In File Photo: Chinese President Xi Jinping (right) and President Duterte wave to the media following a welcome ceremony at Malacañang Palace on November 20, in Manila. Image credits: AP/Bullit Marquez
CHINA hopes the next Philippine president will continue President Duterte’s “independent foreign policy,” a senior ranking Chinese politician and retired diplomat said.
Madame Fu Ying, chairperson of the influential foreign affairs committee of the Chinese parliament, said China, the Philippines and the region benefited from Duterte’s pivot towards China when he assumed presidency in 2016.
“[Duterte’s] independent foreign policy has won him respect from countries in the region, including from China, and he is willing to face the difficult issues with China, and find proper solutions, and he was able to reach consensus with the Chinese leaders, and allowing the relationship to come out of a difficult time and gain vitality,” Fu Ying said during the recent virtual conference billed as the 5th Manila Forum for Philippine-China Relations.
“It’s not only good for the two countries, two peoples, but also good for the region. So I hope that in the future, whoever is succeeding him will be able to wisely, courageously, and responsibly carry out Philippine independent foreign policy,” Fu Ying added.
Fu Ying had served as the Chinese Ambassador to Manila for two years from 1998 to 2000, at the time when relations between Manila and Beijing were strained as a result of China’s increased occupation of the Panganiban Reef (international name: Mischief Reef) in the West Philippine Sea. She was also appointed as the Chinese ambassador to Australia and the United Kingdom, before being promoted as vice foreign minister of China. Now, she chairs the foreign affairs committee of the National People’s Congress, and US think tanks have described her as a “senior figure in a growing number of US-China interactions.”
China’s State Counsellor and Foreign Minister Wang Yi also noted that Duterte’s pivot to China was a “strategic decision to improve the relations” between Manila and Beijing.
“Rainbows appeared after the rainstorms,” Wang Yi said in a recorded speech played during the virtual forum.
Fu Ying said she has been watching the recent spat between the Philippines and China over the West Philippine Sea, referring to reports of Chinese Coast Guard firing water cannon on a Philippine boat that transported food to Filipino soldiers stationed at Ayungin Shoal (international name: Second Thomas Shoal) last November. Foreign Affairs Secretary Teodoro Locsin Jr. protested the incident in “strongest terms” to a point of mentioning the treaty alliance the Philippines has with the United States.
“I have been watching the recent occasional hyping up of the disputes caused by some incidents related to some shoals in China’s Nansha Islands [also known as the Spratly Islands] and feel a bit concerned, hoping the two sides would properly handle it and avoid rolling back the mutual trust that both sides have worked so hard to build in the past years,” Fu Ying said.
Fu Ying suggested that both sides “stay firmly on the positive side” of the relationship and put the Spratly Islands dispute “at an appropriate place and properly handled through dialogues.” The Chinese foreign minister went further, saying that both sides should prevent the Spratly island issue from affecting or “taking hostage” the overall bilateral relationship.
She warned that the West Philippine Sea dispute will be used as an election issue in the Philippines in the upcoming presidential elections in May this year.
“I am aware that the election season is unfolding in Manila. The past experience shows that during such time, some people tend to bring up the disputes with China or try to stand tough against China which appear to be ‘politically correct.’
“Some Filipino scholars are expressing concerns of such tendency, stating that the disputes should not become a defining issue for our relations.
“I agree with such views and hope those who have foresight and stand for China-Philippines friendship can speak up and provide positive influence and we should work together to keep our relations on the right track,” Fu Ying said.
Wang Yi reassured the Philippines that “China will absolutely not use its strength to bully smaller countries, and we never believe in a winner-takes-all approach.”
“We hope to work with the Philippines to find ways to properly manage and resolve the issue in the spirit of goodwill and pragmatism. We need to come up with the resolve as soon as possible to advance joint development without prejudice to either side’s rights and claims, so that we can turn the South China Sea issue from a challenge into an opportunity and a positive factor conducive to the development of the Philippines and the friendship between our two peoples,” Wang Yi added.
Si la France veut avoir une chance se réindustrialiser et de se doter d’un système productif efficace, elle n’a d’autre choix que de mettre les bouchées doubles dans les nouvelles technologies. Par Jacques Moulin, directeur général du think tank IDATE DigiWorld.
Jacques Moulin
Jacques Moulin, le directeur général de l’IDATE. (Crédits : DR)
Plus de 4,5 milliards d’individus ont été confinés : jamais dans l’histoire de l’humanité, une crise sanitaire n’avait eu un tel impact. La pandémie a agi comme révélateur des fragilités de nos économies et de nos sociétés. Mais les confinements à répétition ont constitué aussi un accélérateur de l’hyperdigitalisation de notre civilisation. A tous les sceptiques du « big data », de l’IOT, de la 5G, le maintien de l’activité économique, de l’enseignement, de la médecine, – et bien sûr la recherche pour le vaccin – mais aussi des loisirs et du lien social, en bref de notre survie, aura été la preuve irréfutable de l’utilité du digital.
