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In Major Threat To Dollar’s Reserve Status, Russia Offers To Join European SWIFT-Bypass

In Major Threat To Dollar’s Reserve Status, Russia Offers To Join European SWIFT-Bypass

Three weeks after a meeting between the countries who singed the Iran nuclear deal, also known as the Joint Comprehensive Plan of Action (JCPOA), which was ditched by US, French, British and German officials said the trade mechanism which was proposed last summer – designed to circumvent both SWIFT as well as US sanctions banning trade with Iran – called Instex, is now operational.

And while we await for the White House to threaten Europe with even greater tariffs unless it ends this special purpose vehicle – it already did once back in May when it warned that anyone associated with the SPV could be barred from the U.S. financial system if it goes into effect – a response from the US is now assured, because in the biggest attack on the dollar as a reserve currency to date, on Thursday, Russia signaled its willingness to join the controversial payments channel, and has called on Brussels to expand the new mechanism to cover oil exports, the FT reported.

Moscow’s involvement in the Instex channel would mark a significant step forward in attempts by the EU and Russia to rescue a 2015 Iran nuclear deal that has been unravelling since the Trump administration abandoned it last year.

“Russia is interested in close co-ordination with the European Union on Instex,” the Russian foreign ministry told the Financial Times. “The more countries and continents involved, the more effective will the mechanism be as a whole.”

… and the more isolated the US will be as a currency union meant to evade SWIFT and bypass the dollar’s reserve currency status will soon include virtually all relevant and important countries. Only China would be left outstanding; after the rest of the world’s would promptly join.

On Thursday, the Kremlin confirmed the foreign ministry’s take:

 …click on the above link to read the rest of the article…

Iran To UK: We’ll Continue Oil Exports “Under Any Conditions” As Detained Tanker Crew Released

Iran To UK: We’ll Continue Oil Exports “Under Any Conditions” As Detained Tanker Crew Released

As the “tanker wars” continue Iran’s Foreign Minister Mohammad Javad Zarif warned his British counterpart Jeremy Hunt in a telephone call on Saturday that Iran plans to continue its oil exports “under any conditions”.

Zarif also repeated Iranian demands for the UK to release the Grace 1 oil tanker, seized over a week ago after it was boarded by Royal Marines off Gibraltar. It had been carrying 2 million barrels of Iranian oil and was alleged to have been bound for Syria, in violation of EU sanctions; however, Tehran has accused the UK of fundamentally doing the United States’ bidding. 

In a public statement posted to Twitter, Hunt informed Zarif that the UK would release the tanker if it received guarantees it would not go to Syria

Iran tanker file photo, via Middle East Monitor

On Saturday the four-member crew of the detained tanker had been released, which could serve to ease tensions, according to the WSJ.

They were being interviewed and questioned as to the nature of the voyage, and whether they intended to violate EU sanctions on Syria — which it appears they were given the ship had gone all the way around the south of Africa from the gulf instead of the usual route of the Suez canal, something which had raised suspicions. 

Meanwhile France’s foreign minister said over the weekend that Iran’s decisions to breach caps on uranium enrichment was “a bad reaction to … (a) bad decision,” according to Reuters, and said the region is stumbling dangerously into war. 

“The situation is serious. The rise of tensions could lead to accidents,” French Foreign Minister Jean-Yves Le Drian told reporters.

Iran has recently issued a 60-day window for France and other EU nations to salvage the deal, saying it will blow through another uranium enrichment ceiling by early September is nothing is done to both rescue the deal and ease US-led sanctions.

The Strange Case Of Chrystia Freeland And The Failure Of The “Super Elite”

The Strange Case Of Chrystia Freeland And The Failure Of The “Super Elite”

Canadian Foreign Minister Chrystia Freeland has become a bit of a living parody of everything wrong with the detached technocratic neo-liberal order which has driven the world through 50 years of post-industrial decay. Now, two years into the Trump presidency, and five years into the growth of a new system shaped by the Russia-China alliance, the world has become a very different place from the one which Freeland and her controllers wish it to be.

