The consequences for Russia of the nuclear deal with Iran. OSW COMMENTARY NUMBER 177/03.08.2015

The five permanent members of the UN Security Council (the USA, the United Kingdom, China, France and Russia) plus Germany and the European Union signed a deal with Iran on 14 July in Vienna (a Plan of Action with five appendices, henceforth referred to as the Vienna Agreement). Under this agreement, Iran undertook to restrict its nuclear programme and to bring it under international scrutiny for 15 years in exchange for a gradual lifting of international sanctions (both those imposed between 2006 and 2010 by the UN Security Council and the unilateral US and EU sanctions). Even though Russia has officially reacted positively to this deal, the consequences it will have are rather ambiguous from Moscow’s point of view. Iran looks set to become stronger and will possibly normalise its relations with the West, and especially the United States. This, in political terms, is a disadvantage for Russia. The Kremlin’s ability to use its policy towards Iran as a bargaining chip in contacts with Washington will be reduced significantly. In turn, the benefits will include improving the perception of Russia in the West and the opening up of new opportunities for the geopolitical game in the region, both with Iran and its opponents in the Arab world. Similarly, in economic terms, the possible lifting of sanctions will offer Russia new opportunities to achieve immediate benefits owing to co-operation in the nuclear and military-technical areas. In the short term, the lifting of sanctions will not pose any threat to Russia’s position on the global energy markets. However, in the long term, the end of Iran’s international isolation may bring negative consequences for Russia, such as the dominant position of Western and/or Chinese companies in the Iranian upstream sector, rising exports of Iranian oil and gas to EU and Asian markets (which are essential for Russia) and the downward pressure on oil and gas prices.

Greece’s poor growth prospects. CEPS Commentary, 21 August 2015

Four years ago – almost to the day – when the question of Greece’s debt sustainability was being intensely debated, these same authors argued that Greece would face strong headwinds in its effort to ‘grow solvent’. With the third rescue package dealing with the immediate liquidity issues in the works, and concerns being voiced by the IMF as well as other actors, they find in this CEPS Commentary that the issue is once again pertinent.

Ukraine’s wartime nationalism. OSW COMMENTARY NUMBER 179, 28.08.2015

From the Introduction. The Euromaidan revolution and the war in Donbas that followed it have brought about deep changes in the way Ukrainian citizens think and have led to a rapid transformation of how people view the concept of national community. It began to be increasingly common for proponents of nationalism to refer to solidarity with the state instead of referring to the nation understood as an ethnic community, as they had previously done. This is due to the fact that an entire young generation has matured which takes the Ukrainian state for granted, but also because in the Russian-Ukrainian conflict most Russian-speaking citizens of Ukraine have opted for Ukraine.

Monetary policy and the over-investment cycle: China as an extreme case. CEPS Commentary, 27 August 2015

Against the background of the severe turbulence that is hitting global stock markets, Daniel Gros examines the looming slowdown in the Chinese economy in this CEPS Commentary, which he attributes to an underlying ‘real’ domestic investment/savings imbalance. Given the magnitude of this imbalance, Gros thinks it is unlikely to be solved by monetary policy and that the best that can be hoped for is that the central banks will manage to ‘paper over’ some of the unavoidable symptoms in credit markets.

Syria: An end to the hands-off policy. CEPS Commentary, 31 August 2015

After a year of focusing on the nuclear deal with Iran, international diplomacy is returning to consider resolution of the civil war in Syria, with each side now a little less firm in their positions as the situation on the ground deteriorates further. In this new CEPS Commentary Steven Blockmans sheds light on the highly complex and volatile environment in the Middle East, concluding that failure to seize the new diplomatic momentum to resolve this conflict will likely mean that Syria falls into the hands of IS.