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Economy

Pax Europaea : The EU as Pacifier in the Frozen Conflict Areas

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In this short paper I will try to analyse the unique opportunity the EU has in pacifying one of the still unresolved conflicting neighbouring areas that pose a threat to the stability and high level of cooperation that European countries have achieved in the last half of century. I am referring to the frozen conflicts around the Black Sea . More specifically, the list could be conceived as follows:

In this context, the main centres of gravity are to my mind Russia, the US/NATO and more interestingly the EU.

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Source: Matt [email protected]

Before going further into details, I would present the theoretical framework which will guide us in understanding one of the perspectives of the issues on the ground, namely the defensive realist approach. An analysis based on this perspective follows a pragmatic, non-normative line of thinking which tries to stay away from considerations like human rights, self-determination, ideology or other liberal-democratic political principles. It has nothing to do with the lack of humanity. The justification has to do with a stronger focus on the national interest of the states under consideration.

According to proponents of this view, the world that surrounds us is similar to a system made up of units which constantly interact with one another. The main units are the nation-states that operate under anarchy, meaning that there is no hegemon and no hierarchy of states. In this sense for example, the UN is totally dependent on the interests of the member countries and especially on the veto of the Permanent Five.

There is no legal separation of power or institutional control and no real accountability for states who are autonomous and free to pursue the domestic policies they are happy with. There are only international treaties that have strength for as long as signatory countries agree to it.

Furthermore, what motivates state behaviour is the perception of own or foreign power and the threat that comes with that power. This logic results in a balance of threat among nation states. According to this concept, states will align with other states to counterbalance another stronger and threatening state or group of states. The purpose of this balancing is not for offensive or expansionist reasons but for defensive ones.

I would take a different route from traditional neorealism by arguing that leaders or political figures do matter in international relations. However, states are reluctant to trust one another even if for the moment good relations might be in place. One leader can never know with whom he will have to deal in the future or what orientation the foreign policy of another state will take in longer term.

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Source: David [email protected]

Finally, despite the common criticism that realism is an amoral or even immoral way of seeing things, I would argue that there is such a thing as morality of realism. Values like stability, prudence, pragmatism, understanding of political and social complexities, even respect for human life guide proponents of this perspective when thinking about possible solutions to common problems.

Moreover, realists are able to understand the level of regional development that the postmodern EU shows. Nevertheless, it is clear for them that in other parts of the world modernity rules under the shape of the nation states who selfishly, geopolitically and geostrategically pursue their own interests. Trust-building and paradigmatic shifts are slow processes that ought not to be forced or put aside for more interventionist measures.

Having said this, we can focus more on the EU as a potential pacifier in the above mentioned areas of the world. This part of the world is characterized by uncertainty, total mistrust, strategic thinking as foreign policy and never-ending tension. Boundaries among states are hard but at the same time very much disputed among antagonistic neighbours. History and the bloody memory is fresh in the mind of both the people and political leaders. Fear of the re-emergence of another Russian Empire or Soviet Union brings countries like Georgia, Ukraine and Moldova to pursue NATO and US led coalitions, which in turn fuels the Russian ego and builds up its security apparatus due to a Cold War view of American imperialism.

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Source: NATO-Russia [email protected]

We could sum up that the region is characterized by a vicious cycle of threat perception. We could make an analogy to Europe’s modern history. Luckily for us, it ended up well in a common structure that has been able to integrate the national interest of the member states with the need for cooperation and collaboration. Peace is here to stay, at least while economies are stable and public opinion remains strong. The EU is the best example of how to overcome the dirty nature of politics.

In its relation to the outside world, the EU can rely on its soft power, the power of attraction. Furthermore, I would argue that the EU is more capable than other international actors of pragmatism, toleration of diversity and non-ideological policies. By all this, I am referring to the ability of practically conducting relations without setting strong political or economic standards.

