Europe’s shaky economy. The economies of Sweden and Switzerland contracted in the third quarter. Thanks largely to a decline in exports, economic output fell in both countries by about 0.2 percent – not a huge amount, but enough to counter the otherwise rosy expectations of markets and analysts alike. Germany’s economy, the engine of the European Union, contracted in the third quarter too. The European Commission’s economic sentiment index fell for the 11th consecutive month, a decline owing to fears over Italy and waning consumer optimism. Each of these developments could be interpreted as a short-term blip, but taken together, they point to a longer-term decline in European economic activity.
Is the Idlib deal dead? The agreement Russia and Turkey reached in September over the status of Idlib, the embattled province of northwest Syria, is on the verge of breaking down. The Syrian government claims Turkey has failed to hold up its end of the bargain because it has yet to remove the most extreme elements of armed opposition – namely, the 15,000 or so members of the al-Qaida affiliate known as Hayat Tahrir al-Sham. It also accused Turkey of resuming artillery bombardment of the demilitarized zone the agreement established and of deploying heavy military equipment to Idlib instead of the light equipment stipulated in the deal. Finally, Damascus said that the raising of Turkish flags over the Syrian cities Turkey now controls constitutes an act of aggression. Parties to the Astana talks – Russia, Turkey and Iran – agreed that under no circumstances would Idlib compromise Syria’s sovereign territory. Not for nothing, Russia said it was ready to start bombing HTS positions in Idlib again, going so far as to note that it would cooperate with both the Syrian government and the Syrian rebels that have honored the Idlib agreement to eliminate the jihadist threat there.
Kosovo confronts Serbia. The Kosovar government has enacted a 100 percent tariff on Serbian imports. This follows a 10 percent “prelude” tariff on all imports that it announced a week and a half ago. The move will severely impede commercial ties between Serbia and Kosovo, and, in response, four mayors from Serb-majority municipalities in northern Kosovo resigned, leading political analysts to suggest that the decision could lead to a de facto partition. In addition, the Kosovar government designated as personae non gratae Serbia’s prime minister, along with several Cabinet members, parliamentarians and Supreme Court judges, effectively banning them from entering Kosovo without prior announcement and administrative arrangements. These developments come two days after the NATO-led peacekeeping force in Kosovo announced plans to conduct military exercises near the Serbian border sometime soon. Tensions between Serbia and Kosovo have been on the rise but, until now, confined primarily to rhetorical and diplomatic tussles. These actions increase the risk of an outbreak of violence in a region where violence rarely stays local.
- Germany has ruled out military action in Ukraine, adding that the crisis must be separated from the issue of implementing the Nord Stream 2 pipeline.
- The U.S. Department of Commerce is finalizing its investigation on whether 25 percent tariffs on automotive imports make sense. U.S. President Donald Trump said he supports the move.
- China’s National Development and Reform Commission will now allow foreign-owned banks in the country to increase their medium- and long-term debt accrued from overseas — a move that reflects Beijing’s concerns about a loss of foreign investment.
- Bahrain’s parliament is set to pass austerity measures that will affect pensions and subsidies, raising the specter of renewed opposition from the country’s Shiite majority.
- The International Monetary Fund warned Japan that if it does not carry out structural reforms to boost productivity, it risks losing 25 percent of gross domestic product over the next 40 years because of its aging workforce.
- U.S. national security adviser John Bolton is in Brazil visiting President-elect Jair Bolsonaro. The two will discuss ties to Venezuela, Cuba and China, as well as trade.
- Military leaders from Iran and Pakistan met to discuss military cooperation in training, joint exercises, intelligence exchange and maritime security operations.