Experts warn that religious freedom around the world is worsening

epa07754837 Yazidi ethnic mourners cry, during the fifth anniversary of Yazidi genocide by (IS), in Baadre 25 km south east of Duhok Kurdistan region in Iraq, 03 August 2019, for those who were killed by Islamic state (IS) in Kocho village in Sinjar. Most of Yazidi ethnic population were prepoted to have been kidnaped or killed by Islamic state (IS) group during their control on Sinjar town in 2014. The Kurdish northern Iraq is home to the Yazidi religious minority who was attacked and expelled by the Islamic State (IS) militia group in 2014. Hundreds of people were taken hostages then, including women used as sex slaves and as gifts between the militia fighters. EPA-EFE/GAILAN HAJI

In August, Iraq’s ethnoreligious Yazidi minority marked the five years since ISIS militants overran northwestern Iraq and murdered at least 5,000 Yazidi men and boys who refused to convert to Islam and enslaved more than 7,000 women and girls who were sold off as brides and sex slaves.

An indigenous ethnic group in Iraq, Syria, and Turkey, the Yazidis are mainly Kurdish-speaking followers of a monotheistic religion that can be traced back to the beliefs of ancient Mesopotamia. Following the rise of ISIS, the Yazidis became the first victims of genocide by the Islamic State.

“The Yazidis are better off moving to other countries because Iraq is not safe,” a young Yazidi woman who was kidnapped, raped, and sexually abused by ISIS said after the terrorist group swept across northern Iraq and Syria in the summer of 2014.

The unnamed young woman now lives in Germany where she was given asylum and where regularly visits therapists who help her overcome the trauma of her ordeal. She said that she has no desire to return home to Iraq because the threats to Yazidis, even after ISIS’ current battlefield defeat, remain high and that her community remains susceptible to discrimination and attacks.

Suicide rates are high among Iraq’s Yazidi teenagers, many of whom are young women who survived the horror of being ISIS’ captives. They continuously battle post-traumatic stress disorders and severe depression. While being held captive by ISIS militants, the victims were routinely raped, tortured, sold, called infidels, and beaten while being forced to memorise passages of the Koran.

Sam Brownback, the US envoy for religious freedom, said that, sadly, ISIS’ abuses against the Yazidis are not the only example of faith-based persecution. He added that although the world paid a great deal of lip service to put an end to future cases of genocide and ethnic cleansing, particularly in cases where the perpetrators targeted an ethnoreligious group, the systematic killing and deportation of Myanmar’s Rohingya, a Muslim minority, continues to this day.

Brownback also noted that the forced detention of more than 1 million the Uyghurs – a Turkic-speaking Muslim people, native to China’s Xinjiang Province – into reeducation camps by the Chinese Communist Party and the massacre of Jews at a synagogue in Pennsylvania, in which 11 worshippers died, is further proof that violence against religious communities around the world is on the rise.

“We’re working with like-minded countries to push the topic of religious freedom to the forefront, globally, so that we can start getting the trend line going the other way,” Brownback said while adding that tackling religious persecution is very difficult.

Experts warn that political leaders should foster a culture of tolerance, promote exchanges between different religious groups, and prosecute anyone who promotes violence against minorities.

The plight of the Yazidis, Uyghurs, Rohingyas, and others is expected to be on the agenda of the upcoming annual UN General Assembly in New York, where the world’s leaders will discuss security threats. Whether any decisions can be reached that would bring about a halt to violence against religious communities is, however, unlikely.

Alibaba founder Jack Ma discusses digital economy with Kazakhstan’s Tokayev

epa07831569 (FILE) - Jack Ma, Executive chairman and co-founder of Alibaba Group at the Vivatech startups and innovation fair, in Paris, France, 16 May 2019 (reissued 10 September 2019). Jack Ma is due to step down as Alibaba chairman today. EPA-EFE/JULIEN DE ROSA

Alibaba founder Jack Ma met with officials from Kazakhstan on 12 September where he discussed potential development possibilities within the scope of the strategic cooperation agreement between China and the Central Asian energy giant in the digital economy sector.

“I appreciate your desire to support Kazakhstan. We have a strategic agreement that will help with the development of the digital economy and we are interested in your participation,” Kazakhstan’s President Kassym-Zhomart Tokayev told Ma during the former’s official visit to China.

Ma is the co-founder and former executive chair of Alibaba Group, a multinational technology conglomerate specialising in e-commerce, retail, Internet, and technology. The company’s annual revenue currently stands at $56.152 billion. Alibaba’s online sales and profits have surpassed all US and European retailers since 2015 and has consistently ranked as the world’s largest retailer and e-commerce company for much of the last decade.


EU extends sanctions against Russia six more months

epaselect epa05744383 The image taken with a fisheye lens shows the atrium of the new Europa Building in Brussels, Belgium, 23 January 2016. Located at the heart of the European district, the Europa building combines a new part, a lantern-shaped structure designed by the consortium of Samyn and Partners (Belgium), Studio Valle Progettazioni (Italy) and Buro Happold (UK) with a renovated section of Art Deco complex designed by architect Michel Polak in 1922. The building is plan to host European council and summits. EPA/OLIVIER HOSLET

The Council of the EU has announced on 12 September that it has “extended the restrictive measures over actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine for a further six months, until 15 March 2020”.

The decision was adopted by the Council by written procedure, and the legal acts will be published in the Official Journal on 13 September.

The measures apply to 170 persons and 44 entities and consist of an asset freeze and travel restrictions.

The EU has imposed restrictive measures against Russia since 2014 when Moscow annexed Crimea following an illegal independence vote.

EIB to finance modernisation of rail transport in Poland

epa07251834 A Pendolino train equipped with wifi arrives during a presentation at the train station in Warsaw, Poland, 28 December 2018. Pendolino trains of the EIC (Express InterCity) now have free Wi-Fi internet. EPA-EFE/Leszek Szymanski POLAND OUT

The European Investment Bank announced on 12 September that it has signed a €233 million loan to PKP Intercity rail operator in Poland, to finance their largest long-term investment programme for the modernisation of the country’s transport sector, and for rail transport in particular.

The project aims to improve quality of travelling by train throughout Poland and to neighboring countries. It helps to shift traffic from road to railways, contributing to sustainable transport by enabling higher operating speeds, improving comfort and ensuring safety. It will also contribute to the increased frequency of services on selected routes.

This is the fourth EIB loan to PKP Intercity since 2005. It is part of the ongoing EIB support for rail transport in Poland, which also includes significant financing of the infrastructure provider, PKP Polskie Linie Kolejowe, for upgrading the rail network.

EU provides further €10 million to support Venezuelan refugees

epa07097972 United Nations High Commissioner for Refugees (UNHCR) and International Organization for Migration (IOM) Special Representative Eduardo Stein (R) shakes hands with a Venezuelan guard during his visit to the Simon Bolivar International Bridge on the Venezuela border, in Cucuta, Colombia, 16 October 2018. Stein is in Colombia to learn about the situation caused by the exodus of close to 2.3 million Venezuelans due to the political and socio-economic problems in the Caribbean country. EPA-EFE/Schneyder Mendoza

The European Commission has announced on 12 September an additional €10 million to support Venezuelan refugees and migrants by strengthening the capacities of national institutions, civil society organisations and host communities in the countries most affected by the crisis in Venezuela, namely Colombia, Ecuador and Peru.

The assistance is channeled through EU’s Instrument contributing to Stability and Peace. Its approach will focus on strengthening registration and identification capacities for migrants, funding measures to reduce tensions, and addressing the issue of human trafficking, sexual and labour exploitation.

According to the latest estimates, Colombia hosts nearly 1.5 million displaced Venezuelans. In total, over four million Venezuelans have left the country in the past two years.

EU to support €30 million investment in biomedical research fund

epa07627042 An exterior view of the German cancer research center (DKFZ) in Heidelberg, Germany, 05 June 2019. The German Cancer Research Center in Heidelberg is a biomedical research institution. The centre investigates how cancer develops and which factors influence the cancer risk. EPA-EFE/RONALD WITTEK

The European Investment Fund is providing €30 million to the KHAN Technology Transfer Fund I, a drug discovery fund based in Dortmund, Germany.

The financing is via the InnovFin programme and it is backed by the Juncker Plan’s European Fund for Strategic Investments.

The projects are sourced predominantly from academia in Germany and Austria. KHAN-I will invest in innovative drug discovery projects and spin-off companies at various stages of clinical development.

As of July 2019, the Juncker Plan has mobilised €424 billion of additional investment, including €32.6 billion in Germany. The Plan is currently supporting 967.000 small and medium businesses across Europe.

Mogherini visits Mexico

epa06672444 European Union foreign policy chief Federica Mogherini speaks to the media as she arrives for the Foreign Affairs Council in Luxembourg, 16 April 2018. Foreign Ministers will discuss the situation in Syria and exchange views on Russia. They will also discuss the latest developments in the aftermath of the Salisbury attack. EPA-EFE/JULIEN WARNAND

The European Union’s foreign policy chief, Federica Mogherini, concluded on 11 September her official visit to Mexico, where she met with its Foreign Minister Marcelo Ebrard, and other government officials and civil society representatives.

During the visit, Mogherini and Ebrard discussed a wide range of topics, such as the modernisation of the EU-Mexico Association Agreement, and the Comprehensive Development Plan for Honduras, Guatemala, El Salvador and Mexico. The plan is currently being developed with the support of the UN Economic Commission for Latin America and the Caribbean.

They also discussed regional issues, including Venezuela and Nicaragua, and addressed the need to strengthen the multilateral system and to maintain a solid international rules-based architecture at the United Nations, the World Trade Organisation and other institutions.

Issues such as migration, human rights and the fight against violence were also discussed.

