ANALYSIS / Salvador Sánchez Tapia [Brigadier General (Res.)].

The COVID-19 pandemic that Spain has been experiencing since the beginning of 2020 has brought to light the commonplace, no less true for having been repeated, that the concept of national security can no longer be limited to the narrow framework of military defence and demands the involvement of all the nation's capabilities, coordinated at the highest possible level which, in Spain's case, is none other than that of the Presidency of the Government through the National Security committee .[1]

Consistent with this approach, our Armed Forces have been directly and actively involved in a health emergency that is a priori far removed from the traditional missions of the nation's military arm. This military contribution, however, responds to one of the missions entrusted to the Armed Forces by the Organic Law of National Defence, in addition to a long tradition of military support to civil society in the event of catastrophes or emergencies. [2] In its execution, units of the three armies have carried out tasks as varied and apparently unrelated to their natural activity as the disinfection of old people's homes or the transfer of corpses between hospitals and morgues.

This status has stirred up a certain discussion in specialised and professional circles about the role of the armed forces in present and future security scenarios. From different angles, some voices are calling for the need to reconsider the missions and dimensions of armies in order to align them with these new threats, not with the classic war between states.

internship This view seems to be supported by the apparently empirical observation of the current absence of conventional armed conflicts - understood as those that pit armies with conventional means against each other manoeuvring on a battlefield - between states. Based on this reality, it is concluded that this form of conflict is practically banished, being little more than a historical relic replaced by other less conventional and less "military" threats such as pandemics, terrorism, organised crime, fake news, disinformation, climate change or cyber threats.

The corollary is obvious: it is necessary and urgent to rethink the missions, dimensions and equipment of the Armed Forces, as their current configuration is designed to confront outdated conventional threats, and not for those that are emerging in the present and future security scenario.

A critical analysis of this idea sample, however, paints a somewhat more nuanced picture. From a purely chronological point of view, the still unfinished Syrian civil war, admittedly complex, is closer to a conventional model than to any other subject and, of course, the capabilities with which Russia is making its influence felt in this war by supporting the Assad regime are fully conventional. In 2008, Russia invaded Georgia and occupied South Ossetia and Abkhazia in a conventional offensive operation. In 2006, Israel faced a hybrid enemy in South Lebanon in the form of Hezbollah - indeed, this was the model chosen by Hoffman as the prototype for the term "hybrid" - which combined elements of irregular warfare with fully conventional ones. [3] Earlier still, in 2003, the US invaded Iraq in a massive armoured offensive.[4]

If the case of Syria is eliminated as doubtfully classifiable as conventional warfare, it can still be argued that the last conflict of this nature - which, moreover, involved territorial gain - took place only twelve years ago; a short enough period of time to think that conclusions can be drawn that conventional warfare can be dismissed as a quasi-extinct procedure . In fact, the past has recorded longer periods than this without significant confrontation, which might well have led to similar conclusions. In Imperial Roman times, for example, the Antonine era (96-192 AD), saw a long period of internal Pax Romana briefly disrupted by Trajan's campaigns in Dacia. More recently, after Napoleon's defeat at Waterloo (1815), the Central Powers of Europe experienced a long period of peace lasting no less than thirty-nine years. [5] Needless to say, the end of both periods was marked by the return of war to the foreground.

It can be argued that status is now different, as humanity today has developed a moral rejection of war as a destructive and therefore unethical and undesirable exercise. This distinctly Western-centric - or, if you prefer, Eurocentric - stance takes the part for the whole and assumes this view to be unanimously shared globally. However, the experience of the Old Continent, with a long history of destructive wars between its states, a highly ageing population, and little appetite to remain a relevant player in the international system, may not be shared by everyone.

Western rejection of war may, moreover, be more apparent than real, being directly related to the interests at stake. It is conceivable that, faced with an immediate threat to its survival, any European state would be willing to go to war, even at the risk of becoming a pariah ostracised by the international system. If, at that point, such a state had sacrificed its traditional military muscle in favour of fighting more ethereal threats, it would have to pay the price associated with such a decision. Bear in mind that states choose their wars only up to a point, and may be forced into them, even against their will. As Trotsky said, "you may not be interested in war, but war is interested in you".

The analysis of the historical periods of peace referred to above suggests that, in both cases, they were made possible by the existence of a power moderator stronger than that of the political entities that made up the Roman Empire and post-Napoleonic Europe. In the first case, this power would have been that of Rome itself and its legions, sufficient to guarantee the internal order of the empire. In the second, the European powers, at odds for many reasons, nevertheless stood united against France in the face of the possibility that the ideas of the French Revolution would spread and undermine the foundations of the Ancien Régime.

Today, although it is difficult to find a verifiable cause-effect relationship, it is plausible to think that this "pacifying" force is provided by American military power and the existence of nuclear weapons. Since the end of World War II, the United States has provided an effective security umbrella under whose protection Europe and other regions of the world have been spared the scourge of war on their territories, developing feelings of extreme rejection of any form of war.

On the basis of its unrivalled military might, the United States - and we with it - have been able to develop the idea, supported by the facts, that no other power will be so suicidal as to engage in open conventional warfare. The conclusion is clear: conventional war - against the United States, I might add - is, at internship, unthinkable.

This conclusion, however, is not based on a moral preference, nor on the conviction that other forms of warfare or threat are more effective, but simply on the realisation that, faced with America's enormous conventional power, one can only seek asymmetry and confront it by other means. To paraphrase Conrad Crane, "there are two kinds of enemy: the asymmetrical and the stupid".[6]

In other words, classical military power is a major deterrent that financial aid helps explain the leave recurrence of conventional warfare. Not surprisingly, even authors who preach the end of conventional war advocate that the United States should retain its conventional warfare capability.[7]

From North America, this idea has permeated the rest of the world, or at least the European cultural sphere, where it has become a truism that, under the guise of incontestable reality, obviates the possibility of a conventional war being initiated by the United States - as happened in 2003 - or between two nations of the world, or within one of them, in areas where armed conflict continues to be acceptable tool .

In an exercise in cynicism, one might say that such a possibility does not change anything, because it is none of our business. However, in today's interconnected world, there will always be the possibility that we will be forced to intervene for ethical reasons, or that our security interests will be affected by events in countries or regions a priori geographically and geopolitically distant from us, and that, probably hand in hand with our allies, we will be involved in a classic war.

While still in place, the commitment of US military power to Western security is under severe strain as America is increasingly reluctant to take on this role alone, and demands that its partners do more for its own security. We are not suggesting here that the transatlantic link will break down immediately. It seems sensible, however, to think that maintaining it comes at a cost to us that could drag us into armed conflict. It is also worth asking what might happen if one day the US commitment to our security were to lapse and we had transformed our armed forces to focus exclusively on the "new threats", dispensing with a conventional capability that would undoubtedly lower the cost that someone would have to incur if they decided to attack us with such means subject .

A final consideration has to do with what appears to be China's unstoppable rise to the role of major player in the International System, and with the presence of an increasingly assertive Russia, which is demanding to be considered a major global power once again. Both nations, especially the former, are clearly undergoing a process of rearmament and modernisation of their military, conventional and nuclear capabilities that does not exactly augur the end of conventional warfare between states.

To this must be added the effects of the pandemic, which are still difficult to glimpse, but among which there are some worrying aspects that should not be overlooked. One of these is China's effort to position itself as the real winner of the crisis, and as the international power of reference letter in the event of a repeat of the current global crisis. Another is the possibility that the crisis will result, at least temporarily, in less international cooperation, not more; that we will witness a certain regression of globalisation; and that we will see the erection of barriers to the movement of people and goods in what would be a reinforcement of realist logic as a regulatory element of International Office.

In these circumstances, it is difficult to predict the future evolution of the "Thucydides trap" in which we currently find ourselves as a result of China's rise. It is likely, however, to bring with it greater instability, with the possibility of escalation into a conventional subject conflict, whether between great powers or through proxies. In such circumstances, it seems advisable to be prepared for the most dangerous scenario of open armed conflict with China to materialise, as the best way to avoid it, or at least to deal with it in order to preserve our way of life and our values.

Finally, one cannot overlook the capacity of many of the "new threats" - global warming, pandemics, etc. - to generate or at least catalyse conflicts, which can indeed lead to a war that could well be conventional.

From all of the above it can be concluded, therefore, that if it is true that the recurrence of conventional warfare between states is minimal nowadays, it seems risky to think that it might be put away in some obscure attic, as if it were an ancient relic. However remote the possibility may seem, no one is in a position to guarantee that the future will not bring conventional war. Neglecting the ability to defend against it is therefore not a prudent option, especially given that, if needed, it cannot be improvised.

The emergence of new threats such as those referred to in this article, perhaps more pressing, and many of them non-military or at least not purely military, is undeniable, as is the need for the Armed Forces to consider them and adapt to them, not only to maximise the effectiveness of their contribution to the nation's effort against them, but also as a simple matter of self-protection.

In our opinion, this adaptation does not entail abandoning conventional missions, the true raison d'être of the Armed Forces, but rather incorporating as many new elements as necessary, and ensuring that the armies fit into the coordinated effort of the nation, contributing to it with the means at their disposal, considering that, in many cases, they will not be the first response element, but rather a support element.

This article does not argue - it is not its goal- either for or against the need for Spain to rethink the organisation, size and equipment of its armed forces in light of the new security scenario. Nor does it enter into the question of whether it should do so unilaterally, or at agreement with its NATO allies, or by seeking complementarity and synergy with its European Union partners. Understanding that it is up to citizens to decide what armed forces they want, what they want them for, and what effort in resources they are willing to invest in them, what this article postulates is that national security is best served if those who have to decide, and with them the armed forces, continue to consider conventional warfare, enriched with a multitude of new possibilities, as one of the possible threats the nation may have to face. Redefining the adage: Si vis pacem, para bellum etiam magis.[8]

March and April 2020 will be remembered in the oil industry as the months in which the perfect storm occurred: a drop of more than 20% in world demand at the same time as a price war was unleashed that increased the supply of crude oil, generating an unprecedented status of abundance. This status has highlighted the end of OPEC's dominance over the rest of the oil producers and consumers after almost half a century.

▲ Pumping structure in a shale oil field [Pixabay].

ANALYSIS / Ignacio Urbasos Arbeloa

On 8 March, in view of the failure of the so-called group OPEC+ negotiations, Saudi Arabia offered its crude oil at a discount of between 6 and 8 dollars on the international market while announcing an increase in production from 1 April to a record 12 million barrels per day. The Saudi move was imitated by other producers such as Russia, which announced an increase of 500,000 barrels per day (bpd) from the same date, when the cartel's previous agreements expire. The reaction of the markets was immediate, with a historic drop in prices of more than 30% in all international indices and the opening of headlines announcing the start of a new price war. The oil world was stunned by the collapse in the price of crude oil, which reached historic lows on 30 March, with the price of a barrel of WTI dropping below 20 dollars, a psychological barrier that demonstrated the harshness of the confrontation and the historic consequences it could have for a sector of particular geopolitical sensitivity.

Previous experiences

Saudi Arabia, the world leader in the oil industry because of its vast reserves and huge, export-oriented production, has resorted three times to a price war to obtain commitments from other producers to make supply cuts to stabilise international prices. The oil market, accustomed to an artificially high price, tends to suffer dramatic price declines when supply is unrestricted available . committee Due to the economic and political instability that these prices generate in the producing countries, they usually return quickly to the negotiating table, where Saudi Arabia and its partners in the Gulf Cooperation Council (GCC) always await them.

The first experience of this subject took place in 1985, after the Iran-Iraq war and the oil crisis of the 1970s, Saudi King Fahd bin Abdulaziz Al Saud took the decision to increase production unilaterally in order to recover the market share he had lost to the emergence of new producing regions such as the North Sea or the Gulf of Mexico. The experience led to a 50% drop in prices after more than a year of unrestricted production, which ended with a agreement in December 1986 by 12 OPEC countries to make the cuts demanded by Saudi Arabia and its allies.

In 1997, in response to Saudi Arabia's concern over the increasing displacement of its oil from US refineries in favour of Venezuelan and Mexican crude, the newly arrived Saudi monarch Abdullah bin Abdulaziz decided to announce in the midst of an OPEC summit in Jakarta that he would proceed to increase production without restrictions. The Saudi strategy did not count on the fact that the following year an economic crisis would break out among emerging markets with particular virulence in Southeast Asia and Russia, which plunged prices by 50% again until a new agreement was reached in April 1999.

With the 21st century, came the oil bonanza with the so-called commodity super cycle (2000-2014) that kept oil prices at unknown levels above 100 dollars between 2008 and 2010-2014. This bonanza made it possible to increase investment in exploration and production, generating new extraction techniques that were previously unknown or simply economically unfeasible. In 2005, the US was experiencing a worrying oil crisis, with production at an all-time low of only 5.2 million bpd compared to 9.6 million bpd in 1970. Moreover, energy dependence of approximately 6 million bpd was being met by increasingly expensive crude oil imports from the Persian Gulf, which after 9/11 was viewed with greater scepticism, and Venezuela, which already had Hugo Chávez as its political leader. goal High oil prices allowed the recovery of previously frustrated ideas such as hydraulic fracturing, which was given massive permits to be developed from 2005 onwards with the aim of mitigating the country's other major energy crisis: the rapid decline in domestic production of natural gas, a much more expensive and difficult commodity for the US to import. Hydraulic fracturing, also known as fracking, enabled an unexpected growth in natural gas production, which soon attracted the attention of the US oil sector. By 2008, a variant of fracking could be applied to oil extraction, a technique later called shale, leading to an unprecedented revolution in the United States that increased the country's production by more than 5 million barrels per day in the period 2008-2014. The change in the US energy landscape was such that in 2015 Barack Obama withdrew a 1975 law that prohibited the US from exporting domestically produced oil.

The Saudi reaction was swift, and at OPEC's Vienna headquarters in November 2014, it launched a new campaign of unrestricted production that would allow the Kingdom to recover part of its market share. The effects on international markets were more dramatic than ever, with a 50% drop in price in just 7 months. Multinational oil companies (IOCs) and national oil companies (NOCs) dramatically reduced their profits and were forced to make cuts not seen since the beginning of the century. Exporting countries also suffered the effects of lower fiscal revenues with many emerging markets plunged into unmanageable fiscal deficits, inflation and even recession, with Venezuela in particular sliding into the socio-economic chaos we know today. To Saudi Arabia's despair, the US shale industry showed unexpected resilience by maintaining production at 4 million barrels per day for 2016 from a peak of 5 million in 2014. Saudi Arabia did not understand that shale oil, unlike conventional oil, was not a mature industry, but an expanding one and development. US producers managed to increase the oil recovery rate from 5% to 12% between 2008-2016, the equivalent of increasing productivity by 2.4 times. In addition, the elimination of less competitive companies allowed for a reduction in the cost of services and easier access to transportation infrastructure. The nature of shale, with wells maturing in 18 months to 3 years, compared to 30 years or more for a conventional well, allowed production to be shut in for a short enough period of time to minimise the impact of lower prices, opting to keep the most competitive wells. Saudi Arabia gave up and opted for a 180 degree turnaround Degrees in its strategy, although it did manage to bring Russia to the negotiating table. The longest price war in history, after almost 22 months, ended with an unprecedented agreement among OPEC countries with the incorporation of Russia and its sphere of energy influence, group known as OPEC+. A Russia wounded by international sanctions and the weakness of its currency had given in to Saudi Arabia, which, however, had not managed to defeat the US shale oil revolution.

