Stock markets have retreated again over worries of further US interest rate rises after the Federal Reserve defied Donald Trump to increase rates for the fourth time this year.

The EU has confirmed it is “actively investigating” a potential breach of its diplomatic communications network, following reports that secret cables had been stolen by hackers.

The Bank of England has welcomed a “crucial and positive” move by the EU to help keep a key part of the financial system functioning in the event of a “no-deal” Brexit.

A handful of banks will be forced to write multimillion pound cheques to buy shares in the construction giant Kier Group after some of its biggest investors snubbed the chance to take part in a £250m fundraising.

GlaxoSmithKline (GSK) is to merge its consumer healthcare unit with that of rival Pfizer, to create a new market leader with almost £10bn in annual sales.


Santander has been fined more than £30m for “serious failings” in processing the accounts of dead customers, the Financial Conduct Authority (FCA) says.


Western Unity Is Best for Russian Summitry

In preparing for the summit with Russian President Vladimir Putin on July 16 in Helsinki, President Donald Trump could benefit from a coordinated Western approach toward Moscow as a prelude. But at present, disputes within the West are a serious hindrance. At the July 11-12 NATO summit, leaders should consider priorities and develop clear policies, especially regarding Russian aggression in Ukraine and Georgia. Absent this, Trump’s hand with Putin may be weakened.

The U.S.-Russia summit, if properly prepared and conducted, could begin to put a floor under tense relations. Progress, however, may depend in part on whether Putin sees the West as unified and Trump as someone who speaks for it. Putin likely perceives disunity between America and Europe in Trump’s revocation of his support for the June 9 G-7 summit communiqué and his criticisms of German Chancellor Angela Merkel, Canadian Prime Minister Justin Trudeau, and other leaders. And Putin can be expected to play on this in efforts to split the West and obtain concessions from Trump, such as sanctions relief.

Europeans are concerned about Trump’s criticism of NATO, the European Union and the WTO and what this portends for the NATO summit. Divisions within the EU also imperil Western unity. In recent days the populist government of Italy refused to accept a ship loaded with 629 migrants (which then found safe harbor in Spain), reigniting the continent’s controversy over migrants. Beset by this issue in Germany, Chancellor Merkel is struggling to keep her coalition alive. And the European Union has again been trying to find ways to alleviate and share refugee burdens.  The UK has made “no substantial progress” on how to manage the Irish border after leaving the Union. French President Macron has compared the rise of populism across Europe to the spread of “leprosy.”

The United States and Russia have deep differences on several major issues, including the war in Syria and interference in the 2016 U.S. election. But of broad importance for the West is opposing Russia’s use of coercion to carve a sphere of influence in the post-Soviet space.

In fact, Russian invasions and military occupation of parts of Ukraine and Georgia have been driving forces in the decline in Russia’s relations with the West. These crises should receive priority attention at a Trump-Putin summit, but risks of Russian power plays against other neighbors also merit consideration. Trump could encourage Putin to show restraint and give his diplomats more leeway to resolve conflicts.

The United States and Europe strongly support the sovereignty, independence, and territorial integrity of the states that emerged from the detritus of the former USSR. They provide aid for reforms, and urge Moscow to allow neighbors to choose their own foreign policy directions. But the Kremlin disdains this.

In dealing with Russia over its determination to exercise a sphere of influence, unity of Western purpose is important. It sustains the unprecedented sanctions imposed after Russia seized and annexed Crimea and launched war on eastern Ukraine in 2014. Unity also helps NATO protect its eastern members by rotating forces there.

In Ukraine, Russian forces and proxies are waging a low-intensity war in the Donbas region that has led to over 10,000 deaths. After extensive investigation, the Netherlands and Australia hold Russia responsible for its role in the July 2014 downing in the Donbas of Malaysia Airlines Flight 17, which left 298 people dead. Moscow still denies responsibility. German-French-led negotiations to halt hostilities are foundering; positions are “far apart.” Until Moscow decides to withdraw from the Donbas, the introduction of a UN-mandated peacekeeping force is unlikely.

