose, effective political leadership is now urgently needed.

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Economic, Europe, European Union, Financial Markets, Government, Russia, Society, United States

Tough Western sanctions hit Russia…

RUSSIA

Europe has imposed the toughest sanctions against Russia since the Cold War, sending the rouble into a tailspin and prompting warnings that British firms will be hit hard.

EU leaders have agreed to embargoes against vast sectors of the Russian economy, designed to cripple its banks, energy firms and defence capabilities.

The most drastic measure will prevent Russia’s banks from issuing stocks or bonds in Europe, potentially forcing them into the arms of the Russian state for support.

Nearly half of the bonds issued by big state-run Russian lenders are in European markets. There will also be a blanket ban on all future arms sales to Moscow.

Another eight names of individuals and three firms will be added to an EU blacklist, meaning they will be subject to asset freezes and travel bans. Of those, four are described as personal ‘cronies’ of President Vladimir Putin.

President Barack Obama said the US has also expanded sanctions against Russia. He added: ‘If Russia continues on this current path, the costs on Russia will continue to grow.’ EU leaders said Russia would be shown that ‘destabilising Ukraine, or any other Eastern European neighbouring state, will bring heavy costs to its economy’.

‘Russia will find itself increasingly isolated by its own actions,’ they added. ‘Illegal annexation of territory and deliberate destabilisation of a neighbouring sovereign country cannot be accepted in 21st-century Europe.

‘Furthermore, when the violence created spirals out of control and leads to the killing of almost 300 innocent civilians in their flight from the Netherlands to Malaysia, the situation requires and urgent and determined response.’

The rouble crashed to its lowest level since early May against the dollar as leaders prepared to implement the new sanctions.

Downing Street conceded that the British economy, particularly financial services, would suffer.

BP warned sanctions could ‘adversely impact our business.’ BP has a 20 per cent stake in Russian energy giant Rosneft.

Moscow is likely to retaliate , with one group of Russian lawmakers suggesting banning international accounting firms and consulting groups from the country. Targets were said to be Deloitte, KPMG, Ernst & Young, PwC, Boston Consulting Group and McKinsey. David Cameron said: ‘We want to make it clear that Russia’s behaviour in destabilising another country – Ukraine – is unacceptable.’

In another dramatic escalation of tensions between Russia and the West, Mr Obama has accused Putin of conducting tests in violation of a 1987 nuclear missile treaty.

Mr Obama wrote to the Russian leader protesting about a breach US officials described as ‘a very serious matter’.

 

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Britain, Economic, Europe, European Union, Financial Markets, Government, Politics, Society

The sanctions on Russia should not be borne solely by London…

EUROPE

Germany and the rest of the Eurozone trade far more with Russia than Britain does. Our European partners buy billions of pounds worth of oil and gas, hugely profitable cash-flows which props up the regime of Vladimir Putin.

Yet, Europe’s proposed sanctions on Russia have been carefully designed to inflict as much damage as possible on the City of London, while shielding other economies from collateral damage. The stench of hypocrisy fulminates through the corridors of power.

The aim of the European establishment is to punish Mr Putin, whose behaviour has been appalling. But the cost should not be borne solely by London. According to Europe’s plans, German companies will still be able to sell their wares with relative impunity; Italy will continue to receive their energy supplies courtesy of Moscow; and, France will deliver its warships to Russia as promised. The bulk of the cost will be paid for by British workers who will lose their jobs to satisfy Europe’s desire to be seen to be acting and doing the right thing.

This is the latest example of the European elites showing their expertise in turning every crisis to their advantage. The higher echelons of the European establishment are clearly seeking to use the need to punish Russia as an excuse to intensify their long-standing campaign against the City.

The EU often makes grandiose claims about being a global force for democracy and human rights. Splendid as those values are, time and time again the EU reveals itself as merely an alliance of competing national interests. On matters of global conflict, Brussels not only struggles to produce a united front, but also often ends up pursuing its own internal vendettas instead. This prejudice is seen within the corporatist view of the Eurozone elites when, for example, they are happy enough to sign massive energy deals with corrupt and authoritarian regimes, but don’t either like or understand the workings and mechanisations of genuine free markets. The creation of the single currency too saw much of the financial activity previously conducted in Frankfurt and Paris shift to London.

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Effective sanctions should mean moving beyond the freezing of Russian assets in EU capitals and foreign travel bans on Mr Putin’s inner circle. Financial services, defence, and energy are some of the areas that should come under tighter sanction.

Financial sanctions operate in two ways. They restrict the access of Russian companies to working and investment capital, impeding not just their growth but their continuing activity, so hurting the Russian economy. They also make overseas investors much less likely to continue investing in Russia, with a similar effect. Defence sanctions, essentially the sale of Russian military equipment to other EU members, has the same consequence with the additional value of Russia becoming increasingly isolated. Sanctions on energy can range from tougher regulatory action to an effective blockade on the sales of oil and gas to the EU. Germany’s recent withholding from Gazprom of permission to use a pipeline is illustrative of the effectiveness of such action.

Further sanctions like these would, however, act like a two-edged sword. Certainly, they will injure Russia’s economy, but they will also wound Europe. Some parts of Europe could not get through a winter without severe difficulties if homes and offices were not heated by Russian gas. Some economies remain distinctly shaky and probably wouldn’t want to commit to a sanctioning agenda that would likely rebound on their own trading position.

Of course, it is only right that where Mr Putin’s regime can be targeted, given his ongoing refusal to face up to the consequences of his support for Ukraine’s separatists, such action be taken. Weaning Europe from its addiction to Russian gas is one real way to punish the Russian president and his cronies. Germany gets around a third of its gas and oil from Russia. Given that energy accounts for around 68 per cent of Russia’s exports, an opportunity to hit the regime hard should have been taken by now.

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