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EastWest 66

OPEC on the brink in these troubled times

The new Saudi leadership could decide to put it out to pasture.

POINT OF VIEW – An olive branch for Moscow

Detente between the West and Moscow is required and delays will fuel dangerous hotbeds that may get out of control. The EU must take a stand that it hasn’t managed or fears to take. If we’d been asked a few years ago about  I  the kind of future we had envisioned for  the European Union, most of us would  have probably advocated for the “ever  closer union among the peoples and member states” outlined in the Solemn Declaration on European Union as well as an  extension of that principle, possibly linking  the EU to Turkey and also strengthening its  relationship to Russia. But time and stark realities have conspired to undermine the likelihood of such developments.  This is unfortunate for Turkey, which  from a geographical point of view is only European to a very minor extent and is anything but European from a historical and  religious perspective. But the recent refugee  crisis along the Balkan route has initiated a  quantum leap in EU-Turkey relations that  has been going far beyond what might have  been thought possible in less fraught times.  Meanwhile, the bitter discord that has  From time to time, this overlap has exacerbated tensions with instances of brinkman- ship such as the downing of a Russian plane  been smouldering between Moscow and  Brussels is a much more serious and complex issue. Luckily, for the time being at  least, both Russia and the EU appear to be  aware of the complementary and even essential roles they play for each other in  certain sectors.  A further complication in this web of relations is posed by NATO, which is not part  of the European Union but which contains a  European pillar whose members for the  most part coincide with those of the Union.  by the Turks and more recently Russian  fighters buzzing American ships in the Baltic  sea. As things stand, there is only one reasonable assessment when looking at the  current state of affairs: relations between  Europe and Russia are at their lowest ebb in  the last 25 years. And there is nothing to be  gained from trying to assign blame for the  current state of affairs.  Half of Europe is caught up in a paranoid  fervour, fearing the return of Russian military offensives. Meanwhile Moscow, with  equally fervent paranoia, continually balks at  the idea of sharing its European border with  NATO. In the absence of reason, a clash of  the two risks generating real-world night- mares, as has already been the case in  Ukraine. But it is also becoming increasingly  obvious that the West, the European Union  and Italy would stand to gain a great deal  from improved relations with Moscow.  From a political perspective, the Syrian  issue has clearly demonstrated how Russian  decisiveness and military power can be  combined with the West’s capacity for man- aging coalitions and identifying diplomatic solutions to at least provide a ray of hope for  a situation in which until recently the possibility of any kind of peace was not on the  cards. Unfortunately, the same cannot be  said of the complex Gordian knot hanging  over Libya where Russia has mainly weighed  in by keeping out. The added uncertainty of  whether Moscow would support a United  Nations resolution, an essential premise for  any reasonable and viable solution to the  ongoing crisis, further complicates the issue.  Even in the other theatre of conflict,  stretching from the Baltic states to Georgia, it would be advisable for Moscow and  the Atlantic Alliance to soften their rhetoric  and start looking for potential solutions.  Otherwise, we run the risk of witnessing a  sudden eruption of one of the many  smouldering hotbeds of unrest, possibly  fuelled by interested local parties. Such a  situation could easily get out of hand, with  devastating consequences.  Furthermore, from an economic point of  view, the endless and tiresome chain of embargoes and restrictions has been damaging  for everyone involved.  It is yet another demonstration of how  embargoes end up backfiring against those  who participate in them, often more so than  those against whom they are imposed.  Let’s be clear: those who participate in  embargoes are harmed, not those who imposed them in the first place! In the case of  the Russian embargo, Germany and Italy  obviously had the most to lose from the  trade blockade because they have the most  extensive commercial ties with Moscow.  Meanwhile, the reins of the decision making  process still rest firmly in the hands of the  Americans, and a renewal of sanctions  against Russia is already being considered.  The US plan, which is never openly discussed but always looms in the background,  is that in the context of the drop in oil prices  and the gradual whittling away of Moscow’s  foreign currency reserves, the burden of an  economic blockade will sooner or later  cause the Russian economy to collapse. This  could bring about the fall of Putin and the rise  of governments that, although not more  friendly to the West, would in all probability  be easier to manage. Thus we persevere  with a plan based on an error in judgement  that has proven to be extremely dangerous  in recent times: underestimating the pride of  a great nation that does not intend to relinquish the hope that it can maintain its status  as one of the few major world powers.  One final comment should also be made  about Russian gas, an issue that is undoubtedly economic but also takes on strategic  importance because of the extent to which  many European countries depend on Russian energy supplies. Even when political tensions have reached fever pitch, the exchange  of energy for precious foreign currency has  never slowed or suffered serious delays.  This fact is a clear indication of how crucial  both sides understand such exchanges to  be. Thus it is a pity that, perhaps as a way of reiterating with the left hand the principle  that the right hand is constantly denying or  in order to establish an alibi with which the  EU can ease US concerns, the Union ultimately decided to abandon the construction  of the South Stream pipeline, which would  have connected Russia to the southern  reaches of the European continent. This decision resulted in severe damage to Italy,  which still depends on the northern pipeline  for its gas supplies and saw a billion dollars’  worth of signed deals with the Italian oil and  gas contractor Saipem go up in smoke. Later,  when Russia and Germany decided to double the flow of gas through the North  Stream pipeline without any substantial re- action from Europe, the episode began to  seem like a tragic joke. What should one do  at this point? Continue along the well-worn  path of heightening tensions with Russia  and allowing our big brother the US, perhaps  with Trump at the helm, to continue making  decisions for us, bearing in mind that the US  will always promote its own security and interests over Europe’s? Or would it not be a  good idea to extend a hand to Moscow in  order to see if harmonious cooperation could  restore some semblance of order, not only  to our own neck of the woods but also to the  neighbouring fields that surrounds us? In my  honest opinion, the time has come for us  Europeans to decide to grow up!

FRONT PAGE – Out-of-breath democracies

In June the Swiss (78%) said no to the introduction of a monthly wage for everyone, from the cradle to the grave, as a guarantee of a dignified existence. This provided further confirmation that everyone is required to sharpen up and do all they can to earn a living by providing useful services to the community or appreciated by markets. The primary role of the state is to create ideal conditions to enable everyone to exploit their talents in a fair and transparent competitive environment along with appropriate solidarity mechanisms to support the less fortunate. Let’s hope that the clear indication provided by this vote might act as a warning for all the populist movements in Europe, which are gaining increasing consensus, so they no longer come up with such half-cocked proposals.

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