Tuesday, May 6, 2025

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Argentina’s BRICS rejection: A gamble amid economic turmoil

Published 29 November 2023
– By Sukanya Saha

In the labyrinth of Argentina’s economic woes, President Javier Milei’s recent rejection of BRICS membership adds a new layer of complexity to the nation’s uphill battle against inflation, dwindling foreign reserves, and a looming debt crisis.

Argentina’s economic narrative reads like a tale of multiple currencies and a precarious financial tightrope. With inflation rates soaring well above 140 per cent, and an official exchange rate at odds with the elusive “blue dollar,” Argentina’s economic landscape is a patchwork of uncertainty.

The recent decision to pay international debts in Chinese yuan, leveraging a standing swap line with China, reflects the urgency and creativity required to navigate this financial maze.

As Argentina grapples with a severe shortage of foreign exchange, exacerbated by drought conditions and a poor harvest, the rejection of BRICS+ membership raises eyebrows. The BRICS alliance, with its economic prowess and diverse resources, could potentially offer Argentina a lifeline to weather the storm.

One of the primary advantages of BRICS+ membership lies in the access to a diverse array of markets and resources. For a nation like Argentina, grappling with inflation and a shortage of foreign exchange reserves, the benefits of aligning with a coalition of emerging economic giants are hard to ignore. These nations collectively represent a vast consumer market and a rich tapestry of industries, offering Argentina the prospect of new trade avenues and investment opportunities.

President Milei’s libertarian ideals emphasise a minimalistic approach to government intervention, but the rejection of BRICS+ raises questions about the administration’s commitment to fostering economic growth. In an era where economic interdependence is the norm, opting for isolation might hinder Argentina’s ability to attract foreign investment and forge mutually beneficial partnerships.

It’s also crucial to consider the geopolitical chessboard. In rejecting BRICS+, Argentina may find itself sidelined in discussions that shape the rules of the global economic game. As this alliance solidifies its influence, decisions made within its confines could impact trade agreements, currency valuations, and economic policies worldwide. By refusing a seat at this table, Argentina may inadvertently forfeit a voice in shaping the rules that govern its economic destiny.

However, President Milei’s administration appears to be steering towards economic autonomy, even as the nation faces the pressing need for external support.

The urgent need for Argentina is crystal clear: reduce inflation. Yet, the path to achieving this goal is riddled with challenges. The central bank, burdened with short-term, peso-denominated treasury bills and a precarious interest income scenario, must navigate the balance between controlling inflation and preventing a currency freefall.

The question of debt is paramount. Argentina’s outstanding international bonds, valued at a mere 30 cents on the dollar, signal an impending restructuring. While the global market might not be shocked by Argentina’s restructuring, the country’s $45 billion debt to the International Monetary Fund (IMF) underscores the critical importance of a realistic repayment plan.

Argentina’s actions and policies resonate far beyond its borders, influencing the IMF’s lending approach and potentially setting legal precedents in sovereign debt enforcement.

The real-world experiment lies in the hands of the Argentine president. If Milei’s proposal to dollarise the economy becomes reality, it could redefine the understanding of a country’s debt carrying capacity. Dollarisation may offer a semblance of stability, but the risk of a deep default looms large, turning all domestic debts into a claim on Argentina’s non-existent dollar reserves.

In rejecting BRICS+, Argentina appears to be charting its own course. Whether this bold move proves to be a masterstroke or a miscalculation remains to be seen. As the world watches, Argentina stands at the intersection of economic uncertainty and the quest for autonomy, navigating uncharted waters with the hopes of finding a solution that will reshape its destiny.

Sukanya Saha is a contributing editor at The Nordic Times. Based in New Delhi, she is an accomplished journalist who has previously worked with several major Indian media outlets such as NDTV, India Today, IANS, and Jagran English. Currently, she is associated with Hindustan Times. In 2022, she topped the BRICS International Journalism Programme from India. Committed to understanding the complex dynamics that shape our world, Sukanya's passions range from world politics to science and space exploration.

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Smotrich: “We will finally occupy the Gaza Strip”

The situation in Gaza

Published today 13:29
– By Editorial Staff
Bezalel Smotrich has long advocated for the permanent Israeli occupation of the Gaza Strip and the re-establishment of Israeli settlements in the area.

Israel’s far-right Finance Minister Bezalel Smotrich announced on Monday that the country intends to occupy the entire Gaza Strip. At the same time, Prime Minister Benjamin Netanyahu defended the planned expansion of the offensive against the area.

We will stop being afraid of the word ‘occupation’, declared Smothrich.

On Monday, Israel’s security cabinet unanimously approved a plan to expand the military operation in Gaza, which, according to government officials, means a de facto occupation of the entire Gaza Strip. Tens of thousands of reservists have been called up for the operation.

We are finally going to occupy the Gaza Strip. We will stop being afraid of the word ‘occupation’, said the Finance Minister and Religious Zionist Party leader during a conference organized by B’Sheva newspaper.

Prime Minister Netanyahu described the operation as “intensive” and stressed that Israel will not withdraw from areas taken under its control.

– Once the new offensive is launched, Israel will not withdraw from conquered territories. The intention is the opposite of that, said Netanyahu in a video clip on X.

Opposition: It’s about saving Netanyahu

Netanyahu added that Gaza’s civilian population will be moved south “for its own protection” as part of the plan.

The decision has drawn sharp criticism from the opposition and relatives of Israeli hostages still held in Gaza. Many accuse the government of prioritizing territorial gains over human lives.

– The cabinet decided last night to expand the military operation inside the Gaza Strip – not to maintain Israel’s security, but to save Netanyahu and the extremist government, opposition leader Yair Golan wrote on X.

