Monday, May 9, 2022

Is the U.K. set to shrink, or expand?

A newsletter from POLITICO that unpacks essential global news, trends, and decisions.
May 09, 2022 View in browser
 
POLITICO Global Insider

By Ryan Heath

Check out the weekly Global Insider podcast.| Follow Ryan on Twitter.

Happening Today

Philippines presidential election today: Filipinos have just finished voting; their choice was between a former dictator's son and a human rights lawyer turned vice president. The former — Ferdinand Marcos Jr. is heavily favored to win.

Early voting in Australia's national election starts today — the main voting day is May 21.

Russia's May 9 parade in Moscow did not strike new fear in the hearts of observers. President Vladimir Putin did not declare war or a general mobilization, nor a victory in Ukraine. Instead he repeated his existing unfounded claims about a looming NATO attack and Ukrainian nuclear ambitions.

It was Ukraine's President Volodymyr Zelenskyy with the quote of the day: "This is not a war of two armies. This is a war of two worldviews ." He's right. As Putin claims a continuation of a war that ended 77 years ago, EU countries today celebrate Europe Day and the founding of their union as a tool for lasting peace. There is one hangover from the war: President Joe Biden will today sign into law S. 3522, the "Ukraine Democracy Defense Lend-Lease Act of 2022."

Ukraine may be the new Davos: Megawatt global figures like Bono, Justin Trudeau and Jill Biden — not to mention WHO chief Tedros Adhanom Ghebreyesus — all turned up Sunday.

 

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GLOBAL RISKS AND TRENDS

UKRAINE FRONTS 

MORE RUSSIA SANCTIONS: G-7 leaders issued a four-page statement on Ukraine that promised "continued readiness to undertake further commitments to help Ukraine secure its free and democratic future." The U.S., EU and U.K. have now all announced they have banned their citizens from providing accounting, trust and corporate formation, and management consulting services to any person in Russia. While the leaders commit to a Russian oil ban, Hungary continues to hold up the EU end of the commitment.

BIDEN WANTS CONGRESS TO AUTHORIZE MORE MONEY: In a weekend statement, Biden said "my Administration has nearly exhausted funding that can be used to send security assistance through drawdown authorities for Ukraine," and called for more cash, "without interruption" to "strengthen Ukraine on the battlefield and at the negotiating table."

Congress is still considering his $33 billion military and humanitarian aid appropriation request.

WAR CRIMES: The World Health Organization is gathering evidence for a possible war crimes investigation into attacks it says it has documented by Russia on healthcare facilities in Ukraine. WHO officials told a news conference Saturday they have documented 200 attacks on hospitals and clinics in the country.

REFUGEES: Russians are appearing at far-flung U.S. embassies, seeking a way to America. It's part of a confusing immigration picture as some advocates push Biden to take in more Russians.

U.N.: The Security Council unanimously adopted its first statement since Russia's military action began on Feb. 24, expressing " strong support" for Secretary-General António Guterres' efforts to find a peaceful solution to the "dispute" in Ukraine.

LETTER TO LAVROV: Global Insider reader Stefano Stefanini, Italy's former ambassador to NATO, who has worked in various setting with Russia's Foreign Minister Sergey Lavrov since the early 1980s, has written a public letter to Lavrov. If Stefanini saw Lavrov today, "I would ask you how you reconcile the multilateralism of your DNA with the invasion of Ukraine."

INTERNATIONAL ENERGY AGENCY — U.S. RELEASED OIL RESERVES WITHOUT TELLING US: Reuters reported a scoop Monday that the record release of emergency crude oil reserves authorized by Washington in March was a unilateral action that left allies scrambling.

The Paris-based IEA, which acts as a global energy watchdog, normally oversees international releases from emergency stockpiles.

Retuers reports that "the group's members have become worried that U.S. President Joe Biden is using the Strategic Petroleum Reserve to tamp down rampant domestic inflation for political reasons, instead of protecting consumer countries from a global supply disruption."