Having been set up as a counterpart to the steely Hillary Clinton who was supposed to win the 2016 election, Freeland and her ilk have demonstrated their outdated thinking in everything they have set out to achieve since the 2014 coup in Ukraine. Certainly before that, everything seemed to be going smoothly enough for End of History disciples promoting a script that was supposed to culminate in a long-sought for “New World Order”.

The Script up until Now

Things were going especially well since the collapse of the Soviet system in the early 1990s. The collapse ushered in a unipolar world order with the European Union and NAFTA, followed soon thereafter by the World Trade Organization and the 1999 destruction of Glass-Steagall (1). The trans-Atlantic at last was converted into a cage of “post-sovereign nations” that no longer had actual control of their own powers of credit generation. Under NATO, even national militaries were subject to technocratic control. This cage was perfect for the governing elite “scientifically managing” from above while the little people bickered over their diminishing employment and standards of living from below.

 …click on the above link to read the rest of the article…

British Marines Seize Oil Tanker Headed For Syria In “Aggressive” Operation

British Marines Seize Oil Tanker Headed For Syria In “Aggressive” Operation

A huge development Thursday regarding enforcement of Iran sanctions and the West’s economic war on both Damascus and Tehran: British Royal Marines seized an oil tanker in Gibraltar off Spain’s southern coast while it was en route to Syria in what’s being called an unprecedented and aggressive move to enforce EU sanctions. 

As critics of the West’s sanctions policy on Syria are noting: the European Union has for years allowed advanced weaponry to flow into the hands of anti-Assad jihadists, but it will act swiftly to block vital oil access to the war-torn and starved population

View image on Twitter

View image on Twitter

Pic: Royal Marines from 42 Commando fast-roping from a Wildcat helicopter onto tanker headed to Syria under cover of darkness

According to Reuters:

The Grace 1 tanker was impounded in the British territory at the mouth of the Mediterranean Sea, after sailing around Africa from the Gulf. Shipping data reviewed by Reuters suggests it had been loaded with Iranian oil off the coast of Iran, although its documents say the oil is from neighboring Iraq.

Reports say Gibraltar authorities (Gibraltar is a British Overseas Territory) acted on EU sanctions that have been in place for years against Syria; however one EU sanctions and legal expert told Reuters: “This is the first time that the EU has done something so public and so aggressive. I imagine it was also coordinated in some manner with the U.S. given that NATO member forces have been involved.”

The ship has been identified as the Grace 1 — a Panamanian-flagged tanker managed by Singapore-based IShips Management Pte Ltd. — which had apparently taken the unusual step of sailing all the way around the tip of Africa instead of the Suez canal from the Iraqi port of Basra. 

 …click on the above link to read the rest of the article…

Markets are being Lulled into a False Sense of Accommodation

Markets are being Lulled into a False Sense of Accommodation

Those who take an interest in the actions of central banks will know that the advent of Brexit and Donald Trump’s presidency has seen the direction of monetary policy gradually change in both the UK and the U.S.

Since the EU referendum, the Bank of England have raised interest rates twice, after initially cutting them and implementing a new round of quantitative easing in the aftermath of the vote. The first rate hike in November 2017 came over a decade since the bank last increased rates in July 2007.

A month after Donald Trump was confirmed as the 45th American president, the Federal Reserve raised rates for only the second time in nine and a half years. Since Trump’s inauguration, they have gone on to hike a further seven times, and over the course of eighteen months (starting late 2017) the Fed have rolled off over $600 billion in assets from its balance sheet.

As the Fed continue to roll off assets until their balance sheet ‘normalisation‘ programme ends in September, the sentiment amongst traders is that the central bank will soon begin a course of rate cuts in order to stave off the threat of a recession as the prospect of a full blown trade conflict with China and other nation states gathers momentum.

A similar sentiment can be found in the UK over Brexit. With the British economy stagnant and manufacturing and construction sectors in decline, there exists an expectation that the Bank of England will ultimately reverse course if an economic downturn takes hold.

