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But how did we get to this point?

Allow me to inject a little history into the current crisis. Every day before 24 February 2022, we learned that war in Ukraine could be imminent. Russian troops, we were told, were massing on Ukraine’s borders and could attack at any time. American citizens have been advised to leave Ukraine and relatives of American embassy staff have been
evacuated.

Meanwhile, the Ukrainian president has advised against panic and made it clear that he does not believe a Russian invasion is imminent. Vladimir Putin has denied that he intends to invade Ukraine. He is demanding that the process of accepting new members into NATO be halted and that Russia be given assurances that Ukraine and Georgia will never become members.

President Biden has refused to give such an assurance, but has made it clear that he is willing to discuss further issues of strategic stability in Europe. Meanwhile, the Ukrainian government has made clear that it has no intention of implementing the 2015 agreement to reunite the Donbass provinces with Ukraine with a high degree of local autonomy – an agreement with Russia, France and Germany that the United States agreed to.

Was this crisis avoidable?

Recently I have learned some insights from a key American official knowledgeable of the history involved. He is Jack Matlock. He was a Russia expert at the National Security Council, Director of the Soviet Affairs in the Department of State and finally served as the US Ambassador in Moscow as the Soviet Union was in the throes of coming to an end. When the Soviet Union collapsed in 1991, many observers mistakenly believed they were witnessing the end of the Cold War, when in fact it had ended at least two years earlier through negotiation and was in the interest of all parties.

President George H.W. Bush hoped that Gorbachev would succeed in keeping most of the 12 non-Baltic republics in a voluntary federation.
Since Putin’s main demand is an assurance that NATO will not admit any more members, especially Ukraine or Georgia, there would obviously have been no basis for the current crisis if there had been no enlargement of the Alliance after the end of the Cold War, or if enlargement had taken place in line with building a security structure in Europe that included Russia.

Was this crisis foreseeable?

Absolutely. NATO enlargement was the biggest strategic mistake made since the end of the Cold War.

I think the administration’s recommendation to admit new members to NATO at this time is misguided. If adopted by the United States Senate, it could go down in history as the biggest strategic mistake made since the end of the Cold War. Indeed, the nuclear arsenals are capable of ending civilization on Earth the way we know it.

If NATO is to be the main instrument for unifying the continent, then logically it can only do so by expanding to include all European countries. But that does not seem to be the goal of the US government, and even if it were, it cannot be achieved by accepting new members piecemeal.

The decision to expand NATO piecemeal was a reversal of the American policy that brought about the end of the Cold War. President George H.W. Bush had proclaimed the goal of a “complete and free Europe”. Gorbachev had spoken of “our common European home”, welcomed representatives of Eastern European governments that had broken away from their communist rulers, and ordered a radical reduction of Soviet forces, declaring that a country could only be secure if there was security for all.

President Bush also assured Gorbachev at their meeting in Malta in December 1989 that the United States would not “exploit” this process if the countries of Eastern Europe could choose their future direction through a democratic process. (The admission to NATO of countries that were then members of the Warsaw Pact would, of course, be “taking advantage”). Gorbachev was assured, though not in a formal treaty, that if a united Germany was allowed to remain in NATO, there would be no shift of NATO jurisdiction eastwards, “not one inch”. In the spirit of friendship, Gorbachev took them at their word.

These statements were made to Gorbachev before the Soviet Union broke apart. After the collapse, the Russian Federation had less than half the population of the Soviet Union and a demoralized and completely shattered military. While there was no reason to expand NATO after the Soviet Union recognized and respected the independence of Eastern European countries, there was even less reason to fear the Russian Federation as a threat.

Was this crisis deliberate?

Unfortunately, the policies of Presidents George W. Bush, Barack Obama, Donald Trump and Joe Biden have helped bring us to this point.
The admission of Eastern European countries to NATO started with the administration of Bill Clinton and through the activities of Secretary of State Madeleine Albright continued under the George W. Bush administration, but that was not the only thing that aroused Russian objection. At the same time, the United States began to withdraw from the arms control treaties that had for a time put the brakes on an irrational and dangerous arms race and formed the basis for ending the Cold War. Most important was the decision to withdraw from the Treaty on the Elimination of Ballistic Missiles, which had laid the foundation for a series of agreements that brought the nuclear arms race to a halt for a time.