North American shale production has not stopped growing, and despite its effectiveness, it is the only region in the world with a similar industry, growing at a rate of more than one million barrels per day per year. This status has provided the US with robust energy security as it is not dependent on imports of Venezuelan or Gulf crude. The country achieved positive net oil exports at the end of 2019 for the first time in more than half a century, in addition to being a net exporter of natural gas, coal and refined products. Much of the Trump administration's geostrategic retreat in the Middle East is a response to the country's growing energy independence, which reduces its interests in the region.

The breakdown of group OPEC+:

As mentioned, during the first week of March, OPEC+ met in Vienna seeking a agreement for a further cut of some 1.8 million barrels per day to mitigate the effects of the COVID-19 quarantine in China. The unease among producers was evident, having executed a similar cut in December 2019. Saudi Arabia was trying to share out as much of the production cuts as possible when Russian energy minister Alexander Novak said "niet", citing economic solvency for a drop in prices, scuppering any subject from agreement. It is not known whether Russia's refusal was the result of a well-thought-out plan or simply a bluff to gain ground in the negotiations, but it was the beginning of a new price war. As can be seen in the graph below, the drop in the price of crude oil in the first month has been historic, without a similar reference letter in the history of negotiations between producers. The increase in the availability of oil in the markets due to the Saudi strategy of loading tankers with crude from its strategic reserves, together with a dry stop of the Economics and the demand for oil, generated a sudden price depression hitherto unknown in the sector. Previous price wars normally had the stabilising element that the lower the price of oil products, the higher the consumption in the short term deadline. However, due to the economic effects of the quarantine, this market counterweight disappears, generating in one month what would otherwise have taken 12 to 15 months.

The effects of COVID-19 on global oil demand are estimated to have fallen by 12.5% in March and are expected to reach 20% in April. In the areas of Europe most affected by the quarantine, the drop in fuel sales at service stations has reached 75%, a figure that is very likely to be replicated in the rest of the advanced economies as the measures are tightened and which China is already beginning to leave behind after two months of confinement. The case of air transport is particular, as it consumes 16 million bpd and is currently totally suspended, with no clear date for a return to normality in international aviation. The partial stoppage of industrial production, the extent of which is still unknown, could lead to even greater drops in consumption. Such a status would not require increased production to generate a collapse in prices, which with the added pressure on the supply side are generating unprecedented levels of stress on storage, transport and refining capacity.

A historic agreement :

In early April, Donald Trump, fearful that an oil glut could further depress prices and destroy the US hydrocarbon industry, took the initiative to speak by telephone with the leaders of Saudi Arabia and Russia. In a paradoxical move, the US President succeeded in bringing the major producers closer together to establish new cuts that would put an end to the price war. On 9 April, after several weeks of speculation, the largest ever producers' meeting took place at group , including OPEC members and 10 non-member countries among which Russia, Kazakhstan and Mexico stood out. After several days of negotiations, it was agreed to cut production by 23% in 20 countries with a combined output of more than 40 million barrels, leaving almost 10 million barrels out of the market, starting on the first day of May. The negotiations were coordinated by OPEC and the G20, which at the time was chaired by Saudi Arabia. In this way, a picturesque agreement was reached whereby the aforementioned 10 million barrels were reduced among the OPEC+ members, included in the table below, and another 5 million barrels were estimated to be reduced in an unspecified manner among the US, Canada, Brazil and Norway. The latter cuts, by the nature of their sectors, would be made through the free market and it remains to be seen how they will materialise.

There is some scepticism in the industry and markets about the effectiveness of these cuts, which amount to 10-15% of the oil consumed globally before the COVID-19 crisis. Consumption has fallen by around 20% and oil storage capacity is starting to run out, reducing the margin for absorbing surplus oil. In addition, the cuts will start to be implemented on 1 May, leaving a three-week window that could further depress prices. The nature of agreement, which is voluntary and difficult to monitor, leaves the door open to non-compliance with the established cuts, which are often difficult to apply due to the geological conditions of certain old wells or the existence of contracts that require financial compensation if supply is interrupted. In general, the level of compliance with OPEC agreements has been low, with a greater incidence in countries that export by sea and a lesser incidence in those that export by pipeline, which, unlike maritime cargoes, cannot be controlled by satellite.

The main actors:

Saudi Arabia:

Amid the wreckage of the OPEC+ negotiations, on 6 March Mohammed bin Salman (MBS) led a new palace coup in which former heir to the Saudi throne Mohammed bin Nayef and other members of the royal family were arrested and charged with plotting against Crown Prince MBS and his father Salman bin Abdulaziz. All this at a time when the heir to the Saudi throne seemed to want to consolidate his power with a risky new strategy after the utter failure of the Yemen War and the Vision 2030 national modernisation plan.

Saudi Arabia's undisputed leadership in driving the oil market is based on its ability to increase production by several million barrels in less than six months, something no other country in the world is able to do. The increase in production also allows Saudi Arabia to partially compensate for the decline in prices per barrel, which together with its foreign exchange reserves and access to cheap credit allows Saudi Arabia to face a price war with an apparent resilience far superior to that of any other OPEC country. The low cost of producing a barrel of oil in the country, at around $7, also allows it to maintain revenues in almost any market environment.

However, foreign exchange reserves, at $500 billion, are 30% lower than in 2016, and may be insufficient to maintain dollar-rial parity for more than two years without oil revenues, which is essential for a society accustomed to import-dependent opulence. Moreover, the fiscal deficit has been a major problem for the country, which has been unable to reduce it below 4% after reaching a peak of 16% in 2016 as result of an insufficient recovery in oil prices and the costs of the war in Yemen. Oil's energy dominance has an expiry date and Saudi Arabia's finances are addicted to an activity that accounts for 42% of its GDP and generates 87% of tax revenues. For the moment, the Saudi minister of Economics has already announced a 5% cut in budget by 2020, sample , agreement oil does not ensure an optimistic scenario. In any case, Saudi Arabia has been one of the big winners in the price war. In the failed March negotiations, Saudi Arabia produced 9.7 million barrels per day, a figure that had risen to 11 million barrels per day in the April negotiations. As the cuts are set on a proportional basis, in just one month the Saudi kingdom gained 1.3 million barrels of market share. Similarly, the Saudi sovereign wealth fund Petroleum Investment Fund (PIF) bought shares in Eni, Total, Equinor, Shell and Repsol during the month of April, in a context of stock market falls in these companies.

Russian Federation:

Russia stood firm at the start of the price war, highlighting the resilience of the Russian energy sector and the volume of the country's sovereign reserves, which are lower than those of Saudi Arabia but amount to 435 billion dollars and a stabilisation fund of another 100 billion: 33% more than in 2014. Paradoxically, international sanctions on the Russian oil sector have reduced its dependence on the outside world, allowing the devaluation of the freely convertible rouble not to affect production and partially compensate for lower prices. Russia' s capacity to increase production in the short term deadline, unlike Saudi Arabia, is less than 500,000 bpd, which leaves Russia unable to compensate lower prices with higher production, the main reason for the country's acceptance of the April negotiations result .

Vladimir Putin's leadership is unquestionable with a possible constitutional reform that would allow for an extension of his term of office delayed due to COVID-19. The Russian political elite's good relations with the oil oligarchy allow for unity of action in a country with greater atomisation and the presence of private capital in its companies. Alexander Novak's strategy seems to be in line with that of Igor Sechin, CEO of Rosneft, who is betting on a context of low prices that will end up deeply damaging the US shale industry. There is speculation about a possible US diplomatic intervention with the Russian government in favour of April's agreement OPEC+. Russia's Rosneft's latest move , abandoning Venezuela by selling all its assets to a Russian government-controlled business , may be one explanation for Moscow's concession to accept a agreement that for a month it tried, at least rhetorically, to avoid. The development of future US sanctions on the Russian oil sector will be a good indicator of this possible agreement.

United States:

For the US, falling oil prices mean one of the biggest tax cuts of all time, in the words of its president, with a price of less than a dollar per gallon. However, the oil industry generates more than 10 million jobs in the US and is a central activity in many states such as Texas, Oklahoma or New Mexico, which are fundamental for a hypothetical Republican victory in the 2020 elections. Moreover, the geostrategic importance of the sector, which has allowed the US to reduce its energy dependence to historic lows, has led Donald Trump to take on the responsibility of safeguarding the US oil industry. He himself coordinated the first steps for a major agreement, by means of pressure, threats and concessions. The truth is that the price crisis has come at a time of certain exhaustion for the sector, which was beginning to suffer the effects of over-indebtedness and pressure from investors to increase profits. Since 2011, North American crude oil, priced on the West Texas Intermediate (WTI) index, has experienced an evaluation 10% lower than that of Brent or the OPEC Basket, the other global indices, generating a hyper-competitive environment that was beginning to take its toll on shale producers, which since the end of 2019 have seen a 20% drop in the total drillingissue year-on-year. The North American market, which had already been experiencing storage and transportation problems since 2017, collapsed in the third week of April with negative prices due to the limitations to store oil and speculation in the futures markets.

Donald Trump has finally secured a global agreement that does not bind the US directly, but leaves it to the market to regulate the cuts that seem more than foreseeable. In this way, the Trump administration allows itself not to have to intervene in the oil market, something that would surely force the development of legislation and a complex discussion to save the polluting oil industry at the taxpayer's expense. From the Senate, several politicians from both parties have tried to introduce the need for tariffs or sanctions on those producers who flood the domestic market to the parliamentary discussion , recovering old initiatives such as the NOPEC Act. These threats have allowed the President to gain a strong position at the international level, being one of the big winners at the agreement OPEC+ in April. In fact, when negotiations seemed on the verge of collapse due to Mexico's refusal to take on 400,000 barrels per day of cuts, the US intervened by announcing that it would be the US that would take them on. Subsequent leaks have shown the existence of financial insurance taken out by Mexico in case of low oil prices, which would be charged per barrel produced. The US intervention, more rhetorical than internship since the country has no concrete production to cut, saved agreement from another failure.

Facilities for the refining of petroleum products [Pixabay].

Nothing will ever be the same again:

The shale oil revolution has transformed the oil industry and generated a new geopolitical balance to the detriment of OPEC. Since 2016, OPEC+ countries have made cuts estimated at 5.3 million barrels per day, while the North American shale industry has increased its production by 4.2 million barrels, making it clear that the oligopolistic strategy of the producing countries has come to an end. All that remains is the free market, in which they have an advantage due to lower production costs. However, eliminating a large part of the North American shale final would take more than three years of prices below 30 dollars, at which point a large part of the companies' debt would mature and the drop in new wells issue would seriously affect total production. A journey in the desert for many producing countries that have billion-dollar plans for economic diversification during this decade, probably the last decade of absolute energy domination by hydrocarbons. The world, unlike what was expected at the beginning of the century, has entered a period of oil abundance that will reduce energy costs unless coordinated intervention in the market remedies this. The emergence of new producers, mainly the United States, Canada and Brazil, coupled with the collapse of Venezuelan and Libyan production, has left OPEC 's market share in 2020 at around 33%, in free fall since the beginning of the century when it exceeded 40%.

Global demand for crude oil has declined to such an extent that cutbacks can only be expected to prevent a fall below $15 a barrel by prolonging the full filling of remaining oil storage systems as long as possible. Global oil storage capacity is one of the great unknowns in the sector, with diverging estimates. The bulk of the storage capacity is supported by importing countries, which since the 1973 oil crisis decided to create the International Energy Agency, among other things, to coordinate infrastructure to mitigate dependence on OPEC. The strategic nature of these reserves, coupled with the rapid development of these reserves in the last decade by China and its companies, make access to this information very difficult. In particular, China's Sinopec has developed a strategy of building oil storage facilities throughout the China Sea, including in foreign countries such as Indonesia, to resist any possible blockade of the Strait of Malacca, China's geopolitical weak point. Private companies also have onshore and floating storage capacity of undetermined volume that has already begun to be used in imaginative ways: disused pipelines, oil tankers and even trains and trucks now grounded by quarantine. In the short term, deadline, these strategic reserves will be gradually replenished at a rate similar to 20 million barrels per day, an estimate of the current differential between supply and demand. In 50 days, if no agreement is reached to cut production, the amount in storage would exceed 1 billion barrels, which would probably saturate the market's capacity to absorb more oil, leading to a total collapse in prices.

A return to economic normality is increasingly on the distant horizon, with sectors such as aviation and tourism set to be weighed down by COVID-19 for a long time to come. The impact on oil demand will be prolonged, especially given the storage capacity that will now act as a counterweight to any upward movement in international prices. The shale industry, with great flexibility, will begin to hibernate while waiting for a new, more favourable context. The COVID-19 crisis will have a particularly virulent impact on the oil-exporting countries at development , which have more delicate socio-economic balances. The oil world is undergoing major changes as part of the energy transition and development of new technologies. The COVID-19 crisis is only the beginning of the major transformations that the industry will undergo in the coming decades. An oft-repeated phrase to refute the already dismissed Peak Oil theory is that the Stone Age did not end because of a lack of stones, and contemporary society will not stop using hydrocarbons because of their depletion, but because of their obsolescence.

The always difficult negotiations are made more difficult by the 75 billion euros the UK is giving up.

ANALYSIS / Pablo Gurbindo Palomo

The negotiations for the European budget for the period 2021-2027 are crucial for the future of the Union. After the failure of the extraordinary summit on 20-21 February, time is running out and the member states must put aside their differences in order to reach an agreement on agreement before 31 December 2020.

framework The negotiation of a new European Multiannual Financial Framework (MFF) is always complicated and crucial, as the ambition of the Union depends on the amount of money that member states are willing to contribute. But the negotiation of this new budget line, for the period 2021-2027, has an added complication: it is the first without the United Kingdom after Brexit. This complication does not lie in the absence of the British in the negotiations (for some that is more of a relief) but in the 75 billion euros they have stopped contributing.

What is the MFP?

framework The Multiannual Financial Framework (MFF ) is the EU's long-term budgetary framework deadline and sets the limits for expense of the Union, both as a whole and in its different areas of activity, for a deadline period of no less than 5 years. In addition, the MFF includes a number of provisions and "special instruments" beyond that, so that even in unforeseen circumstances such as crises or emergencies, funds can be used to address the problem. This is why the MFF is crucial, as it sets the political priorities and objectives for the coming years.

This framework is initially proposed by the Commission and, on this basis, the committee (composed of all Member States) negotiates and has to come to a unanimous agreement . After this the proposal is sent to the European Parliament for approval.

The amount that goes to the MFF is calculated from the Gross National Income (GNI) of the Member States, i.e. the sum of the remuneration of the factors of production of all members. But customs duties, agricultural and sugar levies and other revenues such as VAT are also part of it.

Alliances for war

In the EU there are countries that are "net contributors" and others that are "net receivers". Some pay more to the Union than they receive in return, while others receive more than they contribute. This is why countries' positions are flawed when they face these negotiations: some want to pay less money and others do not want to receive less.

Like any self-respecting European war, alliances and coalitions have been formed beforehand.