The aim of the member states is still to satisfy the national interest regardless of their ideological aspirations. They might have adopted the liberal-democratic system and might pursue the extension of this system to interlocutors but the EU is not imposing a particular way of organizing societies, economies or the state. Rather, the EU is encouraging a change from within. At least unofficially. Officially the situation is different and it has to be different since the values that the EU puts on paper are basic for EU’s own existence.

Going back to our disputed territories, the EU could act as a strong mediator and hub for all the conflicting parties. The EU could show understanding because the member states can put themselves in the shoes of each of the forces. Europe had experienced separatism, militarism, realpolitik, spheres of influence and strategic alliance making and foreign policy. Conflict mediation, resolution, peace-building and even reconciliation are strong assets in EU’s pocket.

Not only, but the EU has also strong economic and energy interests in this area of the world. Instability there will lead to the possibility of instability here. European companies and Russian ones are doing business on a daily basis. The leverage is mutual and this leverage should not be used as an instrument to tie up ‘the enemy’ but to build trust through mutual advantageous cooperation. Energy security is one of the fundamental parts of EU’s security strategy. Russia, Ukraine, Georgia, Azerbaijan are both elementary sources of gas and oil and transit routes. The EU should stay away from demonizing the owners of those resources and from trying to get a grip on them because this is perceived by the later as a direct attack on their national interest. Countries rich in resources put the revenue that comes from it on top of the list in their security strategies and see it as a fountain of national prestige.

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Source: Malcolm [email protected]

In order to achieve all the above the EU should follow its own path in becoming a global player. By this I mean keeping away from US instructions or way of doing things. As we all know, the US is suffering today from a very bad image due to its policing of the world. Unilateralism and interventionism should not be part of EU’s foreign policy vocabulary. Instead it should seek compromise, long-term trust-building and should push forward the idea of the EU as not taking sides unless it is the side of the civilian population.

Lastly, the EU should not be blinded by the aspirations of creating a strong economic and commercial bloc if this means threatening the same aspirations of other countries. This is dangerous and it can lead to defensive measures, like for example Russia’s pivot to Central and South East Asia. Partners should not be pushed away but attracted for the well-being of all parties.

To conclude, the area of frozen conflicts is still characterized by modernity and EU member states have managed to surpass the very same situation by own realization of the fact that mistrust leads nowhere. The EU has all the experience and instruments to show and persuade, not force other parts of the world to follow the same path. Preaching should be replaced by concrete proof of which system works best and by signs of trustworthy-ness to more sceptical neighbours.

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China

Ridiculous Tariffs on Wines – China Australia Trade War Explicated

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China Australia Trade War
Scott Morrison (right) has not yet been able to secure a bilateral meeting with Chinese President Xi Jinping (left).(ABC News)

Earlier in November 2020, Communist China slapped Ridiculously high tariffs up to 212.1% on Australian wines. These tariffs were in the response of ongoing trade war between Communist Party of China and Australia. China is the biggest importer of Australian wines making up a whopping 39% of Australia’s total wine export. Australia has already raised concerns at a WTO meeting about China taking measures against its barley, wine, meat, dairy, live seafood, logs, timber, coal and cotton, according to a reuters report.

How did China – Australia trade war begin?

China and Australia shared one of the best times in their relationship after Kevin Rudd from the centre-left Labour party came to the power in Dec 2007. During his leadership Australia decided to pursue appease China policy which included steps such as:

  1. Chastising Taiwan for its renewed push for independence and reiterating support for a one-China policy in favor of People’s Republic of China. (Source: The Age)
  2. Signing a A$50 billion deal with PetroChina in 2009 (largest contract ever signed between the two countries) that ensures China a steady supply of LPG fuel until 2029.
  3. Unilaterally announcing departure from Quadrilateral Security Dialogue to appease China.

