Connect with us

Economy

First EU project bonds fail and will cost Spain €1.4 billion

Published

on

castorThe pilot phase of the European Project Bond Initiative was launched by the European Commission and the European Investment Bank (EIB) in 2012 as an instrument to attract private investments for infrastructure projects to boost growth across Europe. Ironically, its first test case failed tremendously and will cost Spanish citizens at least EUR 1,4bn. Castor, an offshore gas storage facility on the Spanish coast, had the dubious honor to be picked as the first project to be financed through EU project bonds. After gas injections caused a series of hundreds of earthquakes in the region, the project had to be abandoned. According to a clause in the project’s contract, the Spanish government was forced to take responsibility away from the project’s developer for the repayment of the €1.4 billion bonds that were used to finance the Castor project.

“What was supposed to be a driver for growth turned out to be a driver for debt,” said Xavier Sol, Counter Balance director. “The responsibility of the EU is overwhelming. Socialising risk and privatizing profits is what dragged us into this crisis. The Castor failure proves again that a mechanism such as the Project Bonds Initiative cannot be a solution.”

According to Reuters the Spanish government appointed gas grid operator Enagas to reach an agreement with a group of banks to repay concession-holder Escal UGS. This is an attempt to avoid that the €1.4 bn would count against the already high public deficit at a time of austerity measures in Spain (the amount may increase to €1.7bn if financial costs and interests are included). The banks refinancing the debt would be compensated through future revenues from Enagas.

“The result remains the same. Whether through taxes or through increased gas bills, in the end it will be Spanish citizens paying for a failed project. The government is about to choose the worst option on the table,” said Monica Guiteras from Counter Balance/ODG in Spain.

Among those options were the creation of a 'bad bank' to manage the stranded assets  and a nationalization of the facility. In both cases ACS, the private promoter of the project, would at least carry part of the debt repayment. Civil society organizations regret that the government now seems to choose for the most costly option which would be carried entirely by the people of Spain.

Civil society organizations proposed an appeal in court to cancel the compensation requirements.  Alternatively also a moratorium on debt repayments while the case is being settled could be an option. Guiteras regrets that within the government “the political will is to be lacking to pursue these options”.

EU

Budget 2021, Covid-19 measures, Gender Equality Week

Published

on

This week MEPs will decide on their priorities for the 2021 budget, consider how the pandemic has affected fundamental values and hold the first European Gender Equality Week.

Covid-19, rule of law and recovery

On Tuesday (26 October), the civil liberties committee assessed the impact emergency measures to tackle COVID-19 have had on fundamental rights and the rule of law.

The following day, Parliament’s budgets and economic affairs committees will vote to strengthen the InvestEU programme. This fund for 2021-2027 aims to ensure private investment for medium- and long-term priorities such as the digital transition and the Green Deal but needs to be reinforced to cope with the economic impact of COVID-19.

EU budget

The budgets committee will vote today (28 October) on Parliament’s priorities for the 2021 budget. Parliament has already said it wants more funding for young people, researchers, health workers, entrepreneurs, transport infrastructure and security.

Right to repair

In an effort to promote a culture of reuse, Parliament’s consumer protection committee called on Monday (26 October) for a “right to repair” for consumers. MEPs want to facilitate systematic and affordable repairs, encourage repair over replacement, and create a more sustainable single market for consumers and businesses.

Gender equality

To mark the 25th anniversary of the Beijing Declaration, Parliament will hold its first European Gender Equality Week. Taking place until Thursday, Parliament’s committees will host discussions on issues ranging from human trafficking and digitalization to breast cancer and reproductive health.

Internet access

The third in a serious of dialogues entitled Ideas for a New World takes place on Wednesday afternoon. This dialogue between Parliament President David Sassoli, Commission President Ursula von der Leyen and former Commission president Romano Prodi will focus on access to the internet as a human right. There will also be interventions from inventor of the worldwide web Sir Tim Berners-Lee and activist Simona Levi.

Continue Reading

EU

US Presidential election and Russia

Published

on

The US presidential election is just days away. Against the backdrop of a dramatic and unprecedented confrontation between Republicans and Democrats, which borders on paranoia, the anti-Russian theme is actively being promoted, writes Moscow correspondent Alex Ivanov.

It is no secret that in America, accusing Russia of all possible sins and, first of all, of insisting on interfering in the US elections, has become a favorite topic on which only a very lazy person does not speculate.

Especially zealous is the democratic candidate Joseph Biden, who at any opportunity threatens to punish Moscow in the harshest way for trying to influence the election process.