May constitute genocide

Plans to forcibly displace civilians in Gaza raise questions of international law. According to the UN Genocide Convention, the forcible transfer of a protected group with the intent to destroy it in whole or in part may constitute genocide.

Also under the Rome Statute of the International Criminal Court (ICC), such displacement can count as a crime against humanity.

German left party leader calls for NATO replacement – involving Russia

The new cold war

Published yesterday 11:47
– By Editorial Staff
According to Jan van Aken, NATO has outplayed its role - and a new alliance should take shape instead.

Jan van Aken, co-chair of the German left-wing party Die Linke, wants NATO to eventually be replaced by a new international security alliance that includes both Russia and the US.

In an interview with Die Zeit, he said that the NATO-led structure has no future and should be replaced by a more cooperative system.

– We have never wanted to abolish NATO without replacement, but rather to replace it with a cooperative security system, van Aken said in the interview published over the weekend.

He referred to his party’s 2011 manifesto, which proposes that Germany leave NATO in favor of a new collective security arrangement. Van Aken proposes a model similar to the OECD – a kind of “OECD 2.0” – where the focus is on peacekeeping and joint defense.

– A peace and defense alliance together with Russia and the US. But of course, such a structure would require at least ten years of confidence-building measures. During that time, NATO would remain in place – but it has no future, in my opinion, he added.

In addition to his criticism of NATO, van Aken also called for the withdrawal of US troops stationed in Germany – including the nuclear weapons they carry with them. He pointed out that the UK and France already have more than enough nuclear arsenals of their own.

Dreaming of a demilitarized Europe

Van Aken also confirmed that the vision of a demilitarized Europe remains central to the German left-wing party – a controversial and unusual stance in these times.

– Of course I want to live in a country without an army. Don’t you? he asked rhetorically.

The interview was published at a sensitive political moment, with Germany recently announcing a new military aid package for Ukraine, including air defense missiles and artillery. Incoming Chancellor Friedrich Merz has also expressed support for sending Taurus cruise missiles to Ukraine a weapon capable of reaching deep into Russian territory.

This has led to strong criticism from Moscow, which has warned that a German decision to deliver the weapons would make the country an active party in the war, as Russia claims that the Taurus system cannot be operated without German personnel.

Die Linke has consistently opposed arms deliveries to Ukraine and instead advocated a ceasefire and diplomatic solutions.

Trial begins for Diddy – could face life sentence

Published yesterday 10:08
– By Editorial Staff
Combs has been in custody since fall 2024 - and denies all charges.

Today marks the start of the trial against rapper Sean “Diddy” Combs. The 55-year-old is charged with sex trafficking and extortion, among other things.

Combs has faced a series of allegations since late 2023, including from his ex-girlfriend Cassie Ventura, who accused him of a decade of abuse. Last year, charges were added for serious crimes including sex trafficking, pimping, and extortion. Among other things, the rapper is alleged to have used violence to force women to take drugs and participate in so-called “Freak Offs”, which involved sexual acts that were filmed. In total, there are said to be around 60 lawsuits against the 55-year-old.

In an anonymous lawsuit, rapper Shawn “Jay-Z” Carter, 55, is also accused of assaulting a drugged 13-year-old girl together with Combs.

Extortion with firearms

The trial against Combs begins today, reports the BBC. The trial will start with the selection of twelve jurors and six alternates. The defense will review approximately 150 people. Combs is charged with two counts of human trafficking for sexual purposes, two counts of transporting persons for prostitution, and extortion. The extortion charges include kidnapping and coercion to perform sexual acts and take drugs, sometimes involving firearms or threats of violence against the victims.

Opening statements will then be made on May 12, and the trial is expected to last eight weeks. If convicted on all five counts, he could spend the rest of his life in prison.

Combs has been in custody in New York since September 2024 and denies all charges.

Spaniards required to notify authorities ahead of major cash withdrawals

The war on cash

Published yesterday 8:29
– By Editorial Staff
Anyone who does not inform the authorities of planned major withdrawals risks penalties and other reprisals.

Spaniards who want to withdraw €3,000 or more in cash can now only do so if they first notify the country’s tax authorities of their plans.

As usual, the new restrictions are justified by the need to fight organized crime, tax evasion and money laundering at all costs, and anyone wishing to make large cash withdrawals will need to notify the authority on its website, along with some form of electronic ID or digital certificate.

If a receipt from the tax authority cannot be presented, banks also have the right to stop citizens from withdrawing money. Banks are also obliged to report “suspicious transactions” to the tax authorities – including repeated withdrawals below the threshold.

For most people, applying for a cash withdrawal at least 24 hours in advance is sufficient – but those wishing to withdraw €100 000 or more must ask for the tax authorities’ approval at least three days before the withdrawal is to be made.

Anyone who fails to do so, or forgets to tell the authorities that they plan to use cash, will be fined up to 10% of the amount – or at least €600.

Same trend across the Western world

It is worth noting that Spain is far from alone in tightening cash controls – a similar trend can be seen across the Western world. Sweden is often held up as an international horror story, where physical money can no longer be used in many shops or to pay bills – and where people who make regular cash withdrawals risk having their accounts closed.

Anyone who wants to avoid the wrath of the Spanish authorities will have to be very careful in the future – and not just declare exactly how much they intend to withdraw and who they are – they will also have to explain in detail what they will use the money for.

Withdrawing smaller amounts of money, but at different times, is also very risky – even recurring withdrawals of a few hundred euros risk similar reprisals and penalties.

While there is a consensus that organized crime should be fought, critics warn that the Spanish legislation will hit ordinary citizens – and undermine their personal financial privacy, where they effectively have to ask permission to use their own money.

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