Nosediving of China – Australia Relationship

The course of this partnership changed when Julia Gillard from the centre-left Labour Party took over the leadership and initiated closer partnership with United States. This included revival of interest in Joining Quadrilateral Security Dialogue and stationing of US troops near Darwin, Australia.

In 2013, Tony Abbott from centre-right Liberal Party took over the leadership. During his term Australia saw some confusion in its China Policy. His Defence Minister Senator David Johnston told in a statement that Australia is seeking to balance their relationship between China and the United States. It was during his term when Australia and China established a Free Trade Agreement.

However, the relationship between Australia and China took a downturn in 2015 when Malcolm Bligh Turnbull from the centre-right Liberal Party came into power. This is the point in history which has led to current trade war situation between Australia and China.

  1. Australia became the strongest opponent of China’s territorial claim in South China Sea.
  2. Banned foreign donations to Australian political parties and activist groups in a move to target Chinese interference in Australian democracy.
  3. Revived Quadrilateral Security Dialogue with United States (Donald Trump), India (Narendra Modi) and Japan (Shinzo Abe). This was the time when Quadrilateral Security Dialogue saw hope of becoming something bigger as all four countries had centre-right governments who had a clear China Policy.

2019 Onwards: China – Australia Trade War

In 2019, relationship between the two countries further took a dip with Scott Morison from centre-right Liberal party becoming the Prime Minister. During his leadership:

  1. Australia signed a letter condemning China’s mistreatment of Uyghurs and other minorities.
  2. Suggested investigating the cause of Covid 19 in April 2020, which resulted into an angry response from China threatening to reduce Tourism and Trade.
  3. Opposed the Hong Kong National Security Law in June 2020.
  4. Reiterated its support for ethnic minorities in China and freedom in Hong Kong in October 2020
  5. Demanded a formal apology from China for posting a fake image of an Australian soldier holding a bloodied knife against the throat of an Afghan child

In conclusion, these continuous attack on China made China so angry that they deliberately leaked a list of 14 points suggesting why China is angry at Australia

China’s attempt at “buying” left wing politicians around the world

Recent trend is suggesting China’s attempt at “buying” influential left-wing politician around the world. In November, 2017 Australia’s Labour Party’s MP Sam Dastyari went against his own party on South China Sea. He later quit his party after he was found of taking financial favours from China.

In 2008, India’s Centre-left party – Indian National Congress signed a Memorandum of Understanding with Communist Party of China. Its contents are still hidden from the Government of India and the people of India.

Recent US Report has shown concern on President Elect Joe Biden not clearing doubts on his China policy.

How Can we Help Australia Post Ridiculous Tariffs on Australian Wines?

In 2020 China has directly or indirectly impacted many of our lives. Some of us have lost our jobs, some of us are taking a reduced salary. In fact, some of us are sitting at home instead of travelling; while some of us have lost our loved ones only because of communist party was incapable of controlling a virus outbreak.

As the entire world is struggling with this virus, Chinese economy continues to be on path of surpassing the US. Therefore, we should pledge to minimize buying Chinese products. It might be impossible to completely boycott Chinese products, but we can at least minimize it.

Install Cultivate Chrome Extension (non sponsored/affiliate link – We are not getting paid to post this). This plugin works on both Google Chrome and the new Microsoft Edge. It helps you understand the origin and seller location of a product on Amazon. It is a great tool to minimize your dependence on Chinese products. If you are lucky, this extension will also suggest some Made in USA alternatives

Buy Australian Wines – Australia desperately needs a new market for its wine and other products. This New Year and Christmas season, we should pledge to celebrate with at least one Australian wine!

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Economy

Seasif’s Franco Favilla discusses the post-Covid economy and the price of gold

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Although the Covid-19 pandemic isn’t over yet, there has been much discussion on the idea of a “post-Covid” economy, especially with the beginning of vaccination efforts in some countries. With markets throughout the world suffering the economic effects of the virus, experts have been looking towards the future –– and one of the topics that often comes up is the price of gold.

