We use cookies to help improve and maintain our site. More information.
close

May 30, 2019

US threatens Instex

Instex was the EU's knee-jerk reaction to the decision by the US to impose secondary sanctions against companies and banks that do business with Iran. It is not operative yet, and it is becoming clearer by the day that this is a doomed venture. Bloomberg has the story that US the Treasury Department’s undersecretary for terrorism has written a letter to the president of Instex that he and his institution would be subjected to US sanctions if Instex were to start operating. The latter came after US officials realised that the Europeans were more serious about Instex than they had let on in bilateral conversations. The latter was intended to serve as a maximum-impact threat against Instex itself, its staff and anyone associated with it - i.e. the governments of Germany, France and the UK - and all financial institutions that may be directly or indirectly fund it. It is unsurprising that this would happen.

We liked the comment of Mathieu von Rohr of Der Spiegel, who noted dryly that the US was threatening penalties against an inoperative entity. We can only assume that the whole purpose is to make sure that Instex will forever remain an empty shell. European governments did not think this through. The EU has no effective instruments at its disposal right now to defend itself against US financial unilateralism, a point Wolfgang Munchau expanded upon his last FT column. But it has the option to develop one: to cement the euro's international role with a unified capital market and a single European safe asset. This would allow the EU to share at least some of what is currently the dollar's exorbitant and sole privilege, the deep reason why the US has the power to impose secondary sanctions and why others do not. This exorbitant privilege was the direct result of the post-WWII economic order. But its persistence until today is a sin of omission - a European omission. 

Show Comments Write a Comment

May 30, 2019

Alliance - surfing on the Remain vote in Northern Ireland

The EU election results in Northern Ireland saw an extraordinary rise of the pro-Remain Alliance party, a break with the traditional voting patterns and building on Alliance's previous successes in local elections earlier this month. As the Alliance party entered the European Parliament, the pro-Brexit Ulster Unionist party (UUP) lost their seat for the first time in 40 years. Northern Ireland has always sent two unionists and one nationalist to the EP. This time the parameters have changed and the classic divide lost traction among voters. The campaign was all about Brexit, resulting two of their three MEPs being clearly opposed to Brexit. 

The Alliance party is likely to ride its momentum forward, seeing itself already as the third-largest party in Northern Ireland and targeting the 56% who voted Remain in the referendum. As the risk of a no-deal Brexit is rising, so is the concern in Northern Ireland about its future. Business and farming leaders as well as civil servants have warned that a no-deal Brexit could devastate Northern Ireland’s economy.

The ruling DUP, on which Theresa May relies upon for her majority in Westminster, will come under pressure to take the voters' verdict into account when moving forward in Brexit negotiations with any of the hard line successors to May. The election results also suggest that DUP was only speaking for a minority in its continued opposition to the reasonable compromise negotiated by Theresa May, concluded the Irish Times in its election coverage. Whether we see a surge of the Alliance party will be linked to the question of whether voters would be ready to put Remain above unionism on their priority list or not. 

The success of the Alliance party also sends a signal that the people want the devolved parliament in Stormont restored. Tensions between the DUP and Sinn Féin have left Northern Ireland without a regional government since 2017. Once installed the Alliance Party and the Social Democrats (SDLP) could work together to form a moderate bloc in Northern Irish politics, as some commentators like to see it. But the two parties are disadvantaged when it comes to exerting influence in Stormont, writes Newton Emerson. Under the 1998 Belfast Agreement, Assembly members must self-designate as unionist or nationalist, or be classed as other. Unionists and nationalists have extra weight in the assembly’s important veto mechanism, with each side able to block anything on their own. The others are powerless by comparison, as they only get a similar veto if they represent half of the assembly. The assembly is thus set up for a polarised system, which suits the DUP and Sinn Féin well. 

Show Comments Write a Comment

This is the public section of the Eurointelligence Professional Briefing, which focuses on the geopolitical aspects of our news coverage. It appears daily at 2pm CET. The full briefing, which appears at 9am CET, is only available to subscribers. Please click here for a free trial, and here for the Eurointelligence home page.

 

