Daily Briefs

Photo : Lewis Joly/Pool via REUTERS

03 July 2023, Monday | NIAS Europe Daily Brief #559

The French Summit for a New Global Financing Pact

War in Ukraine: Day 493 & 494

By Sneha Surendran

The French Summit for a New Global Financing Pact 

What happened?
On 23 and 24 June, France hosted the New Global Financing Pact summit in Paris. Barbados and India were the co-hosts. Heads of state, officials from international organizations, NGOs, and activists attended the event. In his address, host Prime Minister Emmanuel Macron stated the intended result of the summit, saying: "Policymakers and countries shouldn't ever have to choose between reducing poverty and protecting the planet." The two-day summit saw officials deliberate upon climate change, climate financing, reforms of multilateral financial institutions and the impacts on economies due to the pandemic and wars. 

What is the background?
First, delayed promises and climate debt. Several countries have taken the pledge to achieve net-zero emissions by 2050. However, studies show that climate action continues to lack commitment. For instance, during COP15 in Copenhagen in 2009, developed countries decided to collectively secure USD 100 billion every year by 2020 to assist climate projects in developing countries. In 2020, the OECD reported that the net amount raised was USD 83 billion. Macron reiterated the commitment to this scheme, saying that he is "confident" of the target being reached this year. A March 2023 UN report titled 'Tackling debt and climate challenges in tandem' showed that the debt crisis in developing countries was aggravating climate change. 29 out of 69 poor countries plus lower-middle-income countries that defaulted are at crossroads of high debt and climate vulnerability. The report called for the restructuring of global financial systems. With natural disasters increasing in number and intensity, climate-vulnerable nations find themselves borrowing money for relief and reconstruction. 

Second, the hesitant private sector. Twenty-five per cent of global climate investments happen in South Asia, Latin America, and Africa, which have some of the most ecologically vulnerable zones. Countries here can access loans only after agreeing to several conditions. Further, the tax structures within low and middle-income countries and weak institutional frameworks deter private companies from investing in green schemes. The private sector cannot quantify the risk and benefits they could face in these countries regarding climate change impacts. Additionally, the inability to forecast high returns makes them cautious about investing.

Third, the North-South divide. Presently, the countries of the Global North are responsible for the accumulation of high atmospheric emissions. Historically, the US has emitted the highest share of carbon, followed by EU countries and China. In comparison, the countries of the Global South have contributed a significantly lower per cent of emissions. However, the numerous climate pacts today tend to focus on the actions taken by the Global North. The two sides end up shifting blame, with questions on climate justice factoring in.

What does it mean?
First, the Global South gearing up to fight climate change. Barbados' Prime Minister Mia Mottley, who has emerged as a new voice leading the call for climate action, called for a "total transformation" of international institutions. Her Bridgetown Initiative was an important agenda at the event. It is a five-point proposal that addresses climate financing, global inequality and poverty in developing countries while providing possible solutions incorporating global financial institutions. The carbon footprint of the Global North is over 100 times greater than the Global South. However, emerging economies face the brunt of climate change while industrialized nations are better equipped, technology and finance-wise, to deal with it. 

Second, the relevance of contemporary financial institutions. Contemporary global institutions like the World Bank and the IMF were products of a post-World War II rebuilding effort. Since then, the world has undergone massive changes, including pandemics, shifting geopolitical relationships and a worsening climate. Moreover, these challenges have had a disproportionate impact on the developing and under-developed nations. The inability of global institutions to help alleviate their troubles, coupled with the dominance of developed countries within these institutions, has slowly chipped away the trust in them. A look at the policies of these institutions also reveal that they have exacerbated the debt crisis in poor countries. This has increased the call for institutional reforms over time.  

The note was previously published part of “The World This Week.”

