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from MacroScope:

Moment of truth for EU sanctions

The logo of Russia's top crude producer Rosneft is seen in Moscow

President Barack Obama and the leaders of Germany, Britain, France and Italy agreed on a conference call last night to impose wider sanctions on Russia’s financial, defence and energy sectors.

EU ambassadors are meeting today and are expected to target state-owned Russian banks and their ability to finance Moscow's faltering economy.

European Council President Herman Van Rompuy has written to EU leaders asking them to authorise their envoys to complete an agreement by the end of today. That would avoid the need for leaders to hold a special summit to approve the sanctions.

Under a blueprint produced last week, European investors would be banned from buying new debt or shares of banks owned 50 percent or more by the state.

from MacroScope:

Acid test of EU’s resolve over Russia

Emergencies Ministry member walks at the site of a Malaysia Airlines Boeing 777 plane crash near the settlement of Grabovo in the Donetsk region

EU leaders said over the weekend they would be prepared to impose tougher sanctions on Russia, giving Vladimir Putin one more chance to douse the violence in eastern Ukraine and help investigators do their work at the site of the crashed Malaysian airliner or face the consequences.

A statement from the British government said Germany’s Angela Merkel, Britain’s David Cameron and France’s Francois Hollande agreed on a telephone call that their ministers should be ready to announce a fresh round of sanctions at a meeting of the European Union's Foreign Affairs Council on Tuesday.

from MacroScope:

A turning point?

Emergencies Ministry members work at the site of a Malaysia Airlines Boeing 777 plane crash in the settlement of Grabovo in the Donetsk region

Could the shooting down of a Malaysia Airlines plane over Ukraine be a fundamental turning point in the crisis that has pitted Russia against the West? And if so which way – towards rapprochement or a further escalation?

Kiev accused militants fighting to unite eastern Ukraine with Russia of shooting down the Boeing 777 carrying nearly 300 people from Amsterdam to Kuala Lumpur with a Soviet-era ground-to-air missile. Leaders of rebels in the Donetsk People's Republic denied any involvement, although around the same time their military commander said his forces had downed a smaller Ukrainian transport plane.

from The Great Debate:

In Iran talks, ‘no deal’ bests ‘bad deal’ for U.S.

Iran's Foreign Minister Mohammad Javad Zarif meets with U.S. Secretary of State John Kerry at talks between the foreign ministers of the six powers negotiating with Tehran on its nuclear program in Vienna

With only days to go before the original July 20 deadline for negotiations over the future Iran's nuclear program, there is scant sign that a breakthrough is imminent. The reason is simple: Iranian leaders’ refusal to move from what a senior Obama administration official recently described as "unworkable and inadequate positions that would not in fact assure that their program is exclusively peaceful."

The stakes of the Vienna nuclear talks could not be higher. Although the past months have witnessed the proliferation of alarming new threats in the Middle East, including the emergence of the Islamic State of Iraq and the Levant across Iraq and Syria, these dangers are not equal to the catastrophic, transformational consequences of the Iranian regime, the world's No. 1 state sponsor of terrorism, acquiring nuclear weapons.

from MacroScope:

Sanctions tighten

Britain's PM Cameron, Portugal's PM Passos Coelho, Germany's Chancellor Merkel and Finland's PM Stubb attend an EU leaders summit in Brussels

EU leaders failed to get anywhere on sharing out the top jobs in Brussels last night but did manage another round of sanctions against Russia.

This time they will target Russian companies that help destabilize Ukraine and will ask the EU's bank, the European Investment Bank, to suspend new lending for Russia and seek a halt to new lending to Russia by the European Bank for Reconstruction and Development.

from The Great Debate:

Getting to ‘yes’ on the Iran nuclear deal

Iranian Foreign Minister Mohammad Javad Zarif addresses the media during a news conference in Vienna

Iran’s past nuclear efforts are among the many thorny issues in the continuing Iran nuclear talks. But focusing on the past is a mistake. Instead of insisting on knowing all about what Iran’s nuclear program looked like 10 years ago, the United States and its allies should focus on preventing Tehran from building a nuclear weapon in the future.

Though discussions between Iran and the International Atomic Energy Agency (IAEA) are proceeding in parallel to the six-power nuclear negotiations with Iran, some argue that Tehran must “come clean” on past military experiments before it can be trusted to make new commitments. But reaching and implementing a nuclear agreement should not be held hostage to resolving all the complicated questions about the possible military dimensions of Iran’s past nuclear programs.

from MacroScope:

New EU takes shape

juncker.jpg

The new EU aristocracy will be put in place this week with the European Parliament to confirm Jean-Claude Juncker as the next European Commission President today and then EU leaders gathering for a summit on Wednesday at which they will work out who gets the other top jobs in Brussels.

Although Juncker, who will make a statement to the parliament today which may shed some light on his policy priorities, is supposed to decide the 27 commissioner posts – one for each country – in reality this will be an almighty horse-trading operation.

from MacroScope:

Draghi vs Weidmann

draghi.jpg

European Central Bank President Mario Draghi makes a lengthy appearance in the European Parliament in Strasbourg. He will doubtless reassert that the ECB would start printing money if necessary but, as we reported last week, policymakers are fervently hoping they won’t have to and that a raft of measures announced in June will do enough to lift the economy and inflation.

Bundesbank chief Jens Weidmann fired another broadside over the weekend, saying rates were too low for Germany and policy should remain expansive for no longer than absolutely necessary.

from MacroScope:

Balance tilted in Ukraine?

slaviansk.jpgUkrainian forces pushed pro-Russian rebels out of their stronghold of Slaviansk on Saturday. Its re-capture represents Kiev's most notable military victory in three months of fighting in which more than 200 Ukrainian troops have been killed as well as hundreds of civilians and rebels.

The regions of Donetsk and Luhansk are likely to be next in the government forces’ crosshairs.

from MacroScope:

Renzi and Schaeuble: Compare and contrast

renzi2.jpgItalian Prime Minister Matteo Renzi will spell out to the European Parliament his priorities for Italy’s six-month tenure of the EU presidency.
Emboldened by a strong showing in May’s EU elections, Renzi is pressing for a focus on growth rather than austerity and has even managed to get Germany to talk the talk.

At an EU summit last week, leaders accepted the need to allow member states extra time to consolidate their budgets as long as they pressed ahead with economic reforms. They pledged to make "best use" of the flexibility built into the bloc's fiscal rule book – not, you will notice, countenancing any change in the rules.

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