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NATO Secretary-General Jens Stoltenberg holds a press conference at the summit in Vilnius, Lithuania.
Is Ukraine inching closer to NATO?
The central question at this week’s NATO Summit in Vilnius: How can the alliance provide Ukraine with maximum military and financial support while keeping its strategic options open by dodging a firm commitment to when and how Ukraine will join?
It’s been 15 years since NATO leaders first pledged that Ukraine will become a member. The official summit communiqué, released on Tuesday, reaffirmed that promise. But now that Ukraine is fighting for its survival against Russia, President Volodymyr Zelensky has pushed hard for all the support he can get, including a fast-tracked membership process that leads to a security guarantee.
NATO and Ukraine have both made clear Ukraine can’t join while the country is still at war. But on Tuesday, NATO chief Jens Stoltenberg used a news conference to outline new pledges of support.
He said NATO will…
- Provide multi-year help for Ukraine's transition to NATO training standards.
- Form a NATO-Ukraine council that will hold its first meeting on Wednesday.
- Shift Ukraine’s membership path from a two-step process to a one-step process.
These three pledges raise three new questions.
- Ukraine has trained with NATO for years, mainly on peacekeeping, and surely the war with Russia will help align Ukraine much more closely with NATO’s way of doing things. So what’s new here?
- How will a NATO-Ukraine Council change the war or speed Ukraine’s admission to the alliance?
- Will the new one-step process take six months or 30 years?
Let’s add two more questions …
- Will Zelensky be satisfied with these steps?
- If not, what will he do about it?
US President Joe Biden meets with NATO Secretary-General Jens Stoltenberg in the Oval Office at the White House.
Who'll be the next NATO chief?
When US President Joe Biden met NATO Secretary-General Jens Stoltenberg in the White House on Tuesday, the two talked about who'll replace Stoltenberg when the Norwegian steps down in September. So far, there are two frontrunners.
One of them is UK Defense Secretary Ben Wallace, who has openly expressed interest. Although his boss, British Prime Minister Rishi Sunak, is pushing hard for Wallace to get the job, many NATO members would prefer someone from the EU who has executive experience.
The other is Danish PM Mette Frederiksen, who would be the first female NATO chief. But her candidacy might face two big hurdles: Turkey is not feeling the Nordic love these days, and Denmark has yet to meet the NATO goal of spending 2% of GDP on defense.
Officially, NATO's secretary-general is picked by consensus among the alliance's 31 members. Yet, it's an open secret that as the biggest contributor to NATO's budget, the US has the final say. Biden has kept silent for now, but he can't wait much longer.
Sudan meltdown fuels Saharan instability
Carl Bildt, former prime minister of Sweden, shares his perspective on European politics from Stockholm.
Does Ukraine belong in NATO, as Secretary Jens Stoltenberg said when he visited Kyiv the other day?
Yup, that's certainly the case, the one way or the other. Although, I think there will be some difficulties forging a consensus on exactly what that means at the upcoming NATO summit in Vilnius in July. Some of the Central Europeans and the Ukrainians are pressing for full membership as soon as possible. Others, the US and others, are somewhat more reluctant and would like to have a step-by-step.
What are the implications of the meltdown in Sudan for Europe?
Well, evacuating diplomats, as has been done with success is one thing but it's hardly a solution. We have faced a period of prolonged instability in the third largest country of Africa. That sort of makes Europe worried about the entire belt of instability across the Sahara, along the Sahara even more profound, with also the risk of the Russians starting to meddle in there, as well.
A Canadian soldier holds a flag as they wait for the arrival of PM Justin Trudeau along with NATO Secretary-General Jens Stoltenberg in Adazi, Latvia.
What We’re Watching: NATO (still) wants Canada to pay up, critical mineral gold rush, a tale of two banks
Canada is a NATO laggard – but it’s far from alone
The aging defense league is finding a new raison d’etre battling Russian aggression in Ukraine. But Canada still falls short of the 2% GDP military spending goal that NATO Secretary General Jens Stoltenberg recently said is set “not as a ceiling but a floor, a minimum, that we should all meet.”
A recent NATO report estimates that Canada’s share of defense spending declined against its GDP to 1.27% in 2022, down from 1.32% in 2021 and well shy of the 2% target. Several members spend less than the target, but Canada falls toward the mid-to-bottom of that list.
In 2022, the US topped the list at 3.47% of GDP. The US routinely nudges Canada to spend more on defense. Last month, its ambassador to Canada said he was “hopeful” the country would hit the NATO target.
