Photo : Sergei Fadeichev/TASS
IN BRIEF
By Madhura S Mahesh
THE UK
Government reverses tax cuts for the top earners
On 03 October, Treasury chief Kwasi Kwarteng announced the decision to scrap the controversial tax cuts for the top bracket of the UK. Announced on 23 September, Kwarteng had proposed tax cuts on those earning over GPB 150,000 a year who were currently paying a 45 per cent rate of income tax. The move to scrape this policy had a positive effect on the value of the pound which rose to USD 1.13. At the annual conference of the Conservative Party, Kwarteng announced that the plan for the rest of the tax cuts will not be scrapped. He also accepted that the budget had a negative effect and that they were open to criticisms and solutions. At the same time, he urged the need to move on and deliver the outlined plan. Despite the value of the pound bouncing back, the market, investors and the public are still wary of the future ramifications of the budget and the growing cost-of-living crisis. (“UK scraps tax cut for wealthy that sparked market turmoil”, AP News, 03 October 2022)
TURKEY
Turkish economy records the highest inflation rates since 1998
On 03 October, Turkey’s statistics officially announced the inflation rates for September at 83.45 per cent. Such high rates were last seen in 1998 and some independent groups such as the Inflation Research Group project the rate at 186.27 per cent. These rising inflation rates hit the transportation sector the most with an annual price increase of 117.66 per cent and the food and non-alcoholic drinks sector at 93 per cent. The rising inflation rates have led to an increase in the price of goods which will have a direct effect on the already burdened public. This increase is said to have been a result of President Recep Tayyip Erdogan’s view that high prices are caused by high borrowing costs. Due to this, the Central bank of Turkey has been slashing interest rates to act as an incentive to increase production and exports. This cut in rates has led to a decrease in the value of the Turkish Lira. (“Inflation in Turkey tops 83% as lira drops and Erdogan promises more interest rate cuts”, euronews, 03 October 2022)
THE CZECH REPUBLIC
European Commission aims to give additional funding to the Czech Republic
On 03 October, the Commission announced its plans to the provide Czech Republic with additional funding of EUR 4.5 billion. The funding will be given as a part of the SURE instrument of the EU which focuses on job and workers protection in the face of the Covid-19 pandemic. Czechia with this injection will have received a total of EUR 4.5 billion through SURE. The fund will be given as loans to address expenditures of 2020 and 2021 and maintenance of the measures adopted to handle the socio-economic crisis that rose due to the pandemic. (“Commission proposes to provide additional €2.5 billion to Czechia under SURE ”, ec.europa.eu, 03 October 2022)
REGIONAL
European Commission outlined a failsafe in case of a natural gas shortage
On 03 October, the Commission announced its back-up in the event of a natural gas shortage. It has accepted a German proposal to revive lignite-fired power plants in face of a shortage because of the Russia-Ukraine war and help Europe survive winter. With a cost of EUR 450 million, the measure looks to prepare these plants to handle the load when the demand arises. The plants will be kept under a lignite supply reserve from 01 October 2022 to 31 March 2024 and will help in protecting natural gas availability. The Commission accepted this measure as a part of EU State aid rules which allows for funding of certain sectors or companies in times of need. (“State aid: Commission approves €450 million German measure to replace electricity generation amid Russian natural gas shortages”, ec.europa.eu, 03 October 2022)
Poland asks for World War II reparations
On 03 October, through a diplomatic note, Poland asked for compensation from Germany for World War II. Polish Foreign Minister Zbigniew Rau in a press conference said that "[The note] expresses the position of the Polish minister of foreign affairs that the parties should take immediate steps to permanently and effectively... settle the issue of the consequences of German aggression and occupation." This comes at the same time German Foreign Minister Annalena Baerbock is said to visit Poland to participate in the German Unity Day festivities in Warsaw. The reparations are estimated at around EUR 1.3 trillion Rau is said to talk to Baerbock about the same. (“ Poland demands €1.3 trillion in WWII reparations from Germany”, Deutsche Welle, 03 October 2022)