 …click on the above link to read the rest of the article…

Italian Yields Jump As Salvini Threatens To Crash Government

Italian Yields Jump As Salvini Threatens To Crash Government

Clearly emboldened by the EU Parliamentary results, where the League won a plurality of the vote in Italy, Matteo Salvini on Thursday sent BTP yields higher by threatening to crash the Italian government if the Five Star Movement doesn’t back his tax-cut plan.

BTP

BTP yields have been moving higher over the past two weeks as Salvini has brushed off Europe’s threats to fine Italy up to €4 billion over its refusal to rein in its debt and deficit-spending plans. This would be the first time the European Commission has fined a member state over violations of its fiscal rules.

But Salvini, who is now indisputably the most powerful political figure in Italy, isn’t backing down. He has remained defiant, even as Italy braces for the EU to initiate another excessive debt proceeding on Wednesday, when reviews of member states’ fiscal compliance are expected.

As the Telegraph’s Ambrose Evans-Pritchard pointed out in a column yesterday, Salvini has revived threats to initiate an Italian parallel currency – the so-called “mini-BOT” Italian Treasury bills that a Forbes columnist once warned was the “biggest threat to the future of the eurozone.” 

And with Salvini adding to the political chaos by taking the first tentative steps toward ousting Five Star from the ruling coalition, Italian bond holders will have only themselves to blame if they don’t anticipate more market-rattling political chaos, and position accordingly.

EU Threatens to Legalize Human Harm From Pesticides

EU Threatens to Legalize Human Harm From Pesticides

ILSI-Europe Headquarters, Brussels. Photo: PAN Europe

Current EU regulations forbid human exposure to pesticides that are classified as mutagenic, carcinogenic, reprotoxic (toxic for reproduction), persistent or capable of disrupting endocrine systems. By virtue of these and other protective measures EU regulations are considered the gold standard in public protection.

However, experts who are closely linked to industry (or are part of anti-regulation pressure groups) have taken control of the EU’s new Science Advice Mechanism (SAM). These experts have contributed to a report commissioned to reevaluate the EU’s authorisation of pesticides. The report, called “EU authorisation processes of Plant Protection Products”, and published in late 2018, recommends dramatically weakening the EU regulatory system. Especially notable is the adoption of many ideas previously proposed by the chemical industry. For example, the EU currently deems the acceptable level of public exposure to mutagenic pesticides (those that damage DNA) to be zero. The new report recommends scrapping this standard of protection.

The history of the new SAM report is that it was requested by EU Health Commissioner Vytenis Andriukaitis. Its purpose was to determine how to act in cases of so-called ‘diverging views’; that is, when media and public interest groups get involved. The request follows a series of major controversies over EU regulatory decision-making. One such controversy was over the herbicide Glyphosate. A “European Citizens Initiative” delivered more than a million signatures to the EU Commission asking for a ban on Glyphosate. Several cities banned Glyphosate. Even a dairy company banned the use of Glyphosate by their farmers.

With this pressure from all over Europe, the EU Commission had difficulty reaching a decision since many EU member states (Bulgaria, Denmark, Czech Republic, Estonia, Ireland, Spain, Cyprus, Latvia, Lithuania, Hungary, the Netherlands, Poland, Romania, Slovakia, Finland and the U.K) opposed a ban. Ultimately, a very unusual 5-years extension for glyphosate was agreed but soon the discussion will start again.

 …click on the above link to read the rest of the article…

Can the EU Survive the Next Financial Crisis?

Can the EU Survive the Next Financial Crisis?

Despite the ECB’s subsidy of the Eurozone’s banking system, it remains in a sleepwalking state similar to the non-financial, non-crony-capitalist zombified economy. Gone are the heady days of investment banking. There is now a legacy of derivatives and regulators’ fines. Technology has made the over-extended branch network, typical of a European retail bank, a costly white elephant. The market for emptying bank buildings in the towns and villages throughout Europe must be dire, a source of under-provisioned losses. On top of this, the ECB’s interest rate policy has led to lending margins becoming paper-thin. 