However, in Moscow, the upcoming elections in America obviously do not cause any visible excitement. The Kremlin keeps a silent distance and does not seek to show its preferences. Russia, as before, realistically assesses the election fever in the United States, realizing that most of the statements, slogans and even accusations made during this period have a very approximate projection on the real policy of Washington. In a word, the theatrical action and "high voltage" that occur in America every 4 years practically do not concern Russia in any way. In Moscow have already got used to the loud cries and pleas to "restrain Russia", which in reality have quite a limited impact.

“Competition in a great dislike towards Russia has already become such a constant, probably, of all electoral processes in the United States of America. We are well aware of this and we regret it,” said Dmitry Peskov, spokesman for the Russian president.

Paradoxically, during the administration of President Donald Trump, who, as everyone believes, was allegedly supported by Moscow during the last campaign, relations with Russia reached the lowest possible point. America has only strengthened its sanctions policy against Moscow in recent years, as evidenced by Washington's incredible attempts to stifle the Nord stream 2 energy project. Such insistence of the Americans has already caused a wave of indignation in the EU, while most of its members do not want to put up with the dictates of the United States, especially Germany.

Periodic outbursts of dislike for Russia lead to other consequences, in particular within the framework of NATO. America, against the background of Germany's desire to develop energy cooperation with Moscow, started a large-scale “happening” with the transfer of its troops to other regions of Europe.

The experience of past elections in the United States shows that sociology is deceptive and it is impossible to be sure of someone's victory in advance. As for the leader of public opinion - Democrat Joseph Biden -he himself recently said that Russian President Vladimir Putin does not want him to win. "I had several very frank and direct conversations with President Putin when I was vice president and before that. I think one of the reasons he doesn't want me to be president is because he knows there will be more direct conversations like this," said Joseph Biden.

Joseph Biden himself is confident that relations with Russia will not improve under Putin’s leadership, at least he has repeatedly made it clear during his election speeches. So, recently, he said that the US intelligence services have already warned him that the Russian authorities will try to interfere in the November elections to undermine their legitimacy. According to Joseph Biden, if he becomes President, Moscow will have to "pay a serious price" for such actions. In addition, he promised to seek restrictions on imports of goods from China and Russia to the United States, as well as to counter the growth of Russia's influence in Europe and other regions.

According to Biden, Donald Trump does not take the threat from Russia seriously enough, which makes it easy for Moscow to implement its sinister plans to take over the world. As he seeks the Oval office, Joseph Biden hopes to correct this and other mistakes of the current President.

Joseph Biden and many of his supporters in Washington expect a tougher policy towards Russia. There, for some reason, it is customary to call Donald Trump a "Pro-Russian President" and a "puppet of the Kremlin", despite the fact that he did not actually do anything good for Moscow. An illustrative example of this attitude is a column published recently by the Washington Post staff writer Jennifer Rubin entitled 'Joe Biden would put an end to Trump’s policy of putting Putin first'.

Arms control and non-proliferation of weapons of mass destruction are perhaps the only areas where Joseph Biden can be expected to make positive progress for Russia. First of all, this concerns the Russian-American Treaty on the reduction and limitation of strategic offensive arms (START Treaty), which Donald Trump, apparently, simply intends to let expire in February 2021, instead of, as Moscow suggests, extending it for another five years. The current head of the White house made it a condition of extending the Treaty to involve China in arms control. However, the prospects for multilateral agreements in this area are not yet visible and are unlikely to appear in six months.

Joseph Biden has already promised to extend the START Treaty in the event of his election. The question is how to do this in the two weeks between the date of the inauguration of the new US President (it is scheduled for January 20, 2021) and the end of the contract (February 5, 2021). Russian officials have repeatedly warned that Moscow needs time for domestic formalities related to the extension of such an agreement.

Other agreements are more complicated. So, even the election of Joseph Biden will not prevent Donald Trump from withdrawing the United States from the Open skies Treaty on 22 November, 2020. This agreement allows its 34 member countries, including the United States and Russia, to conduct reconnaissance flights over each other's territories in order to strengthen transparency and mutual trust. On 22 May, Donald Trump announced the US withdrawal from this Treaty, justifying this decision by saying that the Treaty is being abused by Russia. If Joseph Biden wants to return the US to the Treaty, he will have to apply to a special Advisory Commission. Given the fact that there are also those among the Democrats who doubt the benefits of this Treaty for the United States, automatism in this matter should not be expected.

We should definitely not expect the parties to return to the Treaty on the Elimination of intermediate-range and shorter-range missiles, which the US withdrew from last year.