In August, the price of gold exceeded US$ 2,000 an ounce for the first time, driven by multiple factors. However, in November, advancements in Covid-19 vaccines led to a decrease in this trend, a result of the turbulent period we are going through.

“Regardless of the market volatility and the price changes that could occur over a given period of time, the fundamental fact is that the price of gold over the course of 2020 has reached an all-time high, and this, in my opinion, is very good news for the world economy,” explains Franco Favilla, founder and CEO of Seasif, a multinational company active in the extraction and trading of gold and oil.

According to Mr. Favilla, the main problem of the pre-Covid economy was the completely arbitrary nature of international finance. At one time, a ton of gold corresponded to a ton of currency, but since the 1980s, and at an impressive rate since 2000, the gap has widened enormously, so much so that today the relationship between the world’s currencies and gold is enormously unbalanced.

Total gold reserves around the world cover only 30% of currencies. This means there is nothing to cover and guarantee the value of money. In short, money has turned into a pure convention, a pure agreement between parties acting outside the market. Gold, on the contrary, guarantees democracy, because it protects savers and the market, offering an objective value for parameterizing every transaction. 

“My hope, therefore, is that the crisis caused by Covid-19 will help to change finance, making it less ‘phantom’ and more linked to an objective dimension, based on gold, with obvious advantages for the real economy. Gold protects consumers, the most important component in any economic system: if you don’t have a market made up of consumers with a certain level of wealth, how can you sell? To whom? Consumer protection must come first, and gold is one of the main ways of protecting them,” states the CEO of Seasif.

Sustainability has also been at the forefront in discussions about the post-Covid world, as countries look towards establishing a more resilient global economy, one able to better withstand such events in the future –– and “green gold” may well be a part of that future. Green gold, in a sense, can be considered the “gold of the future” due to its ethical and sustainable extraction process. Seasif produces green gold, with a department entirely dedicated to green, and has allocated economic incentives to its continued production.

Even as 2020 draws to a close, the future may still look uncertain. But for those searching for greater security, gold may be one of the few certainties left.

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Economy

How to Trade Shares for Beginners

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stock trading

Although expectations had been modest for 2019, the stock markets around the world had been active in 2019 and the positive returns seen so far have exceeded even the most optimistic expectations. Supported by easy monetary policies around the world, as well as by positive economic expectations for 2020, stocks continue to move, which makes a significant number of people deciding to start investing. Since stock trading is much harder than most of them think, let’s see some of the most important things beginners must consider in order to accelerate their learning curve.

Stick with the most liquid shares

Finding “the next big thing” is one of the illusions that seduces most of the beginners. They spend a significant amount of time looking for those companies that will have huge returns over the next months of years. Not even the most-skilled stock traders are able to do that, so why do you think you will?

Instead of looking for those shares, stick with the companies that already have a leading position in the industry. Google, Facebook, Microsoft, Apple, and Boeing are just some of the names that are popular at the time of writing, and looking at their performance in the long run, so far, they’ve managed to impress.

Study educational materials

Beginners fail to understand that share trading is a skill-based endeavor and study is one of the most important parts of the process. Study as many educational materials as you can and gain as much knowledge as possible because you’ll definitely need it. This guide and other similar ones will introduce you to share trading and help you understand the basic concepts. Remember this axiom: “Around 90% of the traders lose 90% of their capital in their first 90 days of trading”. Education is one of the main factors why beginners stumble into the same mistakes over and over again. You don’t want to be in the same position as most of the people who don’t learn and spend time to sharpen their skills.

Build a portfolio

Closely linked to our first tip, building a portfolio of uncorrelated assets is one of the most important things to consider, if you want to limit the damages of your mistakes. No matter how good you are, in trading, you won’t make money all the time. Diversification will help you minimize the effects of some losing trades. Don’t concentrate all the risk in a single stock and instead pick at least three or four names that might perform positively in the near-term.

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