A negative deposit rate of 0.4% at the ECB has led to negative wholesale (Euribor) money market rates along the yield curve to at least 12 months. This has allowed French banks, for example, to fund Italian government bond positions, stripping out 33 basis points on a “riskless” one-year bond. It’s the peak of collapsed lending margins when even the hare-brained can see the risk is greater than the reward, whatever the regulator says. The entire yield curve is considerably lower than Italian risk implies it should be, given its existing debt obligations, with 10-year Italian government bonds yielding only 2.55%. That’s less than equivalent US Treasuries, the global risk-free standard.

Government bond yields have been and remain considerably reduced through the ECB’s interest rate suppression and its bond-buying programs. The expansion of Eurozone government debt since the Lehman crisis has been about 50% to €9.69 trillion. This expansion, representing €3.1 trillion, compares with the expansion of the Eurosystem’s own balance sheet of €2.8 trillion since 2009. In other words, the expansion of Eurozone government debt has been nearly matched by the ECB’s monetary creation.

 …click on the above link to read the rest of the article…

Blain: When This Insane Monetary Experiment Ends You Will Have Zero Chance To Exit

Blain: When This Insane Monetary Experiment Ends You Will Have Zero Chance To Exit

This is the day the UK isn’t exiting Europe. Surprised? Not really.

Think I’ll try something different this morning – a review of the week touching on some of the key themes we should be thinking about. Let me know what you think.

But firstly let me apologise for the lack of porridge this week. On Wednesday it was being unable to find anywhere to sit with a computer in London City Airport. Yesterday it was courtesy of Flybe from Edinburgh – I’d like to thank them for leaving us standing in a cold bus while they tried to rustle up a crew. The BA flight took off on time, although I wonder if it went to Duesseldorf?

Let me start with a rant:

Bond Yields and the END OF ABSALOOTLEY EVERYTHING…

While everyone is panicking about US curve inversion and the possibility it is signalling recession, is the real issue even simpler and more obvious? Should we be worried about tumbling global bond yields? Aside from it being impossible for funds to meet long term liabilities, what’s not to like about lower for longer? Actually – quite a lot. Even the ECB has noticed zero bond yields haven’t exactly stimulated growth and jobs across Europe and done nothing in terms of stimulating inflation.

Equities seem blithely unconcerned despite all the cack about trade-wars, rising political anarchy, and a distinct feel this business cycle is likely to wind-down into a slough of earnings downgrades and suchlike unpleasantness. The smart money is not worried, because they understand the truth – there is nothing to worry about BECAUSE A STOCK MARKET MELTDOWN IS ACTUALLY IMPOSSIBLE!

 …click on the above link to read the rest of the article…

Can the EU Survive Its Own Censorship?

Can the EU Survive Its Own Censorship?

The EU’s new, comprehensive new Copyright Directive passed the European Parliament ensuring the way we use the Internet will change in the future.

And not for the better.

The controversial parts are Articles 11 and 13, the “link tax” and the “upload filter” requirements. For a good run down of how terrible these new rules are look anywhere on the internet but this article at Gizmodo (who I hope doesn’t charge me a link tax for doing so!) will do. 

I would also watch this video from Dave Cullen, a resident of Ireland, i.e. the EU, as to what he thinks this means.

Dave makes a number of fantastic points about the ramifications of Articles 11 and 13 which I will not dispute. 

The arrogance and pig-headedness of EU MEPs to push this through without even listening to arguments for Amendments speaks volumes as to how much this legislation was bought and paid for.

And you know who was doing the buying. The same folks currently behind destroying Brexit — The Davos Crowd. I don’t want to put too fine a point on this now, since I’ve covered all this recently (here) and in the past (here ).

Controlling The Wire

But there are very valid reasons why this push for control of information flow from the EU is yet another example of their desperations to keep control of what I’ve in the past called The Wire:

In short, The Wire is the main conduit through which we communicate with each other. Even money is The Wire. What are prices if not information about what we are willing to part with our money in exchange for?
Without The Wire modern society fails. So, government can’t shut it down but neither can it allow unrestrained access to it.

 …click on the above link to read the rest of the article…

Blain’s Morning Porridge – March 18th 2019

Blain’s Morning Porridge – March 18th 2019


“It’s the edge of the world and all of western civilization, the Sun may rise in the East at least its settled in a fine location..” 

