Ewald Nowotny, governor of Austria’s central bank and European Central Bank (ECB) governing council member, speaks during the “New Opportunities in the Sign of International Networking” event in Vienna, Austria.
Bloomberg | Bloomberg | Getty Images
There could be some upside for the euro area from the ongoing trade war between the U.S. and China, ECB Governing Council Member Ewald Nowotny told CNBC Tuesday.
Escalating trade war has been a concern for the European Central Bank (ECB), partly due to the export-driven nature of the euro area economy. However, speaking to CNBC in Sintra, Portugal, the Austrian central bank governor noted that there could be some opportunities for Europe.
“The euro zone is affected like everybody else but again in a trade conflict (between) China and the U.S. there are a number of options for the euro zone. It might be on the losing side, frankly speaking in some cases it might be on the winning side. So, this depends very much on the specific perspectives,” Nowotny told CNBC’s Annette Weisbach.
“There might be cases of trade diversions,” he pointed out. “If the U.S. is isolating itself increasingly from world trade that would mean there’s a number of trade relationships, there might be more going…to the euro zone, we might have stronger cooperation also in technological ways between Europe and China.
Both sides of the Atlantic have been at odds over trade ever since President Donald Trump took office back in 2016. Since then, the president ended trade negotiations between the U.S. and the EU over a wide-ranging deal (the Transatlantic trade and investment partnership – TTIP), has imposed tariffs on European steel and aluminium products, as well as threatened to slap further duties on European carmakers.
Trump announced last month that he would delay tariffs on cars and auto part imports for up to six months as discussions with the European Union and Japan take place and while he seeks to conclude talks with China. The president had threatened as early as last year that he would slap a 25% tariff on car imports from the European Union.
On Trump’s approach to international trade and remarks that trade wars are easy to win, Nowotny said: “I think it’s totally wrong, one has to be aware that trade wars are extremely risky.”
Trump to meet the queen and NATO allies after tariff threat to France
U.S. President Donald Trump and First lady Melania Trump arrive at Stansted Airport on December 2, 2019 in Stansted, Essex. President Trump is attending the NATO Leaders Summit which begins tomorrow at The Grove Hotel, Hertfordshire, marking the 70th anniversary of the organisation.
Chris J Ratcliffe | Getty Images News | Getty Images
LONDON — President Donald Trump touched down in the U.K. on Monday night ahead of a highly-anticipated NATO meeting, marking 70 years since the alliance’s creation.
The gathering comes amid overt tensions between some leaders regarding spending pledges, how to tackle the challenges posed by Russia and China, and the relevance of NATO itself.
The two-day meeting is taking place just outside of London, in Watford, with high-profile delegates then heading to Buckingham Palace in the evening where Queen Elizabeth II will host NATO heads of state and government for dinner.
Trump is scheduled to have talks with French President Emmanuel Macron on Tuesday and NATO Secretary General Jens Stoltenberg; he is due to meet German Chancellor Angela Merkel on Wednesday. It’s unclear if the U.S. president will meet with Prime Minister Boris Johnson with the U.K. leader apparently keen for Trump not to involve himself in Britain’s domestic politics ahead of an upcoming election on December 12.
Trump’s meeting with his French counterpart Macron — due to take place at the U.S. ambassador to the U.K.’s residence where Trump and first lady Melania Trump stayed Monday night — could be an awkward affair given the U.S. administration’s threats to impose import tariffs of up to 100% on $2.4 billion worth of French imports.
The U.S. trade representative has identified several goods, including Champagne, handbags and Gruyere cheese that could be targeted.The U.S. said Monday that the move is a response to a French digital services tax that it believes “unfairly targeted” American tech companies.
Flags of NATO member countries hang at the Parliament Square ahead of the NATO Summit in London as NATO countries’ heads of states and government gather in London for a two-day meeting at The Grove Hotel near Watford.
SOPA Images | LightRocket | Getty Images
Defense spending among NATO allies, or the lack thereof (a persistent bugbear of Trump, and of his predecessor Barack Obama) is also likely to feature prominently in this week’s summit.
Although NATO members have increased their defense spending dramatically over the last five years, according to NATO defense spend data, many members are still not hitting a target set in 2014 when members agreed to spend a minimum of 2% of their GDP (gross domestic product) on defense.
NATO estimates for 2019, released in June, show that only the U.S., U.K., Greece, Estonia, Romania, Poland and Latvia have met or surpassed that target. The highest defense spend was made by the U.S., at 3.4% of its GDP, while the lowest spend was by Luxembourg which only spent 0.55%.
It’s the first visit Trump has made to the country since his state visit in June when Trump and the first lady were welcomed with full pomp and pageantry (and widespread protests) to the country.
Protests and crowds in London are expected to be large in the capital. The last time the president was in London, tens of thousands of demonstrators closed many major roadways and a 20-foot “Trump baby” blimp flew over the crowds.