EIB to support transport infrastructure in the Western Balkans

epa07198343 A general view on cars on a highway during an unusual sunny day for this time of the year in Belgrade, Serbia 29 November 2018. Meteorologists predict very cold weather reaching up to minus 10 degrees Celsius for the next days in Serbia. EPA-EFE/KOCA SULEJMANOVIC

The European Investment Bank announced on 12 September that it will support transport infrastructure in the Western Balkans region by signing a €100m loan for the construction of the new highway linking Niš and Merdare in Serbia. The new road is part of the 314 km-long corridor connecting Southern and Eastern Europe.

The project, known as the Highway of Peace, will also benefit from a €48m investment grant from the Western Balkans Investment Framework, an EU-led initiative.

During the signature event , EU Commissioner for Mobility and Transport, Violeta Bulc, highlighted that the project represents a concrete step towards regional cooperation and reconciliation.

Juncker wants “European Way of Life” portfolio name to be changed

epa07829815 President-elect of the European Commission Ursula von der Leyen (R) is welcomed by European commission President Jean-Claude Juncker (L) ahead of a meeting at the European Commission in Brussels, Belgium, 09 September 2019. EPA-EFE/STEPHANIE LECOCQ

Jean-Claude Juncker, the outgoing President of the European Commission, at his interview on Thursday morning at Euronews, weighed in the row over his past chief spokesperson’s new Vice-president portfolio “Protecting our European Way of Life” which President-elect Ursula von der Leyen suggested on Monday’s EU executive reveal.

“A European Way of Life is putting together our main talents and energies, and included in that room is the fact that you have to respect the others, independently from their colour and independently from their initial home State. Knowing Margaritis [Schinas] well because I was in daily contact with him, I know that the title is not corresponding to his own values. And I think that this will have to be changed,” Juncker told Euronews.

Juncker’s comments come as president-elect of thee European Commission, Ursula von der Leyen came under intensifying pressure to drop the controversial title for the Greek Vice-president, after MEPs threatened to escalate the row in late-September hearings of Commissioners-designate in the European Parliament.

It was on Wednesday afternoon when the European Parliament’s conference of presidents took the decision to address von Der Leyen on a letter, asking her to withdraw the Vice-president’s job description title. The European Parliament president, David Sassoli, told journalists in Brussels on Thursday that von der Leyen is invited to join the Conference of Presidents in Strasbourg next week on 19 September to discuss the “comments on certain portfolios and names,” before hearings are to begin.

Cameroon’s president calls for national dialogue on separatist crisis

epa07076540 Cameroon President Paul Biya (C) speaks to the media after casting his ballot in the presidential elections at a polling station in the capital Yaounde, Cameroon, 07 October 2018. The incumbent President Paul Biya is Africa's oldest president who has been in power for 36 years. He faces eight candidates with 6.9 million registered voters. Relations between the government and marginalised anglophone separatists in the North West and South West of the country is a major issue threatening peace and stability in Cameroon. EPA-EFE/NIC BOTHMA

Cameroon President Paul Biya announced on 10 September that he intends to hold a major “national dialogue” this month, to put an end to the violence between security forces and armed separatists from the anglophone minority in the west, in which thousands were killed.

The European Union welcomed the move, stating:

“The announcement by President Biya to convene a national dialogue constitutes a positive development in the search for a solution to the crisis in the North-West and South-West regions of Cameroon.”

“The European Union continues to support all efforts to this end, in coordination with its international and regional partners.”, the statement reads.

The crisis began in late 2016, and escalated a year later when English-speaking militants declared the creation of the independent “Republic of Ambazonia”. In 2017, Biya declared war on the separatists. According to the UN, the conflict has since killed more than 2.000 people, and internally displaced more than 500.000.

Frontex co-leads operation against organised crime in the Western Balkans

epa06342100 A View of the new European Border and Coast Guard Agency (Frontex) headquarters in Warsaw, Poland, 21 November 2017. Frontex helps manage the EU's external borders, ensuring their security, and carrying out regular risk analyses and assessments. The agency's budget is to grow from 281 million Euros (349 million US dollars) in 2017 to 322 million Euros (377 million US dollars) in 2020. EPA-EFE/JAKUB KAMINSKI POLAND OUT

Frontex, the European Border and Coast Guard Agency, recently co-led an international operation against organised cross border crime in the Western Balkans.

The four-day operation was led by Spain and co-led by Frontex, Europol, Germany, Bulgaria, and a number of agencies and international organisations, including Interpol and the United Nations Office on Drugs and Crime. The mission’s goal was to crack down on the trafficking of firearms and drugs, illegal migration, and document fraud. The operation was successful in that it uncovered 14 separate cases of visa fraud or misuse.

Frontex performed controls at border crossing points, border surveillance activities, and helped officers determine whether the documents that they were checking were, in fact, genuine.

The operation was coordinated under the umbrella of the European Multidisciplinary Platform against Criminal Threats as part of the EU Policy Cycle, a four-year plan for the fight against serious and organised crime. The results and the intelligence gathered will help with most future investigations.

Scottish court rules closing UK parliament was illegal

epa07835612 Dark clouds over the Houses of Parliament in Central London, Britain, 11 September 2019. Judges at the Court of Session in Scotland ruled today that proroguing of Parliament by British Prime Minister Boris Johnson was unlawful and the case will be heard at the Supreme Court in London next week. EPA-EFE/WILL OLIVER

Three judges of the Scottish Court of Session ruled on Wednesday morning that Boris Johnson’s decision to suspend the UK Parliament was illegal.

The government will appeal the ruling of Scotland’s highest court to the UK’s Supreme Court next Tuesday.

Former Conservative attorney general Dominic Grieve said Boris Johnson should resign if it the UK Supreme Court confirms the ruling that he “misled the queen about the reasons for suspending Parliament.” Queen Elizabeth II had agreed to suspend (“prorogue”) Parliament until October 14, while the UK is to leave the EU on October 31. The Queen is obliged by custom to follow the advice of the PM.

“This was an egregious case of a clear failure to comply with generally accepted standards of behaviour of public authorities,” concluded one judge Philip Brodie.

The Scottish court ruled that closing the parliament was “unlawful because it had the purpose of stymying Parliament” and contradicts two other English court judgments.

The case was brought by 75 MPs led by Joanna Cherry of the Scottish National Party.

“We feel utterly vindicated and I would be confident that the UK Supreme Court will uphold this decision,” Cherry said.

Scotland’s first minister, Nicola Sturgeon, called for Parliament to be “recalled immediately to allow the essential work of scrutiny to continue.”

Parliament last week passed a law requiring Johnson to seek an extension to the Oct. 31 deadline for Britain’s exit, essentially taking no-deal off the table. Johnson has vowed to defy the law, while his foreign secretary Dominic Raab promises the government will “challenge the law to its limit.”

Italy requests a fiscal time-out to boost growth

epa07835272 Italian Prime Minister Giuseppe Conte (L) is welcomed by EU commission President Jean-Claude Juncker (R), prior to a meeting in Brussels, Belgium, 11 September 2019. EPA-EFE/OLIVIER HOSLET

Following a meeting with the President-elect of the European Commission Ursula von der Leyen, Italian premier Minister Giuseppe Conte asked for fiscal space to restart the Italian economy.

Addressing the press, Conte said that the objective remains to subdue the debt, but insisted that the priority must be “growth and investments,” prioritizing the green economy, digitalisation and the relaunch of its impoverished of the Italian south.

This was Conte’s first visit as prime minister of his second cabinet, backed by the 5-Star Movement (MS5) and the Democratic Party (PD).

Meanwhile, the urgency of economic growth dominated German political discourse. A report by the Kiel Institute for the World Economy (IfW) published on Wednesday projects negative growth of minus 0.3% in the third quarter, as the German economy officially enters a recession. Overall, IfW expects the German economy to grow by merely 0,4% in 2019 and 0,9% in 2020.

The manufacturing sector that drives the German economy, especially the automotive industry, is expected to feel the brunt of the Sino-American trade war and could be threatened further by US tariffs and the prospect of a no-deal Brexit. In any event, declining business confidence is already hurting business confidence and investment in capital goods, to the detriment of German exports.

Finance Minister Olaf Scholz told lawmakers on Tuesday that Germany was ready to pump “many, many billions of euros” into its economy to face the current economic slowdown by boosting domestic demand.

Hong Kong bids for London Stock Exchange

epa07557304 A man walks past a stock ticker displayed outside the building that houses the stock exchange in Hong Kong, China, 09 May 2019. The Hang Seng Index dropped 2.4 per cent, or 692.13 points, to 28,311.07 at the close on Thursday, its lowest close since 08 March 2019. EPA-EFE/JEROME FAVRE

The Hong Kong’s stock exchange made a €35.43bn ($39bn) offer for the acquisition of the London Stock Exchange on Wednesday.

The offer is below the current valuation of the LSE.

A statement issued by the parent company of Hong Kong’s stock exchange (HKEX) described the offer as “a highly compelling strategic opportunity” that will give rise to a global market leader worth $70bn spanning Asia, Europe, and the United States.

The offer comes after the European Commission blocked a merger between Deutsche Boerse and the LSE in 2017 and just as the City of London seeks to redefine its role in a post-Brexit world. While political and regulatory risk weighed in the Deutsche Borse merger that may also be the case for HKEX, as it would effectively give China a political veto over the UK’s most strategic economic sector.

As the same time, the merger would allow the LSE to position itself in Asian markets and present a formidable competitor to Shanghai. Crucially, the emerging group would dominate Eurodollar and Remnibi trading, with the LSE gaining privileged access to mainland China.

Last year the Hong Kong stock exchange reported a $1,2bn profit. Hong Kong is the Stock Exchange of choice for globally significant Chinese corporates and is a conduit for international investors to the Shenzhen and Shanghai markets.