Canada has no plan to reach the 2% target, and its latest budget is still light on defense spending. But the government does tout that it has the sixth-largest NATO defense budget and is a top contributor to the alliance’s common fund. Canada also spent billions on new fighter jets and is making investments in northern and continental defense. NATO doesn’t penalize states that don’t hit the 2% target – and it’s hard to imagine Canada getting thrown out of the club, so all it can do is name and shame in the hope that Canada starts to pull its weight.
Betting on critical minerals
If you don’t know the term “critical minerals,” it’s time to learn. You’re going to hear it a lot in the years ahead. These are minerals of strategic value to a country’s economic health and security. Both Canada and the US use that definition, but the Canucks add a flourish, referring to them as “the building blocks for the future of our green and digital economy.”
They include copper, graphite, cobalt, lithium, and several others necessary for building and operating a contemporary economy. They power everything, from transportation and energy to digital infrastructure and the so-called “green economy.”
Canada is full of critical minerals. Several provinces and territories are mined for cobalt and copper. Saskatchewan is home to uranium and potash, there’s graphite in Ontario and Quebec, and fluorspar in Newfoundland and Labrador. Experts say the capital-intensive mining industry needs and expects (!) subsidies to extract them. The government’s critical mineral strategy will offer some. PM Trudeau’s March budget included an investment tax credit for critical mineral exploration and investor subsidies.
In the US, meanwhile, the Inflation Reduction Act includes critical mineral measures, such as billions in federal loan money, as well as its own tax credits.
The need for critical minerals is booming on both sides of the border – as is trade. In 2020, mineral trade between the US and Canada hit nearly $96 billion, and by 2030, global mineral trade is estimated to hit $567 billion.
Will Canada and the US hit a recession?
Both the Bank of Canada and the Fed are prepped, but the Northern neighbor is more optimistic than the Southern one. On Wednesday, the Bank of Canada held its interest rate at 4.5%, a move it had signaled for some time. The bank says a soft landing has become more likely as it expects Canada to avoid a recession over the next three years while inflation slows and moves toward the 2% target — though it is still a long way off. The upshot? The economy may be edging back toward a pre-pandemic “normal.” But, warns Bank Governor Tiff Macklem, the current restrictive monetary policy may need to stay in place a while longer. Still, by the gloomy climate standards, that’s pretty darn optimistic.
The US Federal Reserve, meanwhile, is grouchy. It hiked its rate from 4.75% to 5% in March, its ninth consecutive increase. On Wednesday, the US Bureau of Labor Statistics released a report showing that inflation fell to 5%, with core inflation at 5.6%. That’s good news, but it’s unlikely to change the Fed’s course, and another rate hike is expected in May.
So, watch your banks and your dollars for signs of recession. And even if Canada is optimistic, the US pessimism will likely put downward pressure on the Canadian dollar, particularly if Canadian rates remain steady. A weaker Canadian dollar means more expensive imports from the US. But the loonie notably held its own on Wednesday.
What does it all mean in the big picture? Cooling inflation rates in the US, Canada, and Europe offer hope that the rate-hike cycle could soon end. But the UK saw an unexpected inflation jump in mid-March, a reminder to temper — or deflate – expectations.
NATO flag
What We’re Watching: NATO members’ defense budgets, Social Security as a political weapon, China’s support for Sri Lanka
NATO chief wants more defense spending
As Russian aggression in Ukraine enters year two, NATO members need to boost their defense spending. That was the message from NATO chief Jens Stoltenberg Wednesday after a summit with member states’ defense ministers. Back in 2014, around the time of Russia’s invasion of Crimea, NATO states committed to raising their respective defense spending to 2% of gross domestic product. (NATO’s direct budget is separate from national defense budgets.) Still, while many have increased their spending on military equipment and training, most NATO states – including Germany, France, Italy, and Canada – still fall short of the 2% threshold. The US, for its part, leads the pack, spending 3.47% of GDP on defense. (You’ll likely remember that former President Donald Trump made a habit of slamming NATO members, particularly Germany, for not paying their fair share. As war ravages Europe again and tensions with China soar, Stoltenberg says that the 2% target, which expires next year, should be the floor – not the ceiling. Finland and Sweden, both vying to join the bloc, respectively spend 2% and 1.3% of GDP on defense.