U.K. — IS IT SET TO SHRINK BY LOSING NORTHERN IRELAND? Piers Morgan now predicts an "inevitable collapse" of the United Kingdom — and he's not alone — after Sinn Féin placed first in Northern Ireland Assembly elections for the first time, pushing the Democratic Unionist Party into second place.

Before we get to any "collapse" of Britain, Northern Ireland will need to form a new government. Failing that, the British and Irish government may need to consider a reworking of the Good Friday Agreement (which requires the leading assembly voices of the Catholic and Protestant communities to share power), if forming a government proves impossible.

Under the current arrangements, with Sinn Féin finishing eight points ahead of the DUP, its leader Michelle O'Neill will be entitled to become first minister. Because the party's votes are more heavily concentrated than the DUP's, the two parties ended up with nearly equal representation in the assembly: 27 for Sinn Féin and 25 for the DUP.

Prime Minister Boris Johnson is now the least popular leader in Europe, among the 22 tracked in Morning Consult's Global Leader Approval Tracker.

Northern Ireland election results

POLITICO

U.K. — EXPANDING THE EMPIRE, LONDON CONSIDERS DIRECT RULE OF BRITISH VIRGIN ISLANDS: British Foreign Secretary Liz Truss said a London-ordered inquiry into the islands' governance showed "substantial legislative and constitutional change is required." The British overseas territory in the Caribbean has a new leader this week — Natalio Wheatley — after premier Andrew Fahie was charged in Miami with conspiracy to commit drug trafficking and money laundering. The Caribbean Community, the Caribbean's main regional bloc, cast London's moves as "retrograde."

UNITED NATIONS — IMPACT INVESTING GOES WRONG: An April 16 scoop from development news site Devex, by Ilya Gridneff, continues to blow up in United Nations circles. Gridneff wrote about a project that received $63 million from the U.N. Office for Project Services to develop plans to build more than 1 million affordable homes in six countries. Today, no houses have been built, and the project is stalled, with around $25 million U.N. money seemingly down the drain.

That funding is now subject to an independent U.N. investigation, but the U.N. hasn't revealed the results of the investigation.

What we do know: The top official at UNOPS, Grete Faremo of Norway, announced Sunday that she is stepping down. Her deputy, Vitaly Vanshelboim of Ukraine, is on administrative leave.

The New York Times picked up the story and investigated further aspects: reporting over the weekend that $60 million was handed to one businessman and $3 million to his college-aged daughter … after U.N. officials met them at a party . The funding was approved by two senior Guterres appointees. You can read more extraordinary claims and analysis here from Mukesh Kapila, a former U.N. official determined to blog every detail of the saga.

The juiciest detail: There are cameo appearances in this saga from the U.N. Ambassador to Dominica Paolo Zampolli (who founded ID Model Management and introduced Donald Trump to his future wife Melania), and the singer Joss Stone.

TECH CORNER 

TIME FOR A DIGITAL BRETTON WOODS? The future of the global monetary order is a hot topic in finance circles — fueled by the rise of cryptocurrencies and Russia's excision from global payments systems.

Former U.S. Treasury official Michael Greenwald, now with Amazon Web Services, called for a "Digital Bretton Woods"— a global foundation for a world with digital money — in 2020, and is still pushing for it.

Greenwald told my colleague Ben Schreckinger that he now counts over a hundred central banks with digital currency pilots, which means a weaker role for the U.S. dollar in the global financial system.

Takeaway: "Central banks have realized they're not the only game in town," Greenwald said, adding "the U.S. needs to be less complacent, more proactive. I would recommend pivoting from an era of "dollar dominance" to an era of "dollar innovation," Greenwald said.

One of the key unavoidable questions at any summit working towards a digital Bretton Woods would be how to manage China's rise. One goal of China's digital yuan is for it to function outside of the SWIFT payment system. So what, in essence, would a post-SWIFT environment look like?

By the numbers: The market cap of Bitcoin now surpasses both Facebook and Tesla . By some measures it's also the 13th most circulated currency in the world.