War in Ukraine: Day 493 & 494
By Rishika Yadav

War on the Ground
On 01 July, Ukraine’s Parliament unanimously approved draft law No. 8401, which restores the country's taxation system to its pre-war state. The law, set to take effect on 01 August 2023, received support from 239 MPs. The adoption of this legislation is a crucial requirement outlined in the agreement with the IMF. Under the new law, the two per cent single tax will be abolished, and taxpayers will have the option to choose an alternative taxation system by submitting an application.
On 01 July, Ukrinform reported on the statement by Andrii Demchenko, State Border Guard Service spokesperson of Ukraine, over the control of borders due to the threat of the Wagner Group. According to him, Ukraine has asserted control over the situation in Belarus, where approximately 8,000 mercenaries from Russia's Wagner private military company could be stationed. Demchenko stated that to address potential risks associated with Belarus accommodating mercenaries, Ukraine is reinforcing its defences in the region. 
On 01 July, Volodymyr Zelenskyy, the President of Ukraine and Pedro Sánchez, the President of the Government of Spain, issued a joint declaration. The declaration emphasizes the condemnation of Russia's ongoing aggression against Ukraine and calls for an immediate and complete withdrawal of all Russian military forces from Ukraine. Spain pledges to actively participate in Ukraine's recovery and reconstruction, with a focus on fostering transparent and inclusive national reconstruction. 
On 02 July, the General Staff of the Armed Forces of Ukraine reported on Facebook about the fighting in various directions against Russia. The main focus of Russian aggression remains on the Lyman, Bakhmut, and Marinka directions. On 01 July, there were 46 combat engagements. In the Volyn, Polissia, Siverskyi, and Slobozhanskyi directions, Russian forces maintained a military presence and conducted airstrikes and artillery strikes on multiple settlements. Ukraine successfully repelled attacks in the Marinka direction, while unsuccessful Russian offensive actions were reported in other areas. 
On 02 July, TCH news reported that Russian forces formed counterattack units to impede the Ukrainian Armed Forces' progress in capturing Klishchiivka and maintaining logistical access to Bakhmut. The Head of the Press Service stated that Russians have reinforced their positions on both the southern and northern flanks. Airborne assault units have been deployed on the southern defensive line, while an infantry unit was stationed on the northern flank.

On 02 July, Hanna Maliar, the Deputy Minister of Defence of Ukraine reported on Telegram that Russia is making advances in multiple directions. She stated that the advances includes Avdiivskyi, Marinskyi, and Lymanskyi. In the Svativ direction, Russia has also moved forward and is attacking Bilogorivka and Serebryanka. In the Bakhmut direction, Ukrainian forces are making progress on the southern flank while fighting continues in the north, where Russia has deployed two airborne assault regiments. In the south, Ukrainian troops are persistently creating conditions for swift forward movement in the Berdyansk and Melitopol directions.

The Moscow View
Claims by Russia

On 02 July, RT news reported on Japan’s exclusion of three Russian energy projects from sanctions. According to the Economy Ministry, Japan has announced the exclusion citing their significance to the country's energy security. The exemption applies to service operations related to oil and gas exploration, extraction, liquefaction, storage, transportation, and transshipment, including projects like Sakhalin 1, Sakhalin 2, and Arctic LNG 2. The measure will take effect from 30 September, and allows the provision of services to Russian subsidiaries of Japanese companies. 

The West View
Responses from the US and Europe  

On 01 July, Euractiv reported on the Austrian government's decision to join the Sky Shield Initiative, the air protection group launched by Germany. Karl Nehammer, Austria's Chancellor said: "The threat situation has massively intensified due to the Russian war of aggression on Ukraine. Austria will therefore join the European air defence initiative, Sky Shield." The leader of the far-right Freedom Party of Austria criticized the decision, arguing that the decision invalidates the country's neutrality.  
On 01 July, Deutsche Welle reported on head of the Central Intelligence Agency (CIA) William Burns's opinion that the effect of the war in Ukraine is corrosive to Putin's leadership in Russia and called Wagner group head Yevgeny Prigozhin's mutiny as its "vivid reminder." He called out the war as a "strategic failure" and said that the Russian disaffection with the war creates a once-in-a-generation opportunity for the CIA. 