The politics of entitlements
President Joe Biden has made crystal clear that he believes the protection of Social Security and Medicare benefits – federally protected pension and healthcare entitlements for seniors – is a powerful political weapon that Democrats can wield against Republicans. Some in the GOP have inadvertently helped him. A number of Republicans have signaled support for plans to reduce spending on these programs by raising retirement ages and finding other ways to reduce future benefits, and Florida Sen. Rick Scott has proposed a plan that would require Congress to reauthorize all federal programs every five years. The GOP’s House and Senate leaders, Kevin McCarthy and Mitch McConnell, respectively, have said publicly they have no such intentions. But politics aside, the funding problems that Republicans point to are real. On Wednesday, the nonpartisan Congressional Budget Office released a report warning that Social Security and Medicare spending will grow much faster than federal tax revenues over the next decade as the fast-rising number of retirees puts measurable strain on the solvency of both programs. Biden says the gap can be filled without cutting benefits by asking wealthier workers to pay more in payroll taxes. Republicans counter that tax increases on the needed scale would weigh heavily on future economic growth. The two parties remain miles apart on solutions.
Will China offer Sri Lanka debt salvation?
Sri Lanka is grasping for debt relief as it heads into a key international meeting with foreign lenders organized by the International Monetary Fund on Friday. Colombo hopes to pump the brakes on the country’s downward economic spiral that saw the country run out of foreign currency and experience its first-ever default last year, triggering food shortages, power cuts, and the wrath of protesters, which forced the resignations of the president and prime minister. The island nation pines for cuts in its debt from international backers, especially China, as the Middle Kingdom is one of Sri Lanka’s biggest creditors, holding about 10% of its $51 billion debt. Beijing has so far been opaque about debt reduction. It expressed ‘support’ for Sri Lanka this week heading into the meeting but stopped short of committing to lowering the debt. Doing so would be a dodgy proposition, not just for Chinese creditors who want to be paid, but for fear that other heavily indebted poor countries will want reductions in their debt burden as well. This puts the 22 million-strong nation, often cited as a cautionary example of China’s debt trap, in yet another tough bind: It needs an emergency IMF loan, but the Fund wants creditors to reduce Sri Lanka's debt beforehand. We’ll be watching to see how far China goes for Sri Lanka.Scotland's First Minister and Scottish National Party (SNP) Leader Nicola Sturgeon.
What We’re Watching: Sturgeon's resignation, NATO-Nordic divide, India vs. BBC, Tunisia’s tightening grip
Nicola Sturgeon steps down
Scotland’s First Minister Nicola Sturgeon announced on Wednesday that she is stepping down. She’s been in the role for over eight years, having taken power after the failed 2014 independence referendum. Speaking from Edinburgh, Sturgeon said she’d been contemplating her future for weeks and knew "in my head and in my heart" it was time to go. A longtime supporter of Scottish independence, Sturgeon was pushing for a new referendum, which was rejected by the UK’s top court late last year. In recent weeks, she and her colleagues had been debating whether the next national election in 2024 should be an effective referendum on independence. Sturgeon will stay in power until a successor is elected — likely contenders include John Swinney, Sturgeon’s deputy first minister, Angus Robertson, the culture and external affairs secretary, and Kate Forbes, the finance secretary.
Turkey divides Finland and Sweden
On Tuesday, NATO and other Western officials publicly acknowledged for the first time that Finland and Sweden might join the transatlantic alliance at different times, a notable public admission that negotiations with Turkey over Sweden’s NATO accession haven’t gone well. Neither Nordic country can become an alliance member without unanimous support from all existing members, and NATO-member Turkey’s President Recep Tayyip Erdoğan has a beef with Sweden. Erdogan is angry that Sweden’s government has provided asylum for dozens of Kurdish leaders he considers terrorists, and it didn’t help when a right-wing activist burned a Koran outside the Turkish embassy in Stockholm, an act Sweden’s government treated as an offensive act of free speech that’s protected by law. Erdogan may also see a political opportunity to boost his reelection chances by defying European leaders in general and Sweden in particular. (Turkey’s elections are expected in May or June.) For NATO, Finland’s membership is arguably the more urgent priority. Though Sweden monitors occasional Russian naval intrusions into its territorial waters, it’s Finland that shares an 810-mile land border with Russia. European leaders hope that, if Erdogan wins his election, a deal can be cut in the coming months to allow Sweden to join the club.
