Iran and the U.S. jostle for influence in Iraq. As the U.S. reimposed sanctions on Iran, the prime ministers of Iran and Iraq met today to discuss joint economic development. They agreed to establish a free trade zone along their shared border and discussed possible electricity and natural gas swaps. These kinds of activities are made possible by a waiver the U.S. extended to Iraq that permits Baghdad to buy Iranian energy. (A U.S. State Department official clarified that the waiver only grants a 45-day exemption, which is designed to address current conditions in Basra.) Meanwhile, Iraqi and Kurdish officials reached a preliminary agreement that allows Kurdistan to resume oil exports through Iraq and Turkey. Exports were halted about a year ago after Iranian forces temporarily took control of the area. Washington supports oil development in Kirkuk, so closer ties between Kurdistan and Baghdad align with U.S. interests in Iraq.

France and Germany approach a eurozone budget compromise. Germany has agreed to France’s proposal for a eurozone budget. In return, the French agreed that it would be part of the larger EU budget. Contributions will come from eurozone members, but before receiving funds, each must first propose spending programs based on EU-identified guidelines and will be expected to adhere to the eurozone’s fiscal rules. These compromises dilute the vision French President Emmanuel Macron had EU reform, they were necessary for securing Germany’s support. Even so, the EU may not be able to enforce its own stipulations. Countries such as Italy can challenge the eurozone’s standards with little consequence because they understand that the German and French economies depend on the eurozone remaining intact and therefore won’t expel its members. In other words, the fund is shaping up to be an informal reward system for members that comply with eurozone rules. But this approach is more seductive than the current tactic: strong rhetoric that lacks teeth.

Honorable Mentions

  • India’s defense minister will travel to the U.S. to advance the acquisition of weaponized Predator drones and a surface-to-air missile defense system.
  • Russia’s foreign minister warned that the West’s actions in the Balkans risk creating a scenario in which states are forced to choose between either Moscow or Washington and Brussels.
  • The United States and Australia announced they will collaborate to develop the Lombrum Naval Base on Papua New Guinea’s Manus Island.
  • Caracas and Moscow are expected to sign an agreement next month on Russian participation in the exploration and extraction of gold and coltan in Venezuela.
  • A U.S. official said that Washington views energy development in the eastern Mediterranean as a priority for cooperation and economic development in the region.
  • Protesters took to the streets throughout France over the rising price of diesel.