Diplomacy & Crisis News

La dangereuse concentration de bâtiments de guerre dans le Golfe ajoute à la confusion diplomatique qui entoure le conflit entre l'Iran et l'Irak. On oublie trop souvent que, au-delà du régime baasiste irakien, le principal ennemi du régime islamique est le communisme. Ce qui, en soi, n'a rien pour (...) / Iran, URSS - 1987/09

For all Trump’s talk of fire and fury, the North Koreans wouldn’t have come to the negotiating table without South Korea’s pragmatic president.

By keeping a key challenger in jail, Turkey’s government risks making Selahattin Demirtas an even more popular and formidable opponent.

Tandis que piétine la conférence sur le droit de la mer, la contestation de l'ordre ancien a donné naissance à un nouveau droit coutumier. Mais grâce à d'énormes moyens technologiques, le pillage se poursuit dans les eaux poissonneuses du tiers-monde. L'extension des souverainetés nationales sur des « (...) / Droit, Mer, Colonisation, Pêche - 1981/08

The last time America withdrew from its own international security agreement, it led to the most devastating war in history.

Iraqi politicians are finally crossing ethnic and religious lines. But how long can the good vibes last?

>> Retrouvez en libre lecture l’article dont est extraite cette citation : « L’Égypte du général Sissi, entre réaction et aspirations révolutionnaires », écrit par Chloé Berger dans le numéro de printemps 2018 de Politique étrangère. < <

Gina Haspel dodges questions but appears headed toward narrow confirmation.

The United States will be worse off once the smoke clears.

As a new outbreak surfaces in Africa, the only possible motive for ending America's anti-Ebola program is that Barack Obama started it.

In staffing and internal policies, he seems to be reversing trends of the Tillerson era that dispirited many diplomats.

M. François Mitterrand a été plébiscité, le 8 mai 1988, dans les départements d'outre-mer (Guyane, Martinique, Guadeloupe, Réunion) et dans la collectivité territoriale de Mayotte. Ses scores ont été très supérieurs à ceux de 1981. Pourtant le gouvernement de M. Chirac avait fait de gros efforts financiers (...) / France Outre-mer, France, Aide au développement, Démographie, Développement, Économie, Finance, Politique, Société, Chômage - 1988/06

« Je suis la bête qui monte, qui monte, qui monte . » M. Le Pen poursuit son ascension. Désormais, le candidat du Front national à l'élection présidentielle n'aura plus besoin de tourner en dérision la peur du fascisme tant les thèmes qu'il a développés se sont banalisés . Les électeurs ont, pour 14,39 (...) / France, Crise des valeurs, Élections, Extrême droite, Parti politique, Politique, Racisme, Société - 1988/05

On October 27, 2017, new auction rounds for the eight pre-salt blocks in Brazil were launched. As the Brazilian government approved a new regulatory framework for the bidding process to allow more investors, 14 foreign companies and two Brazilian entities were qualified to participate in the auction.

As a result of the auction, The National Agency for Petroleum, Biofuels and Natural Gas (ANP) awarded six offshore blocks to Shell, Brazilian state-run Petroleo Brasileiro (Petrobras), and Statoil. This generated BRL 6.15 billion (about USD 1.9 billion) in signature bonus and BRL 760 million (about USD 234.8 million) in investments. The ANP also announced that two more auction rounds for pre-salt layer fields are planned in 2018 and in 2019. ExxonMobil (USA) took eight blocks of pre-salt reserves in the recent auction in April 2018, whereas Petrobras took six blocks.

Moreover, the new regulatory and economic changes in the Brazilian oil and gas sector have brought more transparency on future investments in the pre-salt reserves, incentivizing foreign investors such as ExxonMobil (USA) and Statoil (Norway) to invest again in Brazilian energy projects. The improved regulatory framework ended the mandatory participation of Petrobras as “the sole operator in pre-salt”, creating new opportunities for other investors.