India takes aim at BBC
Indian tax officials raided the BBC’s local offices on Tuesday in what they said was a probe into the British broadcaster’s business practices. But the move comes amid a broader government campaign to censor a new BBC documentary about Prime Minister Narendra Modi’s role in anti-Muslim riots that killed more than 1,000 people in the state of Gujarat while he was governor in 2002. Modi has always denied stoking – or neglecting – the violence, and India’s Supreme Court has reached a similar conclusion. In the weeks since the doc aired in the UK, Modi’s government has cracked down swiftly in India, blocking it from being viewed online in the country, halting screenings at Indian universities, and forcing both Twitter and YouTube to remove it locally. Modi has often used internet laws to muzzle criticism, and tax officials have searched critical media outlets before. Last year the subcontinent slipped eight points to 150 out of 180 countries in the Reporters Without Borders Press Freedom Index. How will the UK government respond?
Tunisia crackdown intensifies
Robocop is not messing around now. Tunisian President Kais Saied, whose monotone style earned him that nickname, has unleashed a ferocious crackdown on his critics and opponents in recent days. On Tuesday, sweeping arrests ensnared the leader of Ennahda, an opposition Islamist movement that once held power in the country. Saied, a constitutional lawyer who was elected as an outsider candidate in 2019, has led a massive overhaul of Tunisia’s government, diminishing the power of the legislature and the courts. He says he’s trying to make government more decisive and efficient in the only country that emerged from the Arab Spring with a democracy. His critics say he is plunging the country of 12 million right back into an authoritarian winter. See our full profile of Saied here.
Russian service members drive tanks during drills held by the armed forces in the Rostov region, Russia.
What We’re Watching: Launch of Russian offensive, China-Iran talks, Macron’s midnight deadline
The Russian offensive has begun
After much speculation about Russia’s next military steps, NATO chief Jens Stoltenberg said Monday that Russia has begun a new offensive in Ukraine. "We see how they are sending more troops, more weapons, more capabilities,” he said during a press conference in Brussels. Russia’s immediate goal, according to Eurasia Group analysis, is to gradually overwhelm outnumbered Ukrainian forces and take full control of the so-called Donbas region of Donetsk and Luhansk provinces, two of the Ukrainian regions Russia annexed last September. The early timing of this new escalation suggests Russia hopes to make significant gains before powerful new weapons sent by the West arrive in Ukraine. It’s also possible that Ukrainian forces will respond to Russia’s incremental escalation by trying not only to repel Russian attacks but to advance south to cut the land bridge Russian forces established last year between the Donbas region and Crimea. The bottom line: This new Russian offensive will offer the first true test of military strength since Moscow mobilized 300,000 more troops last fall. The world will learn a lot about whether the Russian army has greatly improved its training, weaponry, and ability to coordinate a large-scale operation.
Raisi heads to China in bid to deepen ties
Ebrahim Raisi is bringing one hefty entourage to Beijing this week on the first visit by an Iranian president to the Middle Kingdom in 20 years. With Iran’s economy reeling from western sanctions over its nuclear program, its shipment of drones to Russia for the war in Ukraine, and its brutal crackdown on protesters following the in-custody death of Mahsa Amini, Tehran hopes to foster economic growth by deepening trade ties with China. Raisi’s main goal is to implement a sweeping 25-year cooperation agreement the two countries signed in 2021 that includes economic and security cooperation. He is scheduled to meet with Chinese President Xi Jinping, and talks about reviving the Iranian nuclear deal are expected. The countries have grown closer in recent years – China remains Iran’s top trading partner, and Beijing has supported Tehran’s successful bid to join the Shanghai Cooperation Association and even supports the country’s efforts to join the powerful BRICS economic bloc of Brazil, Russia, India, China, and South Africa. The push for greater cooperation comes despite a recent tussle over China’s support for negotiations to settle a territorial dispute between Iran and the United Arab Emirates over three islands Tehran has controlled since the 1970s. We’ll be watching to see whether Xi and Raisi have any big announcements this week.
Macron vs. Midnight
Reforming France’s unsustainably generous pension system is the single biggest policy priority for President Emmanuel Macron’s second term. The bean counters say it has to happen, but the protesters on the streets say the move isn’t exactly popular. Well, now it’s crunch time: Debate on the first reading of the reform bill in the lower house of parliament must end by the stroke of midnight this Friday. Facing staunch rejection from trade unions and the left, Macron’s centrist minority government is hoping to pull along a more or less reliable group of center-right MPs in support of raising the retirement age from 62 to 64 by 2030. But a number of those deputies are already asking for big concessions, including waiving the new retirement age for anyone who worked even a single month in their teens (that’s most people). Procedural quirks give the government some leverage: Unless MPs explicitly vote NON, the reforms would return to the Senate, where they have strong support. The clock is ticking …Swedish and Finnish tanks during NATO's "Cold Response 2022" military exercise in Norway.
