January 27, 2012

The Week in Review

January 27, 2012 | From theTrumpet.com 
Iran pushes back against the EU; anti-Semitism surges in ‘Arab Spring’ nations; Merkel calls for full-on political union; India bypasses sanctions, drops dollar; and the election year begins to heat up.

Middle East 

EU bans Iranian oil; Iran again threatens to close Hormuz: Tensions between Europe and Iran keep ratcheting up, with Iran this week again threatening to close the Strait of Hormuz in response to a Western oil embargo. On Monday, European Union foreign ministers agreed to place a ban on Iranian oil imports in an effort to stop its nuclear program. European nations will immediately cease signing new oil contracts, with states having the option of honoring current contracts through to July 1. This will affect some 18 percent of Iran’s oil exports. The EU also froze the assets of Iran’s central bank, and put sanctions on its state-owned Bank Tejarat, the country’s third-largest bank. Iran reacted defiantly, with Intelligence Minister Heydar Moslehi telling the official irna news agency on Tuesday: “The West’s ineffective sanctions against the Islamic state are not a threat to us.” Emad Hosseini, spokesman for parliament’s energy committee, said that Iran retained its threat to shut the Persian Gulf to shipping. Mohammad Ismail Kowsari, deputy head of Iran’s committee on national security, said Monday the Hormuz Strait “would definitely be closed if the sale of Iranian oil is violated in any way.” The Associated Press writes: “The escalating confrontation is fraught with risks—of rising energy prices, global financial instability, and potential military activity to keep the strait open” (January 23). 

Final results of Egypt’s election are in: Islamists have won nearly three quarters of the seats in the lower house of parliament, according to official figures released last Saturday. The Muslim Brotherhood’s Freedom and Justice Party won 47 percent of seats, and the ultraconservative Salafist al-Nour Party took 25 percent. This will give these parties a dominant role in drafting Egypt’s new constitution, which will be written by a body appointed by parliament. No women were elected to parliament, though the ruling military council, which has appointed the final 10 members of the 508-seat chamber, has selected three women. When parliament convened for the first time on Monday, Muslim Brotherhood member Saad el Katatni was elected as speaker of parliament. Islamists also succeeded in adding Islamic religious references to the oath of office. A presidential election is scheduled to be held before the end of June, when the country’s military leaders are due to step down. 

Anti-Semitism surges in wake of “Arab Spring”: Democratic freedom has led to an explosion of anti-Semitic sentiment in the newly liberated nations in the Middle East whose dictatorships have been toppled in the past year. That was the conclusion of a report released on Sunday by Tel Aviv University’s Kantor Center for the Study of Contemporary European Jewry. “[While] the popular uprisings in the Arab world do not represent a general change in attitude towards Israel, Zionism and the Jews, it seems the anti-Semitic discourse and incitement have become more extreme and violent,” the report said. “Charges of an international Jewish conspiracy have been a central motif in the anti-Semitic propaganda that has accompanied the Arab Spring uprisings.” 

Palestinian security forces involved in anti-Israel demonstrations: Palestinian Authority (PA) security forces have increased their participation in anti-Israel demonstrations in the West Bank, senior Israeli military sources said last week. Three Palestinian policemen, in civilian dress, were recently arrested for throwing rocks at Israeli security forces during demonstrations. “We believe that the PA is financing the protests, but it is new that security officers are involved,” a senior Israel Defense Forces officer said. 

Iraq becoming a “police state”—again: Iraq is becoming a “police state,” an international human rights group says, as the Shiite-led government cracks down harshly on dissidents. In its “World Report 2012,” Human Rights Watch says that Iraq is slipping back into authoritarianism as security forces abuse protesters, harass journalists, torture prisoners and intimidate activists. The report, released Sunday, says the human rights situation in Iraq is worse than it was a year ago, with the U.S. failing to leave behind a stable democracy. The group says it has uncovered a secret prison where detainees are tortured, with those who control the facility reporting to the military office of Prime Minister Nuri al-Maliki. It also says at least 10 protesters and bystanders have been killed and more than 250 injured in Kurdistan. 


Germany and France plan EU tax harmonization: Germany and France are planning to give the European Union new powers to “coordinate” taxation, Agence France-Presse reported January 18, citing a confidential Franco-German paper seen by several media outlets. “European institutions and member states should accelerate the process of tax coordination,” the document says. “In particular, the negotiation of the European Commission proposals on energy tax directive, common consolidated corporate tax base and common system of financial transaction tax should be accelerated.” The EU’s push for a common corporate tax rate is just the beginning—France and Germany want it to go further. The Telegraph’s Bruno Waterfield reports: “EU officials have said that the Franco-German push will give a new lease of life to Brussels for new energy taxes that will set higher minimum road and heating fuel duties based on carbon emissions.” Britain is opposed to giving the EU more power over taxation. The new proposal is yet more evidence of Europe moving toward closer integration while Britain tries to go in the other direction. 

