The EU launches plan to catch up to US green spending
The EU has begun plans to loosen rules on government subsidies for industry to counter the economic impact of President Biden’s huge $369bn green spending package in the US. Since the Inflation Reduction Act (IRA) passed last year, European nations have expressed concern that the massive tax credits it gives for renewable energy, electric vehicles and other green firms, only if they manufacture in the US, will lead to an exodus of investment across the Atlantic.
Already faced with higher inflation than across the pond and economic stagnation, the IRA’s tax incentives for green manufacturing threaten to lure business investment away from Europe. In order to remain competitive, top EU officials have responded to national government desires to emulate the US’ green tax credits. Tax policy is a national jurisdiction, not an EU one, but the Commission can loosen restrictions on government subsidies, or state aid, to allow national governments to legislate more generous green tax incentives. Draft proposals by the European Commission suggest diverting some of the €800bn NextGenerationEU recovery fund towards green tax credits.
While French President Macron has been especially vocal in his desire for greater European “strategic autonomy” and supports more generous state aid to stimulate EU business, a group of more fiscally conservative EU members have opposed the plan. Countries like Germany are wary of excessive spending as deficits across the EU have soared amid the war in Ukraine and energy crisis. Smaller states like the Netherlands fear that allowing national governments to splash out cash for their own industries will distort the EU single market’s level-playing field. Larger economies like Germany and France can provide more generous subsidies to their businesses, while smaller states will be at a disadvantage.
These fears are not unfounded, as during the pandemic Germany and France vastly outspent their neighbours with the EU’s €672bn Temporary Crisis Framework fund, with Germany alone making up 53% of spending. The European Commission has taken note of these concerns, and plans to attach conditions that will preserve the integrity of the single market.
US Secretary of State visits Israel and Palestine amid rising tensions
This week US Secretary of State Antony Blinken has visited both Benjamin Netanyahu, Prime Minister of Israel and Mahmoud Abbas, President of the State of Palestine, to reinforce the US commitment to a two-state solution as the best way to ensure security and de-escalation.
Blinken’s visit comes just after several incidents of violence in Israel and Palestine. Blinken described the attacks earlier this week, which involved two separate incidents of Palestinians attacking Israelis, as a “horrific terrorist attack”. Also, two Palestinians were shot dead in separate incidents near the West Bank and ten Palestinians were killed in a raid by Israeli troops in the town of Jenin, this was one of the deadliest raids in the West Bank for decades.
The recent raid in Jenin brings the total number of Palestinians killed by Israeli troops in January to approximately 35. This makes it the bloodiest month for Palestinians since 2015.
Despite the violent instability, Blinken’s visit confirmed that the US approach to Israel-Palestine relations was not altering. Blinken emphasised that the two-state approach would bring “freedom, security, opportunity, and justice” to both sides.
Blinken and the US position has been criticised, as it has gone no way to resolving tensions that exist within the region. Beyond calling for “de-escalation” on both sides, Blinken did not offer any new US initiatives.During this visit, Blinken did announce an additional $50 million in funding for the UN agency for refugees. However, the overwhelming feeling that has come from his visit is ensuring that the Israel-Palestinian crisis does not overshadow the US’ broader goals.
Pope Francis condemns ‘economic colonialism’ in Africa
On the first day of his visit to the Democratic Republic of the Congo (DRC), Pope Francis made a speech at the presidential palace in the capital Kinshasa.The Pope suggested the DRC’s history had been marred by conflict and a history of foreign domination, stating “political exploitation gave way to an economic colonialism that was equally enslaving… as a result, this country, massively plundered, has not benefited adequately from its immense resources,” to an audience of Congolese politicians and other dignitaries, in Italian.
Despite being a country with vast reserves of minerals, timber and freshwater, the DRC remains one of the poorest countries in the world. About two-thirds of the population lives on less than $2.15 a day, according to the World Bank.
His message resonated within the DRC, a vast central African nation of about 100 million people, which won independence from Belgium in 1960. Tens of thousands of people lined the streets as he travelled from the airport to the capital in his popemobile.
Conflict has also been ravaging the east of the country, where rebels have captured swathes of territory since late 2021. In the next few days the Pope will make his way to South Sudan, another conflict-ridden country to continue his tour of this area of Africa and bring some peace and comfort to the area.
Chile declares state of emergency amid extreme wildfires
Chile’s government has declared a widened state of emergency amid wildfires that have killed at least 13 people and consumed about 14,000 hectares of land, as the South American country experiences an unprecedented heatwave. Hundreds of homes had been damaged while 39 fires raged across swathes of the country.