As Russia balks, NATO might gain two strong Nordic recruits
Russia’s invasion of Ukraine has been a boon for NATO.
The alliance that former President Donald Trump wanted to pull out of and continues to call a “paper tiger” is more relevant and united than it has been in years. Its members are poised to wean themselves off Russian oil and gas, expand their defense spending, and are now also accepting — and expecting — new members.
Enter Finland and Sweden, two Nordic countries with a history of neutrality now moving closer to official NATO membership. While they insist they will be making their decisions on whether to join the defense pact independently, both Helsinki and Stockholm are expected to announce their bids by May.
Although the center-left governments in Finland and Sweden have historically opposed joining NATO, opinion polls show that Putin’s actions in Ukraine have primed their parliaments for change.
NATO couldn’t have asked for more. Finland and Sweden have the most far-reaching level of defense cooperation among the Nordic states. They’ve collaborated often and well with each other; are active members of Nordic Defense Cooperation, the pan-Nordic military group which enables joint operations; and are two of six Enhanced Opportunity Partners for NATO, the closest classification of partnership with the alliance, a status they share with Ukraine.
“Sweden and Finland are very close partners of NATO. They are militarily advanced and technologically savvy. Their traditions of ‘total defense’ would also add to NATO's understanding of how allied societies must build resilience against disruptive threats,” said Dan Hamilton, a senior fellow at the Brookings Institution.
Considering its past conflicts with the Russian Empire and the Soviet Union, Finland has decades of military intelligence experience watching the Russians. And both countries have supported NATO missions in Afghanistan, Iraq, and the Balkans.
“The alliance would be greatly strengthened by their membership,” Hamilton added.
The immediate impact will be geographic. For the duration of the Cold War, NATO shared just a short border with Russia, in northern Norway. In 1999, this increased to 270 miles, as Poland connected with the Russian enclave of Kaliningrad. After the three Baltic states — Estonia, Latvia, and Lithuania — joined in 2004, the figure jumped to 770 miles.
Now, Finland’s 800-mile boundary, which touches mostly uninhabited forests, stands to double the length of NATO’s borders with Russia — quite the opposite of what Vladimir Putin was hoping for when he decided to invade Ukraine.
The two new members would also alleviate some pressure on NATO support to the Baltic states, which is currently constrained through the sliver of territory between Belarus and Kaliningrad known as the Suwalki Gap, Hamilton said. And the expansion would connect all of the Nordic region into a NATO space, raising the threshold of risk for Russia should it contemplate any further aggression.
While Finland and Sweden insist that NATO membership is still under consideration, Moscow is not taking matters lightly. The Kremlin has threatened the deployment of nuclear and hypersonic weapons in the Baltics to bolster defenses.
“If Sweden and Finland join NATO, the length of the alliance’s land borders with the Russian Federation will more than double. Naturally, these borders will have to be strengthened,” said Dmitry Medvedev, a close Putin ally and former president of Russia.
Despite Moscow’s saber-rattling, even critics of NATO expansion are changing their minds following Putin’s brutal actions in Ukraine.
“We can’t be afraid of our own shadow when Putin is invading innocent neighboring countries,” said Michael O’Hanlon, director of research at Brookings and a longtime opponent of extending NATO membership to Ukraine. In the past, O’Hanlon proposed a zone of neutrality that would include not only Ukraine but also Finland and Sweden.
Putin’s actions have changed his mind, and O’Hanlon sees no reason to bow to Russian pressure over its sphere of influence extending to the Nordic states.
“Finland and Sweden clearly pose no threat to Russia. Russia has no legitimate irredentist claims on either. Both are solidly pro-western. But neither can be expected to sustain neutrality as a policy given Putin’s new unpredictability and brazen brutality,” O’Hanlon explained, noting he’s no longer opposed to their membership.
As NATO partners, Sweden and Finland are not covered by the alliance’s famous Article 5 — the “all for one, one for all” clause that considers an attack against one member to be an attack against all members. NATO understands this, and Secretary-General Jens Stoltenberg has already included the two Nordic neighbors in intelligence-sharing about the war in Ukraine.
“I have had close contact with the political leadership both in Sweden and Finland over the last months,” Stoltenberg said in a recent press conference. “And I have conveyed the message that it's for them to decide of course, but if they apply, I expect that 30 allies will welcome them and that we will find ways to also address the concerns they may have about this interim period between the have applied [sic] and until the last ratification has taken place.”
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