Month: December 2020

Authored by Simon Veazey via The Epoch Times,

Amid growing backlash for firing an English teacher over a video on masculinity, Eton College has said that it is “not an issue of freedom of speech.”

Teacher Will Knowland was dismissed from the school—which has famously educated over one-third of all British prime ministers, including Boris Johnson—after he refused to take down a lecture from his private YouTube channel that questioned “current radical feminist orthodoxy.”

The school initially refused to comment since an appeals process is underway.

After growing accusations of bending to woke progressivism, the school has now defended its actions, insisting they made the decision based on legal advice.

“The dismissal of Mr. Knowland was not an issue of freedom of speech,” the college said in a statement emailed to The Epoch Times.

“The school was advised by specialist lawyers that the content in question was in breach of the Equalities Act and the Education (Independent Schools Standards) Regulations. There was simply no other choice than to ask for it to be taken down.”

Pupils at Eton College hurry between lessons wearing the school uniform of tailcoats and starched collars, in Eton, England, in this file photo. Eton is one of the most expensive and prestigious private schools in the world. (Graeme Robertson/Getty Images)

Eton says that they repeatedly asked Knowland to remove the video temporarily from his YouTube channel “pending further discussion” but that he refused.

He was sacked for gross misconduct by a disciplinary panel.

The Patriarchy Paradox

Knowland has taught English for nine years at the £42,500-a-year boys school, which is a byword for privilege and traditional private education.

His video was based on a lecture entitled “The Patriarchy Paradox,” which he had prepared earlier this year, as part of a course to encourage critical thinking in older students.

Before presenting to students, he pre-recorded a video of the lecture, which was circulated among other teachers on the school’s intranet. According to the Telegraph, when one of the teachers complained, the headmaster asked for the video to be removed. It was removed.

Knowland, however, refused to remove the lecture from his personal YouTube channel.

“Because I believe passionately in free speech, I said I would only take it down if given a clear reason, which is how I ended up being dismissed,” Knowland said, reported The Telegraph.

The Provost of Eton (chairman of the governing body), Lord Waldegrave, responded to what he described as a “fake news” narrative that Knowland had been sacked for preparing the video lecture itself.

“It is alleged that he was sacked for having the temerity to articulate such views,” Waldegrave wrote in a statement sent to The Epoch Times. “This is false.”

A student walks in front of Eton College, in Eton, west of London, on Oct. 1, 2015. (Jack Taylor/AFP via Getty Images)

Waldegrave said that Eton “prides itself on encouraging open-minded, independent, and critical thinking.”

Knowland’s personal video was, with the school’s permission, “clearly identified with Eton,” according to Waldegrave.

He said that the dismissal “is not about free speech within the law, behind which Eton stands foursquare. It is about a matter of internal discipline, quite properly now subject to appeal.”

A Letter from Pupils

Knowland said his intention was to present different views from “the current radical feminist orthodoxy”—but not to necessarily endorse them.

“In my lecture, I pointed out that, historically, masculine qualities like strength, courage, and tenacity have often been as beneficial to women as they have been to men,” he said according to the Telegraph.

A crowdfunding site set up in the name of Knowland says, “I have been dismissed from my employment. My wife and I will be made homeless, along with our five children. I am raising money to challenge my dismissal in the Employment Tribunal if necessary.”

The funding site has currently raised almost £35,000 ($46,700) of a £60,000 target.

Meanwhile, a petition letter written by current pupils at the school has been steadily gaining signatures from current and former pupils, reaching almost 2,000 as of writing.

The Epoch Times cannot verify signatories are all as stated.

The authors said that the disciplinary action could not be separated from the content of the lecture.

“We struggle to identify where Mr. Knowland’s video steps out of the realms of academic debate and into genuinely discriminatory private opinion,” the letter said.

“The boys have concluded from watching the video that the problem cannot lie in the way he sets out the ideas, but in the ideas themselves.”

The letter urged the school to be kind.

“The dismissal of Mr. Knowland—at least on the facts available to the boys—points to a heartless and merciless spirit at the top of the school,” they wrote. “Mr. Knowland is loved by all who have encountered him. He is an obviously and thoroughly good man.”