As for the Non-proliferation of nuclear weapons, the headquarters of Joseph Biden made it clear that he is ready to consider returning the United States to the Iran nuclear deal (the Joint comprehensive plan of action, JCPOA, from which Donald Trump withdrew in 2018). However, this will not be easy to do. First, because in the remaining six months, the current administration can ensure that nothing remains of the deal. And secondly, because Iran can put forward conditions to the United States that they will not agree to.

As for the possibility of placing American nuclear weapons in Poland, along with the transfer of part of the US contingent from Germany, these plans have already been promised by Joseph Biden's advisers to reconsider. In general, his administration will clearly try to make up for the damage done to Euro-Atlantic relations by Donald Trump. Joseph Biden will not demand an ultimatum from European allies to increase their defense spending, threatening to leave NATO. It is not profitable for Russia to strengthen relations within the Alliance, because Donald Trump recently openly admitted that the main goal of NATO's existence is to counter Moscow. While members of the Alliance are engaged in internal disassembly, they have less time and effort to implement this task.

Donald Trump likes to repeat: despite the fact that he is accused of excessive sympathy for Russia and almost collusion with the Kremlin, it was he who imposed the toughest sanctions against Moscow. This is not true: under his democratic predecessor, Barack Obama, more Russian individuals and businesses were added to the sanctions lists. In addition, it was Barack Obama who delivered one of the most sensitive blows to Moscow, arresting Russian diplomatic property in a number of US cities and expelling dozens of Russian diplomats from the country. However, Donald Trump is rapidly catching up with his predecessor: in the past week alone, the United States has imposed sanctions on Chechen leader Ramzan Kadyrov, blacklisted five companies allegedly linked to businessman Yevgeny Prigozhin (close to President Putin businessman) and demanded that European creditors of Nord stream 2 withdraw from the project, threatening to impose retroactive restrictive measures against them.

Moscow is waiting for one of two scenarios: either moderately negative or radically negative. At the same time, the personality factor of the US President will only indirectly influence the development of events in a particular scenario.

The presidential election has almost already begun: both Trump and Biden have already voted for themselves ahead of schedule. Moscow remains neutral and refrains from making any comments on the upcoming event. This may be the best way to avoid further unsubstantiated accusations about potential interference and meddling.

Nevertheless, Moscow is very sober and objective about the prospects for further development (or degradation) of relations with America. The eventual victory of any of the contenders is unlikely to bring Russia any tangible positive elements.

Continue Reading

EU

Frontex announces an internal inquiry into media reports of pushbacks in the Aegean

Published

on

Last week (23 October) Bellingcat* reported that the EU’s border agency, Frontex, was complicit in illegal pushbacks.

Asked about the report (26 October) Adalbert Jahnz, European Commission spokesperson on migration said: “We have indeed seen the report by Bellingcat and a number of other media and we are taking this matter very seriously. The Commission is deeply concerned about reports of pushbacks or other forms of non-compliance with EU law, including safeguards for protecting fundamental rights and the right to access to asylum.”

Jahnz said that Commissioner for Home Affairs, Ylva Johansson had been in contact with the executive director of Frontex and Greek authorities, the Commission will: “expect both the Greek authorities and Frontex to investigate any such reports thoroughly and ensure full compliance with EU law. We remain in close contact with both the Greek authorities and with Frontex in relation to the required follow up.”

Today (27 October), Frontex announced an internal inquiry into the media reports, but added that: “no documents or other materials have been found to substantiate any accusations of violations of the law, or the Frontex Code of Conduct by deployed officers.”

Frontex Executive Director Fabrice Leggeri, said: “In our conversation and contacts, I informed EU Commissioner Ylva Johansson that we are looking into the accusations levelled by several news organisations related to our activities at Greece’s external borders. We aim to uphold the highest border guarding standards in all of our operations and do not tolerate any violations of the fundamental rights in any of our activities.”

Frontex does not have a mandate to investigate the activities of EU member states, but it has carried out two investigations in “operational dialogue” with Greece and found no evidence of illegal acts in one incident and are still looking into the other. Frontex says that the situation in the eastern Aegean has been complicated for the vessels deployed by Frontex to patrol because of a disagreement between Greece and Turkey over their maritime borders, it says that this has affected search and rescue activities in the area. 

A joint investigation by Bellingcat, Lighthouse Reports, Der Spiegel, ARD and TV Asahi, which received a grant from the Investigative Journalism for Europe fund found that Frontex assets were involved in one pushback incident at the Greek-Turkish maritime border in the Aegean Sea, were present at another and have been in the vicinity of four more since March. Pushbacks or ‘refoulement’ are prohibited under international law.

*Bellingcat is an independent international collective of researchers, investigators and citizen journalists

Continue Reading
Advertisement

Facebook

Twitter

Trending