Selon Churchill, « il ne faut jamais gaspiller une bonne crise », et nous vivons actuellement un momentum qui offre l’opportunité de bâtir de nouveaux modèles. Il n’y aura pas de retour en arrière. Si le futur sera résolument digital, tout ce qui est digital ne fait pas sens. Encore faut-il que les transformations soient régies par une logique de progrès, d’inclusion économique et sociétale. Il nous faut bien sûr penser Europe. Un projet industriel digital européen inclusif, durable et responsable est la condition sine qua non pour échapper au déterminisme de la bipolarisation de l’échiquier mondial. L’Europe se doit de construire une alternative, empreinte de ses valeurs et forte de ses capacités d’innovation, aux modèles chinois et américains.
Cette voie se co-construira avec les territoires. La centralisation à outrance, la fracture numérique ont démontré leur logique d’exclusion. Nous ne pouvons plus feindre d’ignorer la fragilité des populations qui, par géographie ou par éducation, sont exclues d’internet. L’inclusion repose sur une infrastructure robuste. Nous pouvons pousser un cocorico pour le plan « Très Haut Débit » : la France est dans les premiers pays au monde et le premier pays d’Europe, à fibrer son territoire. Il nous faut désormais accompagner une offre de solutions régionales enrichies.
Le numérique, gage d’une France souveraine
Puisque tout ce qui peut être digitalisé sera digitalisé, seuls résisteront les entreprises, Etats et territoires qui mettent en action leur feuille de route digitale. Cela suppose de penser long terme car les investissements ne peuvent s’insérer dans la dimension temporelle du mandat électif. L’élu post-covid sera nécessairement visionnaire. Clé de voute de la réindustrialisation 4.0, le numérique est le gage d’une France et d’une Europe souveraines et compétitives. Souveraineté ne signifie ni repli sur soi ni protectionnisme mais partenariats lucides et équilibrés pour ne pas perdre en rapidité de transformation.
La « 5G Factory » de Mercedes est éclairante : l’utilisation de la 5G couplée au big data, à la robotique entraîne un gain de productivité de 25% et, grâce à la maintenance prédictive, permet d’assembler avec plus de fiabilité, différents modèles de véhicules sur une même chaine. Dans le secteur de la santé, le numérique affirme un véritable saut « quantique » : la transmission à distance de radios avec la 5G permet de sauver des vies dans des services d’urgence. Le couple « numérique et santé » contribue aussi à lutter contre les déserts médicaux si nombreux en France.
Or, force est de constater qu’encore trop d’industriels français sont frileux face aux investissements nécessaires pour accompagner la révolution 5G et engager la transition 4.0. Or, à l’heure digitale, le plus rapide gagne. L’industrie allemande, convaincue sans tergiversation de l’avantage concurrentiel de la 5G, s’est mobilisée pour être admise à l’attribution des fréquences. La France doit accélérer sa mue : il en va de la crédibilité de ses objectifs déclarés de ré-industrialisation. Est-ce anecdotique si Tesla et Toyota avec leur véhicule green rafle la mise des flottes de taxis parisiens ?
Réformer le capital-risque
Certes, il nous faut aussi réformer le capital-risque français trop timoré : une startup bénéficie de 8,3 fois plus de capital aux Etats-Unis qu’en Europe. Pire encore : la France, terre de médaillés Field, est à la traîne pour l’enseignement des mathématiques. Investir dans l’éducation et la recherche est vitale pour rester dans la course. La majorité des métiers dans les 10 prochaines années n’existe pas encore. Il nous faut repenser les modes d’apprentissage car désormais une vie professionnelle sera composée de 10 parcours différents.
La pandémie a banalisé le recours au télétravail. L’aspiration à travailler autrement – ne parle-t’on pas de néo-ruralité ? – est une opportunité inédite pour les territoires qui veulent développer leur attractivité, accompagner la création d’écosystèmes créateurs d’emploi. Le rôle de l’élu, agrégateur de ces écosystèmes, est dès lors central. Le projet que nous prônons au sein de l’IDATE DigiWorld est inclusif, responsable et durable. Pour cela, il doit tout d’abord s’exercer dans un cadre régulé. Les Digital Market Act/Digital Service Act européens, en sont un premier pas.
Le numérique est aussi le levier pour bâtir une société plus « green » et responsable. Le « green by design » intégrant nativement les préoccupations environnementale et énergétique est un impératif. Ainsi, le digital est-il la clé pour opérer notre « saut de grenouille » et « être absolument moderne ».
Il est temps que la France accompagne sa mutation en accélérant la modernisation de son système productif, en se dotant des « Humanités du numérique » : former chaque citoyen à la compréhension des enjeux du numérique, à l’utilité de ses actes digitaux au quotidien et investir dans la préparation aux emplois de demain, tout en favorisant la R&D au travers de projets européens. Et bien courons maintenant !
Le chef de la diplomatie européenne, Josep Borrell. STEPHANE MAHE / REUTERS
Le chef de la diplomatie européenne Josep Borrell a déclaré lundi redouter une «intégration de fait» à la Russie des régions de l’Ukraine non contrôlées par Kiev. «Je suis de plus en plus préoccupé par la situation dans les régions non contrôlées par Kiev, car elles s’écartent de plus en plus de l’Ukraine et se rapprochent de plus en plus de la Russie», a-t-il expliqué lors d’une audition par la Commission des Affaires étrangères du Parlement européen.