One of the conditions of the KKEX offer is that the LSE abandons its offer for the takeover of the data firm Refinitiv, a group that also owns Thomson Reuters and the private equity house Blackstone. In a statement issued on Wednesday, the LSE reiterated its commitment to the Refinitiv deal, the BBC reports.

Forza Nuova and Casa Pound to sue Facebook and Instagram for defamation

epa01873417 Italian senator Marcello Dell'Utri poses for photos before reads of the Benito Mussolini diary at cultural center 'Casa Pound' in Rome, 24 September 2009. EPA/GUIDO MONTANI

The Italian neo-fascist groups Forza Nuova (FN) and CasaPound said Wednesday they will file lawsuits against Facebook and Instagram.

The groups are protesting last week’s closure of their social media accounts due to hate-speech. The two groups profile is no longer accessible, along with that of national, local, and provincial chiefs across Italy.

According to the leader of FN, Roberto Fiore, the group’s legal team is putting together class action lawsuit, making the case against the two social media platforms on the grounds of defamation and an assault to freedom of expression, on behalf of thousands of users whose accounts were blocked.

CasaPound’s National President Gianluca Iannone is joining the initiative.  Both CasaPound and FN have often made headlines as defenders of the Fascist tradition.

Casapound had 250,000 followers on Facebook, while its leader Di Stefano had 140,000 followers. Its members recently used the fascist salute during a demonstration demanding snap elections.

In a statement to Italy’s public news agency ANSA, a Facebook spokesperson reiterated the platforms’ policy of barring groups that “spread hatred or attack others on the basis of who they are.” Facebook analyses conversations and deletes content by using criteria that are not published so as to prevent hate groups from circumventing the system.

Former lower house speaker and PD MP Laura Boldrini hailed Facebook’s decision as a step “towards the end of an organized season of hatred on social networks,” Reuters reports.

Central banking’s bankrupt narrative

epaselect epa06268754 The sun is reflected from windows onto the mist surrounding the European Central Bank (ECB) headquarters in Frankfurt Main, Germany, 16 October 2017. EPA-EFE/ARMANDO BABANI

Former US Secretary of the Treasury Lawrence H. Summers and Anna Stansbury recently cast doubt on the future of central banking, suggesting that the prevailing monetary-policy framework is in dire need of a rethink. I agree, and have been calling for a reconsideration of “Old Keynesian economics” for more than a decade, starting with an article I published in 2006, two years before the Great Recession made it fashionable to question the way we think about macroeconomic theory. I am heartened that the narrative and body of research I have developed continues to gain public support.

In the current era of low – and in some cases negative – interest rates, many are starting to worry that the European Central Bank and the US Federal Reserve are “running out of ammunition.” When a central bank’s policy rate is already low, it cannot be lowered much more in the event of a crisis. Hence, one could argue that the Fed actually should be raising rates now, while unemployment is low, to create enough space for interest-rate cuts in the future, when unemployment may be high. Yet it makes no sense to raise interest rates if doing so could trigger a recession. The question, then, is whether there is a way to restock the powder keg without generating an explosion.

When the Fed or the ECB raises rates, New Keynesian economic theory predicts that the hike will eventually lead to a decrease in inflation and that the path from point A to point B will inevitably be accompanied by higher unemployment. But my own research suggests that New Keynesian economic theory is wrong. After all, if the Fed were to raise the short-term rate slowly and support equity markets with a guarantee to purchase a broad-based exchange-traded fund at a fixed price, there is no reason why the rate increase should cause higher unemployment.

According to the theory, a lower interest rate is supposed to lead to more investment expenditure, thereby driving aggregate demand and reducing unemployment. And lower unemployment is supposed to put upward pressure on wages, which eventually translates into higher prices (inflation) through a mark-up mechanism. That is the point when the central bank reverses its policy and starts to raise interest rates. Yet this entire story is contingent on the assumption that there exists a unique natural rate of unemployment – that is, the “non-accelerating inflation rate of unemployment” (NAIRU) – at which the pace of price growth will neither rise nor fall.

Although New Keynesians acknowledge that the NAIRU may change over time, they cannot predict how it will behave. Rather, central bankers make internal calculations of the NAIRU, and these then feed into decisions about the policy rate. When the unemployment rate is below the current NAIRU estimate and inflation still fails to materialize, they simply conclude that the NAIRU must have fallen. This is not science; it is religion.

In my book Prosperity for All, I offer an alternative to this latter-day version of reading tea leaves. My theory recognizes that a non-accelerating inflation rate is consistent with any unemployment rate. This point was originally made by John Maynard Keynes himself, in The General Theory of Employment, Interest, and Money, and has been emphasized by post-Keynesian economists for decades. I have shown in my research that the post-Keynesian view can be reconciled with conventional microeconomic theory using a “new” theory of labour-market search.

The standard theoretical narrative is based entirely on the Phillips curve, which asserts a direct tradeoff between inflation and unemployment. This is the narrative that determines what research is allowed into the top economic journals, and which discussions take place in policy meetings at central banks around the world. It is the narrative that informs how everyone from journalists and academics to the wider public interpret monetary-policy decisions. But it is a misleading narrative, one from which we must escape if we are to improve how we manage modern market economies.

To that end, it is not enough to criticize the Phillips curve. If the theory is wrong, it must be replaced with something better, and by something other than a return to 1950s Keynesianism, as today’s critics of the neoclassical macroeconomic theory seem to propose. According to Summers and Stansbury, government should “promote demand through fiscal policies and other means” (emphasis mine). While I agree that monetary policy will be impotent when Europe or the US enters another recession, I am not convinced that government spending is the right response. My own research provides empirical evidence that recessions are caused by crashes in asset markets. As such, it is better to stabilize asset prices than build bridges to nowhere.

Modern market-based societies have pulled more human beings out of abject poverty than any other known form of economic organization. But “capitalism” is not some monolithic structure that exists in contradiction to “socialism.” There is a continuum of alternative economic arrangements, with laissez-faire at one end and central planning at the other. Our goal should be to design institutions that take maximum advantage of the market as a mechanism for coordinating information, while also providing the tracks on which the market runs.

UN marks 10th International Day Against Nuclear Tests

The UN General Assembly marked the tenth International Day Against Nuclear Tests by holding a high-level chaired by the President of the UN General Assembly, Maria Fernanda Espinosa, and attended by UN Secretary-General António Guterres.
Espinosa stated that the world today is in the midst of a particularly dangerous and tense period where nuclear-armed states are increasingly at odds with one another and that it is time to turn to dialogue to help diffuse the situation.
Kairat Umarov, the representative of Kazakhstan to the UN, called on the members of the UN to consolidate their efforts to enforce a comprehensive Nuclear Weapons Treaty that would eventually lead to a full ban of nuclear weapons.

Europe should oppose Ukraine’s law enforcement boss

epa07431056 Ukrainian Internal Minister Arsen Avakov speaks during their joint briefing with Tetyana Slipachuk, the Head of Central Election Committee, Vasyl Grytsak, the Head of Ukrainian Security Service and Yuriy Lutsenko, Prosecutor General of Ukraine (not pictured) in the Central Election Committee office in Kiev, Ukraine, 12 March 2019. The briefing of Top Security Chiefs was dedicated to safeguarding during Presidential elections, which will take place in Ukraine on 31 March 2019. EPA-EFE/SERGEY DOLZHENKO

The election of President Volodymyr Zelensky on 21 April and a parliament dominated by his party on 21 July is seen by many as an electoral revolution.

The electorate said it loud and clear: the old kleptocracy that has dominated Ukraine for three decades must be sent to the ash heap of history, once and for all.

Unfortunately, Zelensky did not hear the vox populi – the voice of the Ukrainian people.

The most striking example is Zelensky’s decision to re-appoint one of the symbols of Ukrainian corruption, Arsen Avakov, as interior minister on 29 August.

Avakov has been sitting on his “Iron Throne” as an unelected police czar since February 2014, surviving one acting president, Alexander Turchynov, and two real ones – Petro Poroshenko and Zelensky.

The omnipotent kingmaker has used his control over the police, the National Guard, volunteer battalions and nationalist street thugs to cement his power and bully both top officials and the Ukrainian people into submission.

Avakov has indeed become the capo di tutti cappi of the Ukrainian law enforcement mafia.

After a brief alliance with Poroshenko, he soon turned into his nemesis and prevented him from rigging the presidential election and being re-elected Kremlin-style in April.

Zelensky thanked Avakov for his help during the election by re-appointing him as interior minister.

The newly-elected president preferred political expediency and horse-trading to the rule of law and the demands of his own electorate, which voted for getting rid of all old corrupt politicians.

The costs of this bargain will be disastrous for Ukraine.

Symbol of corruption

In 2017 Avakov’s son, Alexander, and Avakov’s ex-deputy Sergey Chebotar were charged by the National Anti-Corruption Bureau of Ukraine with embezzling 510,000 euros by supplying overpriced backpacks to the Interior Ministry. They deny the accusations.

In 2018, Chief Anti-Corruption Prosecutor Nazar Kholodnytsky’s office closed the case as part of a political bargain with Avakov. To cosy up to the minister, Kholodnytsky ignored bullet-proof evidence, including video footage of the backpack deal negotiations.

Other videos recorded by the Security Service of Ukraine feature negotiations over corrupt schemes between several other Avakov allies, who implicate the minister himself. One of the allies, Vasyl Petrivsky, has already pled guilty and been convicted for corruption. Avakov denies the accusations of wrongdoing.

In any civilised European country, a minister would have been fired over such evidence a long time ago and could face corruption charges. But in Ukraine, corruption is rewarded, not punished.

Avakov has also buried Ukraine’s still-born police reform by protecting corrupt police officers from dismissal.

