Game Theory

March 28, 2019

Brexit: A path to yes through a forest of no

The Brexit process is marooned in uncertainty as no democratic method seems able to select a route that is favoured by a parliamentary majority. The problem is not new, however, and game…

‘Watershed moment’: EU leaders agree plan for huge rise in defence spending
European leaders holding emergency talks in Brussels have agreed on a massive increase to defence spending, amid a drive to shore up support for Ukraine after Donald Trump halted US military aid and intelligence sharing. It came as French president Emmanuel Macron warned on Thursday night that “the only imperial power that I see today in Europe is Russia” and called Vladimir Putin “an imperialist who seeks to rewrite history” after the Russian president appeared to compare him to Napoleon Bonaparte. Macron also hit back at Russian reactions to his description of Moscow as an existential threat to Europe, saying the Kremlin had clearly been piqued by the fact their game had been uncovered. Macron said Russia reacted the way it did to his speech warning that Russian aggression “knows no borders” because it was true. The European show of unity was marred by Hungary’s prime minister, Viktor Orbán, failing to endorse an EU statement on Ukraine pushing back against Trump’s Russia-friendly negotiating stance. The 26 other EU leaders, including Orbán’s ally Robert Fico, the Slovakian prime minister, “firmly supported” the statement. “There can be no negotiations on Ukraine without Ukraine,” said the statement, a response to Trump’s attempt to sideline Europe and Kyiv. The Guardian, March 7

European leaders discuss Ukraine and defense
At a meeting in Brussels yesterday, EU leaders discussed how to bolster both the continent’s defenses and its support for Ukraine. Ursula von der Leyen, the president of the European Commission, called it a “watershed moment”. Europe’s goal is to better arm itself to deal with Russia without as much backup from the US. To reach that objective, a plan from the commission would offer 150 billion euros, or about $160 billion, in loans to invest in missile defense, anti-drone systems and other defense technologies. The leaders also reviewed a peace plan for Ukraine and ways to support it financially and possibly with troops. “We are very thankful that we are not alone,” said Ukraine’s president, Volodymyr Zelensky, who attended the meeting. New York Times, March 7

Macron says France is 'loyal' US ally as Trump casts doubt on Nato solidarity
President Donald Trump on Thursday expressed uncertainty that Nato would come to the United States’ defence if the country were attacked, leading French President Emmanuel Macron to respond that France was a "loyal and faithful" US ally. Article 5, the alliance's defence guarantee, was invoked following the September 11 terror attacks on the US, leading to Nato's largest operation in Afghanistan - an operation that involved the French military. It is the only time the defence guarantee has been invoked in Nato's history. Trump also suggested that the US might abandon its commitments to the alliance if member countries don't meet defence spending targets, a day after his pick for Nato ambassador assured senators that the administration's commitment to the military alliance was “ironclad”. France 24, March 7

Donald Trump’s crypto project netted $350mn from presidential memecoin
Donald Trump’s crypto project made at least $350mn from the launch of his memecoin, a windfall that is likely to fuel concerns over conflicts of interest arising from the token. Digital wallets owned by the entities running the scheme earned the money from sales of $TRUMP in the three weeks after it was launched in January, according to a FT analysis of blockchain data. Trump has faced a fierce backlash since he and his wife Melania launched memecoins, tokens with no practical use whose value is entirely based on speculation, just days before his return to the White House. Investors and ethics experts have said the sale of crypto tokens would in effect allow a way to channel anonymous donations to the president while also exploiting retail investors. “The president of the United States should not be essentially doing things to profit from his office while in office,” said Tim Massad, adjunct law professor at Georgetown Law School and former chair of the Commodity Futures Trading Commission. “It’s a terrible example.” Financial Times, March 7

Jack Daniel's hits out at Canada pulling US alcohol
Canadian provinces pulling US alcohol off store shelves in response to Trump trade policy is "worse than tariffs", the boss of Jack Daniel's maker Brown-Forman has said. Several Canadian provinces, including Ontario, which is by far the most populated, took action this week in retaliation for US tariffs on Canadian goods. The Liquor Control Board of Ontario, one of the largest buyers of alcohol in the world, removed US-made alcoholic drinks from its shelves on Tuesday. Brown-Forman boss Lawson Whiting said the Canadian response was "disproportionate" to the 25 per cent levies on Canadian goods imposed by the Trump administration. "I mean, that's worse than a tariff, because it's literally taking your sales away, completely removing our products from the shelves," Mr Whiting said. In response to the tariffs, Canada has retaliated with 25 per cent levies on goods imported from the US, including beer, spirits, and wine. Some provinces also took action themselves, including Ontario and Nova Scotia. BBC news, March 7

Eurostar halted by WW2 bomb on Paris tracks near Gare du Nord
Eurostar services have been halted after a Second World War bomb was found in the middle of the tracks leading up to Europe’s busiest train station, Gare du Nord. The unexploded bomb was found while maintenance work was carried out overnight in the Saint-Denis suburb of Paris, according to the national rail company SNCF. Eurostar said services between London and Paris were suspended for the rest of the day at the request of the police. The service’s website urged passengers to “please change your journey for a different date of travel”. The Times, March 7