La région du Donbass, dans l’est de l’Ukraine, pourrait notamment se voir progressivement intégrée «de fait» à la Russie, a expliqué Josep Borrell aux eurodéputés, réunis à Strasbourg pour une session plénière du Parlement. Depuis sept ans, cette zone est déchirée par une guerre entre Kiev et des séparatistes prorusses, et le règlement politique du conflit, prévu par les accords de Minsk de 2015, est dans l’impasse. «La concentration par la Russie de forces à la frontière de l’Ukraine est liée à cette intégration (…) Une attaque massive en Ukraine n’est pas le scénario le plus probable, mais il existe d’autres moyens d’attaquer, comme les cyberattaques», a commenté Josep Borrell.
L’Ukraine a justement été victime, dans la nuit de jeudi à vendredi, d’un vaste piratage informatique ciblant les sites internet de plusieurs ministères. Kiev a assuré dimanche avoir des «preuves» de l’implication de la Russie dans cette cyberattaque. «Nous travaillons sur au moins sept scénarios différents. Je ne pense pas que nous allons immédiatement passer au pire scénario, mais il y en a plusieurs dans lesquels la situation pourrait être suffisamment dangereuse pour nécessiter un état d’alerte permanent», a jugé Josep Borrell.
Les Européens espèrent encore convaincre le président russe Vladimir Poutine de renoncer à une invasion de l’Ukraine, mais ils ont commencé vendredi à préparer de «lourdes» sanctions pour l’en «dissuader», lors d’une réunion informelle jeudi et vendredi à Brest (ouest de la France). Souhaitant affirmer leur crédibilité vis-à-vis de l’allié américain, ils ont rappelé leur mise en garde contre les conséquences d’une nouvelle agression militaire russe contre l’Ukraine. «Elle aura des conséquences et un coût par le biais de sanctions», a souligné Josep Borrell. Ces dernières seront discutées lors d’une réunion des ministres européens des Affaires étrangères le 24 janvier à Bruxelles, a-t-il précisé.
Nuclearelectrica has managed to continue or to develop major investment projects in 2021 whilst increasing its perspectives on the capitals market.
“2021 was a good year for Nuclearelectrica: financially, operationally, investment, human resources wise and innovation wise. (…) Most of my efforts in 2021 were directed towards Nuclearelectrica’s investment projects within the context of decarbonization coupled with Romania’s need for a robust and safe energy system,” Cosmin Ghita, CEO Nuclearelectrica told The Diplomat-Bucharest.
COMMITMENT TO PERFORMANCE | Business Evolution, Projects, PERFORMANCE, Figures
How would you describe the evolution of your company in 2021?
“2021 was a good year for Nuclearelectrica: financially, operationally, investment, human resources wise and innovation wise. We have accomplished a lot in 2021, we have managed to continue or to develop major investment projects, to take the new human resource strategy to a new level, to digitalize significantly our company, to increase our position and perspectives on the capital market.
However most of my efforts in 2021 were directed towards Nuclearelectrica’s investment projects within the context of decarbonization coupled with Romania’s need for a robust and safe energy system. We continued the refurbishment of Unit 1, according to the schedule, and we are to complete the first stage of the project in early 2022, the feasibility study. The purpose is to have another 30 years of safe and clean operation after 2028, in a very efficient and cost-effective manner. Refurbishments of nuclear units are confirmed to have the lowest levelized cost of electricity of all energy sources, renewables included.
We also continued the Cernavoda Nuclear Power Plant Units 3 and 4 Project. We reoperationalized EnergoNuclear, the project company, and already signed one major contract with CANDU Energy as part of the first stage of the project. We are doing our best to develop the project within the established timeframe and have Unit 3 connected to the grid in 2030 and Unit 4 in 2031, just at the right time for Romania to meet its decarbonization targets in a reliable manner whilst phasing out coal-based capacities. According to the PNIESC, Romania’s aim is to generate 55% clean energy by 2030 and nuclear, as many international studies support, is an essential part of this objective.
Also, an equally important project for Romania’s meeting its decarbonation targets and energy security are the small modular reactors deployment. We have worked this year to achieve this intention with NuScale technology, around 2028. We have teamed up with NuScale, the US based company which owns the most advanced and the only licensed SMR technology, in order to provide a stable and clean energy alternative to areas where coal will no longer be an option and, at the same time, allow these areas to continue to socio-economically develop. We are looking at a 6 module power plant, with an installed capacity of 462 MWe, able to generate 193 permanent power plant jobs, 1.500 construction jobs, 2.300 manufacturing jobs and help Romania avoid 4 tons of CO2 emissions per year.
In addition to these benefits, Romania, based on its 25 years of nuclear expertise, has a huge opportunity to be at the forefront of SMR development in the region by developing a strong domestic supply chain that could further expand regionally and by training specialists given the fact that Romania will be the first country in the region to own and operate a SMR full scope simulator.”
What were your company’s business achievements in 2021?
“I will briefly state a few as last year we have set ourselves quite a busy agenda for 2021, and looking back today I can proudly say that Nuclearelectrica team has managed to achieve most of our objectives, even though it was a difficult year:
Maintain excellence in operation and nuclear safety and our top position worldwide in terms of capacity factor which is rewarding as in 2021 we celebrated 25 years of operation of Unit 1.