Parliament adopts law on return to pre-war taxation,” Ukrinform, 01 July 2023
Up to 8,000 Wagner Group fighters could stay in Belarus – Ukrainian border guards,” Ukrinform, 01 July 2023
Joint declaration of the President of Ukraine, Volodymyr Zelenskyy and the President of the Government of Spain, Pedro Sánchez,” president.gov.ua, 01 July 2023
War update: 46 combat engagements occur in three directions,” Ukrinform, 02 July 2023
The situation in Bakhmut is changing dynamically: the Armed Forces told about the enemy's plans,” TCH, 02 July 2023
Heavy fighting is going on everywhere/Anna Painter,” Telegram, 02 July 2023
Russia blocks Wagner-linked news outlets,” RT news, 01 July 2023
Top US general ‘not surprised’ about Ukraine’s slow offensive,” RT news, 01 July 2023
Sophie Williams, Albana Kasapi & Salma Nurmohamed, “Wagner: Russians reflect on group's advance towards Moscow,” BBC news, 02 July 2023
Russian kamikaze drones a major headache for Ukraine – Telegraph,” RT news, 02 July 2023
Japan exempts Russian energy projects from sanctions,” RT news, 02 July 2023
Value of Wagner state contracts revealed by Russian media,” The Press United, 02 July 2023
"EU rushing to secure gas for winter," RT News, 02 July 2023
Nikolaus J Kurmayer, "Neutral Austria to join European Sky Shield initiative," Euractiv, 03 July 2023
"Russia's war in Ukraine 'corrosive' for Vladimir Putin: CIA chiefDeutsche Welle, 02 July 2023
"Kremlin: Palestinian president expresses support for Putin in phone call," The Jerusalem Post, 01 July 2023
"Telephone conversation with President of Palestine Mahmoud Abbas," kremlin.ru, 01 July 2023