The Commission 's proposal for the MFF 2021-2027 on 2 May 2018 already made many European capitals nervous. The proposal was 1.11 % of GNI (already excluding the UK). It envisaged budget increases for border control, defence, migration, internal and external security, cooperation with development and research, among other areas. On the other hand, cuts were foreseen in Cohesion Policy (aid to help the most disadvantaged regions of the Union) and the Common Agricultural Policy (CAP).

The Parliament submitted a report provisional on this proposal in which it called for an increase to 1.3% of GNI (corresponding to a 16.7% increase from the previous proposal ). In addition, MEPs called, among other things, for cohesion and agriculture funding to be maintained as in the previous budget framework .

On 2 February 2019 the Finnish Presidency of committee proposed a negotiation framework starting at 1.07% of GNI.

This succession of events led to the emergence of two antagonistic blocs: the frugal club and the friends of cohesion.

The frugal club consists of four northern European countries: Sweden, Denmark, the Netherlands and Austria. These countries are all net contributors and advocate a budget of no more than 1 % of GNI. On the other hand, they call for cuts to be made in what they consider to be "outdated" areas such as cohesion funds or the CAP, and want to increase the budget in other areas such as research and development, defence and the fight against immigration or climate change.

Austrian Chancellor Sebastian Kurz has already announced that he will veto on committee any proposal that exceeds 1 % of GNI.

The Friends of Cohesion comprise fifteen countries from the south and east of the Union: Spain, Bulgaria, the Czech Republic, Cyprus, Estonia, Greece, Hungary, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Slovakia and Slovenia. All these countries are net recipients and demand that CAP and cohesion policy funding be maintained, and that the EU's budget be based on between 1.16 and 1.3 % of GNI.

This large group met on 1 February in the Portuguese town of Beja. There they tried to show an image of unity ahead of the first days of the MFP's discussion , which would take place in Brussels on the 20th and 21st of the same month. They also announced that they would block any subject cuts.

It will be curious to see whether, as the negotiations progress, the blocs will remain strong or whether each country will pull in its own direction.

Outside of these two groups, the two big net contributors stand out, pulling the strings of what happens in the EU: Germany and France.

Germany is closer to the frugals in wanting a more austere budget and more money for more modern items such as digitalisation or the fight against climate change. But first and foremost it wants a quick agreement .

France, for its part, is closer to the friends of cohesion in wanting to maintain a strong CAP, but also wants a stronger expense in defence.

The problem of "rebates

And if all these variables were not enough, we have to add the figure of the compensatory cheques or "rebates. These are discounts to a country's contribution to budget. This figure was created in 1984 for the United Kingdom, during the presidency of the conservative Margaret Thatcher. For the "Iron Lady", the amount that her country contributed to budget was excessive, as most of the amount (70%) went to the CAP and the Cohesion Funds, from which the UK hardly benefited. It was therefore agreed that the UK would have certain discounts on its budgetary contribution on a permanent and full basis.

These compensatory cheques have since been given to other net contributor countries, but these had to be negotiated with each MFF and were partial on a specific area such as VAT or contributions. An unsuccessful attempt was already made to eliminate this in 2005.

For the frugal and Germany these cheques should be kept, on civil service examination to the friends of cohesion and especially France, who want them to disappear.

Sánchez seeks his first victory in Brussels

Spanish Prime Minister Pedro Sánchez is staking much of his credibility in both Europe and Spain on these negotiations.

In Europe, for many he failed in the negotiations for the new Commission. Sánchez started from a position of strength as the leader of Europe's fourth Economics after the UK's exit. He was also the strongest member of the Socialist group parliamentary , which has been in the doldrums in recent years at the European level, but was the second strongest force in the European Parliament elections. For many, therefore, the election of the Spaniard Josep Borrell as High Representative of the Union for Foreign Affairs and Security Policy, with no other socialist in key positions, was seen as a failure.

Sánchez has the opportunity in the negotiations to show himself as a strong and reliable leader so that the Franco-German axis can count on Spain to carry out the important changes that the Union has to make in the coming years.

On the other hand, in Spain, Sánchez has the countryside up in arms over the prospects of reducing the CAP. And much of his credibility is at stake after his victory in last year's elections and the training of the "progressive coalition" with the support of Podemos and the independentistas. The Spanish government has already taken a stand with farmers, and cannot afford a defeat.

Spanish farmers are highly dependent on the CAP. According to the Ministry of Agriculture, Fisheries and Food: "in 2017, a total of 775,000 recipients received 6,678 million euros through this channel. In the period 2021-2027 we are gambling more than 44,000 million euros."

There are two different types of CAP support:

• Direct aids: some are granted per volume of production, per crop (so called "coupled"), and the others, the "decoupled" ones, are granted per hectare, not per production or yield and have been criticised by some sectors.

• Indirect support: this does not go directly to the farmer, but is used for the development of rural areas.

The amount of aid received varies depending on the sector, but can amount to up to 30 % of a farmer's income. Without this aid, a large part of the Spanish countryside and that of other European countries cannot compete with products coming from outside the Union.

Failure of the first budget summit

On 20 and 21 February an extraordinary summit of the European committee took place in order to reach a agreement. It did not start well with the proposal of the president of the committee, Charles Michel, for a budget based on 1.074% of GNI. This proposal convinced nobody, neither the frugal as excessive, nor the friends of cohesion as insufficient.

Michel's proposal included the added complication of linking the submission of aid to compliance with the rule of law. This measure put the so-called Visegrad group (Hungary, Poland, Czech Republic and Slovakia) on guard, as the rule of law in some of these countries is being called into question from the west of the Union. So, another group is taking centre stage.

The Commission's technical services made several proposals to try to make everyone happy. The final one was 1.069% of GNI. Closer to 1%, and including an increase in rebates for Germany, the Netherlands, Sweden, Austria and Denmark, to please the frugal and attract the Germans. But also an increase in the CAP to please the friends of cohesion and France, at the cost of reducing other budget items such as funding for research, defence and foreign affairs.

But the blocs did not budge. The frugal ones remain entrenched at 1%, and the friends of cohesion in response have decided to do the same, but at the 1.3% proposed by the European Parliament (even if they know it is unrealistic).

In the absence of agreement Michel dissolved the meeting; it is expected that talks will take place in the coming weeks and another summit will be convened.

Conclusion

The EU has a problem: its ambition is not matched by the commitment of its member states. The Union needs to reinvent itself and be more ambitious, say its members, but when it comes down to it, few are truly willing to contribute and deliver what is needed.

The Von der Leyen Commission arrived with three star plans: the European Green Pact to make Europe the first carbon-neutral continent; digitalisation; and, under Josep Borrell, greater international involvement on the part of the Union. However, as soon as the budget negotiations began and it became clear that this would lead to an increase in the expense, each country pulled in its own direction, and it was these subject proposals that were the first to fall victim to cuts due to the impossibility of reaching an understanding.

A agreement has to be reached by 31 December 2020, if there is to be no money at all: neither for CAP, nor for rebates, nor even for Erasmus.

Member States need to understand that for the EU to be more ambitious they themselves need to be more ambitious and willing to be more involved, with the increase in budget that this entails.

Georgian aspirations for EU and NATO membership meet Western fears of Russian overreaction

▲ View of Tbilisi, the capital of Georgia, with the presidential palace in the background [Pixabay].

ANALYSIS / Irene Apesteguía

In Greek times, Jason and the Argonauts set out on a journey in search of the Golden Fleece, with a clear direction: the present-day lands of Georgia. Later, in Roman times, these lands were divided into two kingdoms: Colchis and Iberia. From being a Christian territory, Georgia was conquered by the Muslims and later subjected to the Mongols. At this time, in the 16th century, the population was reduced due to continuous Persian and Ottoman invasions.

In 1783, the Georgian kingdom and the Russian Empire agreed to the Treaty of Georgiyevsk, in which the two territories pledged mutual military support. This agreement failed to prevent the Georgian capital from being sacked by the Persians, which was allowed by the Russian Tsar. It was the Russian tsar, Tsar Paul I of Russia, who in 1800 signed the corresponding incorporation of Georgia into the Russian empire, taking advantage of the moment of Georgian weakness.

After the demise of the Transcaucasian Federal Democratic Republic and thanks to the Russian collapse that began in 1917, Georgia's first modern state was created: the Democratic Republic of Georgia, which between 1918 and 1921 fought with the support of German and British forces against the Russian Empire. Resistance did not last, and occupation by the Russian Red Army led to the incorporation of Georgian territory into the Union of Soviet Republics in 1921. In World War II, 700,000 Georgian soldiers had to fight against their former German allies.

In those Stalinist times, Ossetia was divided in two, with the southern part becoming an autonomous region belonging to Georgia. Later, the process was repeated with Abkhazia, thus forming today's Georgia. Seventy years later, on 9 April 1991, the Georgian Soviet Socialist Republic declared its independence as Georgia.

Every era has its "fall of the Berlin Wall", and this one is characterised by the disintegration of the former Russia. The major armed conflict that was to unfold in 2008 as a result of the frozen conflicts between Georgia and South Ossetia and Abkhazia since the beginning of the last century came as no surprise.

Since the disintegration of the USSR

After the break-up of the USSR, the territorial configuration of the country led to tension with Russia. Independence led to civil unrest and a major political crisis, as the views of the population of the autonomous territories were not taken into account and the laws of the USSR were violated. As twin sisters, South Ossetia wanted to join North Ossetia, i.e. a Russian part, with Abkhazia again following in their footsteps. Moscow recognised Georgia without changing its borders, perhaps out of fear of a similar action to the Chechen case, but for two long decades it acted as the protective parent of the two autonomous regions.

With independence, Zviad Gamsakhurdia became the first president. After a coup d'état and a brief civil war, Eduard Shevardnadze, a Georgian politician who in Moscow had worked closely with Gorbachev in articulating perestroika, came to power. Under Shevardnadze's presidency, between 1995 and 2003, ethnic wars broke out in Abkhazia and South Ossetia. Around ten thousand people lost their lives and thousands of families fled their homes.

In 2003 the Rose Revolution against misrule, poverty, corruption and electoral fraud facilitated the restoration of territorial integrity, the return of refugees and ethnic acceptance. However, the democratic and economic reforms that followed remained a dream.

One of the leaders of the Rose Revolution, the lawyer Mikhail Saakashvili, became president a year later, declaring Georgian territorial integrity and initiating a new policy: friendship with NATO and the European Union. This rapprochement with the West, and especially the United States, put Moscow on notice .

Georgia's strategic importance stems from its geographic centrality in the Caucasus, as it is in the middle of the route of new oil and gas pipelines. European energy security underpinned the EU's interest in a Georgia that was not subservient to the Kremlin. Saakashvili made nods to the EU and also to NATO, increasing the issue of military troops and expense in armaments, something that did him no harm in 2008.

Saakashvili was successful with his policies in Ayaria, but not in South Ossetia. Continued tension in South Ossetia and various internal disputes led to political instability, which prompted Saakashvili to leave Withdrawal .

At the end of Saakashvili's term in 2013, commentator and politician Giorgi Margvelashvili took over the presidency as head of the Georgian Dream list. Margvelashvili maintained the line of rapprochement with the West, as has the current president, Salome Zurabishvili, a French-born politician, also from Georgian Dream, since 2018.

Fight for South Ossetia

The 2008 war was initiated by Georgia. Russia also contributed to previous bad relations by embargoing imports of Georgian wine, repatriating undocumented Georgian immigrants and even banning flights between the two countries. In the conflict, which affected South Ossetia and Abkhazia, Saakashvili had a modernised and prepared army, as well as full support from Washington.

The battles began in the main South Ossetian city of Tskhinval, whose population is mostly ethnic Russian. Air and ground bombardments by the Georgian army were followed by Russian tanks on the territory of entrance . Moscow gained control of the province and expelled the Georgian forces. After five days, the war ended with a death toll of between eight hundred and two thousand, depending on the different estimates of each side, and multiple violations of the laws of war. In addition, numerous reports commissioned by the EU showed that South Ossetian forces "deliberately and systematically destroyed ethnic Georgian villages". These reports also stated that it was Georgia that initiated the conflict, although the Russian side had engaged in multiple provocations and also overreacted.

Following the 12 August ceasefire, diplomatic relations between Georgia and Russia were suspended. Moscow withdrew its troops from part of the Georgian territory it had occupied, but remained in the separatist regions. Since then, Russia has recognised South Ossetia as an independent territory, as do Russian allies such as Venezuela and Nicaragua. The Ossetians themselves do not acknowledge cultural and historical ties with Georgia, but with North Ossetia, i.e. Russia. For its part, Georgia insists that South Ossetia is within its borders, and the government itself will take care of it as a matter of law and order, thus solving a problem described as constitutional.

Given Georgia's rapprochement with the EU, the conflict prompted European diplomacy to play an active role in the search for peace, with the deployment of 200 observers on the border between South Ossetia and the rest of Georgia, replacing Russian peacekeepers. In reality, the EU could have tried earlier to react more forcefully to Russia's actions in South Ossetia, which some observers believe would have prevented what happened later in Crimea and eastern Ukraine. In any case, despite initiating the conflict, this did not affect Tbilisi's relationship with Brussels, and in 2014 Georgia and the EU signed a agreement of association. Today it is safe to say that the West has forgiven Russia for its behaviour in Georgia.

The war, although short, had a clear negative impact on the Ossetian region's Economics , which in the midst of difficulties became dependent on Moscow. However, Russian financial aid does not reach the population due to the high level of corruption.

The war is over, but not the friction. In addition to a refugee problem, there is also a security problem, with Georgians being killed on the border with South Ossetia. The issue is not closed, but even if the risk is slight, everything remains in the hands of Russia, which in addition to controlling and influencing politics, runs tourism in the area.

This non-resolution of the conflict hampers the stabilisation of democracy in Georgia and with it the possible entrance accession to the European institution, as ethnic minorities claim a lack of respect for and protection of their rights. Although governance mechanisms remain weak in these conflicts, it is clear that recent reforms in the South Caucasus have led to promote inclusive dialogue with minorities and greater state accountability. 

Latest elections

November 2018 saw the last direct presidential elections in the country, as from 2024 it will no longer be citizens who vote for their president, but legislators and certain compromisers, due to a constitutional reform that transforms the country into a parliamentary republic.

In 2018, candidate of the United National Movement, Grigol Vashdze, and the Georgian Dream candidate, Salome Zurabishvili, faced each other in the second round. With 60% of the vote, the centre-left candidate became the first woman president of Georgia. She won on a European platform: "more Europe in Georgia and Georgia in the European Union". Her inauguration was greeted by protesters alleging election irregularities. The Organisation for Security and Cooperation in Europe (OSCE) endorsed the election process, but noted a lack of objectivity in the public media during the campaign.

Some Georgian media consider that Georgian Dream enjoyed an 'undue advantage' because of the intervention in the campaign of former prime minister Bidzina Ivanishvili, now a wealthy financier, who publicly announced a financial aid programme for 600,000 Georgians. It became clear that Ivanishvili pulls the strings and levers of power in the country. This questioning of the cleanliness of the campaign has led to Georgia's downgrading of democratic quality in the 2018 ratings.

Public event presided over in January by Salome Zurabishvili at the Georgian presidential palace [Presidency of Georgia].