Emergency EU summit seeks to bolster defence to counter US pivot from alliance
European Union leaders will hold emergency talks in Brussels on Thursday, gathering as the Trump administration upends traditional alliances and retracts wartime backing of Ukraine. Thursday's summit brings all 27 EU leaders together for the first time since the explosive meeting between presidents Donald Trump and Volodymyr Zelensky last week, with US military aid and intelligence sharing since suspended. The evaporation of American support has sent Ukraine's allies scrambling, with EU leaders openly questioning Washington's reliability as a security partner going forward. While the Brussels meeting will aim to cement European support for Kyiv, it is unlikely to yield any major announcements of aid beyond the 30 billion euros ($32 billion) the bloc has already committed for this year. The stark prospect of the United States pivoting from its European alliances has, however, fuelled a growing consensus on the summit's other major topic: the need to bolster Europe's defences against Russia. France 24, March 6

Supreme Court thwarts Trump on foreign aid
The Supreme Court yesterday rejected President Trump’s emergency request to freeze nearly $2 billion in foreign aid. The court, by a 5 to 4 vote, instead asked a lower court to clarify its February order compelling the Trump administration to resume foreign aid payments. The top court’s ruling was one of its first moves in response to Trump’s campaign to slash government spending. Two conservative justices joined the court’s three liberal members to form the majority, suggesting that Trump could face a more sceptical Supreme Court than its mostly conservative composition might have indicated. New York Times, March 6

Macron speech: French nuclear deterrent could cover EU allies
President Macron suggested that France could extend its nuclear deterrent to cover other EU nations as he warned that the continent must prepare to face the threat of Russia without the US. The French president made the suggestion in a televised address to the nation on Wednesday, delivered as “we are entering a new era” after President Trump’s election. France has an independent nuclear deterrent of fewer than 300 warheads designed to protect the country’s vital interests. Although the doctrine is deliberately vague, it is thought to include protection of the French population, territory and sovereignty. Macron is understood to be considering the extension of the notion of “vital interests” to Germany and other EU countries. In his address, he said he would bring together military chiefs from countries “willing to guarantee the peace in Ukraine” in Paris to discuss Ukraine next week, while expressing confidence that the EU governments would back Brussels’ plan for an increase in defence spending of up to €800 billion at a meeting on Thursday. The Times, March 6

US stocks struggle as ‘America First’ bets backfire
When Donald Trump rang the opening bell at the New York Stock Exchange on December 12, the chants of “USA” from the trading floor epitomised the investor exuberance that had greeted the president-elect’s victory and powered US stocks to a series of record highs. But just a few months later, investors betting that the new president’s America First agenda would boost US equities and the dollar, while hitting the currencies and stocks of its trading partners, have been confounded. Investors now worry that his much-vaunted policy of trade tariffs will hurt domestic growth. Meanwhile, the US’s foreign policy has galvanised Europe’s politicians into promising a defence spending boom that has lifted the region’s assets. “You’d be hard pressed to find another period where the disparate trends across the Atlantic have switched gears like this so profoundly,” said Robert Tipp, head of global bonds at PGIM Fixed Income. Financial Times, March 6

Trump posts fresh ultimatum to Hamas as US enters direct talks with group
Donald Trump has posted a fresh ultimatum to Hamas, telling the group to “release all of the Hostages now, not later, and immediately return all of the dead bodies of the people you murdered, or it is OVER for you”. “‘Shalom Hamas’ means Hello and Goodbye,” he wrote in a social media post on Wednesday, in an apparent reference to the beginning of direct talks with the group. The post came just hours after the White House confirmed that the US had entered direct negotiations with Hamas, potentially to bypass Israel in securing the release of the remaining US hostages. It also followed a White House meeting between the US president and a group of hostages who had been released recently under the Gaza ceasefire deal. Fifty-nine hostages are still held by Hamas, though Israeli intelligence believes that only 22 are still alive. Five Americans are believed to still be held by Hamas, one of whom, 21-year-old Edan Alexander, is believed to still be alive. Trump reinforced his support for Israel and referred to a recent decision to provide billions more in support for Israeli arms sales. “I am sending Israel everything it needs to finish the job, not a single Hamas member will be safe if you don’t do as I say,” Trump wrote. The Guardian, March 5

Scientists discover new part of the immune system
A new part of the immune system has been discovered and it is a goldmine of potential antibiotics, scientists have said. They've shown a part of the body known to recycle proteins has a secret mode that can spew out an arsenal of bacteria-killing chemicals. The researchers in Israel say it transforms our understanding of how we are protected against infection. And gives a new place to look for antibiotics to tackle the growing problem of superbugs that resist our current drugs. The discovery centres on the proteasome - a tiny structure that is found in every cell of the body. Its main role is to chop up old proteins into smaller chunks so they can be recycled to make new ones. But a series of experiments, detailed in the journal Nature, shows the proteasome detects when a cell has been infected by bacteria. It then changes structure and role. It starts transforming old proteins into weapons that can rip open the outer layer of bacteria to kill them. BBC news, March 6

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Game Theory

Brexit: A path to yes through a forest of no