Increase in our financial results as part of a solid sales strategy
Near Completion of stage 1 of the Refurbishment project of Cernavoda Nuclear Power Plant Unit 1 according to the schedule, even if a major part of this stage unfolded throughout 2020 and 2021 difficult pandemic years
Continuation of Cernavoda NPP Units 3 and 4 Project and signing of the first contract with CANDU Energy
The teaming agreement with NuScale for the deployment of SMRs in 2028 and the $ 1,2 million grant from USTDA, in early 2021, to assess potential sites for SMR deployment
Implementation of the HR strategy, as we had an ambitious plan to hire 500 people by the end of 2021 and we succeeded in hiring more than 500. Besides this, we aim at growing a new generation of specialists and for this we offer as well scholarship programs, apprenticeship, internship, mentorship and dual learning systems.
The acquisition of a part of Feldioara’s assets, namely the processing line, which will allow us to develop our internal fuel processing and manufacturing capabilities and maintain Romania’s nuclear fuel integrated capabilities doubled by the diversification of the company’s raw material supply possibilities.
And of course, SNN’s positioning on the capital market with a constantly appreciating share price, market capitalization and increased interest from the investor community.
However, all of the above are the result of a great team of specialists to whom I would like to thank and acknowledge their professionalism every chance I get.”
STRATEGY & VISION | RETHINK STRATEGY & PRIORITIES
What challenges have you faced as a CEO/ leader during 2021?
“It was a very busy year, and somehow a tough continuation of 2020, so my first concern was the wellbeing of my colleagues, as they are the driving force of every project, idea, result of the company. Therefore, making sure that we stay safe and protected was a top priority and a challenge. Besides this, challenges are objectives and they are inherent to any significant endeavor that an organization goes through. Nonetheless, a significant factor that kept us moving forward at a rapid pace was an already build in resilience from previous years and people’s professionalism, their expertise, capability and adaptability to working in less than normal conditions.”
What priorities and business strategy focus do you have in 2022?
“Definitely the continuation of our strategic investment projects: refurbishment of Unit 1, Unit 3 and 4, small modular reactors and, in this context, training and growing our new nuclear generation. These 3 main projects are complementary: what large fleet reactors lack is added by SMRs, in terms of flexibility, remote access, backup for renewables. Our purpose is to become a regional trendsetter in nuclear – we will do this by showcasing nuclear energy clear benefits, the clean energy which is reliable, cost effective and stable, with outstanding socio-economic advantages; by develop Nuclearelectica, the Romanian supply chain; by exporting our expertise; by acting as a strategic supporter for decarbonization, energy security, consumer protection. By 2031, we aim to reach 66% contribution of clean nuclear energy in Romania’s energy mix. There’s no real, time and cost efficient decarbonization without nuclear energy.”
PEOPLE & COMMUNITY | FOCUS ON SAFETY, SOCIAL APPROACH, LEVERAGE THE POWER OF COMMUNITY
What initiatives & projects did the company run in 2021 in CSR and social projects?
“For 2021 we split our CSR budget into 2 major directions: half of it for the Cernavoda community as we are responsible for the wellbeing of the communities we activate in. We supported educational and medical programs, trying to provide the community with better educational tools and facilitate their access to reliable healthcare. Also, we offered as well as environmental support for the forestation of certain areas that needed such activities. The other half was directed for the rest of the country, proving financial support on educational, medical and environmental projects, since our CSR strategy for 2021 was tailored to include these three main areas based on an assessment of needs.”
KEEN ON GREEN | SUSTAINABLE, GREENER, COMMUNITY &ENVIRONMENTALLY FOCUS
“Nuclear energy is a big part of the decarbonization solution, therefore every project we develop has a definite clean environment and sustainability component. The reason nuclear is a solid decarbonization and friendly environmental solution is the lack of CO2 emissions, NOx emissions, NOx emissions. Actually, by operating two CANDU reactors we avoid the release of 10 million tons of CO2 per year and after 2031, with 4 CANDU reactors running, we will reach 20 millions tons of CO2 avoided each year, which will probably place us as the most important clean energy generator in Romania. If we add a 6 module SMR power plant, 4 million tons of CO2 avoided will be added every single year.
We are extremely responsible with our burnt fuel, which is stored onsite in a water pool for the first 6 years after its removal from the reactor and then for 50 years into a Fuel Storage which 24/7 monitored by AIEA. The environmental component is extremely regulated and our doses are way below the legal limits.
Furthermore, we are assessing and implementing every solution to enhance our environmental footprint and one of our investment project, the Tritium Removal Facility, a 190 million Euro Project is in full development process.
Corroborated, as mentioned, our CSR programs are very much in sync with our operational and investment projects since we are a keen supporter of clean air, hence our involvement in forestation.”
DIGITAL DNA | Grasping tech, digital innovation, customer -driven, building new bridges
“We started our digital innovation strategy in 2019, however the COVID19 pandemic forced us to accelerate the pace in 2020. Our purpose was to facilitate working processes, HR management, e-learning, procurement processes, uniformization of company processes, digitalization of certain production processes, internal infrastructure and provide cyber safety of the data and employees.