Tips for minimizing ‘flight shame’ guilt
Derived from the Swedish term “flygskam” where the movement originated, “flight shame” is having a notable effect on the way people think about traveling.
The concept aims to get people to stop traveling by plane in order to lower carbon emissions and has gained momentum thanks to environmental activists like Greta Thunberg, who opted to travel by boat instead of flying across the Atlantic to attend a United Nations zero emissions summit in August.
A study of over 6,000 people internationally by Swiss bank UBS, published in September, led the Swiss bank to predict that annual air traffic growth could halve as consumers became increasingly concerned by climate change.
Investment bank Citi has also warned that “flight shaming” could result in a slowdown in air travel as people look to reduce their carbon footprint.
Even musicians are getting in on the act, with Coldplay frontman Chris Martin recently saying the world famous band would not tour its latest album over concerns about sustainability.
British group Massive Attack, which has been working with environmental activist group Extinction Rebellion, approached climate change research organization the Tyndall Centre to help find solutions for zero emission concerts and tours.
However, if time and money constraints mean you can’t quite afford to spend 15 days at sea like Thunberg, it might be worth considering some other ways you travel more sustainably and minimize your “flight shame” guilt.
Switch to other travel
An obvious solution is to consider other “greener” modes of transport, such as train and bus.
Tomer Shalit, CEO of Swedish climate software company ClimateView, says this is a particularly virtuous alternative in Sweden, where “almost all electricity is green” and nearly all the rail tracks are electric, resulting in its trains being virtually zero-carbon.
For those conscious of time, Shalit suggests taking a sleeper train, something he often does for work to travel between his hometown of Umeå, in the north east of Sweden, and the capital of Stockholm – a nine-hour journey.
“The train departs at 9pm and arrives at 6am in both directions which means that your body is being transported to its chosen destination while you are sound asleep,” he says. “My advice would be to try it out a couple of times and if you like it, switch.”
Work out your ‘time versus distance’
Considering just how much time you’re willing to spend “on the road” is important when looking at alternatives to flying, says Andri Kristinsson, CEO of Icelandic personalized digital travel guide Travelade.
For example, if you’re planning to go away for the weekend, then you may only want to be on the road for three hours, while you may be comfortable travelling for longer on a week-long vacation, he says.
“Once you have a timeframe in mind, sit down and map out what cities or countries you could reach during that time – a ‘time versus distance’ graph, so to speak,” Kristinsson explains.
Ask a local
Using public transport is not only the best way to get an authentic experience of the local area but has the added bonus of reducing your carbon footprint.
Skipping a “hop on-hop off” tour bus in favor of joining a walking tour while on holiday can reduce your carbon footprint, Kristinsson points out.
“Stay in a small guesthouse or Airbnb and ask your host about what you should experience during your visit – as locals, they will be able to provide you with the best insights,” he adds.
Ditch single-use plastic
Swapping single-use plastics for a reusable cup or bottle, a metal or bamboo straw, as well as carrying a fabric bag and even a portable water purifier while travelling, is a suggestion James Thornton, CEO of adventure travel company Intrepid Travel, makes for lowering your carbon footprint.
A report by the Centre for International Environmental Law earlier this year predicted that the production and incineration of plastic would pump more than 850 million metric tons of greenhouse gases into the atmosphere in 2019. That is the equivalent of the emissions from 189 five-hundred-megawatt coal power plants.
Take a direct flight
If you simply cannot avoid taking a flight due to long-haul travel, David Armstong, CEO of U.K.-based travel search platform HolidayPirates, recommends taking a direct flight as the biggest carbon emissions occur when a plane takes off and lands.
Equally Thornton suggests taking the time to research which airlines or travel companies have a carbon offsetting program. This is the process that compensates a portion of carbon dioxide pollution by removing an equal amount of emissions from the atmosphere.
“Remember that little box that pops up about carbon offsetting when you book your trip? Tick it,” he says.
“By paying a couple of bucks to carbon offset your flight, funds will be allocated to emission-reduction schemes, like investing in projects that reduce or remove emissions like renewable energy (wind, solar) or protect trees.”
Thornton also urges travelers to go for tour operators that boast good sustainability credentials, by running trips avoiding visits to “overtouristed” areas, for example.
Alliance meets as Russia relations remain frosty
Russia’s President Vladimir Putin listens while U.S. President Donald Trump speaks during a press conference in Helsinki, Finland.
Brendan Smialowski | AFP | Getty Images
The reason for the foundation of NATO — to counter a perceived or real threat from Russia — remains as relevant as ever.
When heads of state and government, and military leaders, of the 29 countries that belong to NATO gather just outside of London Tuesday, discussions will focus on current and emerging security challenges. And one of those ever-present and unpredictable security challenges is Russia.
NATO was set up in 1949 as a military alliance between 10 European countries, the U.S. and Canada “to promote cooperation among its members and to guard their freedom,” the alliance says, “within the context of countering the threat posed at the time by the Soviet Union.”