In Brief
By Sneha Surendran and Prerana P

Satellite images indicate construction of army camp presumably for Wagner
On 01 July, Planet Labs PLC provided satellite images that depicted military-style camps being built in a former military base outside Osipovichi town in Belarus. The town is 320 kilometers north of Ukraine. On 27 June, Aliaksandr Azarau, leader of the anti-Lukashenko BYPOL guerrilla group had said that a site for Wagner was being built near Osipovichi. Furthermore, Alexander Lukashenko, Belarus’ President had said that Wagner’s experience could be of use to his country and that he had offered an “abandoned military unit” to them. These statements lead to believe that the site may be assigned for the use of Wagner troops who have been provided sanctuary in Belarus following the failed revolt in Russia. A spokesperson for Ukraine’s border force reported that almost 8000 Wagner fighters will be stationed in Belarus. (“Satellite photos, reports suggest Belarus is building an army camp for Wagner fighters,” Associated Press, 01 July 2023)
President puts off official visit to Germany amid escalating violence 
On 01 July, President Emmanuel Macron deferred his planned state visit to Germany in the wake of increasing violence in France. Riots have escalated in the country following the shooting of 17-year-old boy of North African descent by the police on 27 June in Nanterre. On 01 July, President Macron consulted with his German counterpart Frank-Walter Steinmeier to postpone the meeting which was scheduled for 02-04 July. The state visit was meant to strengthen France-German relations and would have been the first official visit by a French President to Germany since 2000.  (Federica Di Sario, “Macron postpones state visit to Germany as France braces for more turmoil,” Politico, 01 July 2023)
The far-right AfD party wins the district election
On 02 July, Hannes Loth, the German’s far-right AfD candidate won the first district election of the small town of Raghun-Jessnitz. The German media reported that, it was first time the party has batched victory for a full-time mayor’s position against independent candidate Nils Naumann. Loth received a vote of 51.1 per cent against Naumann’s 48.9 per cent, and has surged to high opinion polls. The last week’s election recalls Robert Sesselmann’s victory as district administrator in Sonneberg, Thuringia. Hannes Loth further expressed his gratitude calling it the “wonderful result,” and has claimed to work as the mayor for everyone in Raguhn-Jessnitz region. (“German far-right party notches another win,” Le Monde, 02 July 2023)
The housing crisis and the infrastructure
On 03 July, BBC reported on Ireland’s heavy housing crisis, which has impacted new investments. Economist John Fitzgerald has estimated that over one-third of all wages in 2021, was paid by multinational companies, yet the country has expressed fresh warnings regarding the housing crisis. After Ireland’s property and banking crisis, there was a severe fall in the housing construction, which has led to the shortfall of infrastructures. IDA Chief Executive Michael Lohan quote: “Housing is a challenge,” and has expressed the necessity in resolving housing related issues. He has expressed gratitude towards government’s initiatives and further mentioned the country’s single biggest threat as “complacency.” The Irish government’s “Housing for All Policy,” aimed at flourishing housing supplies such as cost rental, affordable purchases, etc, which can further benefit 33,000 homes delivery. (“Housing crisis in Ireland undermining new investment – IDA,” BBC, 03 July 2023)
Annual Pride in Vilnius and opposition
On 02 July, the annual pride march was celebrated, where thousands had marched towards the capital city, Vilnius. Due to its majority Catholic population, the Baltic state’s LGBT+ community has expressed serious concern towards the country’s social and legal discrimination. According to the 2022 study commissioned by the Free Society Institute, Lithuania is the only EU country, which has not legalized same-sex marriage and more than 70 per cent of the natives are against same-sex partnerships, which is one of the highest rates in Europe. The diplomat appointed in 2019 commented: “In Russia, Belarus and many other countries around the world, unfortunately, people risk their lives for doing just what we're doing today.” Vladimir Putin, Russia’s President casted that the LGBT+ concept was imposed by Western values, to clash with the Russian cultural traditions. Protesters from the pride march claimed that, “The government could do more,” as the crowd felt the government decisions to be conducive to LGBT+ rights. The recent letter signed by dozens of Lithuanians, would ensure equal rights for the LGBT+ community. (Joshua Askew, “Lithuania's Pride defies counterprotests, despite slow march to equality,” Euronews, 02 July 2023)
Climate activists interrupt Pride march
On 01 July, seven climate activists from the group Just Stop Oil briefly disrupted the London pride march. The activists said that the protest was against march organizers accepting sponsorship deals from “high-polluting industries.” They said: “High-polluting industries and the banks that fund them now see pride as a useful vehicle for sanitizing their reputations, waving rainbow flags in one hand whilst accelerating social collapse with the other.” The protestors were detained by the police after 15 minutes and the march resumed. Meanwhile, Will De’Athe-Morris, spokesperson of "Pride of London" a group that organizes London’s pride programs said that the protest should not take away from the message of the parade.  (“Climate activists disrupt London Pride march to protest corporate sponsorship,” Associated Press News, 01 July 2023)
UK Minister on visit to Tajikistan, and Turkmenistan
On 03 July, the Gov.UK reported on Minister Leo Docherty’s visit to Tajikistan and Turkmenistan. The visit aims to focus on energy security, climate cooperation, and business expertise and further UK’s partnership with the two Central Asian states. Docherty stated: “I am here to highlight the role that UK expertise can play in tackling some of the region’s most pressing climate and security challenges.” He will also discuss security matters including UK-Tajikistan counter-terrorism cooperation due to the crisis in Afghanistan. En route to his return to the UK, Docherty will also visit Istanbul to discuss UK-Turkey cooperation in the energy security and infrastructure sector in Central Asia. (Foreign, Commonwealth & Development Office, Leo Docherty MP, “UK Minister promotes British expertise and steps up engagement in Central Asia,” Gov.UK, 03 July 2023) 
Orkney expresses the need to explore ‘alternative governance’
On 02 July, The Guardian reported that Orkney, the archipelago off the north coast of Scotland would leave UK and become a self-governing state of Norway. The Orkney territory considered changing its legal status and has expressed their desire to explore its Nordic neighbours. The Council leader James Stockan stated: “We were part of the Norse kingdom for much longer than we were part of the United Kingdom.” He further stated that the governments in Edinburg and London had failed and the island receives less per capita funding. Although the liberal democrat Liam McArthur had expressed on upcoming dangers due to the barriers, he favoured on empowering island communities. He mentioned that the islanders require reassurance that the exercise would not affect their day-to-day services. The officials reported that the constitutional changes would require combination of petitioners, referendums and legislation. Further, the motions would be discussed on 04 June by the council. (Tom Ambrose, “Orkney could leave UK for Norway as it explores ‘alternative governance’,” The Guardian, 02 July 2023)
Limiting the emissions and its progress towards net zero
On 03 July, the UK Emissions Trading System Authority (UK ETS) has announced its commencement of a reform, which focused on laying tight limits on industrial, power and aviation emissions. UK ETS comprised of the UK government, Scottish government, Department of Agriculture, Welsh government, Environment and Rural affairs in Northern Ireland, promised its consistent support towards the affected industries. From next year, the listed industries are required to bring down the emissions to net zero goal, which would signify its investment towards the decarbonisation process. Between 2024-2027, the markets would receive extra allowances to protect from international pressures. At the end of each year, the remaining unused allowances can be sold to other firms. The authorities have promised on constant monitoring of the availability of the allowances and have expressed the necessity to include funding, regulations and suite policies to regulate the process. Further, the domestic maritime transport, waste incineration and energy from waste sector would be added to the scheme and the authorities has encouraged the companies to eliminate the emissions and invest on clearer alternatives. (“Tighter limit on industrial, power and aviation emissions, as UK leads the way to Net Zero,” GOV.UK, 03 July 2023)