COAL TO CRYPTO IS NOW A THING: "The surging investment in virtual currency is inflicting real world impacts — perhaps nowhere more acutely than Pennsylvania," according to Sightline Institute's Eric de Place. Bitcoin miners search everywhere for cheap electricity, and sometimes that means tapping government subsidies to revive dirty power plants. More here.

CHINA'S 3-D PRINTED DAM: "The 590 feet high Yangqu hydropower plant will be built slice by slice — using unmanned excavators, trucks, bulldozers, pavers and rollers, all controlled by AI — in the same additive manufacturing process used in 3D printing," South China Morning Post reported. Hoover Dam is 726 feet high.

SUPREME COURT TRUST CLIFF: Supreme Court leak shakes trust in one more American pillar.

POLITICO Executive Editor Dafna Linzer spoke to CNN on the back story and next steps around POLITICO's Supreme Court scoop.

What actually happens when you ban abortion: The U.S. can look forward to even worse maternal mortality rates and larger families, especially among those who can least afford to support them.

 

DON'T MISS CONGRESS MINUTES: Need to follow the action on Capitol Hill blow-by-blow? Check out Minutes, POLITICO's new platform that delivers the latest exclusives, twists and much more in real time. Get it on your desktop or download the POLITICO mobile app for iOS or Android. CHECK OUT CONGRESS MINUTES HERE.

 
 
GLOBETROTTERS

BILLION DOLLAR SUSTAINABILITY QUESTIONS: What's with billionaires and their billion-dollar sustainability gifts this past week? First there was venture capitalist John Doerr's $1.1 billion gift to Stanford . Then Caltech broke ground Thursday in Pasadena on its $750 million Resnick Sustainability Center, funded by California agricultural tycoons Lynda and Stewart Resnick. The Resnicks are the biggest farmers of irrigated land in the world — they specialize in crops like pistachios, pomegranates and citrus that are not drought-tolerant. "Ah yes, the Resnicks: a name practically synonymous with sustainability, right?" wrote Caltech PhD student Celeste Labedz. Other public reaction: Hey, it's better than Elon Musk buying Twitter.

KLEPTOWATCH 

$700 MILLION YACHT LINKED TO PUTIN SEIZED IN ITALY: The Scheherazade, a $700 million yacht docked at Massa Carrara in northern Italy, was seized as it prepared to set sail after a months-long investigation into the vessel's ownership. The yacht has "gold-plated taps, a swimming pool and two helicopter pads," The Times of London reported. Russian opposition leader Alexei Navalny 's team says the yacht's ownership is traceable back to President Putin. Italy's finance ministry said the owner of the ship had "significant business and economic ties" with "key members of the Russian government."

$300 MILLION YACHT SEIZED BY FIJI AT REQUEST OF UNITED STATES: Fijian law enforcement seized Amadea, a 348-foot luxury vessel owned by sanctioned Russian oligarch Suleiman Kerimov .

RUSSIAN-OWNED REAL ESTATE RISES TO TOP OF DOJ SCRUTINY LIST: Wealthy Russians and their luxury homes in New York and Florida are now "at the top" of the Justice Department's money laundering search list, according to Andrew Adams, the head of the department's KleptoCapture task force. "All sorts of assets are on the table, for sure. And bringing up real estate is particularly pertinent," Adams told CNN.

BRAINFOOD

PODCAST — CORPORATIONS CANCEL RUSSIA: More than 500 companies have withdrawn from Russia , resembling the corporate exodus from South Africa in the 1980s. DJ Peterson, Peter Schechter and Muni Jensen explore whether a new standard has been set for corporate responsibility and a stakeholder economy?

REPORT —  " WHEN PASSOVER AND RAMADAN COINCIDE": Four perspectives on recent Middle East policies and tension from Israeli Nimrod Novik, Palestinian Ibrahim Eid Dalalsha, Jordanian Farah Bdour, and Egyptian Hesham Youssef.

BOOK — THE EXTRAORDINARY GENESIS OF THE SUSTAINABLE DEVELOPMENT GOALS. How the U.N's global goals came about. h/t Felix Dodds.

Thanks to editor Ben Pauker, Daniel Lippman and producer Hannah Farrow.

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