Buried investigations

Avakov has actively sabotaged cases into the murder of more than a hundred protesters during the 2013-2014 EuroMaidan Revolution, which ousted ex-President Viktor Yanukovych, and other crimes against protesters, according to Sergey Gorbatuk, the top investigator in charge of EuroMaidan cases. He said that Avakov had protected police officers suspected of the crimes and kept them on their jobs.

Avakov’s police have also failed to investigate about a hundred attacks on activists and journalists since 2014, including at least 12 murders.

The most high-profile murder is that of journalist Pavel Sheremet in a car explosion in Kyiv on 20 July 2016. Not a single suspect in the murder has been identified so far.

Several hours before Sheremet’s murder, he met several veterans of Ukraine’s far-right Azov Regiment, which is close to Avakov. One of them, Sergei Korotkikh, used to be a self-proclaimed national socialist in both Belarus and Russia and studied at the academy of Russia’s FSB, the successor agency of the Soviet Union’s feared KGB.

Sheremet was the common-law husband of the Ukrainska Pravda newspaper’s owner Olena Pritula and the newspaper’s executive director. Avakov has clashed repeatedly with businessman Kostyantyn Grigorishin, who is close to Ukrainska Pravda’s leadership.

Zelensky whitewashed Avakov on 23 July and claimed that there had been major progress in the Sheremet case, saying that news about it would be revealed soon. Since then, nothing has happened, and the case is still dead.

Gandziuk case

Avakov’s police have also sabotaged the case into the murder of Kateryna Gandziuk in the city of Kherson in 2018. She was the victim of an acid attack that took place in July 2018 and later died from her injuries while in hospital less than four months later.

The police initially tried to bury the case by classifying it as “hooliganism.” Moreover, the police initially arrested a scapegoat despite a clear alibi and had to release him later.

The police’s reluctance to investigate the murder led to speculation on the police’s possible involvement in the attack, and the case was transferred to the Security Service of Ukraine. The prosecutors even said that the assault was ordered by “law enforcement and state officials, with the help of separatist organizations.”

One of the suspected organizers of the murder, Sergey Torbin, is a former police officer. He has pled guilty and has already been sentenced to six and a half years in prison.

Gandziuk had also lambasted top police official Artem Antonshchuk and Kirill Stermousov, an ally of Ilya Kyva, an ex-aide to Avakov and currently head of the Interior Ministry’s labour union.

If Europe is serious about fighting corruption in Ukraine, it must send a clear signal to Zelensky – financial aid should be restricted until Avakov and Kholodnytzky are fired and until there is progress in the Sheremet and Gandziuk cases.

European politicians turned a blind eye to Poroshenko’s wrongdoings and should not allow Zelensky to turn into a second Poroshenko.

Who lost Argentina, again?

epa07202869 A view of the security deployment guarding the grounds of the Casa Rosada, the house of the Argentinian Government, in Buenos Aires, Argentina, 01 December 2018. The security detail is in place during the bilateral meeting between Argentinian President Mauricio Macri and his Russian counterpart Vladimir Putin, after the G20 leaders' summit. EPA-EFE/JUAN IGNACIO RONCORONI

Investors and economic observers have begun to ask the same question that I posed in an article published 18 years ago: “Who lost Argentina?” In late 2001, the country was in the grips of an intensifying blame game, and would soon default on its debt obligations, fall into a deep recession, and suffer a lasting blow to its international credibility. This time around, many of the same contenders for the roles of victim and accuser are back, but others have joined them. Intentionally or not, all are reprising an avoidable tragedy.

After a poor primary-election outcome, Argentinian President Mauricio Macri finds himself running for another term under economic and financial conditions that he promised would never return. The country has imposed capital controls and announced a reprofiling of its debt payments. Its sovereign debt has been downgraded deeper into junk territory by Moody’s, and to selective default by Standard & Poor’s. A deep recession is underway, inflation is very high, and an increase in poverty is sure to follow.

It has not even been four years since Macri took office and began pursuing a reform agenda that was widely praised by the international community. But since then, the country has run into trouble and become the recipient of record-breaking support from the International Monetary Fund.

Argentina has fallen back into crisis for the simple reason that not enough has changed since the last debacle. As such, the country’s economic and financial foundations have remained vulnerable to both internal and external shocks.

Although they have been committed to an ambitious reform program, Argentina’s economic and financial authorities have also made several avoidable mistakes. Fiscal discipline and structural reforms have been unevenly applied, and the central bank has squandered its credibility at key moments.

More to the point, Argentinian authorities succumbed to the same temptation that tripped up their predecessors. In an effort to compensate for slower-than-expected improvements in domestic capacity, they permitted excessive foreign-currency debt, aggravating what economists call the “original sin”: a significant currency mismatch between assets and liabilities, as well as between revenues and debt servicing.

Worse, this debt was underwritten not just by experienced emerging-market investors, but also by “tourist investors” seeking returns above what was available in their home markets. The latter tend to lack sufficient knowledge of the asset class into which they are venturing, and thus are notorious for contributing to price overshoots – both on the way up and the way down.

Undeterred by Argentina’s history of chronic volatility and episodic illiquidity – including eight prior defaults – creditors gobbled up as much debt as the country and its companies would issue, including an oversubscribed 100-year bond that raised $2.75 billion at an interest rate of just 7.9%. In doing so, they drove the yields of Argentine debt well below what economic, financial, and liquidity conditions warranted, which encouraged Argentine entities to issue even more bonds despite the weakening fundamentals.

The search for higher yields has been encouraged by unusually loose monetary policies – ultra-low (and, in the case of the European Central Bank, negative) policy rates and quantitative easing – in advanced economies. Systemically important central banks (the Bank of Japan, the US Federal Reserve, and the ECB) thus have become the latest players in the old Argentine blame game.

Moreover, influenced by years of strong central-bank support for asset markets, investors have been conditioned to expect ample and predictable liquidity – a consistent “common global factor” – to compensate for all sorts of individual credit weaknesses. And this phenomenon has been accentuated by the proliferation of passive investing, with the majority of indices heavily favouring outstanding market values (hence, the more debt an emerging market issues, like Argentina, the higher its weight in many indices becomes).

Then there is the IMF, which readily stepped in once again to assist Argentina when domestic-policy slippages made investors nervous in 2018. So far, Argentina has received $44 billion under the IMF’s largest-ever funding arrangement. Yet, since day one, the IMF’s program has been criticised for its assumptions about Argentina’s growth prospects and its path to longer-term financial viability. As it happens, the same issues plagued the IMF’s previous efforts to Argentina, including in the particularly messy lead-up to the 2001 default.

As in Agatha Christie’s Murder on the Orient Express, almost everyone involved has had a hand in Argentina’s ongoing economic and financial debacle, and all are victims themselves, having suffered reputational harm and, in some cases, financial losses. Yet those costs pale in comparison to what the Argentine people will face if their government does not move quickly – in cooperation with private creditors and the IMF – to reverse the economic and financial deterioration.

Whoever prevails at next month’s presidential election, Argentina’s government must reject the notion that its only choice is between accepting and refusing all demands from the IMF and external creditors. Like Brazil under then-President Luis Inácio Lula da Silva in 2002, Argentina needs to embark on a third path, by developing a homegrown adjustment and reform program that places greater emphasis on protecting the most vulnerable segments of society. With sufficient buy-in from domestic constituencies, such a program would provide an incentive-aligned path for Argentina to pursue its recovery in cooperation with creditors and the IMF.

Given the downturn in the global economy and the rising risk of global financial volatility, there is no time to waste. Everyone with a stake in Argentina has a role to play in preventing a repeat of the depression and disorderly default of the early 2000s. Managing a domestic-led recovery will not be easy, but it is achievable – and far better than the alternatives.

China has invested $20 billion into Kazakhstan’s economy since 1991

epa07834753 Chinese President Xi Jinping and Kazakh President Kassym Jomart Tokayev sign documents during the signing ceremony, part of their meeting at the Great Hall of the People, Beijing, China, 11 September 2019. EPA-EFE/Andrea Verdelli / POOL

While on an official visit to Beijing, Kazakhstan’s President Kassym-Zhomart Tokayev said that China has invested $20 billion into the Central Asia energy giant since the collapse of the Soviet Union in December 1991, making the Chinese government one of Kazakhstan’s largest foreign trade and economic partners.

“In 2018, trade between our countries grew by 11.4% and amounted to $12 billion. Over the years of Independence, China has invested about $20 billion into Kazakhstan. We continue to have an opportunity to further reveal the huge potential of the business and investment partnership of the two countries,” Tokayev said.

Tokayev called on Chinese businessmen to more actively use the stock exchange of the Astana International Financial Center, noting that it is a unique institution for the region where more than 250 companies are already registered.

“We are also interested in creating joint innovative enterprises, technology parks, and IT centres with Chinese companies. An IT technology park known as Astana Hub has opened and is actively developing in such areas as Big Data, the Internet of Things, artificial intelligence, cloud technology, and supercomputers” said Tokayev when discussing Kazakhstan’s participation in China’s “one belt, one road” project.

In the agricultural sphere, Tokayev added, “Kazakhstan is one of the top 10 world exporters of high-quality wheat. Last year, wheat exports to China reached 550,000 tonnes. We could increase these volumes to 2 million tonnes. Export supplies of Kazakh salt to international markets are also increasing. We are ready to supply China with up to 1000,000 tonnes of salt every year. In addition, we are ready to supply dairy products, poultry, beef, lamb, pork, as well as flour, cereals, legumes, and oilseeds to the Chinese market. We intend to increase the production and export of organic food to China.”

During his two-day visit to China, Tokayev also held talks with Chinese President Xi Jinping, Prime Minister Li Keqiang, and other members of the Chinese political elite and members of the country’s business circles.