Euclid telecope to study dark energy, dark matter
On 01 July, the European Space Agency’s Euclid observatory was launched from Cape Canaveral in Florida. Euclid was sent on SpaceX’s Falcon 9 rocket. It will require a month to reach its destination, the second Lagrange (L2) point, at a distance of 1.5 million kilometers. It is expected to spend six years in space. The lead scientist said that Euclid will measure dark energy and dark matter with extreme precision while surveying galaxies. The telescope is fitted with instruments that can observe in visible light and near-infrared and also has a sunshield. Experts from 300 organizations from 13 European countries, the US, Canada, and Japan are included in this project. (UK Space Agency, “Mission to map the “dark Universe” sets off on space journey,” Gov.UK, 01 July 2023; Marcia Dunn, “European telescope launched to hunt for clues to universe’s darkest secrets,” Associated Press, 01 July 2023; “Euclid space telescope blasts off to explore dark matter,” Deutsche Welle, 01 July 2023)
Iran puts off appointment of new ambassador to Sweden
On 02 July, Deutsche Welle reported that despite the completion of administrative formalities, Iran has decided to pause the appointment of a new Swedish ambassador in the wake of the Quran burning incident in Stockholm. Several Islamic countries, including Iran, have seen protests against the incident. On 28 June, an Iraqi national burnt a copy of the Quran in front of a mosque in Stockholm, and the act had been filmed by a man holding Swedish flags. The Swedish government has condemned the incident and authorities have opened investigations against the Iraqi national on charges of agitation against a national or ethnic group. Meanwhile, on 02 July, the Organization of Islamic Cooperation (OiC), a Saudi Arabia-based body stressed the need to implement measures to prevent future Quran burning incidents. ( “Quran burning: Iran delays Sweden ambassador appointment,” Deutsche Welle, 02 July 2023) 

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