A bright future, but risks abound

The future of the Brazilian oil and gas sector, and subsequently the Brazilian economy, is positive. In 2017, the oil and natural gas sector accounted for 11 percent of Brazil’s GDP, and keeps on growing. With a recovered economy, the Brazilian government claimed that Brazil has become the largest oil producer in Latin America, and that the pre-salt reserves has been regarded as “one of the most promising oil reserves in the world.” The Brazilian government thus expects the auction to yield investments of about USD 36 billion for the next 10 years, and would create about 500,000 direct and indirect jobs. This development in the oil and gas sector provides an optimistic outlook for many Brazilian states’ economy that depend on oil production, as “the exploration of [the pre-salt] areas should generate BRL 400 billion in royalties and taxes over the next 30 years.” This development could invite more economic and social development in Brazilian states that have suffered from the recent dire economy.

As corruption, fraud, and bribing remain pervasive and ongoing problems in Brazil, the investors will look to Brazilian President Michel Temer’s administration to reinforce new regulatory and economic laws to mitigate these risks in the oil and gas industry and in Brazil as a whole. Indeed, Reuters indicated on April 17, 2018 that President Temer launched a series of policy changes to “tempt investors to return to Latin America’s No.1 economy.” The President aimed to cut restrictions on oil and gas production by eliminating the exclusive rights of Petrobras in operating pre-salt oil fields.

However, despite the positive developments in the oil and gas sector, there are persistent political risks that investors must be wary about. These risks include judicial insecurity, high-level corruption, reputational damage, expropriation and nationalization with the involvement of Petrobras, and contract uncertainty. For instance, an October 27, 2017Financial Times article reported that a federal judge issued an injunction to block the October 2017 auction, a political move sought by the leftist Workers’ Party. While the auction was briefly suspended, the injunction was overturned. However, this recent play provides a cautionary tale for investors, as judicial and political insecurity can undermine the progress of the auctions and pre-salt reserves investments. Along with these issues, the upcoming presidential elections could reverse Temer’s policies and new regulatory framework.

Petrobras and ongoing security crises in Brazil

In addition, according to the Brazilian government, Petrobras “now has the freedom to choose which [pre-salt auction] blocks it will participate in.” The new regulatory framework of the pre-salt reserves has thus allowed Petrobras to gain more autonomy for its strategic management and investment in the oil and gas industry. Increasing the state-owned oil and gas company’s influence and power over one of Brazil’s essential sectors for economic growth may be too early for Petrobras. As the company remains entangled in the biggest corruption probe in Brazil’s history, investors remain cautious of political and judicial development around the company.

This scandal has had a disastrous impact on Brazil’s economy, as investors strayed away from the country for a few months and stock prices dipped quickly in 2014. Overall, this issue was a staggering setback for Brazil’s political, social, and economic growth and worsened the already-existing grievances in country. It took several years for Petrobras to recover from the scandal, as it became the world’s most indebted oil company and reported revenue growth only by 2017. The ongoing investigation and its impact on the public and private sector in Brazil remain a rampant issue that investors, policy makers, and international organizations should continue to monitor.

In addition to the aforementioned political and operational risks, investors must also take into account worsening security risks. In the past five years, Brazil’s security status quo has deteriorated, as over 55,000 people were killed in 2015 due to a surge in police strikes, street crime, violent protests, and armed conflicts between the Brazilian security forces and organized criminal organizations. A vacuum of instability and violence in various cities across the country has persisted since 2015, and along with civilian unrest and excessive responses from Brazilian security forces, drug trade, arms trafficking, robbery, extortion, and kidnapping activities have soared. The rampant corruptions in the government and security forces, and endemic economic and social instability have undermined the Brazilian government’s ability to effectively tackle security crises.

 

This article first appeared on Global Risk Insights, and was written by Alicia Chavy.

The post Pre-salt reserves make Brazil ripe for investment, but risk remains appeared first on Foreign Policy Blogs.

A peine retombé de son paroxysme, le mouvement des lycéens et des étudiants qui a secoué la France en novembre et décembre 1986 a suscité une floraison d'exégèses. De la part notamment de ceux dont c'est le métier de « comprendre ce qui se passe » : l'intelligentsia. Jugement plus important qu'il n'y (...) / France, Éducation - 1987/02

Cette recension a été publiée dans le numéro de printemps de Politique étrangère (n°1/2018). Emmanuel Mourlon-Druol propose une analyse de l’ouvrage dirigé par Michel Aglietta et Nicolas Leron, La Double Démocratie. Une Europe politique pour la croissance (Seuil, 2017, 208 pages).

