Europe/Americas update: August 30 2018

EUROPE

RUSSIA

The State Department on Thursday accused the Russian navy of “harassment of international shipping” for trying to “impede maritime transit” in the Sea of Azov and Kerch Strait as part of an “ongoing campaign to undermine and destabilize Ukraine.” Basically it seems Russia is barring ships from getting to Ukrainian ports.

For its part, the Russian government says it’s seen no sign that the Trump administration is interested in improving US-Russia relations.

UKRAINE

Former Ukrainian Prime Minister Yulia Tymoshenko announced on Thursday that she will run for president next year. At this point it’s assumed that incumbent President Petro Poroshenko will run, but his poll numbers have steadily cratered this year and at this point it looks like he wouldn’t even make a runoff. Tymoshenko’s numbers, on the other hand, have her winning the first round of the election and going to a runoff.

ROMANIA

While he works as Donald Trump’s lawyer (?), Rudy Giuliani is also doing some international consulting and thereby highlighting the way the casual corruption that attends the Trump administration can affect foreign affairs:

Romanian politics were thrown into a tailspin this week after the revelation that President Trump’s personal lawyer, Rudolph W. Giuliani, wrote a letter criticizing an anti-corruption drive that has been welcomed by the State Department.

The Romanian reaction to the letter — which Giuliani said was written for pay in his capacity as a consultant — was the most concrete indication yet that the Trump administration’s freewheeling approach to ethics and business conflicts is having an effect not only inside the United States, but on U.S. allies as well.

A State Department official told The Washington Post: “Rudy Giuliani does not speak for the U.S. government on foreign policy.” Giuliani, for his part, has insisted that he is a private citizen and was not speaking on behalf of the Trump administration. But that is not the way the letter was received in Romania, where critics of the anti-corruption drive seized on it as an endorsement from a senior official who has Trump’s ear.

SWEDEN

Polling suggests that Sweden’s September 9 general election is going to be an inconclusive affair. The two main blocs, the center-left coalition led by the Social Democrats and the center-right Alliance coalition, are polling almost neck and neck, with the center-left bloc up 40.2 percent to 38.9 percent. The fringe right, anti-immigrant (of course) Sweden Democrats party is sitting at over 18 percent, and back in 2014 they outperformed their poll numbers in the election. The Sweden Democrats are probably too toxic to be invited into any coalition government, but they could still extract concessions in return for supporting a minority government–which would seem to favor the Alliance’s chances of forming said government.

GERMANY

Another anti-immigrant protest gripped the city of Chemnitz on Thursday, but in contrast to protests earlier in the week this one seems not to have devolved into a riot. On the other hand, an immigrant in the German town of Wismar was apparently beaten by three attackers wielding an iron chain.

THE NETHERLANDS

Geert Wilders has called off his “Draw Muhammed” contest planned for later this year, citing concerns about violence. It doesn’t matter, of course, as Wilders got the attention he wanted from the whole affair.

UNITED KINGDOM

Panasonic announced on Thursday that it’s going to move its European headquarters from London to Amsterdam after Brexit. That sort of thing is becoming a trend:

In the run-up to March 2019, a number of multinational firms have said they plan to move jobs out of the UK.

Several Japanese financial companies have said they intend to move their main EU bases away from London.

Panasonic’s decision was driven by a fear that Japan could start considering the UK a tax haven if it cuts corporate tax rates to attract business, Mr Abadie told the Nikkei Asian Review newspaper.

If Panasonic ends up paying less tax in the UK, that could render it liable for a bigger tax bill in Japan.

It’s all part of the Brexit dividend. Anyway I’m sure that the EU, which stands to gain all these new corporate headquarters that are about to flee London, is going to offer the UK a real sweetheart Brexit deal anytime now.

AMERICAS

ARGENTINA

Turkey’s decline against the dollar on Thursday was part of a larger decline in the currencies of developing countries that hit Argentina the hardest. The Argentine government responded by jacking up its already extremely high interest rates:

The Turkish lira and the South African rand dropped against the dollar, but it was the Argentine peso that experienced the most extreme fall, driven by fears the country would not be able to make its debt payments. Trying to slow the peso’s plunge, which is down close to 50 percent this year, Argentina’s central bank ramped up interest rates by 15 percentage points.

The move by Argentina’s central bank brings its benchmark lending rate to 60 percent. It came a day after the country’s president, Mauricio Macri, said he had asked the International Monetary Fund to release $50 billion in credit earlier than had been agreed.

Acknowledging once again that I am no economist, I will note that Turkey and Argentina have responded in completely opposite ways to their respective currencies’ declines (Turkey has not raised interest rates at all) and yet both continue to decline.

EL SALVADOR

The Trump administration’s immigration policy has been facilitating not just the emotional abuse of migrant children, but their sexual abuse as well:

Three minors from El Salvador separated from their parents after crossing the U.S. border were sexually abused in shelters in Arizona, Salvadoran officials said Thursday.

Liduvina Magarin, deputy foreign relations minister for Salvadorans overseas, said authorities had received reports of the abuse of the children ages 12 to 17 by workers at unnamed shelters.

“They are sexual violations, sexual abuses, that is what this is about,” Magarin told journalists.

This was an entirely foreseeable, maybe even inevitable, product of the separation policy, and yet Donald Trump and his administration went ahead with it anyway, mostly because the people who crafted the policy simply don’t see Central American migrants as human beings.

UNITED STATES

Trump is now threatening to pull the US out of the World Trade Organization:

“If they don’t shape up, I would withdraw from the WTO,” Trump said Thursday in an Oval Office interview with Bloomberg News. Trump said the agreement establishing the body “was the single worst trade deal ever made.”

A U.S. withdrawal from the WTO potentially would be far more significant for the global economy than even Trump’s growing trade war with China, undermining the post-World War II system that the U.S. helped build.

Trump said last month that the U.S. is at a big disadvantage from being treated “very badly” by the WTO for many years and that the Geneva-based body needs to “change their ways.”

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