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Are we living a new Cold War?

Article published in Cafebabel

Relationship between West and East are getting colder again. © Talk Android

As we follow the recent worldwide developments we can’t help but ask ourselves: is History repeating itself? We witness now the biggest tensions between the West and East since the Cold War. But the similarities have become even bigger, if we look at the other side of the Atlantic, as well as to the Middle East, with the United States sending troops to Iraq. 

The relationships between Russia and the West are freezing, with the European leaders condemning Putin’s order of sending tanks to Ukraine and his motionless stance. In fact, following the G20 Leaders’ Summit last weekend (15-16 November), in Brisbane, Australia, Putin was strongly criticised and once again, he turned his back away saying that he was going back to Moscow, “we have completed our business,” said Putin justifying his departure. 

Putin threats the United States 

A few weeks ago, Russian jets were seen and immediately intercepted over European airspace, raising doubts and suspicions about what Putin is up to. Later, four Russian warships entered international Australian waters, close to the northeast coast, immediately attracting three Australians warships to ascertain. The peak of this ideological war happened when President Putin condemned the United States and its meddling position as an international actor. The Russian President has clearly left a hostile message to the United States. “Is it the exceptionalism of the US its way of leadership beneficial for everyone? And its constant interference on the world’s affairs brings welfare, progress, democracy? Should we stand still and watch? I allow myself to say that it’s not like that. Not at all,” threatened Putin, during the meeting of the Valdai International Discussion Club.

If we put all the puzzle’s pieces together, we know that something very fishy is going on and that Putin’s speech was definitely a threat. The international community has been sanctioning Russia over the Ukrainian invasion led by Russian troops that began in March 2014. Putin’s desire to control the Eastern regions of Ukraine is so hefty, that is leading towards a new “iron curtain” which can have terrible repercussions for Europe and the world. 

European Reactions 

European leaders are not being mild towards Putin. In the United Kingdom, Prime Minister David Cameron tried to adopt a more diplomatic way of approaching stubborn Putin by saying "if Russia takes a positive approach towards the Ukraine's freedom and responsibility, we could see those sanctions removed.” 

France is also in this amalgam. At stake is a Mistral-class assault warship retained by Holland’s government over concerns about Putin’s involvement in the situation in Ukraine. Russia has demanded the handover of the war machine by the end of November. 

Meanwhile, Russian Ilyushin transport plane was seen, once again, flying into international airspace in Estonia and Lithuania, without an official flight plan. They were intercepted by two Dutch F16 fighter jets. As a reaction to the growing military activity in Ukraine, Britain’s defense ministers, as well as the three Baltic States and four Nordic countries, have all agreed to enlarge intelligence and air force cooperation. 

Analogy with the past? 

Cold War Map. Jeroen Elfferich © Flickr 

This is not the end of this two-sided hostile and defensive history. Similar to the alliances created during the Cold War, strategical pacts are being made today, in the XXIth century. Strategical pacts or defensive alliances, the truth is that recently the United States has reinforced its partnership with China and Iran (yes, Iran). 

With China, Obama is about to make a deal concerning a trans-Pacific trade which would eliminate tariffs on goods and services and change labour regulations, government procurement, intellectual property, as well as environmental protections. "What we are seeing is momentum building around a Trans-Pacific Partnership that can spur greater economic growth, spur greater jobs growth, set high standards for trade and investment throughout the Asia-Pacific," said the US President. Moreover, the two world’s largest economies have agreed to grant visas to each other's citizens valid for up to a decade in a deal that aims to fortify business ties with China. 

Meanwhile, Iran and the US are getting closer to a historic nuclear deal, following Vienna talks, which could determine the end of 12 years of deadlock over Iran’s nuclear programme. However, this alliance is making too many waves, as France, one of the six nations involved in the negotiation (US, UK, Germany, Russia and China) is more opposed to nuclear concessions and Iran itself has said that the deal is possible but "excessive demands" by the west could derail chances of an agreement. 

Nevertheless, the US has already secured its alliance with China and relies on the European Union for any possible cooperation as well. If the deal with Iran won't be fruitful, then the scenario will be grey. Moreover, we should pay attention, once again, to America's moves in Iraq. Was Putin right on his condemning statement towards the meddlesome US?

China turns to Europe (for the Golden Visa)

Article published in Cafebabel

Making new friends? Palazzo Chigi © Flickr

Little by little, Southern Europe is welcoming more and more Chinese citizens. The European crisis in the Mediterranean countries is giving rise to an Asian investment never seen before. 

First it was Portugal and Spain, followed by Greece and Cyprus, and now, the Chinese giant is making its move towards Italy. The scheme began in 2012 and it's quite simple: invest a big amount of money in the country and in return you receive a Golden Visa offering a residence permit. 

In exchange for investing millions in local businesses, promoting jobs, or acquiring properties, Chinese families were given the opportunity of gaining residency permits to a number of European nations. They have also the benefit of free travel all over the EU within the 26 Schengen countries, and after some years they can apply for citizenship in the host country, although this varies from country to country. In Italy's case, it is after 10 years. In Portugal, it’s after 6 years. 

The Small Print Of The Golden Visa 

In the Portuguese and Spanish case, the minimum investment amount is 500,000 euros in a property or the creation of jobs in the host country. In Greece the purchases must be at least 250,000 and 300,000 in Cyprus. In Portugal, for instance, visa holders must spend a minimum of seven days in the first year and 14 days in the following four years. In fact, the law was changed. In the beginning, investors had to spend at least 30 days in the country, but after the requirements on the duration of stay in Portugal were changed, the scheme has been attracting more and more Chinese. 

The initial visa is valid for one year and can be renewed twice for two year periods. By that time, visa holders should be able to apply for permanent residency as long as they have fulfilled the compulsory residence time provided by law. 

How Is The Economic Impact of Chinese Investment Seen? 

Portuguese entrepreneur Alexandre Soares dos Santos, former president and shareholder of a supermarket chain has said: "I hate Chinese investment because it brings absolutely nothing to our country (...) no know how, no management," he said quoted by Lusa. Also, Portuguese Socialist MEP Ana Gomes has said to the BBC "I think this is indeed a race to the bottom and it's actually something very anti-EU." This concern is based on the vulnerability to which Europe is exposed as it's literally selling access to the EU. 

In 2012, China Three Gorges bought 21.35% of EDP's capital - Portugal’s leading company in the energy sector - paying the gigantic amount of €2,700 million. State Bird, another Chinese state company, bought in the same year 25% of REN's capital, another Portuguese energy company, disbursing €387 million. As for Beijing Enterprises Water, they made the move to purchase Compagnie des Eaux Portugal's capital, paying €95 millions. 

In the middle of October, the 10th Asia-Europe Meeting (ASEM), took place in Milan, Italy, under the theme "Responsible Partnership for Growth and Security". This summit was chaired by President of the European Council, Herman Van Rompuy, who represented the European Union together with European Commission President José Manuel Barroso. The session aims to fortify the dialogue and cooperation between the two continents. Li Keqiang, Chinese PM, noted that China attaches an extreme importance to its relations with the EU, China's largest trade partner. "We are each other's opportunities for development," he said. 

One thing seems to be clear, as the European economy continues to struggle, it is presumable that more countries will join the race and fling visas to people from outside the European Economic Area who are ready to invest in property or businesses. The question remains: cure for its economic woes or threat of Asian dominance?