Russian President Putin still firmly believes in a complete victory in Ukraine. That is what experts from the American think tank Institute for the Study of War (ISW) write in a latest update on the war.
According to them, neither the West nor Ukraine have yet succeeded in convincing Putin that a compromise is needed to end the war. Putin is prepared for a long, drawn-out war to eventually force Ukraine to surrender or to make the West war-weary, leaving Kyiv alone, the ISW writes.
Based on the recent rhetoric and actions of the Russian president, the experts believe that only several successful counter-offensives by Ukraine can force Putin to the negotiating table. But the question is whether Putin will accept the reality on the battlefield.
The Netherlands became slightly more corrupt last year, Transparency International (TI) reports in its annual corruption ranking. With 80 points, the Netherlands achieved its lowest score ever. The country is still one of the ten countries with the least corrupt public sector. The Netherlands is in eighth place, as in previous years.
Tweede Kamer (Dutch parliament)
The fact that the Netherlands has dropped a few points is mainly due to the lack of political integrity, explains TI spokesperson Andor Admiraal. “For example, there is no good lobbyists’ register, which means there is insufficient supervision of lobbyists. There are also far fewer rules about the financing of political parties than in other countries. Furthermore, a cooling-off period for politicians is not properly arranged.”
For example, CDA Member of Parliament Raymond Knops announced last week that he will lead the lobby club for the arms industry. Knops is now a deputy member of the Defense Committee of the Dutch House of Representatives.
Earlier there was a fuss about the transfer from Minister Cora van Nieuwenhuizen (Infrastructure and Water Management) to the sector association of energy companies. This raised doubts about conflicts of interest and undesirable political influence.
Admiraal: “Almost half of national former politicians start working as lobbyists when their political career is over. That is a real problem in the Netherlands, because voters must know that people in politics make decisions based on their political ideas. Even the appearance of a conflict of interest is enough to undermine that trust.”
A bill is now being drafted for a national lobbying ban, but only for (former) ministers and not for other politicians.
Japan and the United States will strengthen their military ties. The two countries announced this in a joint statement. With the cooperation, they say, they are addressing the threats from China and North Korea in the region. They call China’s role “the biggest security challenge”.
Image: APF
According to Japan and the US, China’s policy is aimed at turning international relations in its favor by, among other things, exerting great political, economic and military pressure. British Prime Minister Sunak also signed an agreement to strengthen military ties between Japan and the United Kingdom.
Tensions between China and Taiwan
In the region, there are particularly high tensions between China and Taiwan. The Chinese army regularly conducts exercises near the island state. The Chinese government sees Taiwan as a renegade province. The Taiwanese have a strong ally in the US.
Last August, top American politician Nancy Pelosi visited Taiwan, which was seen as a provocation by China. In Beijing’s eyes, any visit by a foreign administrator or politician is equivalent to recognition of Taiwan’s independence.
Earlier, US President Joe Biden announced that the US military would defend Taiwan in the event of a Chinese invasion.
The military cooperation includes a new naval unit on the Japanese island of Okinawa, not far from Taiwan. The Americans already have a large base there and will expand the existing army. The site is seen as a strategic location in the region, from which it is possible to react quickly.
Additional troops are also stationed on other islands south of Japan. Both countries will also practice multiple times.
Japan strengthens its military
Last year, Japan announced to significantly strengthen its own defense. It will be the largest reinforcement since World War II. Japan feels the threat from North Korea, which regularly fires missiles, and sees that China has expanded its navy and air force in the vicinity of Japan. According to Japan, Chinese naval vessels regularly sail in Japanese territorial waters.
Russia is trying to recruit Afghan commandos to fight in Ukraine, Sky News reports. According to several Afghan military sources, these special forces could have a major impact on the outcome of the battle, should they decide to join the fight. They are trained by the British and US military.