In the headlines this morning: https://www.morningporridge.com/stuff-im-watching

What a Saturday…Well done Wales on a well-deserved Grand Slam. But, I wonder if there is a hidden message in Scotland’s remarkable comeback being dashed as England clawed back an undeserved draw at Twickenham? The Scots haven’t won on English turf since 1983. They played a blinder second half.. while all the English could provide was a surly Farrell dodging a yellow card.  Perhaps it was a lesson in the tedious inevitability of modern life and a timely reminder it’s not a fairy-tale? (Shame… we wis robbed!) Perhaps Trump, Trade Wars, Income Inequality, the mis-match between asset prices and reality, and all the rest is just stuff that’s stupid, unfair and just the way it is..

Meanwhile, back on Planet Misery… what we got to look forward to? 

The Boeing saga rumbles on. It could be a month till we learn what caused the crash a week ago. The focus is not just upon the possibility Boeing has failed to correct and fully inform users of stall-prevention system problems on the B-737 Max, but now on the US FAA for its dithering and lack of clear action. The agency has been rudderless and leaderless for over a year, neglected by the administration after Trump wasn’t able to put his personal pilot at its head!  

And it’s another last chance for a Brexit deal with Theresa May going for third time lucky – apparently. The Westminster rumours say she’s still likely to lose with many of the Hard-Brexit crowd still hoping to achieve a No-Deal exit – justifying it as giving the UK a stronger post exit negotiating position with Europe.

 …click on the above link to read the rest of the article…

Time Runs Out on U.S. Opposition to Nordstream 2

Time Runs Out on U.S. Opposition to Nordstream 2

The Nordstream 2 pipeline represents the last stand of U.S. influence over the internal affairs of Europe. 

Once finished it will stand as a testament to the fundamental split between the European Union and the United States.

Europe will this as its first successful defense of its newly-declared independence. And the U.S. will have to come to terms with no longer having control overseas.

This is a theme repeating itself all around the world right now. 

Your view of Nordstream 2 depends on who you are. 

If you are the U.S. it is a massive rebuke of the post-WWII institutional order mostly paid for by the U.S. to rebuild Europe and protecting it from the scourge of the U.S.S.R.

From Europe’s perspective it’s, “Job well done and all that but Russia isn’t a threat anymore and it is time for us to come out from underneath the U.S.’s shadow.”

And if you are Russia Nordtream 2 is the wedge driving these two adversaries apart while improving national security on your western border.

Europe has imperial ambitions of its own and Nordstream 2 is a very important part of that. Those ambitions, however, are not in line with those in the U.S., particularly under the “leadership” of Donald Trump. 

Trump has this strange idea that the U.S. has gotten nothing in return for our running the world these past seventy-odd years. Our massive trade deficit is wealth stolen by our trade partners in Trump’s simplistic mind.

He refuses to see the wealth we’ve ‘lost’ as squandered by decades of corruption, sloth, regulatory over-reach, etc. 

And so, to Trump, Nordstream 2 is an abomination because he’s funding NATO to protect Europe from Russia but they then are increasing the amount of gas they buy from that very same ‘enemy.’

 …click on the above link to read the rest of the article…

EU is Steadily Moving Towards Creation of 1984-Style Ministry of Truth

EU IS STEADILY MOVING TOWARDS CREATION OF 1984-STYLE MINISTRY OF TRUTH

EU Is Steadily Moving Towards Creation Of 1984-style Ministry Of Truth

The European Parliament passed a recommendation calling  Russia “the main source of disinformation in Europe” and appealing for increased funding for the EU’s East StratCom Task Force, which already got 1.1 million euros in 2018.

HINT: The East StratCom Task Force is a EU body focused on so-called proactive communication of EU policies and activities in the Eastern neighbourhood (Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine) and beyond (Russia and further).

The passed document says that East StratCom Task Force as well as its two task-force subdivisions dealing with the southern neighborhood and Western Balkans, should get “adequate financial and personnel resources which are still required, aimed at the significant increase of their potential, effectiveness, professionalism, institutional continuity and quality of work, as well as safeguarding them against political meddling by officials and countries that back Russian disinformation.