Six nations propose new sanctions against Iran
On 03 October, new proposals were submitted to the EU regarding sanctions against Iran for its violent response to the ongoing protests. Germany, France, Denmark, Spain, Italy, and the Czech Republic have put forth 16 proposals for new sanctions which are said to target institutions and individuals primarily involved in the suppression of the protests. These proposals will be discussed by the EU foreign ministers on 17 October. Germany’s Foreign Minister Annalena Baerbock called the crackdown due to the fear of the power of education and freedom. She also expressed the limitations of their actions in a tweet which said, "It is also difficult to bear that our foreign policy options are limited. But we can amplify their voice, create publicity, bring charges and sanction. And that we are doing." These protests erupted nationwide due to the death of women in police custody over the issue of hijab. (“Germany, others in EU plan Iran sanctions over protests clampdown”, Reuters, 03 October 2022)
SCIENCE
UK and EU witnessed the largest occurrence of avian flu
On 03 October, the European Food Safety Authority (EFSA), European Centre for Disease Prevention and Control (ECDC) and the EU Reference Laboratory for Avian Influenza reported that 48 million birds were culled in the last year due to the avian flu. This is the largest outbreak of the avian flu in the UK and Europe and is still spreading. Spreading very easily, UK’s Chief Veterinary Officer Dr Christine Middlemiss said that the reason behind the increased cases in commercial farms was the persistence of the flu in wild birds. These numbers are expected to rise with the migration season near. The latest figure only maps the damage done from October 2021 to 09 September. (Malcom Prior “Record avian flu outbreak sees 48m birds culled in UK and EU”, BBC, 03 October 2022)
Swedish Scientist receives Nobel Prize
On 03 October, Svante Paabo, a Swedish scientist was awarded the Nobel Prize in Physiology or Medicine for his study on human evolution. The Prize committee congratulated him and explained how his research has been instrumental in mapping human evolution and the migration of humans around the planet. Paabo’s work explained how there are two different groups of modern humans Neanderthals and Denisovans who were based in Eurasia. He worked with old, tainted and ruined genetic material to understand our history. After identification, he compared these with the genetic material of Homo sapiens and explored what are the common factors between them. His work is said to help us understand what makes us “uniquely human” according to the prize committee. (“Nobel Prize goes to Svante Paabo for Neanderthal work”, BBC, 03 October 2022)
INTERNATIONAL
EU and Israel hold talks after a decade
On 03 October the EU and Israel held talks after a gap of 10 years where the former asked Israeli Prime Minister Yair Lapid about a possible solution to the Israel-Palestine conflict. EU foreign policy chief Josep Borrell participated in these talks and reiterated the EU stance to put an end to this conflict in a peaceful manner. He also conveyed the EU’s concerns about the situation on the ground plagued with violence and security issues. Lapid in a statement expressed, “It is an important milestone in our improving relations. This past year has seen some vast progress in our ties — and there is still so much more that we can do.” The future of these talks is uncertain as Israel heads to the polls on 01 November where it is said that there is a high chance that the parliament will consist of anti-Palestine supporters. (“EU, Israel hold high-level talks for first time in a decade”, AP News, 03 October 2022)
War in Ukraine: Day 222
By Sai Pranav
War on the Ground
On 03 October, Ukraine’s Security Service reported in a telegram post that the Russians had counted the votes of those who had left the regions, especially in Zaporizhzhia and Kherson. An SBC intercepted a phone call from a Russian soldier to his wife discussed that the votes for those who had left the occupied region of Donetsk, Luhansk, Zaporizhzhia and Kherson were taken into account for the referendums. He also said that in Kherson, people were bribed into voting by offering to buy a Lada-Granta car.