Afghan commando forces
There is a chance that about 10,000 of these men will join Russia, according to an anonymous Afghan source. “They have no country, no jobs, no future. They have nothing to lose,” the source told Sky News. The soldiers are said to have been approached by Russia via WhatsApp and the encrypted messaging service Signal.
After the last US troops left Afghanistan in August last year, the Afghan commandos were left behind. Only some of them were evacuated when the Taliban took power. The men who remained in Afghanistan had to go into hiding to avoid prison or execution.
Russian gas exports have already fallen sharply, but the oil industry has yet to be affected. The Russian economy is contracting this year and the next, but less sharply than previously estimated. On balance, income from oil and gas exports has increased considerably, which is filling the state treasury. The European oil boycott will put pressure on revenues, while other sanctions will also hurt more.
Russian economy
Is Europe sinking as Russia climbs out of the trough? A Russian journalist recently asked this question during a press conference of the International Monetary Fund. Wishful thinking, the IMF economists clearly hinted in their response. They expect a contraction of -3.4% for this year, -2.3% for next year, while the eurozone is expected to grow slightly in 2023. However, last April, a contraction of more than 8% was expected for 2022.
Energy exports
Where does this relative windfall come from? Earlier analysis of the Russian economy still assumed a financial crisis. This scenario did not materialize because capital movements were restricted. Russian monetary authorities also prevented a bank run by raising interest rates. Friend and foe praise the attitude of the Bank of Russia, which operates independently and paints a fairly realistic picture of the economy. In a recent publication, the central bank stated that the economic recovery stalled in September, while inflation is rising again — partly due to ‘the exodus of suppliers and retail chains from unfriendly countries’.
Higher returns from energy exports keep Russia going. It is true that Moscow has largely turned off the gas tap to Europe of its own accord (exports are 80% lower than a year ago), but the sale of gas before the war ‘only’ accounted for a quarter of oil revenues. Oil is therefore much more important to the Russian economy. The price per barrel is higher this year than in 2021 (the recently announced production cut by the oil cartel Opec sets a new floor), while the export volume has remained stable. The state is likely to receive RR 11,700 billion (€194 billion) from oil and gas sales this year, an analyst estimates, compared to RR 9,100 billion last year (€151 billion).
The big blow
Western sanctions are potentially disastrous for Russian industry, which relies heavily on imports of machinery and technology. So far, Moscow has succeeded in limiting the effects with a bit of trickery and wizardry. As soon as the stocks run out, it is expected that major problems will arise. In the meantime, the combination of robust energy exports, falling imports and strict monetary policy is resulting in a strong ruble. This also dampens inflation, as imported consumer goods are relatively cheap as a result.
Normally, the strength of the currency says something about the strength of the underlying economy. But in the case of Russia, this is misleading. Analysts still expect the war to cost the country 10% to 15% of GDP, although this bill is spread over several years. The biggest blow will be the European boycott of Russian oil, which will take effect in December.
Emigration wave
This impending intervention has already led to shifts in trade flows: less to Europe, more to Asia. But can the entire decline of exports to Europe (accounting for about half of Russia’s oil exports before the war) be absorbed by, for example, China? It would then have to import more than twice as much Russian oil. Given the limited supply of tankers, this is only possible if new pipelines are built — and that costs time and money. Bofit, the think tank of the Finnish central bank, foresees an ‘exceptionally large drop’ in Russian exports before 2023. Finnish economists expect a 4% contraction for the Russian economy this year and next, making them more pessimistic than the IMF.
Oil and gas sales account for 40% of Russian government revenue. Lower exports will push up the budget deficit. In view of the low, largely domestically financed government debt, this is not an acute problem.
The decline of the Russian economy is happening in slow motion. This not only concerns the effects of the sanctions, but also of the wave of emigration as a result of the mobilization. Demographers expect a declining birth rate, accelerating the population decline that started in 2018. Bloomberg economists now estimate Russia’s potential economic growth at 0.5% annually — up from 2.5% before the war.