Ces trois dernières années, le débat sur l’avenir de la zone euro semble s’être cristallisé autour de deux options : une finalisation de l’union bancaire, qui apporterait la réponse la plus adaptée aux sources de la crise de 2009 ; la mise en place d’un budget substantiel de la zone euro, qui offrirait la meilleure garantie d’un fonctionnement harmonieux de la zone euro. La Double Démocratie s’inscrit dans la lignée de la seconde option, et offre une analyse stimulante des problèmes actuels de l’ensemble européen, et des mesures à mettre en place pour en améliorer le fonctionnement.

C’est en dotant l’Europe d’un budget commun significatif, financé sur des ressources fiscales propres, qu’elle deviendra, pour les auteurs, une réelle puissance publique, ce qui contribuera à sa revitalisation démocratique. Les auteurs relèvent le paradoxe des enquêtes d’opinion européennes : si les citoyens semblent marquer leur attachement à la monnaie unique, ils manifestent fréquemment leur rejet de l’Union européenne. La faiblesse de la puissance publique européenne contribuerait à expliquer ce rejet.

Le premier chapitre expose les faiblesses du système politique européen, et notamment son déficit démocratique structurel. Le deuxième chapitre se focalise sur la question de la souveraineté, particulièrement ambiguë dans la construction politique européenne, cette ambiguïté étant source de tensions. Le troisième chapitre analyse comment « recouvrer la puissance publique » européenne, par le biais du développement d’un budget européen substantiel, entre 3 % et 5 % du PIB européen.

Les auteurs proclament et répètent que la « méthode des petits pas », néo-fonctionnaliste, chère à Jean Monnet, est révolue. Mais l’union bancaire n’est-elle pourtant pas par définition le fruit de la méthode fonctionnaliste ? Et n’est-elle pas également un exemple du (difficile) développement de la puissance publique européenne, via la question de la résolution et de l’assurance dépôts ? Cette réflexion rejoint la première ligne d’analyse évoquée plus haut, notamment traitée dans les travaux de Barry Eichengreen ou Martin Sandbu, mais qui n’est pas abordée dans La Double Démocratie.

Les auteurs en appellent à une recherche interdisciplinaire, prenant en compte la science politique, l’économie, et le droit. Ils ne mobilisent toutefois étrangement aucun des travaux de la riche historiographie de la construction européenne, ou même de l’histoire de l’Europe après 1945. Alors que les auteurs appellent de leurs vœux « l’avènement d’une véritable puissance publique européenne qui permettra le recouvrement de la puissance publique nationale », nulle mention n’est faite, par exemple, des travaux d’Alan Milward. C’est pourtant l’historien britannique de l’économie qui a le premier analysé l’idée du sauvetage de l’État-nation par l’Europe, dans son livre éponyme, The European Rescue of the Nation State paru en 1992, où il étudiait les débuts la construction européenne. L’analyse des auteurs semble faire écho aux travaux de Milward, qui ne prenait certes pas en compte la dimension de revitalisation démocratique comme ils le font eux-mêmes. Le parallélisme entre les réflexions mériterait, par exemple, d’être approfondi.

Michel Aglietta et Nicolas Leron offrent toutefois un ouvrage essentiel, riche et stimulant qui contribue au débat sur la réforme de la zone euro.

Emmanuel Mourlon-Druol

Pour vous abonner à Politique étrangère, cliquez ici.

For nearly a decade, the nuclear question has crowded out serious deliberations over a broader policy toward Iran.