Seventy years on, the USSR has long-since collapsed and the Cold War is over, yet the West’s relations with Moscow remain as tense and complex as ever. Civilian and military cooperation between Russia and NATO are still suspended following the annexation of Crimea from Ukraine in early 2014 and the backing of a separatist uprising in east Ukraine — a move that prompted a military conflict that is still unresolved.
Russia’s interference in the 2016 U.S. election and the nerve agent poisoning of a former Russian spy in the U.K., Sergei Skripal, have also put western nations on guard when it comes to an unpredictable nation under President Vladimir Putin. This year, the breakdown of Cold War-era Intermediate-Range Nuclear Forces Treaty between the U.S. and Russia also prompted fears of a potential arms race between the old foes.
Sarah Raine, consulting senior fellow for geopolitics and strategy at the the International Institute for Strategic Studies (IISS), told CNBC that Russia is still a threat to NATO.
“Russia remains a threat both in conventional terms — as evidenced by its annexation of Crimea and its persistent probing of European air space — as well as in more hybrid terms, through, for example, its use of cyber proxies. But threats can and should be handled through a range of policy responses,” she said Friday.
“It should be possible to remain clear about the threat Russia poses whilst also considering ways for NATO to engage with Russia on concerns of arms control.”
‘No confrontation sought’
NATO has reiterated its condemnation of Russian behavior of late but says that “channels of political and military communication remain open to exchange information on issues of concern, reduce misunderstandings and increase predictability.”
Relations appear to be thawing somewhat between Russia and Ukraine, under the new leadership of President Volodymyr Zelensky (the leaders are due to meet in Paris on December 9 with Germany and France acting as intermediaries). But NATO remains wary of Russia and says it has “responded to this changed security environment by enhancing its deterrence and defence posture, while remaining open to dialogue” although it notes that the alliance “does not seek confrontation and poses no threat to Russia.”
Enhancing its deterrence and defense posture has included the stationing of over 4,000 troops from NATO member countries in Poland and the Baltic nations of Estonia, Latvia and Lithuania, designed to shore up its border.
From Russia’s perspective, it has seen the deployment of NATO missile defense systems in Romania and Poland (although completion of this Aegis Ashore — a land-based missile defense system — site is delayed to 2020) as a provocative move and it has widely criticized the deployment of missile defense shields in its former backyard.
The prospect of Ukraine and Georgia, both of which used to be part of the former USSR, joining NATO (and even potentially the European Union) is also an unsavory prospect for Moscow which fears being surrounded by pro-Western former satellite states.
In September 2019, Russian Foreign Minister Sergei Lavrov said that “NATO approaching our borders is a threat to Russia.” That view was echoed by Russian President Vladimir Putin in late November, when he told Russia’s Security Council that he was “seriously concerned about the NATO infrastructure approaching our borders, as well as the attempts to militarize outer space.”
Tomas Valášek, a senior fellow at Carnegie Europe whose research focuses on security and defense, said that Moscow has become an assertive power with more limited resources.
“Russia lags far behind China in both economic and soft power, but it has used its more limited resources very effectively” he wrote on Thursday.
“Moscow’s general strategy has been to deter what it perceives as challenges to its political order and territory, assert itself as an indispensable power in solving the most pressing global security challenges, and dominate its immediate neighborhood, including the rapidly melting Arctic.”
“To this end, Moscow has built up the military capacity to complicate NATO’s ability to operate in the Black, Baltic, and North seas as well as in the North Atlantic and the Arctic,” he noted.
When did it all go wrong?
At the end of the Cold War and collapse of the USSR in 1991, relations between NATO and Russia improved when the latter joined the North Atlantic Cooperation Council, a forum for dialogue. This was succeeded in 1997 by the Euro-Atlantic Partnership Council, which brings together NATO members and partner countries in the Euro-Atlantic area.
Relations with Russia were further strengthened in 1997 with the NATO-Russia Founding Act and then in 2002 with the establishment of the NATO-Russia Council, or NRC.
However, relations started to sour in 2008 following a five-day war between Russia, Georgia and Russian-backed self-proclamed republics of Abkhazia and South Ossetia. NATO said that Russia’s “disproportionate military action in Georgia in August 2008 led to the suspension of formal meetings of the NRC and cooperation in some areas, until spring 2009.”
An independent report in 2009 commissioned by the EU blamed Georgia for starting the five-day war with Russia (albeit after provocations by Moscow) but said the latter’s military response went beyond reasonable limits and that both sides had violated international law.
NATO’s relations with Russia resumed in spring 2009, however, and before the Ukraine crisis in 2014, NATO and Russia cooperated in a number of security matters, from combating terrorism to arms control.
But all practical civilian and military cooperation under the NATO-Russia Council was suspended in April 2014, in response to Russia’s annexation of Crimea from Ukraine in March that year and its part in the pro-Russian uprising in eastern Ukraine.
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