After 9/11, Putin was the first foreign leader to call President Bush and offer his support. He kept his word and facilitated the attack on the Taliban regime in Afghanistan. At that point, it was clear that Putin was seeking a security partnership with the United States, because the jihadist terrorists who were targeting the United States were also targeting Russia. Nevertheless, Washington continued its course of ignoring Russian (and also allied) interests by invading Iraq, an act of aggression that not only Russia but also France and Germany opposed.

Although President Obama initially promised to improve relations through his “reset” policy, the reality showed that his administration continued to ignore the most serious Russian concerns and duplicated earlier American efforts to disengage former Soviet republics from Russian influence and even to promote “regime change” in Russia itself. American actions in Syria and Ukraine were seen by the Russian president and most Russians as indirect attacks on them.

And as for Ukraine, the US interfered deeply in the country’s domestic politics and actively supported the revolution and overthrew the elected Ukrainian government in February 2014, the Maidan rebellion was born.
Relations continued to deteriorate during President Obama’s first term particularly through activities of Secretary of State Hillary Clinton. Things deteriorated further during Donald Trump’s four years in office. Trump, accused of being a Russian fool, passed every anti-Russian measure that came his way, while at the same time flattering Putin as a great leader.

Can the crisis be solved by applying common sense?

Have we so quickly forgotten the lesson of the Cuban missile crisis?? It was solved through effective negotiation. At this stage this will not be an easy task because things have deteriorated so much. So far there has never been an attempt by a neutral party to bring the warring sides to negotiation. Each time it has been tried it has been by partisans who have their own stakes in things. Switzerland with its rich history of neutrality is in a far better position than any of the others. I am personally cooperating with the Neutrality Initiative to help achieve this noble goal.

* Pascal Najadi is an international investment banker and, as a director of the Dresdner Bank Group, London, was responsible for Central Asia, Russia, Africa, Central Europe and the Middle East. He is interested in international affairs and civic debate in Switzerland. He also produced the film “Grounding” about the bankruptcy of Swissair. He currently lives in Switzerland in retirement.

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In 2019, the world consumed 99.7 million barrels per day (mbd) of crude oil — and OPEC was forecasting a rise to 101mbd in 2020, shana.ir reported.

But in the year, the coronavirus crisis triggered a long-anticipated tipping point in the oil demand by quenching the global thirst for fossil fuels.

Global lockdowns this year that grounded planes and took traffic off the streets, prompted OPEC to slash the 2020 figure to 91mbd, with 2021 demand still seen below 2019 levels.

Downward revisions to demand forecasts are prompted by the rise of electric vehicles and a shift to renewable energy sources as the pandemic has driven down crude consumption by as much as a third in 2020.

OPEC has been scaling back expectations. In 2007, it forecast world demand would hit 118mbd in 2030. By last year, its 2030 forecast had dropped to 108.3mbd, according to Reuters.

In the meantime, Exxon Mobil Corp. posted a quarterly loss for the second straight quarter for the first time this century on July 31, reporting a loss of $1.1 billion, compared with a profit of $3.1 billion a year ago, Wall Street Journal reported. Exxon, the largest US oil company, hadn’t reported back-to-back losses for at least 22 years, according to Dow Jones Market Data, whose figures extend to 1998.

Licking its wounds, Chevron Corp. said on Friday it lost $8.3 billion in the second quarter, down from $4.3 billion in profits during the same period last year, its largest loss since at least 1998. It wrote down $5.7 billion in oil-and-gas properties, including $2.6 billion in Venezuela. Chevron also said it lowered its internal estimates for future commodity prices, WSJ reported.

Moreover, the historic price slump in the oil market which sent oil below $16 a barrel and brought US oil to below zero for the first time in history in April, was caused by slashed demand in the wake of the deadly coronavirus pandemic which has claimed the lives of at least 679,000 worldwide since it broke out late last year.

Now OPEC officials wonder whether all this would herald a lasting shift in consumption habits if oil peak has been put behind and the age of oil is drawing to a close.

An industry source close to OPEC, who preferred to remain anonymous, said key players were beginning to appreciate a new reality in the industry that consumption might be hard to recover but were also preparing the organization to play its role as a market leader in such hard times to save participants as before.

OPEC is no stranger to difficult times. It did save the industry back in the 80s and 90s and the 2000s. However, things were different at those times. The bloc would undergo internal clashes and infighting to save the market and keep shares in the market. But this time, as it turns out, it has acted more refined than ever to attract the support of not only members unanimously to save the market, but also non-members including major producers like Russia.

Just to remember, oil was traded above $145/barrel back in 2008 amid soaring demand.

