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Pence Criticizes Europe For Iran, Venezuela, Russia Links

The atmosphere this year is one of apprehension, according to analyst Florence Gaub of the European Union Institute for Security Studies.

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United States Vice President Mike Pence briefs the media during the Munich Security Conference in Munich, Germany, Saturday, Feb. 16, 2019. VOA

U.S. Vice President Mike Pence strongly criticized European allies Saturday for their stance on Iran and Venezuela, in a speech at the Munich Security Conference in Germany.

“The time has come for our European partners to stop undermining U.S. sanctions against this murderous, revolutionary regime. The time has come for our European partners to withdraw from the Iran nuclear deal,” Pence told delegates.

He also called on allies to recognize opposition leader Juan Guaido as the legitimate president of Venezuela. More than 20 European states have done so, but the European Union has stopped short of fully recognizing Guaido as president. Disputed president Nicholas Maduro is widely accused of vote-rigging to win last years’ election, while the country is mired in poverty and hyperinflation.

“Once more the Old World can take a strong stand in support of freedom in the New World. Today we call on the European Union to step forward for freedom and recognize Juan Guaido as the only legitimate president of Venezuela,” Pence said.

China repeatedly was singled out by the vice president as a threat to the United States and its allies.

“The United States has also been very clear with our security partners on the threat posed by Huawei and other Chinese telecom companies, as Chinese law requires them to provide Beijing’s vast security apparatus with access to any data that touches their network or equipment.”

Pence repeated Washington’s calls for European NATO allies to do more to meet their military spending targets — and cautioned against developing economic links with Moscow, such as the Nord Stream 2 gas pipeline currently under construction between Russia and Germany.

United States Vice President Mike Pence delivers his speech during the Munich Security Conference in Munich, Germany, Saturday, Feb. 16, 2019.
United States Vice President Mike Pence delivers his speech during the Munich Security Conference in Munich, Germany, Saturday, Feb. 16, 2019. VOA

“We cannot ensure the defense of the West if our allies grow dependent on the East,” Pence said.

Moscow’s Foreign Minister Sergey Lavrov took the stage later Saturday, and said Europe was losing out because of its stance on Russia.

“At a time when the Europeans allowed to draw themselves into a senseless standoff with Russia and incurred multi-billion-dollar losses from the sanctions pushed for from overseas, the world is rapidly changing. Actually, the EU has lost its monopoly on the regional integration agenda,” Lavrov said.

China’s senior delegate did not respond directly to the accusations made by Vice President Pence, but instead he offered a defense of multilateralism.

“Our world stands at a crossroads and faces a consequential choice between unilateralism and multilateralism, conflict and dialogue, isolation and openness,” Yang Jiechi, a senior member of the politburo and a former Chinese ambassador to the U.S., told delegates.

German Chancellor Angela Merkel, right, welcomes United States Vice President Mike Pence, left, for a bilateral meeting during the Munich Security Conference in Munich, Germany, Saturday, Feb. 16, 2019.
German Chancellor Angela Merkel, right, welcomes United States Vice President Mike Pence, left, for a bilateral meeting during the Munich Security Conference in Munich, Germany, Saturday, Feb. 16, 2019. VOA

Those sentiments were earlier echoed by German Chancellor Angela Merkel, who strongly criticized U.S. President Donald Trump’s claims that Europe was taking advantage of America on trade.

The Munich Security Conference is seen as a key annual forum for world leaders to discuss global security concerns and conflicts — both in public and in private — in dozens of closed-door meetings taking place inside the venue.

The atmosphere this year is one of apprehension, according to analyst Florence Gaub of the European Union Institute for Security Studies.

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“There is still a lot of grief over the old order being gone where everything was much more predictable, or at least appeared to be more predictable. So that’s slowly setting in,” said Gaub.

The tone of the conference speeches suggests that even among allies, tensions over a changing world order are no closer to being solved. (VOA)

Next Story

Russia’s Alternative to Western Credit Card Debuts in London

Russia will next year diversify its foreign currency holdings in its National Wealth Fund

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Employees demonstrating a payment card
Employees speak while demonstrating a payment card during a tour at a branch of VTB bank in Moscow, Russia. VOA

A Russian backed bank payment card, introduced after Western sanctions upended Russia’s financial system five years ago and prompted Visa and Master card to deny electronic services to some of the country’s leading banks, is set for its European debut on London Wednesday, when a pilot project will be launched in collaboration with the Dutch global payment company PayXpert.