Major counterfeit currency network taken down in Europol-led operation

epa07829899 Counterfeit money captured by the Criminal Investigation Police (PJ) in Operation Deep Money is diplayed at the Judicial Police Building in Lisbon, Portugal, 09 September 2019. In collaboration with EUROPOL, PJ has uncovered one of the largest European networks for counterfeit currencies. Five people were arrested and more than 1,800 counterfeit 50 and 10 euro banknotes seized. EPA-EFE/MARIO CRUZ

With the support of the EU’s law enforcement agency, the Portuguese Judicial Police dismantled Europe’s second-largest counterfeit currency network on the dark web.

Five individuals have been arrested and 1.833 counterfeit banknotes have been seized in the operation. The banknotes were seized across Europe, notably in France, Germany, Spain and Portugal, worth over € 1.3 million.

During the action day, apart from the financial support, Europol, provided the Portuguese authorities with analytical and operational support.

New EU Commission President wants Green Deal to become Europe’s hallmark

epa07832162 European Commission President-elect Ursula von der Leyen holds a press conference announcing her future team, at the European Commission in Brussels, Belgium, 10 September 2019. Von der Leyen, who will assume office on 01 November 2019, made public the assignments of all the portfolios to the Commissioners-designate (2019-2024). EPA-EFE/OLIVIER HOSLET

Preparing for the Climate Action Summit by the United Nations Secretary-General in New York on 23 September, the European Commission on 11 September adopted a Communication reaffirming the EU’s commitment to accelerated climate ambition.

European Commission President-elect Ursula von der Leyen said on 10 September she wants the European Green Deal to become Europe’s hallmark.

“At the heart of it is our commitment to becoming the world’s first climate-neutral continent. It is also a long-term economic imperative: those who act first and fastest will be the ones who grasp the opportunities from the ecological transition. I want Europe to be the front-runner,” she said.

The incoming Commission President said her team “will take bold action against climate change.”

European Commission Executive Vice-President Frans Timmermans from the Netherlands will coordinate the work on the European Green Deal, the Commission said in a press release adding that he will also manage climate action policy, supported by the Directorate-General for Climate Action.

Kadri Simson from Estonia will be in charge of the Energy portfolio.

The European Commission reminded that the EU has put concrete actions behind its Paris Agreement commitments, in line with the Juncker Commission priority of establishing an Energy Union with a forward-looking climate change policy.

Meanwhile, European Commission Vice-President for the Energy Union Maroš Šefčovič noted on 11 September that for the first time, with the Paris Agreement, all parties committed to reducing emissions.

“Now we must make sure these reductions are timely enough to avoid the worst of the climate crisis. The European Union will bring to New York the fruit of our work on the Energy Union: a realistic perspective of a climate-neutral Europe by 2050, backed by ambitious policies set in binding legislation. The EU has ensured that all sectors contribute to the transition. At the Climate Action Summit, we hope our plans will inspire other countries, and we hope to be inspired. Our message is simple: Europe delivers,” Šefčovič said.

For his part, Climate Action and energy, Miguel Arias Cañete said on 11 September the EU “has a powerful story to tell at the UN Climate Summit” later in September. “We are a global climate leader and our climate action is an outstanding example of delivery, including in the context of our Long Term Strategy process. The EU’s approach is to ensure that climate ambition is not only about headline targets, but about actual delivery on our promises, about making sure that objectives will be fulfilled and emissions reductions will happen,” he said.

According to the special Eurobarometer published on 11 September, Cañete said, 92% of Europeans support making the EU climate-neutral by 2050. “As shown by the EU-wide survey published today, our approach has a very strong mandate from our citizens. I am proud to share these messages also in New York,” he said.

The European Commission presented its vision for a prosperous, modern, competitive and climate neutral economy in November 2018 and a large majority of member states endorsed this vision in June 2019.

EU steps up support to prevent radicalisation in Central Asia

epa05659252 Uzbek woman casts her ballot at a polling during presidential election in Tashkent, Uzbekistan, 04 December 2016. Uzbekistan is to elect a new President after the death of Islam Karimov, who served as head of the state since the fall of the Soviet Union in 1991. EPA/RASHID KARAMURZAYEV POOL PHOTO

The European Commission has announced on 11 September that it has mobilised, through the Instrument contributing to Stability and Peace, an additional €4 million to support the media, civil society organisations, and public activities for the citizens of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan to prevent violent extremism and to counter religious radicalisation.

The new projects will contribute to fighting disinformation, and increase the local populations’ political and civil awareness through the training of local journalists, activists, and press officers to produce high-quality content.

The support will coordinate its collaboration with the US-based NGO Internews to promote regional collaboration in Central Asia’s five former Soviet republics.

EIB to invest in social housing, clean energy and transport across Europe

epa06896181 European Investment Bank (EIB) President Werner Hoyer (L) and European Commission President Jean-Claude Juncker (R) give a joint news conference at the end of a meeting at the European Commission in Brussels, Belgium, 18 July 2018. They announced that the Juncker plan exceeds its initial target of 315 billion euros of investment. EPA-EFE/STEPHANIE LECOCQ

The European Investment Bank has agreed on 11 September €7 billion of new financing, that includes support for new investment to improve social housing, clean energy and sustainable transport, telecommunications, health and education.

The EIB Board of Directors met in the Croatian capital, Zagreb, ahead of the Croatian Presidency of the EU, and approved €150 million of new support for agriculture, tourism and manufacturing investment by companies across Croatia.

More than €1.4 billion of new financing were approved for transport investment, €630 million for social housing investment in France, Germany, Poland and Sweden, as well as €2.8 billion backing for private sector investment, through both direct financing and credit lines with local banks.

The ten projects approved by the EIB board will be guaranteed by the European Fund for Strategic Investments, the financial pillar of the Juncker plan.

Should we worry about income gaps within or between countries?

epaselect epa07751572 Syrian refugee seasonal workers cut tomatoes to dry them in the sun in Izmir, Turkey, 01 August 2019. According to the Aegean Exporters Association, more than 60,000 tons of sun dried tomatoes from the Aegean coast in Turkey will be exported to Europe and the USA in 2019. The seasonal workers, most of whom are Syrian refugees, cut the tomatoes in half and lay them out on a white sheet on top of the soil. The fruits are then salted and left to dry under the sun for around a week, before being collected and brought to cold storage. The drying process is carried out entirely by natural means. EPA-EFE/ERDEM SAHIN ATTENTION: This Image is part of a PHOTO SET

At the beginning of classes every autumn, I tease my students with the following question: Is it better to be poor in a rich country or rich in a poor country? The question typically invites considerable and inconclusive debate. But we can devise a more structured and limited version of the question, for which there is a definitive answer.

Let’s narrow the focus to incomes and assume that people care only about their own consumption levels (disregarding inequality and other social conditions). “Rich” and “poor” are those in the top and bottom 5% of the income distribution, respectively. In a typical rich country, the poorest 5% of the population receive around 1% of national income. Data are a lot sparser for poor countries, but it would not be too much off the mark to assume that the richest 5% there receive 25% of national income.

Similarly, let’s assume that rich and poor countries are those in the top and bottom 5% of all countries, ranked by per capita income. In a typical poor country (such as Liberia or Niger), that is around $1,000, compared to $65,000 in a typical rich country (say, Switzerland or Norway). (These incomes are adjusted for cost-of-living, or purchasing-power, differentials so that they can be directly compared.)

Now, we can calculate that a rich person in a poor country has an income of $5,000 ($1,000 x 0.25 x 20) while a poor person in a rich country earns $13,000 ($65,000 x 0.01 x 20). Measured by material living standards, a poor person in a rich country is more than twice as well off as a rich person in a poor country.

This result surprises my students; most of them expect the reverse to be true. When they think of wealthy individuals in poor countries, they imagine tycoons living in mansions with a retinue of servants and a fleet of expensive cars. But while such individuals certainly exist, a representative of the top 5% in very poor countries is likely to be a mid-level government bureaucrat.

The larger point of this comparison is to underscore the importance of income differences across countries, relative to inequalities within countries. At the dawn of modern economic growth, before the Industrial Revolution, global inequality derived almost exclusively from inequality within countries. Income gaps between Europe and poorer parts of the world were small. But as the West developed in the nineteenth century, the world economy underwent a “great divergence” between the industrial core and the primary-goods-producing periphery. During much of the postwar period, income gaps between rich and poor countries accounted for the greater part of global inequality.

From the late 1980s on, two trends began to alter this picture. First, led by China, many parts of the lagging regions began to experience substantially faster economic growth than the world’s rich countries. For the first time in history, the typical developing-country resident was getting richer at a faster pace than his or her counterparts in Europe and North America.

Second, inequalities began to increase in many advanced economies, especially those with less-regulated labour markets and weak social protections. The rise in inequality in the United States has been so sharp that it is no longer clear that the standard of living of the American “poor” is higher than that of the “rich” in the poorest countries (with rich and poor defined as above).

These two trends went in offsetting directions in terms of overall global inequality – one decreased it while the other increased it. But they have both raised the share of within-country inequality in the total, reversing an uninterrupted trend observed since the nineteenth century.

Given patchy data, we cannot be certain about the respective shares of within- and between-country inequality in today’s world economy. But in an unpublished paper based on data from the World Inequality Database, Lucas Chancel of the Paris School of Economics estimates that as much as three-quarters of current global inequality may be due to within-country inequality. Historical estimates by two other French economists, François Bourguignon and Christian Morrison, suggest that within-country inequality has not loomed so large since the late nineteenth century.