Manufacturers will soon be liable for damage caused by artificial intelligence. That is what the European Commission is proposing today. This means that in the future, for example, damage caused by self-driving cars can be recovered from the manufacturer.
At the moment it is not always clear who is exactly liable if there is damage caused by, for example, a robot or algorithms. With this proposal, the Commission wants to give manufacturers and consumers more clarity.
Not just physical damage
The Commission also believes that damage should go beyond physical or material damage. For example, if you are discriminated against by an algorithm, the manufacturer is also liable. Take, for example, employment agencies that use algorithms to find suitable candidates and can systematically exclude people through the algorithm.
The problem is that it is often difficult for the consumer to prove whether the error is caused by artificial intelligence. For this reason, the Commission wants the burden of proof for people and companies to be lighter. If a victim can demonstrate that the damage is caused by the device or software, the manufacturer will be liable.
It may take a while before these rules really take effect. The European Parliament and the EU countries have yet to consider them.
While Russia is gaining ground in eastern Ukraine, there was also positive military news last week. With the weapons received by the West, Ukraine has launched a number of successful attacks against the Russian army and is preparing a counter-offensive against southern cities like Kherson. Ukraine also launched its first attack on a Russian naval base in Crimea.
In addition, a new study by scientists at Yale showed that the sanctions are effective and have now paralyzed the Russian economy.
With the beginning of the transit of food from the Black Sea, the image may arise that Russia would be ready for an agreement. However, this is implausible. The country is already preparing for a long-term conflict and unfortunately Russia’s position vis-à-vis the West could improve significantly in the near future.
First, we must realize that Russia is expanding the conflict to more and more stages. In space, for example: Russia has indicated that it would stop collaborating on the International Space Station, which may endanger the entire project. This also applies to the maritime level: Putin this week approved a new maritime doctrine against American dominance of the world’s seas.
Not to mention the diplomatic scene, where Russia is very active and is trying to influence its image worldwide. In the former Soviet sphere, Putin has visited Tajikistan and Turkmenistan and has held summits with leaders in Kazakhstan and Uzbekistan. Important consultations have been held with regional powers Iran, Turkey and Saudi Arabia. In Uzbekistan, Foreign Minister Sergei Lavrov met ministers from the Shanghai Cooperation Organisation, an Asian bloc led by China and Russia.
The same Lavrov also visited Africa, where he disseminated the Russian perspective on the war in Egypt, Uganda, Ethiopia and Congo. This ties in with anti-Western sentiment and with the economic concerns of many African leaders, as already demonstrated by Macky Sall, president of Senegal and currently chairman of the African Union.
In Africa, Russia has other instruments. In recent years, the Russian private army, the Wagner Group, has gained influence in countries such as Mali, the Central African Republic, Libya and more recently Burkina Faso. This could cause unrest on Europe’s borders.
Even more important than Russian diplomacy is that Western unity threatens to crumble. First, take the US. After the summer, the mid-term elections for the House of Representatives and the Senate will take place there and it is very likely that Biden’s position in Washington will weaken. Ukraine is currently not a major topic in the US. Foreign news in the US is about China and Saudi Arabia. However, the main topic on the news is inflation. Rising prices combined with a recession do not bode well for the incumbent government and its ability to conduct coherent foreign policy.
Consider Europe. Here we see a similar dynamic. The pain of higher prices is becoming more and more apparent and this is causing political tensions. Italian Prime Minister Mario Draghi was the first prominent victim of this when he resigned after clashing with the Five Star Movement over aid packages. After new elections, a right-wing coalition that favors a more positive relationship with Russia could come to power. Everywhere, including in rich countries such as the Netherlands, economic problems will put a lot of pressure on politicians in the coming months.