Moscow authorities hoped to get the MIR card accepted eventually in foreign markets, but progress has been slow outside Russia for the MIR payment system,  which operates outside of Western-controlled international financial systems such as Swift, which banks use to transfer money.

The pilot project with PayXpert “will lay the foundation for new promising trends in the foreign expansion of Russian payment cards,”  according to Vladimir Komlev, the head of Russia’s National Card Payment System, which operates the MIR system.

De-dollarization efforts

The effort is seen by analysts as part of the  Kremlin bid to de-dollarize the Russian economy to lessen the sting of Western sanctions. A Russian Finance Ministry official this month told Reuters that Russia will next year diversify its foreign currency holdings  in its National Wealth Fund, which supports Russia’s public pension system, aiming to lower the share of dollars in the fund’s reserves.

Dmitry Dolgin of the Dutch banking group ING said in  a report this month that de-dollarization efforts are now obvious across most sectors, including local business loans and bank-held international assets, although he said the dollar’s role  has actually increased in company and household savings and cash assets, partly because dollar interest rates have been higher than those offered for euros.

Credit Cards offers unique features
American Express, Visa and Master Card is displayed in this image. Each Credit Card offers unique features and benefits, along with unmatched privileges. Pixabay

U.S. authorities have been able advance sanctions by targeting companies that use dollars, and the establishment of electronic payment systems not tied to the dollar or largely controlled by U.S. businesses is one way for the Kremlin to reduce the impact of the West’s serial punishment of Moscow. Washington and the European Union have imposed a wave of sanctions since 2014 to punish Russia for the 2014 annexation of Ukraine’s Crimean peninsula, alleged meddling in the 2016 U.S. elections, and the poisoning of a defected Russian spy in England.

Komlev told Reuters this year that “In the next three years we want MIR cards to be operational in countries where Russians are used to traveling.” He projected MIR cards would be operational at some banks in at least a dozen countries by the end of this year. Turkish banks started to conduct transactions this year with MIR, which means both “peace” and “world” in Russian.

MIR was launched initially as a national payment system, with the first cards issued in December 2015. Russia’s leading bank, state-owned Sberbank, started issuing them in October 2016, and by the end of last year more than 70 million MIR-based cards had been issued by 64 Russian banks. The Kremlin has mandated that state welfare and pension payments must be processed through the system by next year, along with salaries paid to civil servants.

The card has a long way to go before it rivals VISA our Mastercard internationally. It is not accepted by international shopping platforms or major online booking services for airlines and hotels, although APEXX Fintech, a British start-up global payment company, said Thursday it would now start working with the MIR system. Among smartphone applications only Samsung has concluded an agreement with the MIR system.

Meanwhile, de-dollarization has been moving quickly. Russia’s Central Bank has currency swap deals in place with Iran, China and Turkey, allowing direct trade to be conducted in local currencies instead of U.S. dollars. Russia reportedly lost $7.7 billion in its bid to reduce dollars held in its reserves. Some of the dollars were turned into gold, and since January the bank has purchased 96.4 metric tons of gold.

People stand in line as they wait to enter the bank with their card
People stand in line as they wait to enter a branch of Sberbank of Russia bank. VOA

Alexei Zabotkin, head of the Russian Central Bank’s monetary policy department, has conceded that it would be impossible to completely empty the country’s foreign exchange reserves of dollars, as this would be  “fraught with excessive risks.” According to central bank data the  National Wealth Fund has $45.5 billion, 39.17 billion euros and 7.67 billion British pounds.

In August, the state-controlled Rosneft oil giant announced it would stop using the U.S. dollar for its export contracts.

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Nonetheless, analysts say there are limits on how far Russia can de-dollarize – the ruble is highly volatile and remains unattractive for investors and de-dollarization brings additional and sometimes prohibitive trading costs.

European regulators will be watching the London project closely. EU officials have been sympathetic about Russia’s de-dollarization bid, suspecting that as a spin-off the euro will be boosted as an international currency. In June the European Commission concluded that “the euro clearly stands out as the only candidate that has all the necessary attributes of a global currency that market participants could use as an alternative to the U.S. dollar.” (VOA)