These estimates, if correct, suggest that the world economy has crossed an important threshold, requiring us to revisit policy priorities. For a long time, economists like me have been telling the world that the most effective way to reduce global income disparities would be to accelerate economic growth in low-income countries. Cosmopolitans in rich countries – typically the wealthy and skilled professionals – could claim to hold the high moral ground when they downplayed the concerns of those complaining about domestic inequality.

But the rise of populist nationalism throughout the West has been fueled partly by the tension between the objectives of equity in rich countries and higher living standards in poor countries. Advanced economies’ increased trade with low-income countries has contributed to domestic wage inequality. And probably the single best way to raise incomes in the rest of the world would be to allow a massive influx of workers from poor countries into rich countries’ labour markets. That would not be good news for less educated, lower-paid rich-country workers.

Yet advanced-economy policies that emphasize domestic equity need not be harmful to the global poor, even in international trade. Economic policies that lift incomes at the bottom of the labour market and diminish economic insecurity are good both for domestic equity and for the maintenance of a healthy world economy that provides poor economies with a chance to develop.

NATO hopes for stronger partnership with Sweden

epa06204278 Armoured troops from Skaraborg's Swedish regiments is practice with a US-enhanced armored gun company as part of the preparations for Aurora 17 field exercise in Skovde, Sweden, 14 September 2017. Swedish military conducts its largest joint field exercise with NATO in 20 years. EPA-EFE/Bjorn Larsson Rosvall/TT SWEDEN OUT

Rose Gottemoeller, NATO’s deputy secretary-general, said during a visit to Stockholm that the Western alliance hoped to deepen its strong partnership with Sweden when it comes to security issues, NATO-EU cooperation, and combatting Russia’s hybrid warfare campaign.

During a meeting with Defence Minister Peter Hultqvist, she praised Sweden’s contributions to international security, including sending contingents on NATO missions in Afghanistan, Kosovo, and Iraq, as well as the Swedish military’s participation in NATO security exercises in the Baltic Sea.

During her time in Stockholm, Gottemoeller also visited the Nordic Centre for Gender in Military Operations, and the Swedish Armed Forces International Centre, where she met with the Supreme Commander of the Swedish Armed Forces, General Micael Bydén.

Sweden’s role

Unlike most of Western Europe, non-NATO members Sweden and Finland have maintained strong national defence forces since the end of the Cold War 30 years ago. As the rest of Europe consciously downsized their armed forces to small all-volunteer militaries that are poorly suited to the concept of territorial defence, Sweden and Finland continued to maintain and develop advanced territorial defence capabilities as well as enhanced bilateral cooperation agendas, while also bolstering their ties with NATO.

In the case of the former, Sweden’s armed forces are able to deploy significant maritime and air warfare forces in a crisis situation, both of which are critical to maintaining a strategic balance in the Baltic Sea in the face of a more aggressive military posture from Russia.

EU continues to lead the global fight against climate change

epa07017579 A lake of molten ice from the Rhone Glacier is pictured prior to a visit of the micro organism sample collection site of the Center for Changing Alpine and Polar Environments of the Ecole Polytechnique Federale de Lausanne (EPFL) in Obergoms, Switzerland, 13 September 2018. By collecting and analyzing micro organisms from some of the world's biggest glacier-fed streams in the upcoming years, the team of EPFL scientists aims to understand how the microbial life has adapted to extreme environments, additionally allowing to unravel some of the implications of vanishing glaciers as a result of climate change. EPA-EFE/VALENTIN FLAURAUD PICTURE TAKEN WITH A DRONE

The European Commission adopted on 11 September a Communication reaffirming the EU’s commitment to accelerated climate ambition.

The EU has put concrete actions behind its Paris Agreement commitments, in line with the Juncker Commission priority of establishing an Energy Union with a forward-looking climate change policy. The Union is successfully transitioning towards a low emissions economy, with a view to reach climate neutrality by 2050. Under the Paris Agreement, all parties have to present a long-term strategy by 2020.

According to the latest special Eurobarometer study on climate change, 93% of Europeans believe that climate change is a serious problem, and 92% of them supported making the EU climate-neutral by 2050.

EIB to support development of Europe’s space technology

Arianespace's Ariane 5 lifts off from the launch zone at Europe's spaceport in Kouru, French Guyana, 14 August 2007, carrying the dual-satellite payload of SPACEWAY 3 and BSAT-3a into geostationary transfer orbit. SPACEWAY 3 was lofted by Arianespace for US-based Hughes Network Systems, LLC, while BSAT-3a was booked by Lockheed Martin Commercial Satellite Systems as part a turnkey contract with Japan's Broadcasting Satellite System Corporation (B-SAT). EPA/ARIANESPACE HANDOUT EDITORIAL USE ONLY

During the 15th anniversary celebrations for the European Global Navigation Satellite Systems Agency on 10 September, the European Investment Bank, and the GSA signed an agreement to cooperate on supporting investment in the European space-based service economy.

The objective is to create high-skill jobs in the EU by supporting innovative companies and accelerate the development of new applications that use European global navigation satellite systems and earth observation data.

The global space economy has been evolving rapidly in recent years, a growth that has been partially driven by the United States and China as well as other countries that have highly developed new space missions.

According to a recent study on the future of the EU’s space sector, European space entrepreneurs feel there is a lack of financing sources and tend to seek private capital outside the EU, particularly from the United States.

In this context, European public innovation instruments play an essential role in unlocking private capital for the space sector.

Mogherini visits Cuba

epa06888890 Federica Mogherini, High Representative of the European Union for Foreign Affairs and Security Policy, speaks to media prior to her departure from Mitiga International Airport in Tripoli, Libya, 14 July 2018. Mogherini is on a one-day trip to Libya to inaugurate the premises of the European Union Delegation to Libya and the EU border assistance mission in Tripoli. EPA-EFE/STR

Federica Mogherini, the European Union’s foreign affairs chief, wrapped up her official visit to Cuba, where she co-chaired the second EU-Cuba Joint Council on 9 September with Cuba’s Minister for Foreign Affairs Bruno Rodríguez.

At the meeting, Mogherini and Rodríguez discussed how to continue with the implementation of the two sides joint Political Dialogue and Cooperation Agreement that was first signed in 2017.

While in Cuba, Mogherini met with representatives of civil society, entrepreneurs, and European business leaders to discuss trade and economic cooperation, including measures to protect EU companies who are doing business with the Communist-controlled island nation.

British economy shows resilience despite political volatility

epa05590096 A one euro coin pictured on top a of 5 pound note, London, Britain, 13 October 2016. EPA/FACUNDO ARRIZABALAGA

While the prospect of a no-deal Brexit looking likely, the UK economy is still showing signs of resilience.

The Pound Sterling has rebounded in view of surprisingly strong growth and increased optimism that a no-deal Brexit can be averted. On 10 September, the Governor of the Bank of England Mark Carney compared the pound’s volatility to emerging market currencies.

Economic output in July was 0.3% higher than in June, according to the UK’s Office for National Statistics. That was an unexpectedly strong bounce back, compared to the 0.2% contraction from April to June, when companies stopped stockpiling.

The economy continues to be driven by the service sector – which accounts for about 80% of Britain’s economy – while manufacturing output remains sluggish. There is some evidence that firms are restarting the stockpiling process in anticipation of a higher no-deal Brexit possibility, but it is difficult to know what is the real economic effect of the current political impasse will be on the real economy.

Meanwhile, earnings excluding bonuses continued to surge at an estimated annual pace of 3.8% from May to July, down slightly from the previous reading, while unemployment remains at the historically low level of 3.8%.

Poverty level drops to 18-year low in US

epa06876629 BMW motor vehicles sit in on a sales lot in Peabody, Massachusetts, USA 09 July 2018. United States President Trump has recently threatened to impose a tariff on European Car makers, and the German car manufacturer responded that such a tariff would put the jobs of 8,000 US employees in South Carolina at risk. EPA-EFE/CJ GUNTHER

The US poverty rate is at the lowest it has been since 2001 and middle-class income has hit a historical high, the Census Bureau reported.

In 2018, 11.8% of Americans lived under the poverty line just slightly higher than the 11.7% in 2001, prior to the 9/11 terrorist attacks in New York, Washington, and Pennsylvania.

The median US income for last year was $63,000, a boost that has come from record levels of employment, often adding a second wage in households. The positive numbers, however, also point to the fact that household income has just modestly surpassed that of 2007, more than a decade after the start of the global financial crisis.

From 2017 to 2018 the American economy added 2 million people to the ranks of those without medical insurance, the first rise in the uninsured population since former President Barack Obama’s 2010 Affordable Care Act. A total of 27.5 million of 330 million Americans are believed to be without any medical insurance.

The uninsured rate rose to 8.5%, which is approximately half the rate of 2010 (16.5%). From 2011 to 2017, an average of 400,000 Americans gained access to health insurance cover.

In an electoral year, the hike in the number of the uninsured adds to the general climate of political polarisation. Republicans have argued that Affordable Care Act, known colloquially as ‘Obamacare’, was always flawed and its influence is waning, while Democrats state that defunding and dismantling the plan is adversely affecting the public’s health.

Republicans have said that Obamacare caused insurance premiums to surge, pushing people off the market unless they qualify for federal subsidies. The counter-argument from the Democrats is that that the major tax cuts for higher incomes, which was adopted by a Republican-led Congress at the end of 2017, eliminated financial penalties for those who fail to take health insurance and removed the motivation for low-pay employees to contribute part of their salaries to be insured.

The EU rethinks the Fiscal Compact

epa07546895 European flags in front of the European Commission during an 'Open Day' for the public to visit the EU Commission headquarters in Brussels, Belgium, 04 May 2019. EU institutions in Brussels opened their doors to the public on 04 May to celebrate 'Europe Day'. EPA-EFE/STEPHANIE LECOCQ

It appears that the consensus over a fiscally tight, export-driven EU economy is contested. The Finnish Council Presidency will table a proposal for the review of the fiscal compact on Saturday’s Eurogroup, Reuters reports.