In Georgia, Russian forces have occupied Abkhazia and South Ossetia since 2008, when Moscow waged war against its southern neighbor. Georgia has made significant reform strides, such as holding free and fair elections and spurring economic growth and openness. Its aim to join NATO has made it a prime target for Russian hard power and propaganda, but Tbilisi eases strains by pursuing practical cooperation. Russian tourism in Georgia has skyrocketed, as have wine exports to Russia.

In Armenia and Azerbaijan, Russia exerts little effort to resolve the simmering conflict over Nagorno-Karabakh, an isolated ethnic Armenian region in Azerbaijan. Moscow supplies arms to both sides and has a military base in Armenia. In April amid rising risks of renewed fighting, the French, Russian, and U.S. co-chairs of the Organization for Security and Cooperation in Europe’s Minsk Group urged the sides to respect a ceasefire and keep heavy equipment behind the frontlines.

In Moldova, Russian forces occupy its breakaway region of Transnistria. On June 22, the UN General Assembly urged that Russia unconditionally withdraw troops and armaments, but Moscow is unlikely to comply.

The military alliance between Belarus and Russia remains strong, but Minsk has rebuffed pressures from Moscow to allow a Russian airbase. Belarus also has trade and border security disputes with Russia. Reacting to its aggression in Ukraine, President Alexander Lukashenko has stoked Belarusian nationalism and sought improved ties with Europe and the United States. Moscow could seek a leadership change if Lukashenko pursues a more independent foreign policy.

Neighbors are not only concerned about military pressure from Russia, but also about risks that it might exploit leadership transitions. At the summit, Trump could encourage Putin to let transitions play out on their own and not to intervene.

In May, Armenia experienced a peaceful change of power after popular protests deposed entrenched leadership. Shortly after assuming office Prime Minister Nikol Pashinyan, the former opposition leader, visited Moscow and emphasized to Putin his country’s strategic ties with Russia. Putin wished Pashinyan “success” even though the Armenian’s ascendancy owes to the kind of grassroots rebellion that Putin has opposed in Georgia and Ukraine. Moscow may be wary about using a heavy hand in Armenia for fear it might cause politics to veer westward, as happened in Georgia and Ukraine. The Kremlin will keep a close eye on this strategic outpost.

In Uzbekistan, after the passing in 2016 of a repressive leader long in the tooth, President Shavkat Mirziyoyev has taken steps to open the country wider and lessen internal repression. Strains with Moscow have ebbed, but Uzbekistan has not shown interest in joining regional security or economic structures that Russia dominates.

In Kazakhstan, President Nursultan Nazarbayev over the years has skillfully engaged Moscow while inviting Western, Russian, and Chinese firms to help develop the country’s bounty of energy and mineral resources. Days ago a top official surprised observers when he said Nazarbayev might not run for re-election in 2020. Nonetheless, the Kazakhstani leader has arranged to chair the national security council beyond his presidency. He may be keen to ensure that the transfer of some power does not cause unease in the Kremlin.

Why should the U.S. government care about Russia’s stance toward its neighbors? Leaving aside the Baltics, which are NATO members, other post-Soviet states are unlikely soon to become U.S. treaty allies. Moreover, U.S. trade with them is modest, and large American investments are found only in Caspian energy.

The answer is that Europe and European security are vital U.S. interests. Russian aggression in Georgia and Ukraine has undermined the post-Cold War structure of peace in Europe and raised concerns that Moscow might employ force elsewhere against neighbors. Western sanctions are likely to be maintained until Russia withdraws from Ukraine. Should Moscow ever again use force against a neighbor, the West may once more respond with coordinated sanctions.

While it is uncertain Trump will do this, he could improve his bargaining position with Putin at the summit by bolstering allied ties at the NATO summit—especially his relations with the British, French, and German leaders—and by gaining their support for his strategy with Putin. At the center of the strategy ought to be U.S. opposition to Russia’s use of coercion to dominate neighbors, but also U.S. support for voluntary, pragmatic ties between them. Second, Trump could try to align his policies on Russia more closely with those of the substantial bipartisan consensus in Congress. Cooperation is especially important regarding Ukraine, on which Congress and key American allies have strong feelings.

This approach could help Trump impress upon Putin that the West will persist in opposing actions that undermine European security, even as the West remains ready to engage Russia on issues of mutual interest, such as reducing nuclear dangers, managing the Arctic, and sustaining the International Space Station.


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