Major producers including OPEC, which includes Saudi Arabia, Russia, and the US, among many others, now have to find a way to hammer out strategies to weather falling prices in the coming months, and ensure revenue generation as consumption seems to have entered a long-term decline with aviation falling dramatically and motorists staying home in fear of contracting the virus.

For its part, OPEC, whose members sit on 80 percent of the world’s proven oil reserves, has put behind its classic infighting in favor of winning more market share and saving prices by joining long-time market rivals like Russia in a bid to dilute the supply glut in a market awash with costly shell supplies from US producers.

As a result, OPEC with Russia and other allies, a grouping known as OPEC+, agreed record output cuts of 9.7mbd, the equivalent of 10 percent of global supplies. Those deep cuts run to the end of July.

Despite losing the lion’s share of the global oil market to non-members, OPEC’s role to steer the market and prevent falling prices is more crucial than ever as the 13-memebr group has brought together 10 non-members including Russia for the first time in the industry’s history to close ranks to tackle a dwindling industry.

Source: shana.ir

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“It would be best if we could reach a deal before the summer break,” Merkel said, calling for compromise from member states to enable the deal to be ratified by the end of the year.

“We must act quickly and decisively,” she said, AFP reported.

European Commission chief Ursula von der Leyen proposed the huge fund to help the EU out of its deepest-ever recession, but the plan was immediately met with fierce opposition from fiscally conservative member states including Austria and the Netherlands.

The proposed package consists of 500 billion euros in grants and 250 billion euros in loans but requires unanimous EU approval.

“The starting position is far from easy but I hope that all member states will act in a spirit of compromise in the face of this unprecedented situation,” Merkel said.

“Cohesion and solidarity have never been more important than today. The crisis can only be overcome if we act for and with each other,” she said.

The European Council is due to hold a video summit on June 19 on the controversial stimulus package, the EU’s largest to date.

However, a decision is not expected until the leaders have met in person, said Merkel, whose country assumes the EU presidency in July.

The German chancellor had in late May stunned observers by proposing along with French President Emmanuel Macron the plan for 500 billion euros in grants to help the hardest-hit EU members to get their economies back on track.

That proposal, now making up the bulk of von der Leyen’s package, shattered a long-standing German taboo as it included taking on shared debt, a dramatic U-turn after years of obstinate German opposition to joint borrowing.

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Brazilian Treasury Secretary said he expected President Jair Bolsonaro’s administration to keep supporting the same fiscal policy, with the government aiming to reduce deficits after the COVID-19 pandemic subsides. Expenses have risen to deal with the coronavirus crisis.

Earlier on Sunday, Reuters, citing a government source, reported Almeida was expected to resign soon. Almeida, who has served a year and a half in Bolsonaro’s administration, had initially been expected to stay in the government for six months, the source said.

“I’m tired and soon there will be new discussions of fiscal adjustment after the COVID pandemic,” Almeida told the blog, adding it was ideal that a new Treasury secretary is involved in those talks.

Brazil has the world’s second-largest death toll from the coronavirus, at 43,332, behind only the United States. The Brazilian government expects the gross domestic product to contract 4.7% this year, as quarantines and lockdowns to curb the spread of the virus slow economic activity.

Almeida, a longtime government finance specialist, played an important role in recent macroeconomic reforms proposed by Economy Minister Paulo Guedes. Almeida also served under former President Michel Temer.

Almeida said without elaborating that he would not work in the public sector.

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The all-party Treasury select committee said large numbers of people are enduring financial hardship and are unable to benefit from the Chancellor of the Exchequer’s schemes for salaried employees and the self-employed, the Guardian reported.

The committee said the chancellor, Rishi Sunak, needed to make good on his promise to “do whatever it takes” to protect individuals and businesses from the impact of the pandemic. The MPs called on Sunak to address the gaps in his coronavirus job retention scheme (CJRS) and self-employment income support scheme (SEISS).

Employers across Britain face a deadline this week to make job cuts, as the furlough scheme is gradually wound down from August.

The MPs said they recognized that Sunak’s costly financial support packages had been welcome to many of those unable to work due to the lockdown of the economy, but found that “rolling out financial support at pace and scale has inevitably resulted in some hard edges in policy design and some critical gaps in provision”.

The job retention scheme is designed to give employed workers 80 percent of their salaries up to a cap of £2,500-a-month if they are furloughed, while helpful for the self-employed is designed to pay 80 percent of their average monthly trading profits over the last three years. About 8.9 million jobs have been furloughed at a cost of £19.6 billion, and 2.6 million claims costing £7.5 billion had been made under the SEISS.