According to a leaked document, the European Central Bank’s quantitative easing program has averted the unravelling of the eurozone but has in-itself failed to bolster growth. The document is in line with European Fiscal Board recommendations, making the case for a review of the rules that require states to keep deficits below 3% of GDP and aim towards a 60% debt-to-GDP ratio.

Calls to revise the Fiscal Compact will not necessarily consolidate a North-South political divide, which already exists.

As Germany is on the brink of recession, attitudes towards fiscal discipline are changing. The biggest economy in the EU contracted by 0.1% in the second quarter and data suggests the country will post negative growth in the third, officially entering a technical recession for the first time since 2013. In Germany, one in five jobs is dependent on exports, which are now suffering due to the Sino-American trade war, while the threats of US tariffs and a disorderly Brexit also weigh on business confidence.

Given negative bond yields for bonds issues of up to 30-year maturity, Germany is considering a policy turn towards public investment to counterbalance a nosedive in exports. The country maintained the biggest trade surplus in the world for more than five years and now has the fiscal space for a significant turn to domestic consumption.

Germany is ready to pump “many, many billions of euros” into its economy to counter any significant slowdown in growth and fight climate change, Finance Minister Olaf Scholz told parliament on Tuesday.

“We will not get away with small measures,” Scholz added, underscoring the need for investment in a transition to a low-carbon economy.

The banner of sustainability is also seen as a legitimating narrative that can justify the political U-turn of fiscal conservatives, not least the German Christian Democrats. Chancellor Angela Markel and SPD Environment Minister Svenja Schulze are expected to announce a bold climate package investment package on September 20. This will include a wider pricing mechanism for carbon emissions and payouts for low-income families to cushion the impact of the new measures. The package will be complete with a €5bn investment fund, extending interest-free loans for environmental protection projects.

The appointment of Italy’s prime minister Paolo Gentiloni as Commissioner for Economic and Financial Affairs is seen as a signal towards policy change.

In his acceptance speech, Gentiloni was clear about his intentions: “I thank President Ursula Von der Leyen for the position she has assigned me in the new Commission,” Gentiloni said, adding that he will work “above al to contribute to boosting growth and social and environmental sustainability of that growth. ”

Meanwhile, the second Giuseppe Conte government in Italy is planning an expansionary budget, which at least in part will be deficit-financed. The budget deficit planned will be approximately 2,3% of GDP, compared to a projected 2,04% deficit this year.

Above all, the Conte government wants to avoid a scheduled VAT hike from 22% to 25,2%. On Tuesday, Conte was explicit in his call for fiscal compact reform. “We want to review the Stability and Growth Pact so that EU rules help growth and sustainable development,” Conte said in an address to the Senate.

There is not as yet a policy consensus. Austrian chancellor Sebastian Kurz Twitted on Monday that EU deficit rules should be toughened rather than loosened.

UK summons Iranian ambassador over Adrian Darya 1 oil delivery

epa07779717 View of the Iranian oil tanker Grace 1 anchored off Gibraltar, southern Spain, 18 August 2019. The ship prepares to depart from Gibraltar, after authorities denied the US request of seizing the ship and its cargo. According to reports, Iran's ambassador to the UK Hamid Baeidinejad said on 18 August that Iran renamed Grace 1 to 'Adrian Darya', to conform to international laws. The oil tanker was held on 04 July on the suspicion it was transporting crude oil to a refinery in Syria against EU sanctions. EPA-EFE/A. CARRASCO RAGEL

After weeks of controversy surrounding an Iranian oil tanker, Britain summoned the Islamic Republic’s ambassador to protest a clear breach of the assurances that were given by Tehran in August that the oil cargo of the Adrian Darya 1 would not be delivered to Syria.

“Iran has shown a complete disregard for its own assurances over the Adrian Darya 1,” UK Foreign Minister Dominic Raab said in a statement, adding, “The sale of oil to a brutal regime is part of a pattern of behaviour by the Government of Iran that is designed to disrupt regional security. We want Iran to come in from the cold, but the only way to do that is to keep its word and comply with the rules-based international system.”

The Adrian Darya 1, formerly named the Grace 1, was seized by Royal Marine commandos on 4 July after British intelligence determined that the vessel was attempting to violate an international embargo against the Iranian and Russian-backed regime of Syrian dictator Bashar al-Assad.

Gibraltar, the British Overseas Territory located between Spain and Morocco, released the ship on 15 August after receiving formal written assurances from Tehran that it would not discharge its 2.1 million barrels of oil in Syria.

Following the vessel’s release, the US warned any state against assisting the ship, saying it would consider that support, including allowing the Adrian Darya 1 to dock in a port, as aiding and abetting Iran’s Islamic Revolutionary Guard Corps, a group that has been designated as a terrorist organisation.

The Americans’ warning is part of an overall strategy to bring Iran to heel after the Trump administration withdrew from the 2015 nuclear deal between Tehran and the between Iran and the P5+1 (the five permanent members of the United Nations Security Council—China, France, Russia, United Kingdom, United States, and Germany) after the Islamic Republic continued to act as the main sponsor of terrorist organisations in Lebanon, Gaza, Iraq, and Yemen.

Britain said that its condemnation of Iran’s actions would also be raised at the United Nations later this month.

In response to the UK’s decision to formally condemn Iran’s actions, a spokeswoman for the US State Department said, “As we have warned all along, the Iranian regime has once again reneged on its assurances to the international community about its intentions to transport illicit oil to the murderous Assad regime.”

Tehran under pressure for centrifuge installation

Iran’s theocratic government came under further scrutiny on 9 September following a report by the International Atomic Energy Agency which confirmed that the Islamic Republic had installed advanced next-generation IR-4, IR-5 and IR-6 centrifuges, moving the regime a step closer to producing enriched uranium, a move that would see it openly breach the 2015 nuclear deal.

The Iranian government has openly attempted to strongarm Europe into saving the nuclear deal, known officially as the Joint Comprehensive Plan of Action, by demanding that the EU stick to their economic commitments of the agreement, despite the new round of American sanctions that could automatically target European businesses if they continue to do business with Iran.

Despite the complications that the Adrian Darya 1 case presents for the Islamic Republic, Tehran is optimistic that Europe, either through the Paris-based INSTEX special purpose vehicle or another sanctions-busting mechanism, will help Iran continue to have access to the international oil market.

Draghi’s dangerous farewell

epa07739770 Mario Draghi, President of the European Central Bank (ECB), speaks during a press conference following a meeting of the Governing Council of the European Central Bank, in Frankfurt am Main, Germany, 25 July 2019. The ECB is expected to publish its decisions on monetary policies, including the monthly interest rate. EPA-EFE/RONALD WITTEK

Mario Draghi risks deepening the eurozone’s problems in the final weeks of his eight-year term as president of the European Central Bank. He has promised that the ECB will reduce interest rates further to spur the Eurozone economy. But policymakers have room for only modest rate cuts, which will do little to boost growth – and will put potentially intolerable pressure on the Eurozone’s fragile banks.

Back in June, Draghi said that the ECB was preparing a new dose of stimulus, including further reductions of its policy interest rate and a renewal of quantitative easing (QE) through purchases of government bonds. And he continued to call for “a significant degree of monetary stimulus” following the ECB Governing Council’s most recent meeting on July 25.

More recently, Christine Lagarde, who is due to succeed Draghi as ECB president on November 1, said the central bank “has a broad tool kit at its disposal and must stand ready to act.” Likewise, Olli Rehn, governor of Finland’s central bank and a member of the ECB’s Governing Council, called for “substantial and sufficient” action. Financial markets thus expect aggressive “big-bang” measures from the ECB at the council’s next meeting on 12 September.

The risk now is that the ECB’s measures fall well short of expectations. Governing Council member Jens Weidmann, the president of Germany’s Bundesbank, says the Eurozone does not need monetary stimulus. The council’s other German member, Sabine Lautenschläger, recently said that “it is much too early for a huge package.” There is no risk of deflation, she added, and hence no need for more QE. Klaas Knot, the president of the Dutch central bank, shares this view.

The ECB is not a normal central bank. It serves a confederation of countries – a Europe of nation-states – and conflicting interests are embedded in its decision-making. This results in delays and half-measures.

For example, the ECB postponed introducing much-needed QE for two and a half years before finally doing so in January 2015. By then, Eurozone inflation had fallen to about 1%, and, despite the ECB’s massive four-year QE program, which ran until December 2018, inflation remains at that low level.

While pursuing QE, the ECB regularly projected that inflation would rise back to its target of “below, but close to” 2%. But, because policymakers constantly threatened to end QE, markets inferred that the ECB was not committed to a sustained stimulus. The euro-dollar exchange rate thus barely moved; in fact, the euro appreciated against a basket of major currencies. Eurozone inflation became “de-anchored” from monetary-policy decisions. The ECB then declared victory and prematurely withdrew QE just as the eurozone economy was slowing down.

The clash of interests among eurozone member states is straightforward. Until recently, inflation in Germany had been around 1.5% per year; in France and Italy, it has been closer to 0.6% (see Figure 1). Lautenschläger is right that Germany is nowhere near deflation, but one more downward shock could push the French and Italian economies there.

The real (inflation-adjusted) interest rate in Germany is about -1.5%; in Italy, it has been 1-2%. The “significant and impactful” stimulus that Rehn advocates will require pushing interest rates deep into negative territory in Italy and other southern Eurozone members with very slow productivity growth.