Le Japon est actuellement dans la ligne de mire des grands pays industrialisés, et plus particulièrement des Etats-Unis, qui en font volontiers le bouc émissaire de leurs propres difficultés. Au-delà d'un changement de politique économique, c'est une mutation des mentalités qui est exigée d'une (...) / Japon, Pacifique, Asie du Nord, Industrie, Économie - 1987/02

Ni à droite ni à gauche. Par-delà la droite et la gauche. L'objectif des nouveaux conservateurs n'est pas la prise du pouvoir, mais l'élaboration - à partir des découvertes des sciences physiques, biologiques et sociales - d'un système d'explication global du monde qui se substitue à celui, « usé » de (...) / France, Idées, Idéologie, Inégalités, Libéralisme, Parti politique, Politique, Religion, Marxisme - 1979/12

Emmanuel Macron’s ambitious plans to reform eurozone institutions received a further setback when German chancellor Angela Merkel toed her party’s line and rejected some of his bolder proposals when the two met in Berlin last week. Merkel’s stance makes it unlikely that any meaningful structural reform of eurozone institutions will be agreed upon at the EU summit in June. This piece analyses the eurozone economic risk outlook, given the low probability of reform in the short-to medium term.

Disagreements over future of eurozone

The latest meeting between Angela Merkel and Emmanuel Macron last week reinforced the fundamental disagreements between the two leaders on the future of the eurozone. While Macron emphasized the importance of greater convergence between the eurozone economies, Merkel was keen to stress the need for compromise. She was clearly unwilling to expend any political capital and instead toed her party’s hardline stance on structural reform. There are three central planks to Macron’s proposals: the creation of a eurozone bank deposit guarantee scheme, the transformation of the European Stability Mechanism to a more permanent European Monetary Fund to weather economic shocks, and the creation of a fiscal union with a central eurozone budget.

There is simply no appetite in Germany for any reform that could entail transfers from German taxpayers to weaker eurozone countries. The CDU/CSU is wary of the challenge from the far-right Alternative for Germany, while the centrist Free Liberals are skeptical of closer European integration. Merkel, while broadly supportive of Macron’s aims, has exhausted much of her political capital during the arduous negotiations over government formation and has not committed to supporting any of the substantive proposals. She has resisted the idea of creating a fiscal union, which would entail creating a central eurozone budget and has also rejected the creation of a bank deposit guarantee scheme for failing banks. The only area of agreement has been on creating a more permanent European Monetary Fund that would be better able to protect the eurozone in the face of macroeconomic shocks. However, the CDU/CSU has insisted that this process should be undertaken only after a treaty change which would necessitate the approval of national Parliaments. Therefore, there is unlikely to be much immediate progress on this front either.

These fundamental disagreements over the future institutional structure of the eurozone are unlikely to be resolved by the next EU summit in June. The summit is seen as the last opportunity to agree on some reform before the European elections next year. Therefore, the probability of structural reform in the medium turn is extremely low.

Updated economic risk outlook given low probability of reform

The low probability of structural reform of the eurozone increases economic risk over the medium term, as it leaves the eurozone vulnerable to economic shocks. A common bank deposit guarantee scheme is essential to lower the probability of banks runs, while a permanent monetary fund will help to recapitalize the banks in an event of crisis and avoid a debt loop between banks and sovereign governments. A fiscal union with some form of debt mutualisation and central budget is equally essential if the monetary union is to survive. Without these institutional reforms, the eurozone economies are always left vulnerable to global economic shocks. Therefore, the recent lack of progress on creating these structures does increase economic risk over the medium term.

While there is no immediate sense of crisis, the risk trajectory is likely to increase gradually because of several economic headwinds both within the eurozone and globally. First, there has been an unexpected decline in the eurozone’s economic activity. Various economic indicators have surprisingly under performed this year. Most notably, German industrial production has taken a significant hit while business confidence indicators in Germany have declined too.

Second, the prospect of Brexit and the threat of a trade war with the USA constitute two significant global outliers that could hurt future growth in the eurozone. While the UK is likely to bear the brunt of the costs of Brexit, there is likely to be some disruption to eurozone economic activity too, depending on the nature of the final withdrawal agreement. Trade relations with the USA are uncertain as well because it is unclear how long tariff exemptionsare going to last. These two global outliers inject considerable economic uncertainty and are likely to dent business and consumer confidence in the eurozone.

Ultimately, the lack of progress on structural reform coupled with looming economic headwinds means that an economic downturn is likely in the short to medium term.

 

This article was first published on Global Risk Insights, and was written by Aman Navani.

The post Disagreements on Eurozone reform impact economic outlook appeared first on Foreign Policy Blogs.