THE APPROACH TO THE WEST

Since the policies pursued by the Georgian presidency since Saakashvili came to power, Georgia has made a determined move into the Western world. Thanks to all the new measures that Tbilisi is implementing to conform to Western demands and requirements , Georgia has managed to profile itself as the ideal candidate for its entrance in the EU. However, despite the pro-European and Atlanticist yearnings of the ruling Georgian Dream party and a large part of Georgian society, the country could end up surrendering to Russian pressure, as has happened with several former Soviet territories that had previously attempted a Western rapprochement, such as Azerbaijan and Kazakhstan.

EU compliance

Becoming the most favoured country in the Caucasus to join the European Union, with which it has a close and positive relationship, Georgia has signed several binding treaties with Brussels, following the aspiration of Georgian citizens for more democracy and human rights. In 2016 the agreement of association entered into force between the EU and Georgia, allowing for serious steps in political and economic integration, such as the creation of the Deep and Comprehensive Free Trade Area (DCFTA). This preferential trade regime makes the EU the country's main trading partner partner . The DCFTA financial aid encourages Georgia to reform its trade framework , following the principles of the World Trade Organisation, while eliminating tariffs and facilitating broad and mutual access. This alignment with the EU's framework legal framework prepares the country for eventual accession.

As for agreement of association, it should be mentioned that Georgia is a member country of the association Eastern under the European Neighbourhood Policy. Through this association, Brussels issues annual reports on the steps taken by a given state towards closer alignment with the EU. The committee of association is the formal institution dedicated to monitoring these partnership relations; its meetings have highlighted the progress made and the growing closeness between Georgia and the EU.

In 2016 the EU's Permanent Representatives committee confirmed the European Parliament's agreement on visa liberalisation with Georgia. This agreement was based on visa-free travel for EU citizens crossing the country's borders, and for Georgian citizens travelling to the EU for stays of up to 90 days.

Georgia, however, has been disappointed in its expectations when the EU has expressed doubts about the desirability of membership. Some EU member states cited the potential danger posed by Georgian criminal groups, which several pro-Russian parties in the country took advantage of to wage a vigorous campaign against the EU and NATO. The campaign paid off and anti-Russian opinion waned, prompting Moscow to assert itself further with military manoeuvres, although public support for the Georgian Dream continued in the 2016 elections.

Despite the lack of any prospect of forthcoming accession, the EU continues to offer hope, as in German Chancellor Angela Merkel's tour of the Caucasus last summer. On her visit to Georgia, Merkel compared the Georgian conflict to the Ukrainian conflict due to the presence of Russian troops in the country's separatist regions. She visited the town of Odzisi, located on the border with South Ossetia, and at a speech at the University of Tbilisi said that both that territory and Abkhazia are "occupied territories", which did not go down well with Moscow. Merkel pledged to do her utmost to ensure that this "injustice" remains present on the international diary .

Georgian President Salome Zourachvili also believes that the UK's exit from the EU could be a great opportunity for Georgia. "It will force Europe to reform. And being an optimist, I am sure it will open new doors for us," she said.

Hope in the Atlantic Alliance

Russia's behaviour in recent years, in addition to encouraging Georgia's rapprochement with the EU, has given a sense of urgency to its desire to join the Atlantic Alliance.

In 2016, several joint NATO-Georgia manoeuvres took place in the Black Sea, where a coalition fleet was stationed. This was evidence of a growing mutual rapprochement that Georgia hoped would lead to NATO membership at that year's NATO summit in Warsaw. But despite the country's extensive defence, security and intelligence training, it was not invited to join the club: Russia was not to be inconvenienced.

NATO assured, however, that it would maintain its open-door policy towards eastern countries and considered Georgia to remain an exemplary candidate . Pending future decisions, Tbilisi was left with strengthening military cooperation, offering as an incentive the "Black Sea format", a compromise solution that includes NATO, Georgia and Ukraine and increases NATO's influence in the Black Sea region.

Georgia, as the capital ally of NATO and the European Union in the Caucasus region, aspires to greater protection from the Atlantic Alliance vis-à-vis Russia. The European political centre observes the Georgian population's efforts to join the international organisation and opts for a strategy of patience for the Caucasus region, as in the Cold War years.

Approaching Russia's borders is problematic, and multiple criticisms have been levelled at NATO over the easy Georgian membership due to its geostrategic status . Russia has repeatedly expressed concern about such joint cooperation between the US, NATO and neighbouring Georgia.

President Zurabishvili's speech at the Holocaust remembrance events in Jerusalem in January [Presidency of Georgia].

A VIGILANT RUSSIA

The wounds of the 2008 South Ossetia war have not yet healed in Georgian society. Despite Georgia's political attempts at rapprochement with Western institutions, Russia remains suspiciously vigilant, so that relations between the two countries continue to be troubled. Last summer saw the latest episode of tension, which led the Georgian president to describe Russia as an "enemy and occupier".

After some rapprochement in 2013 that saw an increase in food trade and Russian tourism coming to the country, Moscow has shifted to a strategy of attempting rapprochement at the religious and political level. With that intention, a small group of Russian lawmakers travelled to the Georgian capital for the Orthodox Interparliamentary Assembly. This international organisation, led by Greece and Russia, is the only one that brings together the legislative bodies of Orthodox countries. The meeting took place in the plenary hall of the Georgian Parliament, where Russian MP Sergei Gabrilov took the seat of the Speaker of the House. Several politicians from the civil service examination did not take kindly to this and mobilised thousands of citizens, who staged serious public disorder in an attempted storming of the Parliament. The Russian delegation was forced to leave the country, but the attempt at Russian influence through religion was clear, whereas until then the Church had kept out of all political controversies.

The riots, in which many people were injured, prompted members of the government to cancel all foreign travel and the president to cut short her trip to Belarus, where she was to attend attend the opening of the European Games, a presence considered important in Western eyes. Demonstrators protested against the Georgian Dream headquarters, where they burned and stormed outbuildings. The ten days of rioting were not only justified by the incident at the Assembly, but also as a reaction to the Russian occupation. In addition, the conflict between the Georgian Dream and the opposing parties led by Saakashvili, now in exile in Ukraine, may also have contributed.

The crisis ended with the departure of Prime Minister Mamuka and the appointment of Georgi Gaharia as his successor, despite criticism that he had been criticised for his management of the unrest as interior minister.

The uprisings, while well-intentioned, are against Georgia's interests, the Georgian president said, as what the country needs is "internal calm and stability", both to progress internally and to gain sympathy among EU members, who do not want more tension in the region. Salome Zurabishvili warned of the risks of any internal destabilisation that Russia could provoke.

In the wake of the June protests, the Kremlin issued a decree banning the transport of nationals to Georgia by Russian airlines. While claiming to ensure "national security and protection of citizens", it was clear that Moscow was reacting to an anti-Russian tinged revolt. The decision reduced visitor arrivals from Russia, which had been accounting for one in four tourists, which the government said could mean a loss of $1 billion and a 1 per cent reduction in GDP.

The tension reached the television media in the Georgian capital. Days after the riots, the host of Rustavi 2's 'Post Scriptum' programme intervened in the broadcast speaking Russian and hurled several insults at President Vladimir Putin, which Russia described as unacceptable and 'Russophobic'. The channel apologised, admitting that its ethical and editorial standards had been violated, while several Georgian politicians, including the president, condemned the episode and lamented that such acts only increase tensions between the two nations.

The events of last summer show Georgians' rejection of an enmity with Russia that, in addition to heightening tensions with the big northern neighbour, may have an impact on Georgia's relationship with the EU and other Western international organisations, as they will not tread on quicksand, especially with big Russia in front of them.

REFERENCES

Asmus, Ronald D. A Little War That Shook the World. London: Palgrave MacMillan, 2010.

Cornell S. E. & Starr, F. The Guns of August 2008. Russia's War in Georgia. London: M.E. Sharpe, 2009.

De la Parte, Francisco P. The Returning Empire. La Guerra de Ucrania 2014-2017: Origen, development, entorno internacional y consecuencias. Oviedo: Ediciones de la Universidad de Oviedo, 2017.

Golz, Thomas. Georgia Diary: A Chronicle of War and Political Chaos in The Post-Soviet Caucasus.New York: Taylor and Francis, 2006.

The UN Conference did little to increase international commitment to climate change action, but did at least boost the assertiveness of the EU

In recent years, the temperature of the Earth has risen, causing the desertification of lands and the melting of the Poles. This is a major threat to food production and provokes the rise of sea levels. The Intergovernmental Panel on Climate Change (IPCC) has concluded that there is a more than 95% probability that human activities over the past 50 years are the cause of global warming. Since 1995 the United Nations has organized international meetings in order to coordinate measures to reduce CO2 emissions, which arguably are behind the increases in temperature. The latest meeting was the COP25, which took place in Madrid this past December. The COP25 could be labeled almost a missed opportunity.

ARTICLE / Alexia Cosmello and Ane Gil

The Intergovernmental Panel on Climate Change (IPCC) was established in 1988 by the World Meteorological Organization (WMO) and United Nations Environment Programme. The IPCC's Fifth Assessment Report concluded that: "Climate change is real and human activities are the main cause". In recent years, rising temperatures on earth have contributed to the melting of the Polar Ice Cap and an increase in desertification. These developments have provoked the rise of sea levels and stresses on global food production, respectively.

In 1992, the IPCC formed the United Nations Framework Convention on Climate Change (UNFCCC) with the goal of minimizing anthropogenic damage to the earth's climate. 197 countries have since ratified the UNFCCC, making it nearly universal. Since 1995, the UNFCCC has held an annual Conference of the Parties (COP) to combat climate change. These COPs assess the progress of national governments in managing the climate crisis, and establish the legally binding obligations of developed countries to combat climate change. The most significant international agreements emerging from UNFCCC annual COPs are the Kyoto Protocol (2005) and the Paris Agreement (2016). The most recent COP25(25th Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC) took place in Madrid in December 2019.

The previous conference(COP24) marked a significant improvement in international regulation for implementing the Paris Agreement, but crucially ignored the issue of carbon markets (Article 6). Thus, one of the main objectives of COP25 was the completion of an operating guide for the Paris Accords that included provisions for carbon market regulation. However, COP25 failed to reach a consensus on carbon market regulation, largely due to opposition from Brazil and Australia. The issue will be passed onto next year's COP26.

Another particularly divisive issue in COP25 was the low level of international commitment. In the end, only 84 countries committed to the COP25 resolutions; among them we find Spain, the UK, France and Germany. Key players such as the US, China, India and Russia all declined to commit, perhaps because together they account for 55% of global CO2 emissions. All states will review their commitments for COP26 in 2020, but if COP26 goes anything like COP25 there will be little hope for positive change.

COP25 also failed to reach an agreement on reimbursements for damage and loss resulting from climate change. COP15 set the goal of increasing the annual budget of the Green Climate Fund to 100 billion USD by 2020, but due to the absence of sufficient financial commitment in COP25, it appears that this goal will not be met.

It is worth noting that in spite of these grave failures, COP25 did achieve minor improvements. Several new policies were established and a variety of multilateral agreements were made. In terms of policies, COP25 implemented a global "Gender Action Plan," which will focus on the systematic integration of gender equality into climate policies. Additionally, COP25 issued a declaration calling for increased consideration of marine biodiversity. In terms of multilateral agreements, many significant commitments were made by a vast array of countries, cities, businesses, and international coalitions. Notably, after COP25, the Climate Ambitious Coalition now counts with the impressive support of 27 investors, 763 companies, 393 cities, 14 regions, and 70 countries.

But by far the saving grace of COP25 was the EU. The EU shone brightly during COP25, acting as an example for the rest of the world. And this is nothing new. The EU has been a forerunner in climate change action for over a decade now. In 2008, the EU established its first sustainability goals, which it called the "2020 Goals". These goals included: reducing GHG emission by 20% (compared to 1990), increasing energy efficiency by 20%, and satisfying a full 20% of total energy consumption with renewable energy sources. To date, the EU has managed not merely to achieve these goals, but to surpass them. In fact, by 2017, EU GHG emissions had been reduced not just by 20%, but by 22%.

The EU achieved these lofty goals because it backed them up with effective policies. Note:

i) The launch by the EU Commission in June 2000 of the European Climate Change Programme (ECCP). Its main goal is to identify and develop all the necessary elements of an EU strategy to implement the UN Kyoto Protocol of COP3.

ii) The EU ECCP developed the ETS (EU emissions trading system), which has helped to reduce greenhouse gas emissions from energy-intensive industries and power plants.

iii)The EU adopted revised rules for the ETS in February 2018, which set the limits on CO2 emissions of heavy industry and power stations.

iv)The EU opted for a "circular economy." In May 2018, the EU decided on new rules for waste management and established legally binding targets for recycling. In May 2019, the EU adopted a ban on single-use plastic items.

v) The EU limited CO2 emissions on the roads. In April 2019, stricter emission limits for cars and vans were passed. By 2029, both cars and vans will be required to emit on average 15% less CO2.

vi) The EU approved new regulations in May 2018 for improved protection and management of lands and forests.

If the EU is anywhere near as successful at combating climate change in the decades to come as it has proved itself to be in the past decade, the EU seems primed to achieve both its 2030 Goals, and its 2050 Goals (the European Green Deal). The 2030 Goals include cutting GHG emissions by at least 40% by 2030 (compared to 1990). Such new measures will make the EU's economy and energy systems more competitive, more secure, and more sustainable. The 2050 Goals are even more ambitious: they include the complete elimination all CO2 emissions and the achievement of a climate-neutral EU by 2050. The EU's 2030 and 2050 Goals, if achieved, will be a remarkable step in the right direction towards achieving the Paris Agreement objective to keep global temperature increase stabilized at 1.5ºC and well below 2ºC.

The European Green Deal and 2030 and 2050 Goals will demand far more effort than the 2020 Goals, especially in the political and economic spheres. Poland has yet to commit to the Deal, which has led the European Council to postpone the matter until June 2020. But progress in the EU towards the 2050 Goals is already underway. The Just Transition Mechanism was proposed in December 2019 to provide support for European regions projected to be most affected by the transition to climate neutrality. (This measure will also hopefully serve to assuage the concerns of Poland and other members.) The EU Commission is to prepare a long-term strategy proposal as early as possible in 2020 with the intention of its adoption by the Council and its submission to the UNFCCC shortly thereafter. Furthermore, the EU Commission has also been tasked with a proposal, after a thorough impact assessment, for an update of the EU's nationally determined contribution for 2030 under the Paris Agreement. The EU's example is reason to hope for a bright and sustainable future for the developed world.

Unfortunately, not every developed country is as committed to sustainability as the EU. While many efforts have been made at both the global and regional levels to combat climate change, it is abundantly clear that these efforts are horrendously insufficient. In order to properly address climate change, consistent commitment to sustainability from all parties is imperative. Those countries such as the US, China, India and Russia that abstained from committing to the COP25 resolutions need to begin following in the EU's sustainable footsteps and start behaving like true global citizens as well. If they do not, even the EU's exemplary efforts will not be anywhere near enough to slow climate change.

Brexit, with the departure from the EU of a free-market champion, has boosted the coordination of the free-trade countries of northern Europe.

16th century engraving showing a view of Lübeck, when it was part of the Hanseatic League.

ANALYSIS / Jokin de Carlos Sola

Made up of the little people of Europe's northern coast, the Hanseatic League controls the sea and the money that moves across it. This definition applies to two organisations, one medieval and one recently created, ready to make its voice heard on the European stage.