Even if pushing interest rates deep into negative territory were technically possible, there are political limits to the scope of further QE. For starters, the ECB already holds around 25% of the bonds issued by eurozone governments. Northern Eurozone members will be reluctant to buy more Italian government bonds, fearing that they would share the losses if Italy were to default. The alternative of channelling more cheap ECB credits to banks will, as before, prop up “zombie” Italian and Spanish borrowers struggling to repay their debts.

And, as Germany’s population ages, returns on savings have become a major economic and political issue – giving German policymakers another reason to oppose further reduction of interest rates.

But perhaps the strongest argument against further easing is its likely effect on the Eurozone’s banks. When the ECB lowers its policy interest rates, commercial banks need to reduce the rates they charge on their loans, but cutting their deposit rates is much harder. Hence, banks’ profits shrink. And bank profitability in the Eurozone is already abysmally low because the entire area is overbanked.

The squeeze on profits has intensified as Eurozone growth has slowed to a crawl, with some countries now close to recession. Eurozone banks’ market-to-book-value ratios have fallen steadily since early 2018 and now range between 0.4 and 0.6 – well below those of their US peers (see Figure 2). Markets are saying that Eurozone banks’ profitability prospects are very weak and that their assets may be worth much less than the banks believe. Thus, even a modest ECB-induced decline in interest rates will cause significant damage to their balance sheets. And any perception that some governments may need to bail out their country’s banks could tip them into the dreaded “sovereign-bank doom loop.”

The ECB can do little good at this point, but it could cause great harm. Further monetary stimulus will either amount to less than anticipated or will not be sustained. Yet, the domino effects of a perfunctory and ill-conceived stimulus effort could undermine the Eurozone’s financial system and public finances in far-reaching ways.

Draghi, on his way out, wants to leave with one last triumph. But in his eagerness to act when the ECB has no good policy options left, he risks tarnishing his legacy.

Ursula von der Leyen’s to-do list

epa07832175 European Commission President-elect Ursula von der Leyen holds a press conference announcing her future team, at the European Commission in Brussels, Belgium, 10 September 2019. Von der Leyen, who will assume office on 01 November 2019, made public the assignments of all the portfolios to the Commissioners-designate (2019-2024). EPA-EFE/OLIVIER HOSLET

When Jean-Claude Juncker became European Commission President five years ago, he confronted formidable challenges. But the test faced by his successor, Ursula von der Leyen, is even more complex.

As von der Leyen underscored in her “agenda for Europe,” one of her top priorities must be to carry out “a new push for European democracy.” She can strengthen the European Union’s democratic legitimacy in two ways: on the output side, by making sure that the EU delivers on citizens’ expectations at a time of rapid change and escalating external challenges, and on the input side, by fostering constructive cooperation with the European Parliament.

Yet, today, the European Parliament is highly fragmented and polarised, making a stable, pro-European coalition difficult to build. In order to pass legislation, von der Leyen will need the support of the Conservatives and Social Democrats, as well as robust and productive working relationships with the Greens and the Liberals. She will probably have to form flexible coalitions in specific areas, which will be time-consuming and increases the risk of political failure on contentious issues.

After the recent elections, for the first time in the European Parliament’s history, pro-European factions – the conservative European People’s Party, the Social Democrats, the Greens, and the Liberals – met to create a cross-party political program. But the process stalled, as the Parliament could not agree on its own candidate for the office of Commission President, and a four-party “coalition agreement” is no longer on the table.

Von der Leyen should nonetheless engage the Parliament politically as much as she can, beginning with the priorities included in the mission letters that she will send to commissioners. These priorities should be shaped by discussions with the newly elected chairs of the parliamentary groups.

Fostering constructive cooperation with the European Parliament will require the credible implementation of a de facto right of initiative for the Parliament, regular dialogue with the President, and the enduring commitment of every single commissioner. Von der Leyen must be able to rely on her team to help her navigate the complex political environment not only in the Parliament, but also in the European Council, and to guide her efforts to engage the European public in a debate on the EU’s future.

That is why von der Leyen must ensure that when tailoring the commissioners’ portfolios, inter-institutional relations are given sufficient weight. In the previous Commission, Vice President Frans Timmermans handled such relations as part of his vast portfolio. In the new Commission, inter-institutional relations – together with democratisation – should form a commissioner’s full portfolio.

That commissioner’s task would be hugely important, and thus should be undertaken by an experienced policymaker – ideally someone who has worked at the national and European levels, in the European Parliament and with the Council. Given von der Leyen’s party affiliation, a Social Democrat would be a good choice, though whoever is chosen would need to be able to work across party lines.

Working directly with von der Leyen and the Commission’s vice presidents, this commissioner should manage overall relations with the European Parliament and the General Affairs Council, while also helping to coordinate each individual commissioner’s interactions with the Parliament. This portfolio would include preparation of the Commission’s annual and pluri-annual programs and, in particular, its joint declaration with the Parliament on annual legislative priorities.

Moreover, given the portfolio’s lack of policy specialisation, this commissioner could support von der Leyen in handling particularly urgent, controversial, or otherwise delicate issues – such as migration or Eurozone reform – that require extra political effort to enable progress. Such a commissioner could also ensure that actions in internal and external policy areas – from the common foreign and security policy to engagement with Europe’s broader neighbourhood – are coherent.

Finally, this commissioner would play an important role in helping to implement one of the priorities von der Leyen has outlined in her agenda: the Conference on the Future of Europe, which is supposed to deliver results as early as next summer. This ambitious endeavour – in which the public, civil society, and European institutions will participate on an equal footing – will require careful preparation and stewardship, not least because von der Leyen wants the European Parliament, Council, and Commission jointly to define its goals and scope in advance.

In this and other areas, the stakes are higher for both the Commission and the Parliament than they were during the previous term. Delivering the tangible results that citizens are demanding will require leaders to master rapidly changing policymaking conditions, characterised by rising internal EU scepticism and intensifying external pressure, including interference from outside actors like China. Transformative technological change and monumental threats like climate change compound the challenge.

In this context, the European Commission and the Parliament should be more motivated than ever to cooperate. This should include annual reviews of priorities by the Commission, in collaboration with the Parliament, to assess progress and identify necessary action.

Such a process has become all the more important at a time when EU member governments are losing patience with supranational decision-making. Unless EU institutions prove themselves, member governments may be tempted to circumvent them and cooperate within smaller groups, for the sake of efficiency.

Ensuring effective cooperation with a fragmented European Parliament will not be easy. But it is possible, especially for a Commission that places the highest priority on doing so, while enhancing its own legitimacy by leading a broad public debate on Europe’s future. That is the Commission von der Leyen must build.

KMG International will expand its network of petrol stations in the Balkans

The foreign subsidiary of Kazakhstan’s national oil and gas company KazMunayGas (KMG International) will expand its network of petrol stations in the Balkans.
“We plan to increase the market share in the retail segment from 16% to 25% in Romania; from 3% to 15% in Bulgaria; and from 23% to 25%” in Moldova,” the company’s Director for International Projects Azamat Zhangulov told reporters during a press tour in Romania.
KMG’s management was able to increase the annual processing capacity of Romania’s Petromidia refinery from 3.8 million to 5 million tonnes after a comprehensive modernisation overhaul that took place between 2009-2012.
The management of KMG International also announced the launch of a power plant at  Petromidia facility, which will provide electricity not only to the refinery but also for nearby Navodari, an industrial city of 32,000 people located near the plant.
KMG’s are the latest of the company’s investments into the region, which began with its acquisition of Romania’s Rompetrol in 2007. The purchase gave KazMunayGas direct access to the Black Sea region with a sales market of 300 million people.

Oil production in Kazakhstan amounted to 90.3 million tonnes in 2018. The former Soviet Central Asian republic plans to increase oil production from 90 million tonnes in 2020 to 100 million tonnes by 2024. According to KMG, about 65 million tonnes of Kazakhstan’s oil will be exported to the Black Sea region via the CPC system and sea-based tankers.

Increasing the output volumes were part of the prerequisite for the purchase of Rompetrol assets by KMG.

UN, NATO welcome prisoner swap between Russia and Ukraine

epaselect epa07825129 Relatives and journalists meet Ukrainian film director Oleg Sentsov (C), after the plane with freed prisoners landed in Boryspil International Airport near of Kiev, Ukraine, 07 September 2019. The 35 political prisoners and Ukrainian sailors were freed during Russia-Ukraine prisoner swap 35x35. The swap list includes 24 sailors captured by Russia in the Kerch Strait, and 11 more convicts, including Ukrainian film director Sentsov, as local media report. EPA-EFE/SERGEY DOLZHENKO

More than five years after war broke out be Russia and Ukraine, the two former Soviet republics made a tentative move towards ending the fighting after exchanging 70 prisoners – 35 from each side – a development that has been widely hailed by the international community as a significant step towards easing tensions between the two countries.

United Nations’ chief António Guterres, welcomed the exchange and praised all those who brought this to fruition, including Ukraine’s new President Volodymyr Zelensky and Russia’s Vladimir Putin.

“We welcome the new that the Ukrainian sailors who seized by Russia last November are finally back home, as well as the film-maker Oleg Sentsov. This is a step in the right direction. NATO continues to call on Russia to fulfil all its obligations under the Minsk Agreements, including the release of all prisoners,” a NATO spokesperson said.

Sentsov, a well-known director in the Russian-speaking world, was arrested by Moscow’s intelligence service, the FSB, in his native Crimea following Russia’s forced annexation of the Black Sea region in 2014 and sentenced to 20 years’ imprisonment by a Russian court on trumped-up charges of plotting terrorist acts.

In November 2018, three Ukrainian naval vessels attempting to pass from the Black Sea into the Sea of Azov through the Kerch Strait on their way to the Ukrainian port city of Mariupol. Russian naval vessels fired upon and seized the Ukrainian ships in international waters off the coast of Crimea and took 24 Ukrainian sailors prisoner.