From 2019, throughout 2020 and 2021, we have managed to implement 12 digital innovation projects, we have 16 digital innovation projects under implementation process, so all together our strategy included 28 projects.
In future, very few companies will continue to work in the traditional manner. We are not looking towards digital innovation because this is a trend, but because our company needs are as such. Digital innovation protects employees, enables their work and time, protects company infrastructure and processes. The future is digital.”
Could cryptocurrencies one day bring down the banking system? These decentralized technologies have already shown the potential for disrupting finance, which craves a faster, cheaper, and freer system. If people choose control over their money and identities over security, the fears of financial authorities may be realized.
The crypto boom is threatening conventional finance
Covid-19 has revived discontent with financial authorities
Central banks and regulators will not stand idly by
Central banks and regulators will not stand idly by
Could cryptocurrencies bring down the banking system – and, with it, the authorities who oversee it? Two years ago, such a question would have made central bankers laugh.
It no longer does. During a September Eurofi conference in Ljubljana, seasoned European policymaker Benoit Coeure laid out an alarming scenario: “The financial system is shifting under our feet.” In a speech intended above all as a wake-up call for financial supervisors, the French economist insisted that “central banks have to act while the current system is still in place – and to act now.”
Unforeseen obsolescence
The centralized financial system as we know it could in fact disappear. Not in a tragic fight to the death, nor following a systemic collapse at a larger scale than the one that triggered the 2008 banking crisis. Rather, this time, the traditional banking system may be silently pushed to the margins after having become inadequate, irrelevant, and outdated – in other words, incapable of adapting to a drastically changing world.
What worries Mr. Coeure most is the crushing technological superiority of decentralized cryptocurrencies, which – after only a few years in existence – have proved they have the potential to disrupt finance.
The former European Central Bank (ECB) executive board member is no tech fearmonger. Since 2020, as the chair of the Innovation Hub at the Basel-based Bank of International Settlements (BIS), he has been on a mission to help policymakers and technocrats around the world develop central bank digital currencies (CBDCs).
The ex-central banker is convinced that CBDCs (i.e., digital versions of fiat currencies) are the only option central banks have today if they want to stay in the game – let alone to maintain their leading role in the financial system. The problem, Mr. Coeure recognizes, is that CBCDs will take years to be rolled out, while privately issued digital assets and stablecoins are already there.
Dangerous animals
Meanwhile, there are several thousand cryptocurrencies in existence; the top 20 make up about 90 percent of the market.
In spite of extreme price fluctuations of the top cryptocurrencies since their inception, more and more people are tempted to jump ahead. As of June 2021, there were already 221 million users worldwide, including 120 million using bitcoin alone. This boom has only just begun.
The pandemic played an important part in what appears to be a bandwagon effect. The hype surrounding crypto – or to be more precise, sugarcoated marketing playing down people’s legitimate fears and concerns – has fueled investors’ optimism bias: the overconfident belief, common to all gamblers, that they are going to win rather than lose big.
Despite their growing popularity, bitcoin and other cryptocurrencies are still far from being a conventional way to invest money. Investors are often blind to the fact that bitcoin, after all, has no intrinsic (i.e., real) value. Normally, investments are made in view of future income. This is not the case for bitcoin; as one financial analyst put it, “one cannot invest in BTC, one can only speculate in BTC.”
It is no coincidence that the pandemic has revived markets’ discontent with monetary authorities.
Stablecoins, for their part, appear less volatile and therefore less exposed to the risk of a brutal price crash. In contrast to bitcoin, they are tied to the value of fiat money (usually the United States dollar) or any other asset with real value (such as gold, silver, oil). Still, it remains difficult for the inexperienced investor to learn his or her way through a seemingly opaque and chaotic market.
Fabio Panetta, the Italian economist who replaced Benoit Coeure at the ECB’s executive board in 2020, has used harsh words to describe what he even refuses to call “currencies.” “Crypto-assets are very dangerous animals,” he said.
He is not wrong; but does it make sense to think that such high-risk assets could be the future of money? Is it really conceivable that the banking system, central bank money and their powerful guarantors of last resort – states and central banks — could be swept away? Perhaps only if a problem emerged, shaking the markets’ perceptions of central bank money and policy.
Broken trust
Indeed, such a problem may have come to light in 2008. Bitcoin’s inception in 2009 is often viewed as an act of defiance against the centralized banking system. The global financial crisis revealed that misconduct had for long become the norm in the banking industry, and that much of the regulatory frameworks in place had been a failure.
To repair those frameworks, central banks were given new assignments. Not only did they become intransigent banking supervisors and regulators; they aspired to become a new kind of fiscal power, in command of steering the economies in times of crises and beyond.
The ECB is a case in point. It stretched to breaking point its original, narrowly defined mandate of maintaining price stability in the eurozone. Unlike other central banks, it had to face a sovereign debt crisis – which, in 2012, almost brought down the EU’s common currency. Even if markets’ trust in sovereign money could be restored (through then-President Mario Draghi’s famous commitment to do “whatever it takes” to save the euro), it never fully recovered.