Furthermore, it called on EU member states “to ensure that electoral laws take into account possible threats stemming from disinformation campaigns” and urged them to “adapt their electoral rules on online campaigning and to monitor and evaluate the transparency features in relation to political advertising introduced by the online platforms.”

The suggestions also include support for “independent and diverse Russian-language media in the countries of the Eastern Partnership and beyond” and “to focus on the EU accession countries and partners in the EU neighborhood by assisting them in their efforts to counteract hostile propaganda and disinformation activities.”

The formal justification of the moves suggested in the document is based on the mainstream media narrative that Russia every day carries out disinformation campaigns and cyber attacks, aimed at increasing tensions within the EU and its member states.

 …click on the above link to read the rest of the article…

EU: Telling Europeans What to Think

EU: Telling Europeans What to Think

  • The above initiatives, of course, exist in addition to all the other measures that the EU has put in place to “guide” Europeans onto the path of proper thinking… which the untransparent and unaccountable online tech giants — Facebook, Google, Twitter and Mozilla — signed in October 2018, and their 2019 “Code of Conduct on countering illegal online hate speech online.”
  • In the same vein as China’s “reeducation camps” or the former Soviet Union’s “rehabilitation centers” that abused psychiatry for political purposes, Marine Le Pen in September was ordered to undergo psychiatric tests for tweeting the pictures, ostensibly to establish whether she “is capable of understanding remarks and answering questions”.
  • It is probably safe to say that the first victims of the EU’s media literacy policies will be diversity of opinion and free speech.
Marine Le Pen (pictured at podium), the leader of France’s Rassemblement National (National Rally) party, posted tweets condemning the Islamic State terrorist group, including photos of their murdered victims. For this, she was charged with the crime of “disseminating violent images,” and ordered by a court to undergo a psychiatric evaluation to determine whether she “is capable of understanding remarks and answering questions.” (Photo by Sylvain Lefevre/Getty Images)

The first European Media Literacy Week, an initiative of the European Union, will take place March 18-22 in various European cities. The week is a new initiative by the European Commission, putatively “to underline the societal importance of media literacy and promote media literacy initiatives and projects across the EU”. The European Commission explains its policy of strengthening ‘media literacy’ within the EU — which could have been a noble and useful initiative — the following way:

“With the rapid rise of digital technology and its increasing use in business, education and culture, it is important to ensure everyone can understand and engage with digital media.

…click on the above link to read the rest of the article…

EU: Going Full Orwell

EU: Going Full Orwell

  • The problem is that this professedly noble initiative comes from an organization that has already for several years been censoring free speech in Europe.
  • The handbook guidelines state that journalists should “Take care not to further stigmatize terms such as ‘Muslim’ or ‘Islam’ by associating them with particular acts… Don’t allow extremists’ claims about acting ‘in the name of Islam’ to stand unchallenged. Highlight… the diversity of Muslim communities… where it is necessary and newsworthy to report hateful comments against Muslims, mediate the information.” In other words, the guidelines ask journalists to disinform the public.
  • This is the same European Commission that most recently expressed its disapproval of the withdrawal of Austria from the UN’s “Global Compact for Safe, Orderly and Regular Migration.” The Compact stipulates that media outlets that do not support the UN’s migration agenda will not be eligible for public funding. How is that for “fully respecting Europe’s fundamental principles of freedom of expression, a free press and pluralism”?

The EU has launched a comprehensive Action Plan against Disinformation. Its purpose, according to a recent press release from the European Commission, is apparently to “protect its democratic systems and public debates and in view of the 2019 European elections as well as a number of national and local elections that will be held in Member States by 2020”.

In June 2018, leaders of EU member states had met in the European Council and invited the European Commission “to present… an action plan by December 2018 with specific proposals for a coordinated EU response to the challenge of disinformation…” It is this action plan that the Commission presented to the public on December 5.

The Action Plan focuses on four areas:

  1. Improved detection of disinformation (the European Commission dedicated 5 million euros toward this project and seemingly expects Member states to contribute on a national level, as well).

 …click on the above link to read the rest of the article…

Olduvai IV: Courage
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