Europe’s signs of stagnation. More hints of stagnation in Europe’s economy are emerging. First, Italy is preparing a stimulus package, hoping to reverse the gradual recession it entered into last year. The package includes cutting some business taxes, expanding existing tax cuts and allowing local authorities to spend more on investment. Italy is hoping to return to gross domestic product growth this year, but the European Commission will probably have something to say in the coming months about the country’s growing deficit. Second, retail figures released in the U.K. showed the biggest decline in 17 months, indicating a drop in consumer confidence that’s likely related to the uncertainty surrounding Brexit. Third, in a bid to boost profits at banks across Europe, the European Central Bank is considering allowing banks to pay lower interest rates on some excess reserves. Lastly, European Union officials are supporting an initiative to allow European banks to more easily sell off nonperforming loans. Together, these updates paint a picture of slowing growth in the south, flagging optimism in the north, and a struggling financial system across Europe.
A raid on North Korea … in Spain. On Tuesday, a Spanish judge ruled to unseal details regarding a raid of the North Korean embassy in Madrid. Ten masked men entered the embassy on Feb. 22 carrying fake guns, ordered people tied up, and stole a number of computers and documents. Cheollima Civil Defense, a group that says it helps North Korean defectors, claimed responsibility for the raid but said it did not use force to enter the embassy out of regard for Spain. Following the raid, which came just a week before the U.S.-North Korea summit in Hanoi, several members of the group flew to the U.S. and turned over information stolen from the embassy to the FBI. Madrid is now asking that the intruders be extradited to face justice in Spain.
Asia’s other powers, becoming powerful. On Wednesday, India became the fourth country (after the U.S., Russia and China) to successfully shoot down a low-orbit satellite during a test of an indigenous ASAT missile. Indian Prime Minister Narendra Modi promptly hailed his country as a “space superpower.” Space, of course, will play an ever more important role in the wars of the future, and India has quietly been making giant leaps forward in the domain. Meanwhile, sources in South Korea told Yonhap that Seoul and Washington have reached a tentative agreement on joint management of a complex that, in a conflict, would serve as the primary command and control center for U.S. and South Korean forces. This could be a small but tangible step toward South Korea retaking greater operational control from the U.S. over its forces in wartime. And in Japan, the Diet approved a record defense budget worth 5.26 trillion yen (around $48 billion), cementing plans for a new missile defense system and F-35 fighter jets. This comes a day after Japan deployed new ground force units, including land-to-air and land-to-ship missile units, to two southwestern islands around which Chinese naval and coast guard vessels have been showing up more and more frequently.
- Algerian President Abdelaziz Bouteflika has lost the support of the country’s ruling party, and former President Liamine Zeroual has offered to manage the transition. This won’t exactly solve the issue of Algeria being run by a very aged man; Zeroual, at 77, is younger than Bouteflika, but not by much.
- The U.S. conducted an anti-ballistic missile test, successfully destroying a target missile that was launched from the Marshall Islands in the Pacific.
- Russian banks are beginning to connect to China’s version of the SWIFT system, in a bid to decrease their dependence on the Western-controlled settlement system.
- The U.S. imposed another round of sanctions against individuals associated with the Islamic Revolutionary Guard Corps in Iran, Turkey and the United Arab Emirates.
- The British Parliament will vote Wednesday on alternative forms of Brexit to see if any of them can garner majority support.