Recent News

  • October 17, 2019
  • A dangerous game for the EU
  • After Brexit, get ready for a German EU budget rebate
  • February 04, 2019
  • Watch out for the resurgence in Tory unity
  • The gilets-jaunes' effect on the European elections
  • What did he possibly mean by that?
  • May 25, 2018
  • Rejected by US, Germany is turning towards China...
  • ...and France is turning to Russia
  • UK ties Galileo to security partnership
  • Germans are discovering miniBoTs
  • September 14, 2017
  • Bravo Mr Juncker
  • ... what he said about the labour market
  • ... and what his speech means for Brexit
  • January 05, 2017
  • French Socialist primaries - old wine in new bottles
  • Le Pen's hard ecu
  • Will Tusk get a second mandate?
  • Themes of 2017
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • December 02, 2019
  • Will pension reform protests spiral out of control?
  • Malta's PM resigns over murder case
  • April 24, 2019
  • May's final and biggest gamble
  • Will the EP be Brexit's great parliamentary beneficiary?
  • Can Loiseau fight the far right given her past?
  • September 12, 2018
  • It is easy to criticise Chequers but very hard to come up with an alternative
  • February 05, 2018
  • How big is Germany's external surplus, really?
  • Macron's first election test
  • Coeure's endorsement of a fiscal union
  • July 03, 2017
  • Can Greece exit its programme without a credit line?
  • The softening Brexit
  • Macron's state of the nation address
  • November 28, 2016
  • And now what Monsieur Fillion?
  • The inescapable logic of an interim agreement
  • On Germany's foreign policy post-Trump
  • How to lose against the populists
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • September 17, 2019
  • Beware of the diplomacy of humiliation
  • Germany’s climate hypocrisy
  • March 18, 2019
  • May's deal still on the table. Don't rule it out.
  • EPP decision on Fidesz still open
  • On the defeat of liberalism
  • September 21, 2018
  • SPD ministers want to continue grand coalition
  • March 28, 2018
  • The real reason for the sanctions against Russia
  • Wishful thinking: Brexit edition
  • Wishful thinking: Future of euro edition
  • Wishful thinking: Italy edition
  • October 02, 2017
  • Catalonia recalls EU and eurozone instability
  • French trade unions increase pressure over labour reforms
  • Watch out for a political accident in the UK
  • Municipal elections boost Portugal's Socialists
  • April 10, 2017
  • Nein, nein, nein, und nein
  • Sounds like a bad Brexit story, but ain’t
  • On how not to exit the euro
  • October 17, 2016
  • Ceta is dead for now
  • L’après-Hollande, c'est Hollande
  • SPD against Russia sanctions
  • Nissan to join customs union and other fanciful tales
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • January 24, 2020
  • Is Germany anti-semitic and racist?
  • Did the Greek financial crisis play a role in Brexit?
  • September 18, 2019
  • No doubt, this is a constitutional crisis
  • Macron's immigration bid
  • May 13, 2019
  • Brexit Party has already changed UK politics
  • Orbán visits Trump, after a very long wait
  • Le Pen's appeal to the PiS likely to fall on deaf ears
  • January 04, 2019
  • Will the AfD become the Dexit party?
  • Romania's corruption problem in the spotlight of its EU presidency
  • August 28, 2018
  • Urban politics and national crisis - the Irish case
  • How anti-semitism became one of the main issues in British politics
  • April 25, 2018
  • Macron's pitch to Trump
  • Montoro in Schleswig-Holstein
  • The old world and the new
  • December 22, 2017
  • Will Macron be the new de Gaulle?
  • 2018 through the looking glass
  • August 21, 2017
  • Soft, getting softer
  • Tsipras' chances of a boost
  • On the fallacy of a middle-ground option for the eurozone
  • April 20, 2017
  • Don’t bet on Trump turning globalist
  • A note on UK election polls
  • December 20, 2016
  • The politics of terror
  • On Lagarde
  • Is a disruptive Brexit possible?
  • August 22, 2016
  • Gold for Brexit
  • EU and Turkey talking past each other
  • Switzerland is the next migrant transit country
  • On the death of neoliberal economics
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • February 18, 2020
  • What to make of David Frost?
  • Whose success is the EU's arms embargo on Libya?
  • January 27, 2020
  • How the left lays the ground for Le Pen
  • Project Fear - Irish Edition
  • January 06, 2020
  • A decade that started with a bang
  • What to expect of Spain's next government
  • Divide et impera: Macron's pension reform strategy
  • December 17, 2019
  • The marginal impact of the Greens
  • November 28, 2019
  • Merkel’s legacy
  • November 11, 2019
  • Grand coalition agrees to continue grand coalition
  • Can Greens and conservatives agree on priorities?
  • Germany - self-content and without energy
  • October 23, 2019
  • Putin brokers deal to push Kurds away from border
  • AKK’s biggest gamble yet
  • October 07, 2019
  • What did Conte know?
  • September 23, 2019
  • Corbyn’s last big battle
  • Germany’s CO2 compromise meets all targets - except the climate targets
  • September 09, 2019
  • Chances of no-deal are rising and rising
  • Resist the beginnings
  • August 27, 2019
  • Remain’s narrowing pathway
  • Macron's diplomatic masterstroke
  • August 09, 2019
  • Salvini pulls the plug
  • Could a no-deal Brexit fuel unification for Ireland?
  • The challenge currency war poses to the eurozone
  • Black zero in dark times
  • The need for a new EU industrial and competition policy
  • Mitsotakis' first tests
  • Eurozone financial data
  • July 29, 2019
  • No-deal Brexit is no longer just a scenario
  • No German warships to the Strait of Hormuz
  • July 17, 2019
  • The dreaded scenario
  • Meet the Labour no-dealers
  • July 09, 2019
  • What the UK polls are telling us - and what not
  • July 01, 2019
  • The questions we will be asking tomorrow
  • What category of diplomatic accidents is Sea Watch 3?
  • June 24, 2019
  • Economic reform has torn up the SPD - climate policy does the same for the CDU/CSU
  • Not intruding, not really
  • June 18, 2019
  • Retaliation threats over drilling
  • June 10, 2019
  • How to create Brexit facts
  • The new Alde is already in trouble
  • June 06, 2019
  • Is this the end of traditional parties as we know them?
  • How a no-deal Brexit could happen
  • June 03, 2019
  • Reinventing the French right without Wauquiez
  • Tory leadership election is between feasible and unfeasible Brexit options
  • May 31, 2019
  • Salvini’s frightening strength
  • The significance of Corbyn’s latest flipflop on the referendum
  • May 30, 2019
  • US threatens Instex
  • Alliance - surfing on the Remain vote in Northern Ireland