Europe needs a political union, might not save Greece, says Merkel: The EU eventually needs to create a political union with many more powers handed over to a central government, German Chancellor Angela Merkel said in an interview with several newspapers, published January 26. This union would have a stronger parliament, with an upper and lower chamber, and with the European Court of Justice as its supreme court. One of the papers conducting the interview, the Guardian, summarized the new treaty Germany is pushing, saying it “would enshrine the German model of fiscal and monetarist rigor as binding on the eurozone, in a move that would, in effect, outlaw Keynesian economics.” Chancellor Merkel said, “We will only be able to strengthen our common currency if we coordinate our policies more closely and are prepared to gradually give up more powers to the EU. … My vision is one of political union because Europe needs to forge its own unique path. We need to become incrementally closer and closer, in all policy areas.” Europe is moving toward becoming a single German-led superstate, just as the Trumpet has long predicted. 

Croatia votes to join EU: Croatia voted to join the EU in a referendum held on January 22. Of the 48 percent of the population that turned out to vote, 68 percent voted to join the EU. Germany deliberately broke apart Yugoslavia to gain power over the Balkans, and now Croatia is joining Germany’s club. For more information, read our free booklet Germany’s Conquest of the Balkans.

India bypasses dollar for Iranian oil purchases: India has agreed to buy Iran’s oil with gold rather than the U.S. dollar, debkafile reported Monday. This agreement means India has joined China and Russia in ignoring the U.S.-led European sanctions on Tehran’s financial business and oil exports. China is expected to soon switch to gold for Iranian oil purchases. Both India and China are superpowers in terms of gold holdings. Together, Beijing and New Delhi buy around 1 million barrels of Iranian oil each day, which is 40 percent of Iran’s total exports. By making the purchases in gold, India and China allow Tehran to bypass the scheduled freeze on its central bank’s assets and to work around the oil embargo that the EU agreed to implement on Monday. Analysts also expect the colossal amounts involved in these transactions to boost the price of gold and diminish the utility of the dollar on global markets. 

China overtakes Japan as world’s top coal importer: China surpassed Japan in 2011 to become the world’s top coal importer, according to data published Thursday. The switch was driven by a Japanese reduction of imports after the March 2011 earthquake damaged many of Japan’s coal-fired power plants, in addition to robust Chinese demand. Japan had maintained the number one position from 1975 until 2010, the International Energy Agency’s Coal Information showed. In 2009, China overtook the U.S. to become the world’s largest energy consumer, and the speed at which China’s economy continues to grow is historically unprecedented. China’s frenetic drive for resources is intensifying the global scramble for the planet’s wealth. As Europe and other powers watch China devour a rapidly increasing proportion of resources, they will strive to tighten the grip on their own supply channels. 

Russia looks to Aussie bills as U.S. dollar alternative: Moscow may begin buying the Australian dollar as an international reserve currency as soon as next month, striking another blow to the beleaguered U.S. dollar. Since the U.S. Federal Reserve cautioned that America’s economic recovery was at risk, prompting the Fed to announce that U.S. interest rates might stay close to zero for three years, investors around the world, including those in Russia, have been looking for alternatives to the greenback. 

Latin America 

U.S. “reset” backfires as Brazil turns to China: Ten months after U.S. President Barack Obama pledged to help Brazil develop its potentially massive offshore oil reserves, Brazil has spurned the U.S. and opted to sell its oil to China. China recently bought a 40 percent stake in Repsol-ypf’s Brazil unit, which has drilling rights to the Santos Offshore Basin, according to the Washington Times. The Times also reveals that China has bought a 30 percent stake in Galp Energia, a Portuguese company that holds rights to the same basin. As rival powers snatch up oil in America’s backyard, Washington appears to be asleep. 


Bishops defeat UK welfare law: Britain’s Conservative government is attempting to pass a law capping the benefits families can receive from the government, but were defeated in the House of Lords by an opposition aided by Church of England bishops. The government wants to cap welfare payments at £26,000 (us$41,000) per family. To earn that kind of money, a working family would have to earn around £35,000 (us$55,000) before tax. Rather than heeding the biblical principle that “if any would not work, neither should he eat” (2 Thessalonians 3:10), the bishops are encouraging idleness, as Britain’s debt grows ever larger. 

Obama takes State of the Union message to key states: After delivering his State of the Union address on Tuesday, U.S. President Barack Obama began a three-day swing-state tour in a bid to raise support in election battlegrounds. The president’s main message was a call for higher taxes on the wealthy, something Republicans strongly oppose. Republican presidential candidate Mitt Romney called the president “detached” from reality, telling supporters: “This is a president who talks about deregulation, even as he regulates. Who talks about lowering taxes, even as he raises them.” With more than 13 million people out of work and a government debt standing at a record high of $15.2 trillion, expect this year’s presidential campaign to be fraught with division.

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