In 2017, eight northern European countries (the Netherlands, Ireland, Denmark, Sweden, Finland, Estonia, Latvia and Lithuania) began the process of creating the New Hanseatic League initiative. Its main objective goal is to maintain and increase economic orthodoxy, now that the United Kingdom - one of its main supporters - is leaving the European Union, and to prevent France from taking advantage of this moment to implement its expansionary Economics policies.

The first League

The First Hanseatic League or simply the Hansa was a commercial and defensive alliance of trading cities and guilds of the major maritime cities of the Baltic and North Atlantic. Founded in Lübeck in 1158, the first alliance consisted of the free German maritime cities of Lübeck, Hamburg, Lüneburg, Wismar, Rostock and Stralsund.

Many other cities later joined the Hansa, such as Cologne, Groningen, Berlin and Stockholm. In addition, the Hansa set up trading posts in ports in almost all of northern Europe, and even established their own quarters - called kontors -in other places such as London, Antwerp, Novgorod and Bruges.

This alliance acquired great commercial as well as military importance. Since its foundation, the Hansa had maintained an almost symbiotic relationship with the Baltic monastic state of the Teutonic Knights. Later it would establish its own fleet. With the growth of the nation states and the decline of the guilds, the Hansa declined until it consisted only of Lübeck, Hamburg and Bremen, and was finally dissolved with German unification.

Creation of the New Hansa

With the enlargement of the European Union, new opportunities arose to balance the power of the dominant Franco-German bloc (also known as the Aachen bloc) on the European committee . Thus, the Visegrad group , the Three Seas Initiative or the Craiova group have been created in Central and Eastern Europe. In recent years, the New Hanseatic League has emerged in the north of the continent.

The latter initiative was born in the wake of Brexit. As the third country in terms of economic weight in the EU, the United Kingdom has had a great influence on the Union's economic policy, defending ideas such as economic stability, deficit reduction, debt reduction, economic deregulation and a stable monetary policy that avoids inflation, as well as a free trade policy.

These ideas clashed with the French economic policy of greater economic dirigisme and interventionism, with its emphasis on social projects and protectionism. Meanwhile, Germany's cautious attitude acted as a balance and middle ground between the two positions. London's positions have also been supported by the Netherlands and Denmark, as well as other countries with a tradition of maritime trade, who, faced with the prospect of the UK's departure from the EU, decided to establish greater coordination among themselves.

Another cause for the training of the New Hansa is the coming to power of Emmanuel Macron and his rise as a strongman in the EU. Macron has abandoned part of the economic speech with which he was elected in 2017 to move closer to traditional French positions, also followed by countries such as Italy and Spain.

A final trigger for the Dutch- and Irish-inspired initiative was the replacement in January 2018 of Jeroen Dijsselbloem as Eurogroup president by Mario Centeno, Portugal's socialist minister. For many northern European politicians, Dijsselbloem's intransigence in the face of the Greek debt crisis in 2015 was correct and a way forward for EU and Eurozone economic and monetary policy.

This group was initially known by names such as "The Vikings" or "Bad Weather Coalition". In February 2018 the finance ministers of the Netherlands, Denmark, Ireland, Sweden, Finland, Estonia, Latvia and Lithuania signed the founding document of the New Hanseatic League.     

Political and economic values

The main objectives of the New Hanseatic League are based on free trade ideas, as well as maintaining a balanced budget . Its main objectives are the development of the European Stability Mechanism, established in Luxembourg. The idea would be that this development would eventually turn the ESM into a plenary session of the Executive Council European Monetary Fund, which would redistribute wealth between member states with surpluses and those with trade deficits. The Hansa is also in favour of giving the ESM more power to interfere in national budgets in order to avoid exceeding deficit limits.

However, although the founding document sticks to the European Stability Mechanism, the Hansa does not intend to stop there. Some representatives of these countries have spoken out against a budget for the eurozone, a eurozone finance minister and a common deposit insurance scheme, as proposed by Macron. They also criticised the European Commission for its decision not to initiate a disciplinary procedure against Italy over its deficit and debt.

The Hansa's positions have gained general popularity in their respective countries. On the one hand, the right-wing parties in those places have long advocated free trade approaches, while the left-wing parties do not want the welfare state of their respective populations to be put at risk in order to help the southern European countries.

The ideological origins of the New Hansa could be traced back to British Thatcherism in the 1980s. This political ideology included on the one hand a liberal approach to Economics, advocating ideas such as deregulation, privatisation and free trade. Thatcherism did not advocate the break-up of the EU, but included a sceptical view, advocating a union limited to Economics, without advancing political union. This thinking, in opposition to traditional French dirigisme, has had a clear influence within British politics and within the Conservative Party. However, its influence on other European politicians, such as various leaders in the Netherlands and Denmark, is somewhat less well known.

The defence of a liberal and capitalist Europe, contrary to a strong central power, is shared by many countries, all of them located in the northern fringe of the Union. This pits them against the Mediterranean countries, which have required EU aid in recent years.

However, there are other elements that characterise these countries beyond their wealth and geographical position, such as their size and their dependence on trade, derived from their maritime character. This makes them favourable to increased trade treaties and forces them to seek resources they do not have on their own territory.

Leadership of the group

The New Hanseatic League is an initiative and not an organisation as such, so it has no official leader; decisions are taken in unofficial councils of heads of government and finance ministers. However, several personalities have been prominent, notably Mark Rutte, the Dutch prime minister, and Wopke Hoekstra, his finance minister.  

Wopke Hoekstra is considered the architect of the New Hansa. Aged 41, he is a Christian Democrat, a practising Protestant, a member of the Remonstrant Brotherhood and a former student of the Institut Européen d'Administration des Affaires (INSEAD), Europe's most prestigious business school. He has shown the most intransigent side of the Dutch government on economic issues in recent years. It has reached the point that Dijsselbloem himself has criticised the New League's training because, according to him, it damages the idea of solidarity within the Union.

Mark Rutte, on the other hand, has used the creation of the New Hansa to increase the Netherlands' weight in European politics. Rutte is regarded as one of the most active Dutch premiers in foreign policy since the Second World War and has tried to assert the Netherlands in the EU vis-à-vis France and Germany. At the same time Rutte has tried to occupy the British voice in Europe's committee as one of the most Atlanticist leaders.

Other leaders who have shown their involvement in this project have been the Danish finance minister until 2019, Kristian Jensen, and the Irish deputy prime minister, Simon Coveney. On the other hand, the role of Denmark and Sweden was core topic for the Baltic countries to move away from the Visegrad group and join the New Hansa.

Economic, financial and technological weight

The Hansa has managed to bring together an economic weight that other initiatives of the same kind have not been able to muster. Currently, the combined GDP of the Hansa countries is more than 2.2 trillion euros, close to the 2.5 trillion euros of the French GDP, the second largest economic force in Europe.

The group also has clear financial clout. Cities such as Amsterdam, Stockholm and Dublin have been climbing the ranks of Europe's leading financial capitals in recent years, although they have yet to overtake Paris and Frankfurt. Moreover, these are countries where technological innovation exists, especially Estonia and the Netherlands.

The fact that group does not exceed 10% of the European population somewhat mitigates its influence, as the votes of the countries and blocs in the European committee are partly based on issue of inhabitants, but it is nonetheless a relevant political actor in the EU. In contrast, the southern European countries (Spain, Italy, Portugal and Greece) account for 30 per cent of the European population, but are considered less decisive.

The Hansa positions represent a break with the EU principle that, for reasons of inter-territorial social cohesion, those countries that have more and are more developed contribute more. The ideas of the more radical sections of the Hansa can even be labelled as a certain neo-colonialism, insofar as they seek to use the supranational mechanisms of the EU to ensure that debtor countries in the South repay loans, which will keep them at certain levels of debt.

The Netherlands, Sweden, Denmark, Finland and Ireland are among the top contributors to the common European budget , behind the top four (Italy, UK, France and Germany). On a per capita basis, the Netherlands, Sweden and Denmark are at the top of the list. While Estonia, Latvia and Lithuania are beneficiaries, they are less so than Poland, Greece or Romania.

Given its greater contribution to the EU, or less dependence on aid, the Hansa is demanding a greater say in the EU's direction. For the time being, it has succeeded in imposing various criteria on budget in 2020, as opposed to those of the recipient countries.

Exercise of influence

One of the main objectives of the New Hanseatic League was to ensure that the two most controlling figures over the European Economics (the presidency of the Central Bank, and the leadership of the International Monetary Fund) were to its liking. In both cases it has failed, largely because of Emmanuel Macron's intervention.

The Netherlands had a particular interest in the appointment of the ECB, as outgoing president Mario Draghi had lobbied the Dutch government to activate stimulus policies. The New Hansa's candidate was Bundesbank president Jens Weidmann, known for his criticism of Mario Draghi's stimulus policies and for advocating a high-interest policy. Macron agreed with Germany that the European Commission would go to a German (Ursula von der Leyen) in exchange for the ECB being chaired by Christine Laguard, who would continue Draghi's policies.

For the IMF, Rutte proposed Dijsselbloem, despite his criticism of the Hansa. The final vote was between him and Bulgarian economist Kristalian Georgieva. Although Germany ended up voting for the Dutchman, Georgieva became the new head of the IMF. 

However, the Hansa has also had some victories, such as holding the Commission firm on the Italian budget , which was going to exceed deficit limits; exerting influence on the European budget , which has suffered a drastic reduction; or slowing down, if not completely blocking, Macron's project for a common budget for the Eurozone.

visit from Dutch Finance Minister Wopke Hoekstra (right) to his Irish counterpart Paschal Donohoe (left) at the end of 2018 [Gov. of Ireland].

Expansion strategy and partnerships

One of the problems previously mentioned for the Hansa has been its lack of weight in the European committee . For this reason, its leaders have sought the political alignment of countries with which there may be ideological overlaps.

One of the first countries to establish contact with the Hansa countries was Austria. This makes sense since Austria has a similar economic structure to the other Hansa countries due to its small size and population. In addition, the government of Sebastian Kurz seemed to have a strong programme towards Europe very much in line with the Hansa. Famous is the proposal of several Austrian politicians for the creation of two European currencies, one for the north and one for the south. This subject of connections would be very important for later influencing Germany. In the new von der Leyen Commission, the Finance Committee was won for Austria by the economist Johannes Hahn.

The Austrian courtship also seems to have a strategic goal as a step to also start influencing Germany, which acts as a balancer of the balance. Several German politicians from the CDU and CSU are favourable to the Hansa's thinking and have been very influential throughout Merkel's government. But when Wolfgang Schäuble was removed from the Finance Ministry and replaced by the Social Democrat Olof Scholz these positions lost importance.

Similarly, the Hansa (and above all the Netherlands) has been establishing contacts with the Flemish government in Belgium. Although Flanders is just another state in the Belgian federation, the lack of a government in Brussels gives it great importance, along with the government of Wallonia. In addition, the Flemish control the port of Antwerp and have always been closer to the ideas of the Hansa.

On the other hand, the Hansa also seems to have initiated contacts with Slovakia and the Czech Republic. This was seen when in March 2019 both countries signed a declaration together with the Hansa countries against the Italian budget . It would be unusual to see these countries moving very close to the Hansa because they remain natural recipients of European funds. However, given that they are countries with healthy accounts, they could be seen as allies of the Hansa in some future actions.

In a way we could see Hanseatic diplomacy as a partial evolution of Otto von Bismarck's diplomacy (to push France out of power by training regional alliances). The aim is to form a sufficiently strong bloc that can present itself solidly on the European committee and convince Germany to tilt the balance towards budgetary orthodoxy and the interests of the northern countries. Alongside France are most of the southern countries. One could very generally say that the Hansa's objectives are: "Mobilise the North, seduce Germany, silence the Mediterranean".

Strange alliances in front of the Hansa

The Hanseatic configuration of alliances around Europe and their influence on the new European budget seems to have created curious alliances, the largest of which is undoubtedly the one that may arise between Poland and France.

This may sound strange, because when it comes to foreign policy, social policy and on certain points of European integration, Poland and France have been poles apart. But when it comes to economic policy and the European budget , France and Poland are on the same page, and this may result in a common front against the Hansa.

The reasons for the Franco-Polish rapprochement are varied. Both nations follow the tradition of the social welfare state, France because of its republican fraternity bequest and Poland because of its Catholic heritage, both opposed to the Hanseatic absentee state. Moreover, both countries have reasons to want to avoid restrictive budgets. The Polish government fears that a drastic reduction of investment in Poland would force it to make social cuts, which would lead to instability. France is sample opposed for a more ideological reason: Macron has championed the idea of 'A Europe that protects' and would have trouble sticking to this idea.

Nevertheless, Poland and France have some sticking points, especially with Macron's attempt at a new Ostpolik to calm relations with Russia.

Conclusion

The creation of the New Hanseatic League is ultimately written request a reaction to two movements: the creation of European regional systems and the withdrawal of economic policies favouring Northern Europe. 

If the countries of Europe organise themselves into blocs, it may be easier to carry out certain initiatives because there are fewer interlocutors to negotiate with.

On the other hand, the creation of an initiative with the specific goal purpose of defending northern interests may pose a risk for southern countries, accentuating north-south differences in Europe. This would put Germany, which wants to avoid such a compromise, in a difficult position status .

The smart thing to do would be to avoid these confrontations directly by seeking other sources of revenue for the EU that do not compromise the wealth of the Hansa countries, as Morawiecki expressed and Macron has also pointed out. Thus, some taxes have been discussed, such as those on air travel, financial transactions and the digital world. But again, with the importance of the financial sector and new technologies in countries such as Ireland or Estonia, this may encounter civil service examination. It is not a simple task.

In any case, it should be ensured that European politicians have sufficient vision and understanding to make agreements that take into account all the idiosyncrasies of the European Union.

The success of several reforms is overshadowed by the impulsiveness and personal interests of a president with a tarnished image.

Jair Bolsonaro talks to the press at the beginning of January at the headquarters of the Ministry of Economics [Isac Nóbrega, PR].

ANALYSIS / Túlio Dias de Assis

One year ago, on 1 January 2019, a former Brazilian army captain, Jair Bolsonaro, climbed the steps of the Palácio do Planalto for the inauguration of his presidential mandate. He was the most controversial leader to assume Brazil's head of state and government since the presidency of the no less flamboyant populist Jânio Quadros in the 1960s. The more doomsdayers predicted the imminent end of the world's fourth largest democracy; the more deluded, that Brazil would take off and take its rightful place in the international arena. As was to be expected, neither extreme was right: Brazil continues to maintain the level of democracy of the last 30 years, without any military attempt , as some had feared; nor has Brazil become the world power that many Brazilians believe it deserves because of its exceptional territorial, population, cultural and political characteristics. As is often the case, the reality has been less simple than expected.

Economy

Among the most attractive aspects of Bolsonaro's candidacy to the public during the election campaign was the promise of economic recovery under the administration of Chicago Boy minister Paulo Guedes. In order to fulfil this promise purpose, right at the beginning of his mandate, Bolsonaro unified the former ministries of Finance, Planning, development and management, Industry, work and Foreign Trade and Services under the umbrella of the Ministry of Economics, all under the command of the liberal Guedes. Guedes became a sort of "super-minister" manager of the new government's entire economic diary .