On the same day, the Czech Republic collected over EUR 1.22 million to fund the upgraded T-72 Avenger tank as military aid to Ukraine. The fundraising campaign was named “A Gift for Putin” and had the slogan “A gift from the Czech Republic!”. The fundraiser started at the beginning of September. All collected funds for the campaign are transferred to Ukraine’s Embassy in Prague account. The details for the purchase of the tank and its logistics were consulted with Ukraine’s servicemen before the start of the campaign. The T-72 Avenger is an upgraded version of the Soviet T-72 tank with improved combat capabilities, comfort and efficiency. It has modern features that were absent in the Soviet-era tank.
The Moscow View
Claims by Russia
On 04 October, LENTA RU reported that the Director General of the Zaporizhzhia Nuclear Power Plant, Igor Murashov, was discovered to have a connection with Ukraine’s Security Service (SBU). Murashov confessed that he communicated with an SBU employee through messengers to update the situation in the ZNPP. He confirmed that Ukraine had been attacking the NPP from the cities of Nikopol and Marganets. He was detained by a Russian patrol on 01 October and was later released. He also said that the man from SBU did not allow him to appeal to Russia, Ukraine, the UN and the IAEA to stop the shelling as it did not “align with Ukraine’s interests”. The shellings continue in the ZNPP, and IAEA Director General Rafael Grossi is said to visit Russia and Ukraine to negotiate the situation and help create a security zone around the power plant.
On 03 October, Russia’s State Duma unanimously passed draft constitutional laws that recognize the annexation of Donetsk and Luhansk People’s Republics, Zaporizhzhia and Kherson regions as well into Russia. The law states that the residents of the territories will be recognized as Russian citizens from 30 September. A month is provided for the residents to reject their citizenship and acquire it by submitting applications and swearing in as Russian citizens. After joining Russia, DPR and LPR will continue to be republics, while Zaporizhzhia and Kherson will be addressed as regions. The transition period of the territories acceding to Russia will be till 01 January 2026. The new territories will have representatives in the State Duma and will mandatorily have to change their currency to roubles. The State Duma ratified the unification of four regions into Russia.
In a statement by the presidential spokesperson Dmitry Peskov, he said that the demarcation for the regions of Kherson and Zaporizhzhia is yet to be determined. According to him, there have been issues with identifying proper boundaries for these regions as they are partly occupied by Ukrainian forces. He said that he will clarify the precise boundaries for the two territories later
The West View
Responses from the US and Europe
On 03 October, billionaire Elon Musk tweeted polling a proposal for a plan to end the war in Ukraine was met with different responses. Ukraine’s President Volodymyr Zelenskyy replied with his poll asking whether Musk supports Ukraine or Russia. His four-point plan was to let the UN conduct another referendum in the four regions to see whether they wanted to join Russia or not. He also proposed that Ukraine should be neutral, Crimea should belong to Russia, and the region should get its water supply resumed. Musk replied to the tweet by Zelenskyy that his company SpaceX had donated USD 80 million to Ukraine and none to Russia. He also said that he is with Ukraine and will provide the Starlink satellite internet terminals to Ukraine, which help access people’s internet through satellite.
On 03 October, the UK’s Defence Intelligence updated that Russia is facing difficulty in following the new partial mobilization decree as chaos has spread in implementing it. Local officials are unclear about the instructions and goals of the mobilization. Wrong people are conscripted into the army and the Russian officials find logistics and training of the new soldiers difficult.
Europe is at “unprecedented risks” regarding its gas supply in winter. Amidst the fear of a total Russian gas cut-off, Europe is facing one of the worst energy crises in its history. It has fulfilled its 80 per cent energy storage in winter ahead of time currently holding 88 per cent, however, the International Energy Agency suggests that 90 per cent of energy should be stored for Europe to get through winter if Russia completely stops its supply. The EU took up measures to mandatorily reduce the consumption of energy by five per cent during peak price hours and a voluntary ten per cent reduction overall. It was mainly to be followed by regular consumers and businesses. The EU also advised consumers to turn down thermostats by one degree and adjust boiler temperatures as well as industrial and utility conservation. The EU also aims to cap excessive revenues made by energy companies and tax surplus profits of fossil fuel companies. The energy crisis has led to extreme conditions in Pakistan, Bangladesh and the rest of Asia.
