The Greenback Chokehold

The world cannot accept the US as a global “economic policeman,” declared France’s foreign minister, commenting on the Trump administration’s decision to withdraw from the Iran deal and reimpose harsh US sanctions on any companies that do business with Tehran.


US power may not be what it once was, as Willis wrote last week, but US dominance of the global financial system is one area where Washington still rules the roost. Some two-thirds of international trade and lending is done in dollars, according to the Bank for International Settlements. A similar percentage of governments’ global reserves are held in greenbacks.

Now, if you want to do business in dollars without shuttling them around in briefcases or keeping them stuffed in your mattress, you’ll have to deal at some stage with US correspondent banks. And that’s where Washington can put you over a barrel, by threatening to cut you off from the US financial system if you violate sanctions. That’s precisely what the Iran sanctions do.

European leaders have proposed legislation to deflect the impact of US sanctions, but few CEOs are likely to bet their firms on that. Exclusion from the US financial system would have an immediate and crippling impact, while lawyering it all out could take years. If the US wants to play hardball, then it’s a world of hurt for European companies, which are all deeply entwined with the US financial system.

Over the longer term, of course, alternatives to the dollar-based international financial structure may gain momentum. The Euro accounts for about a fifth of global reserves and lending. But breaking the bond with the US would be extremely costly today.

Beijing, for its part, is keen to boost the renminbi as an international reserve and transactions currency, but only a fraction of non-Chinese trade is RMB-denominated and international RMB reserves remain miniscule. Various governments are also experimenting with sovereign cryptocurrencies as a way to get around US financial system and sanctions, but these bids are in their infancy.

For now, whether the French (or others) can accept it or not, the dollar’s dominance still gives Washington tremendous leverage over friends and foes alike.

The Business and Market Fair that recently took place in Sanzule, Ghana featured local crops, livestock and manufactured goods, thanks in part to the Livelihood Restoration Plan (LRP), one of Eni's initiatives to diversify the local economy. The LRP program provided training and support to start new businesses to approximately 1,400 people from 205 households, invigorating entrepreneurship in the community.

Learn more at Eniday: Energy Is A Good Story

It's been two months since President Trump abruptly ordered the withdrawal of US troops from northern Syria, paving the way for a bloody Turkish offensive in that region. (See our earlier coverage here.) What's happened since? A guide for the puzzled:

No "end date" for US troops in Syria – US Secretary of Defense Mark Esper said this week that the United States has completed its military pullback in northeastern Syria. Back in October, President Trump pledged to withdraw the roughly 1,000 American troops deployed there. Since then, some American troops have left Syria altogether, while others were redeployed to defend nearby oil fields from ISIS, as well as from Syrian government troops and Russia. Now, there are roughly 600 American troops dispersed around Syria, and the remainder have been deployed in Iraq to stave off a potential ISIS resurgence. It's not clear if any troops have returned to the US. When asked about the chaotic comings and goings of US troops in Syria in recent months, the commander of US Central Command said frankly: there's no "end date" for American troops stationed there.

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Turkey's government has captured many thousands of ISIS fighters as a result of its operations in northern Syria. Many of these prisoners have already been deported to some of the more than 100 countries they come from, and Ankara says it intends to send more. There are also more than 10,000 women and children – family members of ISIS fighters – still living in camps inside Syria.

These facts create a dilemma for the governments of countries where the ISIS detainees are still citizens: Should these terrorist fighters and their families be allowed to return, in many cases to face trial back home? Or should countries refuse to allow them back?

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What's the difference between Alphabet and Google?

Well, Google is the search engine, YouTube, all the stuff you probably think of as Google. Alphabet is the parent company that was created four or five years ago. And it contains a whole bunch of other entities like Jigsaw, Verily - the health care company that Google runs, Waymo - the self-driving car unit. Also, it's important to know Google makes tons of money. Alphabet, all that other stuff loses tons of money.

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The collapse of the Islamic State's self-declared caliphate in Iraq and Syria has given rise to a host of new challenges for governments around the world. Turkey has captured thousands of ISIS fighters as a result of its offensive in northern Syria, many of whom are foreign nationals who left their home countries to fight with the Islamic State. To date, non-Middle East countries have mostly opposed ISIS fighters returning home, leaving them, and their spouses and children, in legal limbo. Here's a look at where these foreign fighters come from.