Inflation slows across the West
High levels of inflation that have plagued Western nations throughout 2022 showed positive signs towards the end of the year, with the US and EU recording lower-than-expected inflation levels in December. Price rises compared to 2021 of 6.5 percent in the US and 9.2 percent in the Euro area were lower than in previous months, strengthening signs that inflation was abating in much of the West, and consumer and business confidence rose off the back of the optimistic data.
This comes after months of interest rate hikes by central banks, particularly the US Federal Reserve and European Central Bank, in an effort to quash rising prices by reducing consumer spending.
The drop in inflation is mostly due to oil and gas prices which have plummeted over the second half of 2022. Reduced energy consumption from a mild winter, government energy bill support in Europe, and low Chinese oil demand due to national lockdowns, helped ease soaring European energy costs. In the US, President Biden’s gradual release of 180 million barrels of oil from the US Strategic Petroleum Reserve since spring has helped reduce fuel prices for Americans.
Despite the encouraging news, central banks have maintained a hawkish stance, insisting that more interest rate hikes are necessary to bring inflation down to their official target of two percent. They argue that although energy prices have fallen, core inflation (removing the impact of volatile food and energy prices) continues to rise in the EU, while US services inflation remains high. Furthermore, China’s reopening is likely to increase global demand for oil and energy prices worldwide. Inflation may have fallen, but it still has a long way to go.
“Qatargate” scandal embroils EU Parliament
Over the course of four days from December 9-12 Belgian and Italian police conducted raids and arrests across the two countries as part of an investigation into an alleged cash-for-influence scandal involving members of the European Parliament (MEPs) and Qatar and Morocco. Over €1.5 million in cash was seized, EU Parliament offices were raided, and ten suspects were arrested. Belgian prosecutors charged four with money laundering, corruption and participating in a criminal organisation, claiming that a Gulf state believed to be Qatar had bribed MEPs to influence EU legislation.
One of those charged is Greek MEP Eva Kaili, a socialist MEP and one of fourteen vice presidents of the EU Parliament. In November 2022, Kaili had praised Qatar’s labour rights record and challenged accusations of corruption against the country in an EU Parliament debate. She was swiftly suspended as vice president and from her political party. Others implicated include Kaili’s father; Kaili’s husband, an EU Parliament aide; former socialist MEP Antonio Panzeri; and two more current S&D MEPs.
In response to the scandal, the EU Parliament has suspended a pending vote on visa-free EU travel for Qataris, and has moved to suspend the diplomatic immunity, normally afforded to MEPs, of those being investigated after requests from the European Public Prosecutor’s Office. Qatar has denied any involvement in the scandal.
The scandal highlighted the EU Parliament’s lack of scrutiny, with European Commission President Ursula von der Leyen repeating past calls for an independent ethics regulator. A 2019 report by the European Court of Auditors found that declarations of gifts and financial interests have few checks, while a 2018 Transparency International report found that during its previous legislative term 24 MEPs broke the Code of Conduct and nearly a third had outside jobs, but zero MEPs had been sanctioned for ethics violations.
Brazilian election protests
Brazil is currently experiencing widespread protests over the election of their new leader – Luiz Inácio Lula da Silva – whom supporters of former president Bolsenaro alleged committed election fraud. Supporters of the former leader have blocked roads across 23 Brazilian states, and the Federal District recorded roadblocks as of 1 December, adding 267 roadblocks according to data from Federal Highway Police (PRF), with sentiments echoing that of the January 6th insurrection of Capitol Hill in the US.
The protestors are calling for a coup to prevent the inauguration of the elected president, but have been widely criticised for blocking supplies of food and fuel to remote areas. On January 8th, pro-Bolsonaro protesters stormed the Praça dos Três Poderes, as well as the Federal Senate and the Supreme Federal Court. The insurrection failed and many Bolsonaro supporters were arrested following the violent event. During his presidency, Bolsonaro fueled distrust in the electoral system of Brazil, and personally challenged the results of the Presidential election alleging a large number of votes must be deemed ‘invalid’. Brazil’s former justice minister Anderson Torres has since been arrested on suspicion of ‘omission’ and ‘connivance’ since the invasion of government buildings of whose security he was in charge. It seems the protests have started to decline but the democratic future of Brazil remains uncertain.