President Gabriel Boric suspended his vacation to travel to the affected areas and said there is “evidence” that some of the wildfires were sparked by unauthorised burnings. “The full force of the state will be deployed to, first of all, fight the fires and to accompany all the victims,” Boric said. Although this problem is not confined to just Chile, as authorities around the world have struggled to contain increasingly intense wildfires exacerbated by climate change, Chile is experiencing its worst ever wildfires in the region.
The severity of the fires is what prompted the President to declare a state of emergency. Thirteen people have already been killed, mainly firefighters, and more than 6,000 citizens evacuated from their homes. With local resources becoming overwhelmed, the Chilean government put out a request for foreign aid, which many countries have answered with expert fire-fighting planes and other technology. The number of fires has decreased since the very start of February, with 65 being declared “under control” , but the worst ones continue to burn. With the heatwave and strong winds set to continue, Chile faces a long battle with the fires into the future.
Turkish opposition promises to undo Erdogan’s legacy
Turkey’s opposition Nation Alliance unveiled their manifesto for upcoming elections this year, 100 years since the founding of the republic, pledging to undo much of President Erdogan’s legacy. The alliance, a broad coalition of parties united by their opposition to Erdogan’s democratic backsliding, has promised to return the country to a parliamentary system, blaming Erdogan’s “one-man rule” consolidation of power in the presidency for the economic malaise plaguing the country.
Since coming to power in 2002, Erdogan has concentrated power in his own hands, undermining the independence of the judiciary, central bank, and electoral bodies through the appointment of loyalists and relatives. The media is dominated by state-controlled outlets, with 90% of Turkish media essentially under Erdogan’s control. After a failed coup attempt in 2016, Erdogan used the political insecurity to launch a purge of dissidents and narrowly won a 2017 referendum granting sweeping powers to himself via an executive presidency.
The Nation Alliance’s united manifesto promises a comprehensive undoing of Erdogan’s political legacy: restoring the primacy of parliament instead of the president; protecting the independence of the judiciary, central bank, and electoral council; lowering the electoral threshold from seven to three percent; and revitalising a fraying relationship with the West.
The manifesto launch comes as Erdogan moved the election date forwards to 14 May, and has turned to increasingly desperate tactics to stay in office. He has launched a massive spending campaign in a bid to win votes, including 600bn lira for energy subsidies and offering early retirement to 2.3 million workers. However, with inflation at an eye-watering 58%, the value of these handouts will be quickly eroded.
Erdogan has also used the state apparatus to quash his opponents. Mayor of Istanbul Ekrem Imamoğlu, a possible Nation Alliance presidential candidate, was barred from politics for criticising the Supreme Election Council in 2019. The constitutional court has suspended funding for the HDP, a Kurdish opposition party, and is moving towards an outright ban. As the country approaches its centenary, Turkey braces itself for a make-or-break election.
Blockade continues between Azerbaijan and Armenia
Nagorno-Karabakh is a territory formally part of Azerbaijan with an Armenian-majority population. It is a de facto independent state that has been outside the Azeri rule since 1988.
Both Muslim Azerbaijan and Christian Armenia claim ownership of Nagorno-Karabakh; Russia ruled it from 1823 but when the Soviet Union collapsed tensions were reignited. 94% of the population of Nagorno-Karabakh are ethnically Armenian, and after the collapse of the Soviet Union they petitioned to become part of the Republic of Armenia. In 1991, when both Azerbaijan and Armenia declared independence from the USSR the tensions in Nagorno-Karabakh escalated into armed conflict.
The war resulted in a million people becoming refugees, and around 30,000 lives lost. Both Armenia and Azerbaijan engaged in ethnic cleansing during the war.Nagorno-Karabakh remains land-locked and to travel between it and Armenia involves crossing a small section of Azerbaijan. For over eight weeks now, Azerbaijani protesters have set up a blockade outside the town of Shusha, and they have blocked the only road for food, medical supplies, and people in and out of Nagorno-Karabakh.
The protesters describe themselves as environmental activists and demand access to a mining site inside Nagorno-Karabakh. This has now been described as a humanitarian crisis as no food or supplies has been able to enter.
Nagorno-Karabakh has experienced much violence in its past, in the 1980s where Armenia can be seen as victorious and in 2020 when Azerbaijan regained control, heavily aided by Turkey. The 2020 peace deal and ceasefire was aided heavily by Russian soft power, who sent troops to Nagorno-Karabakh that have remained there since.