On 03 October, Sweden provided “advance diving missions” capable vessels to the Baltic Sea to investigate the undersea explosion that led to leakage in Nord Stream 1 and 2 pipelines. The leaks methane leak occurred near the economic zone of Denmark and Sweden in the Baltic Sea. On 30 September Russia accused the West of sabotaging the pipelines to which the West strongly denied any allegation. Swedish Coast Guards have reported that major leaks in the pipelines have stopped, however, Nord Stream 2 has increase in smaller leaks. Denmark, Germany and Sweden are leading a joint international investigation team to find who is responsible for the explosion and the subsequent leaks. They are trying to stop the leakage of the pipelines.
On the same day, the Czech government cautioned its citizens who also hold citizenship in Russia to leave the country amidst the partial mobilization call. It warned that the Czechs who hold Russian citizenship will also face the risk of military conscription. They were advised to flee the country. The government announced that its citizens would not be provided with necessary, full consular protection by the Czech Embassy in Moscow.
The Global Fallouts
Implications of the Ukraine war
Following the partial mobilization call by Russia’s President Vladimir Putin, many Russians have fled to Istanbul, Turkey which still hasn't imposed sanctions on Russian travellers. Russians are flying to Turkey to go to other places as it is accessible easily. The large influx of Russians after the mobilization call to Istanbul is being compared to “white Russians” escaping the Bolsheviks in 1917 by Eva Rapoport, the coordinator of the Ark, a group helping Russians flee their country.
An investigation by the Associated Press and the PBS series “Frontline” discovered that the bulk cargo Laodicea was owned by Syria and is used by Russia to smuggle stolen Ukrainian grain worth USD 530 million. The ship is docked in Lebanon and its prosecutors supported Russia allowing the ship to unload. AP used satellite imagery and marine radio transponder data to determine that Russia is stealing grains from Ukraine and unloading them in the ports of Turkey, Syria, Lebanon and other countries. Russia has denied the allegation calling them baseless and false.
References
Security Service of Ukraine, “During the fake referendum, the invaders even counted the "votes" of Ukrainians who left the occupied territory.,” Telegram, 03 October 2022
“The Czechs collected funds for the T-72 tank for Ukraine,” mil.in.ua, 03 October 2022
“Director General of Zaporizhzhya NPP confessed to having links with Ukrainian special services,” LENTA RU, 04 October 2022
“State Duma passes laws on accepting DPR, LPR, Kherson and Zaporozhye regions into Russia,” TASS, 03 October 2022
“Russian State Duma ratifies accession treaties for former Ukrainian territories,” RT, 03 October 2022
“Kremlin comments on borders of new territories,” RT, 03 October 2022
Michelle Nichols, “Musk and Zelenskiy in Twitter showdown over billionaire's Ukraine peace plan,” Reuters, 04 October 2022
Sammy Westfall and Missy Ryan, “Elon Musk tweets ‘peace plan’ for Ukraine. Chaos ensues.,” Washington Post, 03 October 2022
The UK Ministry of Defence, “Latest Defence Intelligence update on the situation in Ukraine - 3 October 2022,” Twitter, 03 October 2022
David Mchugh, “Experts: Europe faces ‘unprecedented risk’ of a gas shortage,” apnews, 03 October 2022
Ben Turner, “Energy crisis: Europeans 'must lower thermostats to prepare for Russia turning off gas supplies',” euronews, 03 October 2022
Jan M Olsen, “Sweden sends special diving vessel to area of pipeline leaks,” apnews, 03 October 2022
“Czech Republic updates warning for citizens to leave Russia,” Reuters, 03 October 2022
Robert Badendieck and Mehmet Guzel, “Fleeing Russians follow path of 1917 refugees to Istanbul,” apnews, 03 October 2022
Michael Biesecker, Sarah El Deeb and Beatrice Dupuy, “Russia smuggling Ukrainian grain to help pay for Putin's war,” apnews, 03 October 2022