Russia-Belarus military alliance
Russian military leaders have warned Ukraine of a potential alliance forming with Belarus. Belarus may enter the Russia-Ukraine conflict, as has been signalled by their planned joint military drills with Russia, should Moscow feel it necessary to ‘prevent escalation’, claimed Aleksy Polishchuk in an interview aired on state media. In late December, Vladimir Putin made a rare visit to the Belarusian capital, Minsk. More recently, Lukashenko, visited a military base where Russian troops are stationed to meet troops and discuss the joint military drills. Despite the unilateral ceasefire agreement for the Orthodox Christmas celebrations on January 6th and leaders claiming that these joint military drills with Belarus are designed to ‘prevent escalation’, those monitoring the conflict have warned it could do the opposite and open up a new front of fighting in the north of Ukraine.
Russia has long had a close relationship with Belarus, even using it as a springboard to invade Ukraine last February by conducting military drills on its neighbours land before launching the offensive. The two countries have since agreed to escalate their military alliance, meanwhile Ukrainian leaders have denied the likelihood of an attack – Serhiy Popko, the head of the Kyiv military administration stated that he would not presuppose the orchestration of a new joint offensive on the basis of these drills. Belarus has so far declined to join the conflict, but this will be an important flash point of the ongoing war as it nears its first anniversary.
Iran government grant concessions to protestors
Triggered by the death of 22-year-old Mahsa Amini, who was arrested by the morality police for the ‘incorrect’ wearing of her hijab and died in custody, nationwide protests in Iran have called for increased freedoms under its theocratic regime. Demanding greater social freedoms, and a more liberal dress code, the protests will soon hit the four-month-mark. Whilst the number of protestors overall remains unknown, Iran Human Rights, a non-profit organisation, have estimated that more than a thousand protests have occurred involving a total of 155 cities. At least 458 people have been killed, 18,000 protestors have been detained, and 11 have been sentenced to death.
At first attempting to crush the protests with violence, Iran’s government has made some concessions. Disbanding the religious morality police, the unit in charge of enforcing the country’s strict dress code for women, marks the first serious concession granted since the protests began. Speaking on Monday, the senior official and spokesman for the committee in charge of overseeing the implementation of such moral values, Ali Khan Mohammadi, announced that the morality police had been abolished. Commenting that there were ‘newer, more updated and detailed methods’ to promote the Hijab, questions have arisen as to how the government will now enforce the Hijab law which remains in place.
Taiwan extends compulsory military service
In the face of mounting tensions with China, Taiwan has extended its length of mandatory military service from four months to a year. Due to the threat posed to Taiwan by Beijing, with analysts noting that the threat of invasion is significantly higher than ever, President Tsai Ing-wen has looked to boost the island’s defensive capabilities. Such a challenge comes from China as a result of Chinese President Xi Jinping’s goal of unification. At the end of the Chinese Civil War in 1949, the Chinese nationalist Kuomintang, led by Chiang Kai-Shek, fled China from the communists to the island of Taiwan, establishing the Republic of China (ROC). Whilst fewer than 15 world governments recognise the ROC as an official country, Taiwan is considered a ‘vibrant democracy’. However, Xi’s goal of unification threatens the existence of the independent island.
Outlining plans expected to come into effect in 2024, Tsai Ing-wen has announced that conscripts will face 8 weeks of basic military training. Coming after a report that 71 Chinese aircraft had breached Taiwan’s air defence identification zone over a 24 hour period, Tsai Ing-wen’s new policy of defence follows her comment that ‘as long as Taiwan is strong enough, it will be the home of democracy and freedom all over the world, and it will not become a battlefield’.