From the outset, Guedes made it clear that he would do his utmost to lift the barriers of Brazilian trade protectionism, a doctrine adopted at Degree by every government for more than half a century. In order to deploy his crusade against statism and protectionism, Guedes has this year promoted bilateral trade rapprochement with several strategic allies, which, 'unlike previous governments, will not be chosen on the basis of ideological criteria', according to Bolsonaro. Already in January there was the advertisement of a Novo Brasil at the World Economic Forum in Davos, defined by greater openness, zero tolerance for corruption and the strengthening of Latin America as a regional bloc.

Retail

Despite his support for economic openness, Bolsonaro's team has never been overly favourable to trade with Mercosur - his regional multilateral trade bloc - with Guedes even stating that it was a burden for Brazil, as he considered it an ideological rather than an economic alliance. However, this aversion to Mercosur, and mainly to Argentina, seems to have ended after the signature of the Mercosur-EU tradeagreement , given that the potential volume of trade that would be generated by such a pact would be enormously beneficial for Brazilian agricultural and livestock producers. area Similarly, a agreement was also signed with the countries of the European Free Trade Area (EFTA), comprising Switzerland, Norway, Iceland and Liechtenstein.

Of these two agreements, the most controversial has been the one signed with the European Union, mainly due to the high levels of rejection in some member states such as France, Ireland and Austria, as it is seen as a possible risk to the Common Agricultural Policy. On the other hand, some other countries were critical, citing Bolsonaro's environmental policy, as the agreement was signed during the summer, which coincided with the time of the fires in the Amazon. As a result, several member states have still not ratified the treaty and the Austrian parliament has voted against it.

However, the fact that multilateral trade relations do not seem to have made much progress, due to the obstacles imposed by Europe, has not prevented Brazil from expanding its commercial activity. Contrary to what one might think, due to its ideological closeness to Donald Trump and his foreign policy, the rapprochement in subject economic relations has not been with the US, but with the antagonistic Asian giant. In this process, Bolsonaro's trip to Beijing stands out, where he showed himself to be open to Chinese trade, despite his previous less favourable statements in this regard. agreement During the proposal visit a free trade agreement with China, which has yet to be approved by the Mercosur summit, and several smaller agreements, including one on agricultural trade, came up.

This sudden Chinese interest in increasing agricultural imports from Brazil is due to the increase in demand for meat in China, triggered mainly by the swine fever epidemic that devastated domestic production. This has led to an immediate rise in the price of beef and pork in Brazil, up to 30% in some cuts in little more than a month, which has distorted the domestic market, as meat, mainly beef, is usually very present in the average Brazilian's regular per diem expenses .

Public accounts

With regard to the country's internal accounts, it is worth highlighting the approval of the pension reform(Reforma da Previdência), which initially had a markedly liberal character, with the aim of eliminating privileges and disproportionate pensions for high-level public officials. However, several modifications during its passage through the Chamber of Deputies and the Senate meant that the savings for the public treasury were slightly less than Guedes had envisaged. Still, it is a big step forward considering that the pension system had a deficit of 195 billion reais (about $47 billion) in 2018. This deficit is due to the fact that Brazil had one of the highest benefit systems in the world with the fewest demands, with many people retiring at the age of 55 on 70 per cent of their original salary.

This measure, together with several other adjustments in the public accounts, including the freezing of some ministerial expenditures, reduced the public deficit by 138.218 billion dollars in January (6.67% of GDP) to 97.68 billion dollars in November (5.91% of GDP), the most leave since the economic recession began five years ago. Among other relevant data is the drop in the Central Bank's base interest rate to a historic low of 4.5%, while the unemployment rate fell from 12% to 11.2%.

result As a result, Brazil's GDP has increased by 1.1 per cent, a timid but promising figure considering the huge recession from which Brazil has just emerged. Growth forecasts for 2020 vary between 2.3 and 3 per cent of GDP, depending on the approval of the long-awaited tax reforms and management assistant.

Security

Another reason for the controversial captain of reservation to become president was Brazil's historic crime problem. Just as Bolsonaro came up with a strong name to tackle the economic status , for security he recruited Sergio Moro, a former federal judge known for his indispensable role in Operação Lava Jato, Brazil's biggest anti-corruption operation, which led to the imprisonment of former president Lula himself. With the goal to fight corruption, reduce criminality and dynamite the power of organised crime, Moro was put in charge of a merger of Departments, the new Ministry of Justice and Public Security.

In general, the result has been quite positive, with a B decrease of issue in violent crime. Thus, there has been a 22% reduction in homicides, which is one of the most worrying indicators in Brazil, as it is the country with the highest absolute issue number of homicides in the world per year.

Among the factors that explain this drop in violent crime, the main one is the greater integration between the different institutions of state security forces (federal, state and municipal). The transfer of gang leaders to prisons with a higher level of isolation, thus preventing them from communicating with other members of organised crime, has also played a role. Another element has been the recent"anti-crime pack" C , which consists of a series of laws and reforms to the penal code to give more power to state security forces, as well as stiffer penalties for violent crime, organised crime and corruption.

In contrast to these developments, there has also been an increase in the number of accidental deaths in police operations. Some cases have been echoed in public opinion, such as that of an artist who ended up shot in his car when the police mistook him for a drug trafficker, or those of children killed by stray bullets in shoot-outs between drug gangs and the security forces. This, together with controversial statements by the head of state on the issue, has fuelled criticism from most of civil service examination and several human rights NGOs.

Social policy and infrastructure

In terms of social policies, the past year has been far from the apocalyptic dystopia that was expected (due to Bolsonaro's previous attitude towards homosexuals, Afro-Brazilians and women), although it has not been as remarkable as in the previously mentioned sections. There has been no progress in areas core topic, but neither have there been notable changes in terms of social policy compared to 2018. For example, the emblematic social programme Bolsa Família, created during the Lula government and which greatly helped to reduce extreme poverty, has not been cancelled.

Starting with Education, at the end of 2019 Brazil came out with one of the lowest report PISA scores, a fact that the minister of education, Abraham Weintraub, blamed on the "Education progressive Marxist mood of previous administrations". As result of the failure of the regular public system, and even the lack of security of some centres, the government has openly promoted the construction of new civic-military Education centres by state governments. In such a subject centre, students receive a Education based on military values while the officers themselves provide protection in these public spaces. It should be noted that the existing schools are among the highest ranked in Brazil on subject in terms of educational quality. However, this is not without controversy, as there are many who consider that this is not an adequate solution, as it may end up educating from a militaristic perspective.

On subject health, the most notable event this year was the end of the health cooperation programme with Cuba, Mais Médicos. goal This agreement was launched in 2013, during Dilma Rousseff's term in office, and its aim was to provide a larger and more extensive universal medical service attendance through the contracting of several doctors 'exported' by the Castro government. The programme was criticised because the Cuban doctors only received 25% of the salary provided by the Brazilian government and the remaining 75% was retained by Havana. Bolsonaro broke the agreement, thus causing vacancies in staff health care that could be filled in a short time. Cuban professionals were given the opportunity to remain in Brazil under political asylum if they revalidated their degree program in medicine in the Brazilian system. This incident has not brought about a significant change in the precarious national health system; the only consequence has been the deterioration of relations with Cuba.

Despite not making much progress on the social front, the Bolsonaro administration has made improvements in national logistics infrastructure. Under the command of the military's Tarcisio Gomes de Freitas, the Ministry of Infrastructure has stood out for its ability to complete works not finished by previous governments. This led to a noticeable difference in the issue and quality of operational roads, railways and airports compared to the previous year. Among the sources of financing for new works is the reopening of a pooled fund established in 2017 between Brazilian and Chinese financial institutions, worth US$100 billion.

visit Bolsonaro with Indian Prime Minister Narendra Modi during an official visit to New Delhi in late January [Alan Santos, PR] [Alan Santos, PR].

Environment

One of the areas most feared to be harmed by Jair Bolsonaro's administration was environmental policy. This concern was heightened by the controversial fires in the Amazon during July and August. To begin with, the Ministry of the Environment, like all the others, was affected by the austerity policies of Paulo Guedes, in order to balance the public accounts, although according to Minister Ricardo Salles himself, it was the one that suffered the least from the budget cuts. As a result, forest protection was compromised at the beginning of the drought period in the Amazon.

Seeing the 278% increase in deforestation in July, Bolsonaro reacted impulsively and fired the director of the high school Nacional de Pesquisas Espaciales (INPE), accusing him of favouring civil service examination and conspiring against him. The status prompted the departure from the Amazon Protection Fund of Germany and Norway, the two largest contributors, which was met with criticism from Bolsonaro, who also accused the NGOs of being the cause of the fires. Finally, under international pressure, Bolsonaro finally reacted and decided to send in the army to fight the flames. goal which he achieved in just under a month, reaching the highest number on record in October leave .

In the end, the annual total ended up 30% higher than the previous year's figure, but still within the average range of the last two decades. However, the damage to the national image was already done. Bolsonaro, thanks to his rivalry with the media, his vehement eagerness to defend "national sovereignty" and his lack of restraint when speaking, had managed to be seen as the culprit of a distorted catastrophe.

Additionally, at the end of the year, yet another controversy hit the Bolsonaro administration: the mysterious oil spill off Brazil's northeast coast. Thousands of kilometres of beaches were affected and to this day there is still no official culprit for the crime. There were several hypotheses on the matter; the most widely accepted, which was also supported by the government, was that the spill came from an illegal shipment of Venezuelan oil attempting to circumvent the trade blockade imposed on Maduro's regime. According to analyses carried out by the Universidade da Bahia, the structure of the oil was indeed very similar to that of crude oil from Venezuelan fields.

Foreign policy

In foreign policy Bolsonaro can distinguish himself rhetorically from his predecessors, but not in terms of his actions. Although he would like to apply his ideology in this area, he himself has accepted that this is not possible. In the face of the strength and interests of state institutions, such as the diplomatic tradition of Itamaraty (Ministry of Foreign Affairs), Brazilian foreign policy has remained as pragmatic and neutral as in all previous democratic governments, thus avoiding the closing of doors for ideological reasons.

A good example of Brazilian pragmatism is the economic rapprochement with China, despite Bolsonaro's rejection of communist ideology. This does not mean, however, that he has distanced himself from his quasi-natural ally in terms of ideology, Donald Trump. However, the relationship with the US has been of a different nature, as there has been greater proximity in international cooperation and security. The US pushed for Brazil's designation as a strategic NATO partner , reached a agreement for the use of the Alcântara space base, very close to the Equator, and supports Brazil's entrance in the OECD.

In the economic sphere, however, there does not seem to be such closeness, and there have even been some frictions. One of these was Trump's threat to impose tariffs on steel and aluminium from Brazil and Argentina, which he finally withdrew, although the damage to trade relations and the São Paulo and Buenos Aires stock markets had already been done. Some analysts even suggest that the lack of reciprocity from the US on subject , as well as the rejection by some EU members of the agreement with Mercosur, was what pushed Bolsonaro to seek a compensatory relationship with the BRICS, whose 2019 summit took place in Brasilia.

Another peculiar point of Bolsonaro's foreign policy has been his position on the Israeli-Palestinian conflict, which once again sample shows the inconsistency between rhetoric and action. During the election campaign Bolsonaro promised on several occasions to move the Brazilian embassy from Tel-Aviv to Jerusalem, something that has so far not happened and only an economic office has been relocated. Bolsonaro probably feared trade reprisals from Arab countries, to which Brazil exports products, mostly meat, worth almost 12 billion dollars. Prudence on this issue even earned him the signature of several agreements with Persian Gulf countries.

Despite the above, there has been one aspect of foreign policy in which Bolsonaro has managed to impose his ideology against the 'historical pragmatism' of the Itamaraty, and that is the Latin American sphere. Brazil ceased to be the theoretically neutral giant that timidly supported the so-called Socialism of the 21st century during the Lula and Dilma governments, and now coordinates with the governments of the other political side.

Most notable is his enmity with Nicolás Maduro, as well as with former president Evo Morales, whose request to pass through Brazilian territory was openly denied by Bolsonaro. There has also been a distancing from the returning Peronism in Argentina, with the absence of Bolsonaro and any high-ranking Brazilian representative at the inauguration ceremony of Kirchner's Alberto Fernández. In the same context are the approaches to Chile, Uruguay, Paraguay and Colombia, as well as the new Bolivian government provisional , with which Bolsonaro sees more similarities. With them he has promoted the creation of PROSUR as opposed to the former UNASUR controlled by the Bolivarian left. Even so, despite having adopted a more ideological policy in the region, Brazil continues to maintain diplomatic cordiality since, although its leader takes liberal conservatism to extremes in his rhetoric, his policies in the region hardly differ from those of other right-wing governments.

Bolsonaro

In general, as has been shown, Bolsonaro's government has achieved positive results in its first year, mainly highlighting its progress in the areas of security and Economics. However, while the work of various ministers has improved perceptions of the administration, Bolsonaro himself does not appear to be making a particularly positive contribution. Throughout the year, he has generated controversy over unimportant issues, which has accentuated his previous enmity with most of the press.

As a result, the president's public image has gradually deteriorated. At the end of 2019 his popularity stood at 30%, compared to the 57.5% he started the year with. This contrasts with the approval rating of members of his government, especially Sergio Moro, who has managed to remain unmoved above 50%. In addition, his son Flavio, who is a senator, has come under investigation for a possible corruption case, in a process that the president has sought to prevent. Bolsonaro also caused a scandal in the middle of the year when he tried to appoint his son Eduardo as ambassador to Washington and was accused of nepotism. In addition to the tensions in his own party, which led to a split, there is little rapport between Bolsonaro and the presidents of both chambers of the fractured congress Nacional, both of whom are under investigation in conveniently stalled anti-corruption operations.

Impeachment?

All this chaos caused by the president gives the impression of a Bolsonaro who goes against the tide of his own government. The apparent success of the reforms already carried out ends up being tainted by the impulsiveness and personal interests of the man who once defended the impersonality of the state, which ends up causing the deterioration of his political image. In addition, there is the recent release of former president Lula, which entails the risk of the unification of the civil service examination, depending on how moderate speech is adopted. This being the case, it is possible that Bolsonaro's headless but efficient government will not find it easy to stay in power until the end of its term. It should be remembered that the hand of Brazil's congress does not usually tremble when it comes to impeachments; in little more than three decades there have already been two.

Will success in parts of the Vision 2030's diary -like diversifying the economy- have a parallel opening up to religious moderation?

King Salman bin Abdulaziz Al Saud in a recent Custodian of the Two Holy Mosques Chairs Cabinet's Session [Saudi Press Agency] [Saudi Press Agency].

ANALYSIS / Marina García Reina

Since King Salman first envisioned the need of a reform of Saudi Arabia towards a less dependent economy on petroleum, gradual changes have been done upon the aim of progress, and, in a more precise way, not to be left behind in the world race led by western countries and the booming Asian giants. The crown prince Mohammed bin Salman Al Saud has positioned himself as the leader of the shift towards a religiously moderate Saudi Arabia within the frame of the Vision 2030 initiative. Predictably, however, the reforms held in the country have been subject to numerous criticisms and double readings.