It is no coincidence that the outbreak of the Covid-19 pandemic and its host of authoritarian policy responses (previously unseen in democratic nations) revived markets’ discontent with monetary authorities. For instance, savers increasingly perceive the persistently low (or sometimes even negative) interest rates as an illegitimate tax on their deposits. For long, they meekly accepted the creeping expropriation as a necessary (and temporary) evil in times of crises. Their tolerance level is dropping as they suspect that central banks will monetize part of governments’ colossal Covid debt through inflation.
With inflation on the rise and no end to financial repression in sight, crypto attracts even low-risk-profile investors. Some adopt a devil-may-care attitude, weighing the probability of losing (but also gaining) money in a gambling game against the certainty of losing in the fiat system. In a way, they send a message to central banks: “you’ve gone too far.”
Freedom call
What the crypto rush reveals above all is that markets crave alternative finance. They want it to be faster, cheaper, more rewarding – and, above all, freer.
Safety is important too. But, as revealed by the ECB’s recent public consultation on a digital euro, privacy is valued very highly by customers these days. Maybe the stringent transparency requirements imposed by the current banking regulations – obsessed with money laundering, tax evasion and financing of terrorism – have simply become too intrusive for the taste of many citizens.
Crypto entrepreneurs have heard the message. As one prosperous start-up advertises its financial offering: “Our goal is to disrupt the financial industry, one happy user at a time, and introduce financial freedom through crypto.”
Unbank the world
Newcomers have recently challenged commercial banks’ business models by creating open-source protocols that replicate existing financial instruments within a decentralized architecture. Their blockchain- and smart contract-based services promise to revolutionize payments, savings, lending, trading, asset management, derivatives, and insurance.
The pioneers of decentralized finance (DeFi) share a common goal: knock off their pedestal the middlemen and gatekeepers that have domineered centralized finance so far. Today, DeFi is among the fastest-growing sectors in the crypto world. According to one of the players involved, its market size is already measured in the trillions.
Yet it may still only be in its infancy. For the moment, DeFi is a playground essentially for experienced investors, with knowledge barriers remaining high.
Technology might soon render possible a large-scale investor revolution. Once access to DeFi gets easier, retail bankers might have a real reason to worry. DeFi markets could attract virtually anyone who has a smartphone and an internet connection.
Moreover, 1.7 billion adults worldwide are excluded from the traditional banking sector. DeFi could provide microfinance solutions to those unbanked, usually low-income individuals, opening up new prospects. In the world of DeFi, no credit amount is too small to be granted. Financing opportunities might arise that so far would have been unthinkable.
One can only imagine the positive impact on developing countries – not to mention those where authoritarian or irresponsible governments destroy the value of national currencies and the wealth of citizens.
Bridge builders
So far, DeFi is largely unregulated. Permissionless and censorship-resistant ecosystems enable perfectly anonymous users to interact on peer-to-peer trading platforms – at their own risk. None of the compliance procedures or mandatory disclosure requirements at the heart of today’s banking system, such as Know Your Customer (KYC) or Anti-Money Laundering (AML), need to be applied in those settings.
This scares off many potential users, notably in Western countries, where regulation is highly valued. Some companies are currently exploring a new market niche by providing crypto-services to those who want to take a safer road, preferring to turn to “regulated” institutions that trade and store crypto-assets on their behalf.
Market leaders Celsius and BlockFi present themselves as “centralized” blockchain-based companies, which perform KYC and comply with AML. In a way, their platforms create a bank-like environment meant to give crypto-beginners a sense of security – albeit a distorted one, as the companies’ accounts have been hacked more than once.
In order to provide investors with more secure and easy access to cryptoassets, other DeFi platforms seek to bridge the gap between blockchain-based finance and traditional capital markets. For example, Defi Technologies Inc. offers so-called digital-asset-exchange-traded-products (ETPs), listed on regulated stock exchanges.
Central banks and regulators will not stand idly by while decentralized finance cuts the ground from under their feet.
“Crypto-banks” and digital asset investment firms currently have the wind in their sails. They are the ones that could precipitate society’s move to digital finance.
The question is, for how long? Sooner or later, big incumbent banks might challenge them, building blockchain infrastructures of their own. But only a few have so far been able to get a foot into crypto, let alone disrupt the disrupters.
A recent study revealed a widening of the gap between leading banking institutions and those lagging behind. It looks as though crypto is already sorting out winners from losers.
Scenarios
Central banks and regulators will not stand idly by while decentralized finance cuts the ground from under their feet. They will come up with new regulations.
Already, in September 2020, the European Commission published a proposal for a regulation of the “Markets in Crypto-Assets” (MiCA). The document was drafted largely in reaction to Facebook’s Libra announcement, perceived as a threat to national currencies. In the meantime, Libra (rebranded Diem) was watered down to a simple dollar-backed stablecoin and is nowhere close to being issued. DeFi, on the other hand, gained momentum precisely in 2020-2021 – and is at risk of becoming MiCA’s first collateral damage.
Fortunately or not, MiCA is expected to enter into force only in late 2024. By then, many of its provisions may be obsolete. Compared to regulators, crypto innovators move at lightspeed.
Policymakers are “increasingly worried about being left behind,” Benoit Coeure admitted during a conference in Geneva. Could CBDCs get them back into the race? Mr. Coeure seems skeptical: “The time has passed for central banks to get going,” he said in Ljubljana.