The committee said five specific groups were being harshly treated:

• Those newly in employment. The MPs said hundreds of thousands of people were suffering financial hardship through no fault of their own, often due to unfortunate timing in starting a new job or their employer’s choice of timing in submitting paperwork to HMRC. They said the government should find a way to extend eligibility criteria to all new starters.
• Those newly self-employed. Many people who have started a business in the last year don’t qualify for support from the SEISS as they cannot fulfill the eligibility criteria.
•  Self-employed people with annual trading profits in excess of £50,000. The committee said hundreds of thousands of people were potentially suffering hardship because of the arbitrary £50,000 cut-off for the SEISS. It said the government should remove the cap and allow those with profits just over this cap access to some financial support, up to £2,500 a month.
• Directors of limited companies who take a large part of their income in dividends. The committee said the government had failed to take action to help the hundreds of thousands of limited company directors missing out on support because they pay themselves in dividends, often on the advice of their accountants. The MPs said HMRC should request additional information about the proportion of dividends that had come from company profits and from other sources.
• Freelancers or those on short-term contracts. The committee said that in industries such as TV and theatre, where short-term PAYE contracts were the norm, many workers are not entitled to support under the CJRS or SEISS.

Mel Stride, the chair of the treasury committee, said that overall Sunak had “acted at impressive scale and pace. However, the committee has identified well over a million people who — through no fault of their own — have lost livelihoods while being locked down and locked out of the main support programs.

“If it is to be fair and completely fulfill its promise of doing whatever it takes, the government should urgently enact our recommendations to help those who have fallen through the gaps.”

The MPs said it was unfair that in one household, a self-employed single-parent earning just above the £50,000 cap received nothing while next door, a couple who were either both self-employed and earning profits below the cap or salaried employees with full entitlement to CJRS, received up to £5,000 a month.

The Treasury said: “Our wide-ranging support package is one of the most comprehensive in the world — with generous income support schemes, billions paid in loans and grants, tax deferrals and more than £6.5 billion injected into the welfare safety net.

“All our support is targeted to make sure we use public funds responsibly, helping those who need it most as quickly as possible while minimizing fraud risk.”

The committee’s report comes at a key moment for the furlough scheme as the Treasury prepares to scale back the support it provides from 80 percent to 60 percent of workers’ wages from the start of August. Firms will be expected to contribute 20 percent to continue furloughing their staff.

Employers across the country face a crunch decision this week to either accept making contributions or to cut jobs if they are unable to do so. Firms looking to make more than 100 job cuts must run a 45-day consultation period, giving them a deadline of mid-June if they will be unable to top-up furloughed workers’ wages come August.

A survey of 1,200 firms by banking industry body UK Finance found that seven in 10 UK businesses have been negatively impacted by the coronavirus crisis and that one in five has less than one month worth of cash reserves left. Around 18 percent of firms warned they could cease trading altogether and may not survive the fallout from the pandemic.

October is expected to mark the first big wave of company failures. That is when business loan repayment holidays — granted for up to six months — will come to an end, just as government support for employee wages through the coronavirus job retention scheme is expected to wind down.

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Addressing a Sunday session of the Administration’s Economic Headquarters, Rouhani said the cabinet’s top priority in addressing the economic strategies of the coronavirus is to protect the livelihood and economy of families, particularly vulnerable groups.

He said the problems created by the pandemic could be addressed with serious cooperation from the people, stressing that popular partnership is the most effectual help in dealing with the economic challenges and shocks.

Denouncing the harsh and inhumane sanctions that have been imposed on Iran amid the COVID-19 outbreak, Rouhani said, “Fortunately, the administration has carefully devised plans since the outbreak of the disease to tackle the coronavirus economic problems, and has tried to withstand such a difficult situation vigorously by formulating special policies and with reliance on people.”

The president also said the main priority in the administration’s economic plans is to control prices and supply the basic means of life, according to the government’s official website.

“Strict monitoring and control, as well as timely reaction to price hikes, are among the major duties of all authorities, producers, guilds, and salespeople, and shortcoming and failure in this regard is by no means acceptable.”

He further unveiled grand plans to resolve the housing market problems, saying economic policies have been developed to regulate and control the flow of liquidity that may disrupt the housing market.

In April, Leader of the Islamic Revolution Ayatollah Seyed Ali Khamenei gave permission for withdrawing €1 billion from the National Development Fund of Iran to battle against the novel coronavirus and handle the consequences of the disease.

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