A succinct contextualization

It is convenient to recall the year 1979, when Shiite militants overthrew the secular Shah of Iran and Sunni fundamentalists besieged the Masjid al-Haram (Grand Mosque) in Mecca. That same year, the country's Shiite minority started a revolt in Al-Hasa province, resulting in numerous deaths. The Saudi monarchy responded to those mishaps by moving closer to the Wahhabi (an extremely conservative conception of Islam) religious establishment and restoring many of its hardline stances. As a result, for instance, the government shut down the few cinemas that existed in the kingdom. It was not till 2015 (or 2014, depending on which reforms to base on) when King Salman bin Abdulaziz Al-Saud -along with Mohammed bin Salman (popularly known as MBS), who he promoted to crown prince-, proclaimed reforms in Saudi Arabia towards a more moderate political scenario, opening up a new era of Saudi politics. The two expressed their will to limit the authority of the religious police to arrest citizens. They allowed the first cinemas and music concerts since decades of prohibitions, condemned religious incitement, and gradually granted women several rights.

Vision 2030

First conceived by King Salman, Vision 2030 is meant to be the decisive plan to transform the country by a sweep in economy and society, and Crown Prince Muhammad bin Salman himself has positioned as its spearhead. It is basically the headline upon which all the modernization changes are framed. The plan aims to face the three major challenges that Saudi Arabia has nowadays: unemployment, diversification, and privatisation.

It is worth mentioning that in contrast to the great majority of western countries, Saudi Arabia has a growing youthful population. Approximately, 70% of Saudi population is under 30 and the 29% of Saudis between 16 and 29 are unemployed. Vision 2030 includes greater investments in education to train future Saudi leaders, which seems quite unnecessary when noticing that Saudi citizens pay no taxes and receive free education (making up 25% of the total budget), free health care and subsidies for most utilities.

Economy is something that has been worrying most Saudis, since the country's economy is almost entirely based on petroleum and recently the price of a barrel of oil has ranged between about $46 and $64 in 2019, much lower that what it has ranked for years. Diversifying the economy is crucial for the progress of Saudi Arabia. All in all, Vision 2030 will rely on earnings coming from the Aramco's IPO (initial public offering), which will be placed in a sovereign wealth fund -also sourced by Saudi fiscal assets and the sale of state-owned real estate and other government assets-, expectedly resulting into an investment-driven economy rather than a petroleum-based one as it has been for decades. It has also cast serious doubts the nature of the measures that are being developing to modernize the country, especially because the social aspects have been left apart by, for instance, the construction of Neom, a planned futuristic city in the middle of the desert, which is meant to be the great achievement of the crown prince MBS.

Additionally, the initiative has been configured as the political rebirth of the crown prince in the eyes of the international sphere, since it means diminishing the role of government by selling Aramco's 5% of shares to investors, even so, the enterprise still is under tight control of the royal family. Without going any further, Khaled Al-Falih, the chairman of Aramco, is also the new minister of Energy, Industry, and Natural Resources, which once again brings to light the relation between these two.

The stated target is to increase the private sector's contribution to GDP from 40% today to 65% by 2030. Much of this private sector growth will come through public-private partnerships, as said before, high-positioned Saudis will have been directly or indirectly pressured to invest in the IPO. The Saudi government has been criticised on several occasions for being corrupted and showing a lack of transparency over its acts. In this area, Vision 2030 hopes to ensure the law and the obligation of honestly reporting every business activities. Under proposal of MBS a follow-up department, headed by a ministerial rank official, has been set up to follow the implementation by government ministries of projects that have been approved.

Anti-terrorist positioning and extremist ideologies

Mohammed bin Salman has severely expressed his aim of not only dealing with extremist ideologies, but also of destroying them. As part of this determination, some clerics, which are meant to form part of the extremist ideology that the leader seems to condemn, have been targeted.

Nevertheless, organizations such as Amnesty International, Human Rights Watch and the Committee to Protect Journalists have demonstrated that these presumed extremist clerics have long records of advocating the type of reform and religious moderation MBS asserts to support. For instance, in September 2017, numerous clerics, journalists and scholars known for their reluctance to MBS policy, which they consider as half-measured and not going straight to the point, were arrested by Saudi security forces. On the other hand, certain state clerics continue unpunished despite publicly criticizing the reforms and inciting hatred against the Shia minority. In particular, two members of the Council of Senior Scholars -the highest religious body in the country, whose role is to advise the King on religious matters by issuing fatwas (judicial advice provided by a religious specialist)- have been in the spotlight for years. These are Saleh al-Fawzan and Samm leh al-Lohaidan, both close to bin Salman. These two scholars are owners of broadcasting channels funded and promoted by the Saudi government from which they divulge their ultra-conservative view of Islam and condemn with the death penalty whatever they consider as violations of religious and moral rules contrary to Islam. An example of such are the declarations made saying that Shiites are not Muslims or that Muslims are not allowed to protest or even publicly criticize rulers as this would lead to rebellion that would in turn justify rulers' violent response, like those held in 2017.

Together with these personalities, there are others who also hold high-rank positions in the country's politics and government. Abdulaziz al-Sheikh, for example, is the grand mufti (muslim religious who has the authority to interpret Sharia) of Saudi Arabia. In that capacity, he has issued numerous fatwas and statements preaching the virtues of obedience to existing authorities and submitting to their policies without question. This, once again, raises the question of whether or not Saudi Arabia is actually cleansing extremist ideologies. Some, as Abdullah Almalki -a religious academic-, argue that the sovereignty and free choice of the people must have precedence over any desire to implement Sharia and that justice and free choice must be the pillars of any political community.

Almalki's father, Salman Alodah, like himself, advocates religious tolerance against calls of jihad in Iraq, Syria, and elsewhere, calling for a democratic change, supporting the empowerment of women, fighting against discrimination, and respecting the religious minorities who are marginalized in the Kingdom. Both Almalki and Alodah were also arrested in the 2017 detentions and referred the following year to court for a secret trial -something that has become common when the accused are moderate voices, feminists and intellectuals-, facing death penalty for their extra-progressive views. Besides these cases, probably the best known one was that of the Washington Post columnist Jamal Khashoggi's murder at the Saudi consulate in Istanbul in October 2018.

In contrast to some of these powerful men characterised by their severe religious stances, the Saudi society as a whole holds a somewhat more nuanced view of Islam and does not completely identify with them. On this, it is worth recalling the attack on the Shia mosques carried out by Daesh in May 2015. The event was followed by mass funerals in the Saudi streets, which exposed the unity of the Saudi people above sectarian lines.

Al Qaida was apparently eradicated from the country and, as a result of that, it moved its operations to Yemen, where Saudi Arabia's military force together partnered with the UAE -with limited US support, it must be said- and the Yemeni government forces have been doing efforts to combat it, achieving, for instance, the liberation of Mukalla. Specifically, Saudi Arabia blames the failing states of Iraq, Lebanon, Syria, and Yemen as the reason why Al Qaida has not yet been definitively eradicated.

The Iraqi government broke down after the US invasion in 2003, which led to a sectarian and corrupt government. In Syria, Bashar al Assad led the military uprising and breakdown of authority, providing al Qaida refuge, although he continuously expressed he was combating terrorists, actually al Qaida freely operated in both sides of the border. Saudi Arabia claims that further efforts must be made to remove Assad as an essential part of the battle against terrorism in the region. It also advocates efforts at the international level to stop with the use by terrorists of pro-Palestine propaganda to recruit young members.  

Aramco and the oil crisis

Petroleum prices have dropped considerably in recent years, exacerbating the need of a side Saudi economy which does not revolve around oil. This has become a rough task, taking into account that the petroleum sector employs around 70% of the population in Saudi Arabia. Aramco's IPO, which promises to sell shares to investors, has become the centre of the Vision 2030 initiative for Mohammed bin Salman.

The reasons behind the IPO are two: money -Saudi Arabia needs greater money inputs in order to accomplish the reform plans and finance the war in Yemen- and the political rehabilitation of the crown prince (MBS) under the consent of the international sphere, portraying, in a way, that the IPO may not be motivated that much because of an economic interest (which of course it is) but more deeply because of a political benefit of claiming that Saudis are opened to the world by selling part of Aramco to foreigners.

The tremendous expectation raised around the IPO can be interpreted as a way of starting attention of the incidents of 2017 and Khashoggi's murder mentioned before. Aramco's initial public offering, which started this last December in Tadawul (Saudi Arabia's domestic stock market), went resoundingly bad after the US attack in Baghdad resulting in the death of the Iranian military commander Qasem Soleimani as well as the Iraqi-Iranian deputy chief of the armed organisation Popular Mobilization Committee. Shares of the State petroleum company have dropped in a 1.7%. However, in spite of this event, Aramco's IPO went reasonably well and the company managed to be valued at $2 billion, which is not surprising considering that the Saudi government has actively encouraged Saudis to invest, meaning that there are investors (people within the orbit of the royal court and big business) who have no choice in the matter because their livelihoods and stature are dependent on proving they support Mohammed bin Salman's program and retail investors who will invest because of all the hoopla and nationalist sentiment whipped up around the offering.

Women and the guardianship rule

Undoubtedly, changes have been done within the Saudi State to overcome the lack of involvement of women in everyday life. As an example of it, the permission to drive automobiles extended to women has found a significant echo globally. Women make up half of the population in Saudi Arabia. As part of the Saudi transformation of its economy plan, there is a need beyond the sole fact of integrating women in society, namely that of integrating this half of the Saudi population into the labor force.

Women conform nowadays just the 7% of the work force. After the implementation of the Vision 2030 plan, the number is expected to rise up to a 30% by that year. Following a worldwide tendency, more women than men graduate from universities in all disciplines. Furthermore, thanks to efforts attributed to the crown prince and to King Abdullah before him, women can be members of the Consultative Assembly since 2014. Currently, they occupy 20% of its seats. In September 2011, King Abdullah granted women the right to vote, a right they exercised in 2015 for the first time.

Further changes have been done within the country in favour of integrating women, which have gone unnoticed by the public eye. Princess Reema bin Bandar al Saud is an example of that. As president of the Saudi Federation for Community Sport, she has developed different initiatives, together with other ministries, to promote women; for instance, by creating football leagues. Moreover, opening women access to the armed forces has also been a huge step forward considering the impact in the shift of gender perspective. It cannot be omitted that Saudi Arabia has been for decades an extremely conservative country and that what may be seen as basic things for westerners in the 21st century, supposes a top-down reform within their principles, especially considering that they are being introduced in a considerably short time.

Conclusion

Saudi Arabia is facing -and will face in the following years- great challenges to redirect the country's economy into one less dependent on oil, and to reeducate a youth that has been raised up with almost everything being granted by the government. Finally, there is also the challenge of making bin Salman's vision more translatable to the western public, which, as said, see the reforms with some skepticism, notwithstanding official energetic and ambitious proclamations. As a summary, society, diversification of economy and governance and bylaws are crucial for the Saudi progress. What is true is that, regardless the reticence of Westerners, MBS has gained huge support among his compatriots and is thought to be the reformer he repeatedly self-proclaims to be. This may lead us, Westerners, to consider whether an Islamic conception of renovation of Islam in appliance to govern is similar, and if so, to which extent, to our own conception of it.

By blocking some candidates, the European Parliament seeks the prominence denied by the failure of the proclamation of the Spitzenkandidat

▲ Ursula von der Leyen, at the plenary session of the European Parliament in which she defended her candidacy [European Commission]

ANALYSIS / Jokin de Carlos

In 1963, the Elysée Treaty was signed between President Charles de Gaulle and Chancellor Konrad Adenauer, ending centuries of Franco-German rivalry and beginning the friendship between the two countries. Over the next few decades, France and Germany, as the leading economies of the Union, would largely mark the diary political and economic. Even in times of crisis, both leading countries avoided giving an image of confrontation.

However, after the European elections last May, there was a public tussle between Berlin and Paris over who should replace Jean-Claude Juncker as head of the European Commission. On the one hand, led by Angela Merkel, there were those leaders who defended the nomination of the Bavarian Manfred Weber, Spitzenkandidat of the European People's Party, made up of conservative formations; on the other hand, led by Emmanuel Macron, there were those who, of liberal or social democratic tendencies, opposed this nomination in preference to the Dutchman Frans Timmermans or the Danish Margrathe Vestager.

After weeks of negotiation and diplomatic tension, Weber's candidacy was withdrawn, in part because of Merkel's political weakness in Germany and the momentary defenestration of Sebastian Kurz in Austria due to Ibizagate. But the position it was not for Vestager or Timmermans but for Ursula von der Leyen, Germany's defense minister and Merkel's Christian Democrat colleague, originally from Hanover and from an aristocratic family. 

And so ends the summer of our discontent, with this Hanoverian sun.

Election

One of the main problems facing the new president of the Commission is going to be how to achieve consensus among the leaders in the committee and between parties in Parliament.

Von der Leyen was unanimously elected in the committee, however, his election to the European Parliament was the closest in history, with only nine votes above the required majority. This vote had several surprises, such as the favorable vote of the Italian 5-Star Movement or the Polish PiS and the rejection of the SPD or the totality of the Greens.

Composition of the Commission

On 9 September, von der Leyen announced her nominees for the new Commission, which is made up of 28 members in the 28 member countries, although the United Kingdom Withdrawal to have a site for its scheduled departure from the Union on October 31.

The von der Leyen Commission has been organised in the form of pillars, each led by a Vice-President and composed of one or more Commissioners with specific portfolios. There are five pillars: (a) agreement European Green, which will cover topics such as energy, transport and agriculture; (b) a Europe ready for the digital age, for issues such as innovation and skill; (c) protecting our European way of life, which will encompass the areas of immigration and security; (d) one Economics to work for the people, destined for commerce, work and finance, and (e) a strong Europe in the world, which will include issues such as international relations or crisis management.

For the composition of this Commission, von der Leyen has tried to integrate two of the Spitzenkandidat who were discarded for the presidency. Socialist Frans Timmermans, a former Dutch deputy prime minister, will remain as vice-president and lead the pillar of the agreement the European Greens, while the liberal Margrethe Vestager, former Danish Deputy Prime Minister, having been Commissioner for skill in the previous Commission, he will lead the pillar of A Europe Ready for the Digital Age. These are two of the most popular Commissioners in the Juncker Commission; in the case of Vestager for her fight against tax evasion by several large American technology companies, such as Google, Amazon or Apple.

Of the rest of the vice-presidents, three will head the other three pillars: the new High Representative of the Union Josep Borrell, former Spanish minister in several portfolios and former president of the European Parliament, will lead A Strong Europe in the World; Christian Democrat and former Latvian premier Valdis Dombrovskis will lead the economic pillar, and Greek conservative Margaritis Schinas will lead the pillar of protecting the European way of life.

Three other vice-presidencies, with smaller areas, will go to the Czech Republic's Verá Jorubá (Values and Transparency), Slovakia's Maroš Šefčovič (Interinstitutional Relations) and Croatia's Dubravka Šuica (Democracy and Demography).

Among the nominees for commissioners are prestigious people who have held important positions in their respective countries, as well as in previous European commissions: Paolo Gentiloni, former Italian premier, will be commissioner of Economics, and Didier Reynders, former Minister of Defence, Finance and Foreign Affairs in Belgium, will be in charge of Justice.

Analysis

There are two characteristics that can be highlighted about this Commission proposal: (1) The first is its more political character and (2) the second is a marked Francophilia. 