A 2021 BIS study confirmed that even though most central banks have a keen interest in CBDCs (and some already “experiment” with the technology), only a handful are actually running pilot programs.
The People’s Bank of China is a front-runner. The ECB is among those that still “investigate;” it recently stated it wanted to get “ready” to launch a digital euro, but will not necessarily do so.
A host of technical (notably security-related) issues remain unsolved. The potential disintermediation of banks is another tricky problem. For the banking sector, a retail CBDC – if not well managed – could become a threat far greater than DeFi.
Finally, there is the question of why consumers would prefer CBDCs to decentralized cryptocurrencies.
The likes of Mr. Coeure hope that if privacy and safety principles were to rule, central banks will come out on top. The precise opposite might happen: the fact that digital cash gives central banks the power to track end-users’ spending in real time may in fact have a deterrent effect. Citizens today may be used to a high level of surveillance, but CBDCs could become the straw that breaks the camel’s back.
At some point, people might want to regain control over their money and identities. Many will desert centralized finance and turn to privacy-protecting DeFi platforms. Self-sovereign identity at consumer scale could become a pillar of the future financial landscape.
Le chef de la diplomatie européenne, Josep Borrell, se rend en Ukraine pour soutenir Kiev face à l’agressivité de Moscou. Pour l’Union européenne, il s’agit d’un véritable test de crédibilité de son action extérieure.
Le chef de la diplomatie européenne, Josep Borrell, au dernier Sommet européen de décembre 2021, où il fut beaucoup question de la Russie. (Kenzo Tribouillard/Pool via REUTERS)
Publié le 4 janv. 2022 à 17:20
Pour son premier déplacement de 2022, Josep Borrell tient visiblement à faire passer un message aux Etats-Unis et à la Russie. En se rendant du 4 au 6 janvier en Ukraine, jusque sur la ligne de front où s’opposent les forces de Kiev aux séparatistes prorusses, le chef de la diplomatie européenne espère signaler à Moscou et à Washington qu’ils ne peuvent s’entretenir de l’avenir de cette région sans les Européens – des pourparlers entre responsables américains et russes sur l’Ukraine doivent avoir lieu les 9 et 10 janvier à Genève.
« Toute discussion sur la sécurité européenne doit se faire en coordination avec l’UE et avec sa participation», a déclaré le Haut Représentant de l’UE. «Nous ne voulons pas et ne devons pas être un spectateur non impliqué, avec des décisions prises au-dessus de nos têtes», a-t-il ajouté, un an après l’ humiliation diplomatique que lui avait infligée le ministre russe des Affaires étrangères. Lors d’une conférence de presse, Sergueï Lavrov avait fustigé l’arrogance des Européens, après avoir expulsé trois diplomates de l’Union sans en avertir son homologue.
Souveraineté
Accompagné du ministre ukrainien des Affaires étrangères, Josep Borrell compte visiter, lors de sa visite, la zone critique qui jouxte les territoires tenus par les séparatistes prorusses. Il ira ensuite à Kiev pour rencontrer d’autres responsables ukrainiens et, selon ses équipes, « souligner le soutien ferme de l’UE à la souveraineté et à l’intégrité territoriale de l’Ukraine à un moment où le pays est confronté au renforcement militaire et aux actions hybrides de la Russie ».
Sanctions
Depuis plusieurs semaines, les Occidentaux s’inquiètent sérieusement du déploiement de plus de 100.000 soldats russes à la frontière orientale de l’Ukraine et redoutent une nouvelle agression . En décembre dernier, les Vingt-Sept ont menacé Moscou de lourdes sanctions économiques si jamais il passait à l’acte. « Mais le Russes s’y sont préparés, ils ne craignent pas vraiment les armes économiques », estime Gustav Gressel, chercheur de l’ECFR. Le secrétaire général de l’Otan, Jens Stoltenberg, a prévu d’organiser le 12 janvier une réunion spéciale des pays alliés avec des responsables russes dans le but d’éviter un conflit ouvert.
Test de crédibilité
L’enjeu est très élevé. Selon Cyrille Bret, de l’Institut Jacques-Delors, « l’Ukraine à bien des égards est le laboratoire de l’action extérieure de l’UE, un vrai test de sa crédibilité ». Le chercheur reconnaît des mérites à l’Union, qui « affiche depuis l’annexion de la Crimée en 2014 une position forte et constante à l’égard de la région, confirmée régulièrement par le renforcement ou l’extension des sanctions infligées à certains citoyens russes ou ukrainiens ». D’après lui, « qu’Emmanuel Macron, Angela Merkel et Ursula von der Leyen aient réussi à maintenir les Vingt-Sept soudés autour de l’instrument des sanctions est déjà une énorme réussite. A cela s’ajoute un soutien budgétaire de l’UE, certes conditionné, à Kiev ». Reste que, bien évidemment, « cela ne forme pas une stratégie complète, puisqu’il manque un volet militaire que les Etats-Unis, eux, pourraient actionner ».
PM’s hogwash arguments against free rapid tests range from hypocritical to obscene
Wed 5 Jan 2022 05.26 GMT
‘At every stage of the pandemic, prime minister Scott Morrison has had to be dragged into action.’ Photograph: Lukas Coch/AAP
Scott Morrison’s bloody-minded refusal to fund rapid Covid-19 tests is misguided, expensive and dangerous. It is just one more example of the Liberal leader putting his own crude political interests ahead of public safety.