Tensions will also increase between European countries. The new Italian government will take office at a time of rising interest rates, which will bring renewed concerns about the debt burden of southern European countries. And also think of Eastern Europe. Viktor Orbán, prime minister of Hungary, stated last week that the European sanctions policy is failing and that the EU should not align itself with Ukraine, but between Russia and Ukraine. Impending energy shortages will sharpen the dividing line between countries that are more and less dependent on Russian gas.
So it is quite possible that Western unity and support for Ukraine will come under great pressure in the coming months, let alone possible disruptions such as a new corona wave.
This does not mean that Russia is going to win the war or that the West should push for an agreement with Russia now. This is not feasible. But it does mean that we have to think now about what we will do with a weaker position. And that it is time to look more outwardly and launch our own EU diplomatic offensive.
Last month, the Netherlands had the highest gas price of all countries in the European Union.
Dutch households paid 283 euros per megawatt hour (MWh) of gas in July, more than twice as much as the average EU household. Gas is also about half the price in neighboring countries Germany and Belgium. A month earlier, gas in Sweden was more expensive than in the Netherlands, but in July Swedish households paid 237 euros per MWh.
(Bigstock/JKLS photography)
Purchasing power crisis
Energy prices have been rising rapidly for some time due to the war in Ukraine. Food and rent prices are also rising sharply. There is currently a purchasing power crisis that we have not experienced in decades.
The energy prices are the average rates (including taxes) that energy companies charge for a new energy contract. 283 euros per MWh comes down to 2.76 euros per cubic meter.
People also pay relatively high amounts for electricity in the Netherlands: 419 euros per MWh, including taxes and a reduction in energy tax. Only in Italy and Denmark prices are higher.
An average household that has to renew its energy contract has lost about 3700 euros per year extra compared to last year. The Dutch Budget Information Service Nibud warns that one in three households will run into problems as a result. “Some just need to cut back a bit, but there is also a large group who can’t get by even if they budget well.”
High prices also affect middle incomes
People with a low income can apply for an energy allowance of 1300 euros in the Netherlands. “That is not enough to keep people afloat”, according to Nibud. “We see too many groups who have too little income structurally to make ends meet. This also applies to people with a regular income.”
Companies make record profits
What we are seeing now is that inflation is impoverishing citizens while companies are making record profits. There’s plenty of money, but it all flows to companies.
MADRID – The United Kingdom’s departure from the European Union was the major political claim during British Prime Minister Boris Johnson’s term in office. However, the consequences have been disastrous for international trade, especially for Spain.
Brexit has cost Spain 18 billion euros in trade with the United Kingdom. In 2021, the first full year of Brexit – exports of goods and services from the United Kingdom to Spain amounted to 13.1 billion pounds (about 15.3 billion euros).
Less than during the pandemic
That is even a lower volume than the 14.1 billion pounds of 2020, the pandemic year. UK exports to Spain are a long way from the record £19.5 billion reached in 2019, before Covid and Brexit.
Imports from UK
Something similar is happening with regard to imports from the United Kingdom of goods and services from Spain. In 2021, shipments from Spain to the United Kingdom amounted to £22.4 billion (€26.2 billion). Trade from Spain to the United Kingdom in 2021 was comparable to that of 2020 (22.2 billion pounds). In other words, Brexit has prevented trade from recovering from the pandemic.
The 2021 data is a long way from the £31.6 billion foreign trade record Spain had with the UK in 2019. Between what has been lost in imports and exports on both sides since 2019, total trade between the UK and Spain is now €18 billion less than in 2019, data from the UK’s National Statistics Office shows.
Spain is UK’s sixth trading partner
Spain is among the six European countries with the most commercial exchanges with the United Kingdom, after the Netherlands, Germany, France, Ireland and Italy.
The parity in the two currencies comes after the euro plunged nearly 20% in value over the past 14 months compared to the U.S. dollar.
In the past two since, the euro has continually traded above the dollar, even reaching a value of $1.60 per euro during the financial crisis of 2008. And over the past decade, one euro has been worth, on average, $1.18, according to Federal Reserve data.
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