(1) On previous occasions the commissioners used to show a profile and in many cases a preference for staying in the shadows. In a way, they could have been considered the secretariat of the committee European. However, the selection made by Von der Leyen seems to want to put an end to this tradition, by opting for more well-known names. Thus, Gentiloni or Dombrovskis have previously governed their countries, while others such as Vestager, Timmermans or Reynders have had a certain previous prominence. It seems that the interest of EU politicians is no longer so much to create the European Federation as soon as possible as to bring Brussels closer to the people. Whether this strategy works or not, time will tell.

(2) The second characteristic of this new Commission is a clear pro-French direction, to the satisfaction of Emmanuel Macron. Many of the members of the Commission are political allies of the French President; the clearest is the case of Ursula von der Leyen herself, despite having been part of Merkel's cabinet and being a co-religionist of hers. It should be remembered that it was Macron who proposed it for the position after the veto of Weber, who was the candidate Merkel's initial. But that's not all. Both Timmermans and Vestager are political allies of Macron (Vestager had been his first choice to chair the Commission). Josep Borrell is also a well-known Francophile, and Didier Reynerds is a French-speaking Belgian whose party is allied with Macron's, as is the Italian commissioner Paolo Gentiloni. So this is a mostly Francophile Commission, which could increase Macron's weight on the Union and advance his vision of Europe.

Outside the Commission, the other officials nominated by the committee They were Christine Lagarde, a former French finance minister, who has stepped down from leading the IMF to head the European Central Bank, and Charles Michell, the French-speaking prime minister of Belgium and Macron's liberal colleague, the new president of the European Central Bank. committee European.

These nominations have also sought to meet a series of objectives:

i) The first and clearest is that the aim is to put an end to the possible alienation of the countries of Central and Southern Europe. Out of eight vice-presidents, four are from Central Europe, in charge of such important areas as the economic pillar or justice issues; two others are from the South, with responsibility for immigration and foreign policy issues.

ii) An attempt has also been made to reach out to groups that may have doubts about von der Leyen or directly voted against her in the parliamentary session. Looking at the greens, the portfolio agreement European Green aims to reduce carbon emissions by 55% from their 1990 levels by 2030 and make Europe the first zero-carbon continent by 2050. The pillar on immigration, called Protecting our European way of life, seems to want to augur a stricter immigration policy with the aim of promoting a more sustainable immigration policy. goal to maintain the support of Poland's PiS and Hungary's Fidesz.

iii) Briefly, it should also be mentioned that the nomination of Gentiloni to the economic portfolio seems to be a way of rewarding Italy for the training of a pro-Brussels government. While the nomination of a left-wing Italian to Economics It seems that the nomination of Austrian conservative Johannes Hahn to the Budget Committee has been made to balance that of Gentiloni.

Challenges and potential complications

The four main challenges facing this new Commission seem to be ecology, Economics, immigration and the construction of a common foreign policy.

As has been said before, the nomination of Borrell and other commissioners may lead to a foreign policy that follows French lines, which at times can lead to conflicts with Poland, the Baltic States or even Germany if tensions between France and the United States lead Washington to question its commitments to NATO and Russia.

Immigration looks set to remain a major issue for the Commission, although not as much as in recent years, largely because the issue The number of people arriving in Europe has dropped drastically. From more than one million in 2015 to less than 150,000 in 2018. Everything seems to indicate that the line on illegal immigration is going to be tougher than in previous years, although an attempt will be made to avoid populist rhetoric. However, the very name of the portfolio, Protecting our European Way of Life, has already come under fire from certain political sectors and civil society in Western Europe.

The Economics will be another element core topic. With a Brexit that could damage the Economics or cause a slowdown.

Another major problem is going to be related to Timmermans and his position. As the head of the pillar agreement The Dutch will be in charge of dealing with countries to reduce their carbon emissions. The countries of Central Europe, especially Poland, are still very dependent on the coal sector, which employs a significant portion of the workforce. Timmermans showed some clumsiness when it came to dealing with Poland and Hungary on justice issues as Juncker's vice-president, so it remains to be seen how he deals with the energy issue.

In relation to the nominations, there has been concern about Parliament's blocking of the commissioners from Romania, Hungary and France, who were rejected for various reasons. In the case of the Hungarian nominee, the veto was attributed to his relationship with a law firm, and in the case of the French nominee, to his relationship with an American think tank . However, the general analysis seems to indicate that these rejections, especially in the case of the French nominee, appear to be a reprisal by Parliament for having been section in the decision on the presidency of the Commission – since the proclamation of the Spitzenkandidat with the most votes was disregarded – by the committee European, especially Emmanuel Macron. The Fall of the Romanian Government and the Establishment of a Government provisional until the 2020 legislative elections may delay the training of the Commission. According to High Representative Josep Borrell, it is to be expected that the training of the von der Leyen Commission is delayed until 1 December.

Conclusion

To say that the von der Leyen Commission is going to be continuist, as many claim, would be partially incorrect. Although the ideology seems to be the same, the objectives set are very different and much more political. It seems that some of the mistakes made by the Juncker Commission want to be solved and it is trying to respond to some of the demands that citizens make to Brussels, on issues such as environmental care, economic improvement, the correct integration of Central Europe, border control, the development of the environment, and the development of the European Union. development of a common international policy and the rapprochement of Brussels with the Europeans.

Whether this will be a failure or a victory, on verra.

The need for labour has traditionally led Sweden to welcome waves of immigrants; Sectors of society today experience it as a problem

▲ Oresund Bridge, between Denmark and Sweden, seen from Swedish territory [Wikipedia]

ANALYSIS / Jokin de Carlos

Sweden has had a reputation, since World War II, for being a country open to immigrants and for developing tolerant and open social policies. However, the increase in issue The slow cultural adaptation of some of these new communities, especially the Muslims, and the problems of violence generated in areas of greater vulnerability have led to an intense discussion in Swedish society. The view that a generous migration policy may be destroying Swedish identity and making life more difficult for native Swedes has fuelled the vote of some civil service examination The Social Democrats last year revalidated public support for a government that maintains traditional policies with a certain greater emphasis on the expulsion of those whose application has been rejected.

Migration policy

One of Sweden's historical problems has been its leave By the 1960s, the fertility rate had fallen to the threshold of 2.1 children per woman needed for population replacement. That was something that threatened Sweden's notorious welfare state, because of the need for tax revenues to maintain generous public services, so the country promoted the influx of immigrants. At the same time, the need for manpower was also raised by the development of the national industry.

Sweden emerged from World War II in good condition. It did not suffer the destruction of other nations, as it remained territorially on the margins of the conflict, and it was able to consolidate a metallurgical industry that, thanks to the production of its iron mines, had benefited from selling to both sides in the war. That development required a great deal of work that the leave The concentration of the population on the coast and in the south, outside the industrial centres, made it difficult to gather. In addition, Sweden's welfare state and continued decades of peace created a class average that he did not want to work in the new industry because of the low wages it offered to be competitive.

To solve the labor shortage and thus maintain economic progress, Sweden turned to immigration since the 1950s. The government first opened the border to asylum seekers or work and then built clusters of dwellings, usually of leave near industrial areas where newcomers could find jobs without any language. When the cultural impact of these additions was too great in some areas, the government proceeded to close the borders, restricting immigration. When new workers were needed, the government reopened the border.

This system helped to advance economically, but it also isolated many social groups, who were stuck in low-income areas with little possibility of development or social integration.

development historical

Both during and after World War II, Sweden was an important destination for people from Norway, Denmark, Poland, Finland and the Baltic Republics escaping war or the destruction it created; It was also a neutral destination for many Jews. In 1944, there were more than 40,000 refugees in Sweden; While many returned to their countries after the war, a group A considerable number of them remained, mainly Estonians, Latvians and Lithuanians, whose home nations were incorporated into the USSR.

In 1952, Sweden, Denmark and Norway formed the committee Nordic, creating a area of free trade and freedom of movement, which Finland joined in 1955. With this, thousands of migrants went to Sweden to work in the industry, mainly from Finland but also from Norway, which had not yet discovered its oil reserves. This increased the percentage of the immigrant population from 2% in 1945 to 7% in 1970. All this helped Tage Erlander (Prime Minister of Sweden from 1946 to 1969) to create the project "Strong Society", aimed at increasing the public sector and the welfare state. However, this influx of labour began to harm native Swedish workers, and consequently, in 1967, trade unions began to pressure Erlander to limit labour immigration to the Nordic countries.

In 1969, Erlander resigned from the position and was replaced by his protégé, Olof Palme. Palme was a member of the most radical wing of the Social Democrats and wanted to further increase the welfare state, continuing the project of its predecessor on a larger scale.

In order to attract a larger workforce without angering unions, Palme began using pro-refugee rhetoric, opening Sweden's borders to people escaping dictatorships and war. At the same time, these people would be moved to industrial neighborhoods, built especially for them in nearby industrial areas where they would work. At the same time, Palme sought to make Sweden an attractive country for immigrants through assimilation policies in favor of multiculturalism.

During this period, people of many nationalities began to arrive in the country: from those fleeing conflict in Yugoslavia or martial law in Poland to those fleeing the Middle East and Latin America. These new populations settled far from native Swedish demographics; Because of this, many neighborhoods in the class They became isolated ghettos. In 1986, Palme was assassinated and his successor, Ingvar Carlsson, changed immigration policy and began accepting only those they configured as refugees from the United States. agreement with United Nations standards.

During the 1990s, increased conflicts in places like Somalia, Yugoslavia, and several African nations increased the flow of war refugees, with many of them going to Sweden. The Ministry of Migration and Asylum Policy was established in 1996. However, the two largest movements of people from foreign countries would occur in the wake of the subsequent conflicts in Iraq and Syria. The conservative government of Fredrik Reinfeldt began taking in a large volume of Iraqi refugees, who in 2006 became the country's second-largest minority, after the Finns. In 2015, the Social Democratic government of Stefan Löfven opened the border to Syrian refugees, who arrived en masse, fleeing the Syrian Civil War and the push of Daesh.

This succession of waves of immigrants from the Middle East aggravated some problems: in many neighborhoods, outsiders don't feel like they're in Sweden, mainly because they were built to "not be Sweden"; In addition, difficult integration and low-paying jobs fuel gangs and organized crime. All of this led Löfven to implement a stricter migration policy in 2017, accepting fewer asylum seekers and beginning to expel those whose asylum claims had been denied.

As you can see, the trend in Sweden is to open borders to immigration when it is needed and to close them when it starts to cause social tensions.

Origins of the Immigrant Population

Sweden has become a very ethnically diverse society, where almost 22% of the population has a foreign background. Until 2015, the largest ethnic minority in the country were Finns, who numbered more than 200,000 at the end of the last century. In the wake of the war in Iraq and the Syrian migration crisis, people from the Middle East have become the largest group.

Currently, 8% of the inhabitants of Sweden come from a country with a Muslim majority – mainly from Syria and Iraq, but also from Iran – although only 1.4% of the population practices the Muslim religion (around 140,000 people in 2017), as there are also immigrants from these countries with other religious affiliations. such as Christians, Druze, Yazidis or Zoroastrians. These numbers may have increased slightly, though not to cause very drastic changes in demographics.

Despite not being particularly numerous, the Muslim community has generated media attention as a result of various controversies. In 2006, Mahmoud Aldebe, a member of the committee A Muslim from Sweden, he put forward in a letter to the political parties of the Riksdag and the Swedish government especially controversial demands, such as the right to specific Islamic holidays, special public funding for the construction of mosques, that all divorces between Muslim couples be approved by an imam, and that imams be allowed to teach Islam to Muslim children in public schools. These demands were rejected by the authorities and the class Sweden's politics. It has also been the case that some Muslim associations or mosques have invited radical preachers, such as Haitham al-Haddad or Said Rageahs, whose lectures were eventually banned.

Vulnerable Areas and Organized Crime

The Swedish government has designated some neighbourhoods as Vulnerable Areas (Utsatt Område). They are not strictly "No-Go Zones", because they can be entered by police officers, health services or the media. These are areas of lower security that require greater attention from the authorities.

Some of them are located in Malmö, the city with the highest crime rate in the country, mainly due to its location. Malmö is located on the other side of the Oresund Bridge, which connects Denmark to Sweden and is the only overland route between Sweden and the mainland without having to go around the Baltic. There, various gangs and mafias participate in drug and human trafficking, while at the same time confronting each other in a struggle for control of space. Groups of this subject they also operate in Rotterdam, in relation to the activity generated by its important port.

Despite the impression given by certain anti-immigration messages, crime in Sweden is at levels similar to those of 2006. After that year, the issue crime prices fell, only to rise again in 2010 and 2012. A link could be made between this rise and the economic crisis, which led to an increase in unemployment, but its link to immigration records is less clear. The arrival of Iraqis in 2005 did not lead to greater insecurity on the streets of Sweden, nor has the reception of Syrians in recent years. Sweden's homicide rate is 1.1 per 100,000 inhabitants – below many other European countries – and there are more crimes recorded by native Swedes than by foreigners, according to the committee Swedish National Crime Prevention.

However, the mafias operating in Sweden are mostly made up of certain ethnic groups. His training it stemmed especially from the influx of people from Yugoslavia, both workers in the 1970s and refugees from the Balkan wars of the 1990s. Chief among these groups, known as the Yugo Mafia, is today led by Milan Ševo, nicknamed "The Godfather of Stockholm." Other groups include K-Falangen and Naserligan, composed of Albanians; the Werefolf Legion, made up of South Americans, and the Gangsters, originally made up of the Assyrians (Syria's Christian minority). However, one of the largest is Brödraskapet or the Brotherhood, founded in 1995, with more than 700 members who are all native Swedes and with a large presence in Swedish prisons.

Migratory movements in Sweden between 1850 and 2007. In red, arrival of immigrants; in blue, departure of emigrants [Wikipedia-Koyos]

Terrorism

Since 2011 there have been three terrorist attacks in Sweden; A fourth attack could have been avoided as its preparation was detected in time. The first was made by Anton Lundin Pettersson, a Swedish neo-Nazi who in 2015 attacked the Trollhättan School, killing four people, all of them immigrants. The next was perpetrated by the Nordic Resistance Movement, a neo-Nazi organization, which acted against a refugee center and the café of a left-wing organization; Only one person was injured in the attack. The third, the most well-known, was perpetrated in 2017 by a man from Uzbekistan apparently recruited by Daesh, who rammed a truck into pedestrians in central Stockholm, killing five people and injuring fourteen.

Of the three attacks, only one was jihadist-motivated, unlike the weight that Islamist terrorism has had in other European countries with larger Muslim populations. In any case, the segregation experienced in some communities and the radical indoctrination that takes place in them led young Swedish Muslims to go to Syria to join Daesh and the authorities are closely monitoring their possible return.

Hits and misses

For a long time, the European left held up Sweden as an example of model successful social democrat; Now, from certain right-wing groups, he is held up as an example of failed multiculturalism. Both statements are probably an exaggeration for partisan purposes. However, the truth is that Sweden has a generous well-being that is difficult to maintain, and that in its also generous opening of borders it has made mistakes that have not facilitated the integration of the new population. Everything seems to indicate that Löfven continues the path he began in 2017 and there has been an increase in police presence on the streets as well as a hardening of immigration policies, in turn following the policies made in Denmark.

Time will have to pass to see what results these policies will have in a future Sweden.

In Norse mythology, Valhalla is a huge, majestic hall that, in the afterlife, heroes aspire to enter