There are no silver bullets to end a pandemic. The public understand that. Vaccines are an important weapon. But only because they let us move from the blunt instrument of citywide lockdowns to a combination of other, more targeted and inter-locking public health measures.
This includes an effective regime of testing, tracing, isolation and quarantine. All these elements must work together.
Morrison’s dereliction of leadership responsibility for Australia’s testing regime, with queues snaking through city streets and rapid antigen tests being hawked online at extortionate prices, is one more addition to the many errors that have come before it.
At every stage of the pandemic, Morrison has had to be dragged into half-hearted action – with catastrophic consequences.
Morrison has been obsessed with picking political fights instead of his government’s core responsibilities like quarantine and aged care. Almost 1,000 Australians have now died in commonwealth-regulated aged care homes that were meant to keep them safe.
In this pivotal stage of the pandemic, it is in everyone’s interest to ensure every Australian, regardless of their income, has access to free at-home rapid antigen test kits. This is because every time a positive case is identified, it provides the chance to staunch a chain of infection and keep bending the curve so that our hospitals aren’t overrun.
Morrison’s myriad arguments against free rapid tests range from the hypocritical to the obscene.
First, Morrison insists the Treasury cannot afford it. This is patently ridiculous. Let’s not forget how Morrison wasted an eye-watering $40bn in JobKeeper payments to companies that didn’t need it – enough to buy every Australian household a dozen tests every month into 2024!
Morrison’s position on rapid tests is ultimately a false economy because mass-testing saves money in the long run. Public hospitals can easily spend more than $100,000 invasively ventilating an intensive care patient, or the chain of infection can be detected and halted weeks earlier using a cheap rapid test.
Second, Morrison points to conventional PCR laboratory tests as fully subsidised alternative. Apart from the mammoth queues to access a PCR test, these tests are much more expensive to taxpayers. For every PCR test conducted by a private laboratory, Medicare is charged $85; by comparison, rapid tests generally cost about $10 (even less when the government is buying millions of units in bulk). Put another way, for every rapid test that displaces a PCR test, taxpayers would save at least $70.
Third, Morrison draws a distinction between medicine, which he says should be funded, and tests, which he says shouldn’t. This is hogwash.
Since 1991, successive federal governments have funded free breast and cervical cancer screenings. John Howard expanded on these programs by including at-home bowel cancer tests. The fact that Morrison’s own government is conducting a feasibility study on free lung cancer screenings suggests he has no objection.
Australia’s world-leading response to HIV/Aids also hinged on providing vulnerable groups with free testing, treatment, condoms and clean needles.
Fourth, the government warns it cannot possibly meet Australians’ insatiable appetite for free tests – a statement that is grounded in a deeply elitist perspective on public health behaviours by lower income Australians.
Morrison might find this hard to imagine, but not every household has an extra $25 saved for a rapid test when they need it. This is a recipe for massive undetected spread among those Australians least able to pay.
Finally, Morrison says he won’t “undercut” businesses trying to make a buck out of these tests. This is a total abrogation of responsibility, leaving public health at the mercy of price-gouging companies who – unlike Morrison – listened to experts’ warnings of a looming spike in demand.
The fundamental principle of Medicare is that Australians deserve access to healthcare based on their needs, not their ability to fulfil the needs of the market.
If Morrison wants to ensure Australians can find rapid tests at their local shops, that’s good; he should involve those businesses in delivering publicly funded testing kits. But since Morrison’s stated motivation is to avoid “undercutting” their profits, it seems he’s forgotten who he works for.
One of the few things that unites most Australians is our revulsion at the hideous inequities of the American health system; Morrison’s apparent fondness for mingling business with healthcare suggests he doesn’t share that view.
Why then has Morrison taken this hypocritical and unsustainable position? I suspect three reasons.
Morrison may be trying to ease fears ahead of the election. Australians are watching rising case numbers with trepidation and soaring positive test rates – now more than 20% in most states – suggest there are many more cases lurking beneath the surface.
If Morrison cannot reduce the numbers in reality, he can reduce the numbers that are announced in the media each day. As Donald Trump once claimed, “if you don’t test, you won’t have any cases”.
Morrison also knows voters have now seen through the myth of Liberals being superior economic managers. Morrison is now the biggest-spending postwar prime minister with record debt and record deficit.
National debt is set to reach $1.3tn – more than seven-times the Labor government’s supposed “debt bomb” of $189bn in 2013 – equivalent to 55% of GDP, compared with 12% when we left office. Morrison’s performative austerity on rapid tests is a feeble attempt to regain some fiscal credibility.
Finally, Morrison now stakes this public position on a thread-bare ideology of “personal responsibility”. He’s borrowed this from his British counterpart, Boris Johnson, who thought he could politically skate through the latest UK debacle. But it’s also political code language for a Darwinian survival-of-the-fittest contest in which the weak, the poor and the vulnerable are cast aside.
Perhaps that’s what Morrison really meant when he said of rapid tests, “someone’s always going to pay for it, and it’s going to be you”. Once we had Medicare. Now we have MorrisonCare.