As anti-lockdown protests continue to rage in London, resulting in the arrests of over 150 this past weekend, The Sunday Times is out with a hugely alarming report that almost has to be seen to be believed given how open and brazen an example it is of the state using every means possible to crush free speech and independent thought.

Britain will literally use military intelligence to seek out and stamp out what The Times calls “anti-vaccine militants” and related “propaganda content” in cyberspace.

Of course, it’s entirely open to state authorities’ interpretation as to what this even means, and will likely morph into cracking down on any speech that’s even remotely critical or questioning as to the potential harmful side effects of the new rapidly developed COVID-19 vaccines.

This as the UK has agreed to buy more than 350 million doses of vaccines from at least seven global producers, and hopes to start vaccinating as fast as possible as confirmed cases continue to rise into the winter months.

The Times writes that a secretive elite unit will be used as part of information warfare combating anti-vaccine content online:

The army has mobilized an elite “information warfare” unit renowned for assisting operations against al-Qaeda and the Taliban to counter online propaganda against vaccines, as Britain prepares to deliver its first injections within days.

The defence cultural specialist unit was launched in Afghanistan in 2010 and belongs to the army’s 77th Brigade. The secretive unit has often worked side-by-side with psychological operations teams.

If this doesn’t sum up the British state’s self-understanding of its own immense power and control over citizens in the year 2020 then nothing else will: the military will use psyops on UK citizens to enforce vaccine group think.

The army has mobilised an elite “information warfare” unit renowned for assisting operations against al-Qaeda and the Taliban to counter online propaganda against vaccines, as Britain prepares to deliver its first injections within days. https://t.co/7JY2gl0oMj

— The Times (@thetimes) November 29, 2020

But it’s not exactly that the UK military openly admitted this. Instead, it’s coming to light via leaked internal documents:

Leaked documents reveal that its soldiers are already monitoring cyberspace for Covid-19 content and analysing how British citizens are being targeted online. It is also gathering evidence of vaccine disinformation from hostile states, including Russia…

And of course “Russia!” manages to be conveniently slipped in as the ultimate “justification” – given the military must fundamentally frame its operations as seeking to root out and subvert a ‘foreign plot’ as opposed to admitting blunt suppression of citizens’ rights and freedom of information.

LIVE IN LONDON–Anti-lockdown protests. #londonprotest pic.twitter.com/wXCtN2EyFU

— The Dispatcher HQ (@TheDispatcherHQ) November 28, 2020

A follow-up statement to the reporting by the UK Ministry of Defence claimed the brigade’s efforts are “not being directed at the UK population” but primarily at hostile foreign actors wishing to sow disinformation.

Again, it’s amazing just how casually The Times reports this – as if it’s par for the course and merely another standard weekend news development in the creeping Orwellianism that is contemporary UK statism backed by the ultra-powerful military and intelligence communities (or perhaps already long established?).

By Elwin de Groot, Maartje Wijffelaars, and Piotr Matys of Rabobank

Summary

• In this piece we take a closer look at the potential implications of a continued deadlock on the EU Budget and Recovery Fund
• What has happened, what are the key issues at handand what are the options to resolve this standoff?
• We ponder the potential impact for the European economy and markets should there be severe delays (or even a breakdown) in the implementation of the Recovery Fund

Recovery Fund held hostage by veto against budget

The EU is in limbo over its next multi-annual budget and, by implication, the Recovery Fund. In the week of 16 November, Hungary and Poland voted down the most recent proposals for the EU’s next multiannual budget, running from 2021 until 2027. Not because they oppose these proposals–in fact they would be among the main beneficiaries of the budget and recover fund-, but out of anger over the new rule-of-law mechanism that was adopted in early November and which is set to come into force next year. The new mechanism is supposed to block transfers of EU funds to countries infringing on EU standards in certain areas such as fundamental rights and judicial independence. This mechanism should protect the financial interests of the EU, i.e. to protect EU tax payers against the misuse of EU funds. Yet Hungary and Poland claim the mechanism to be a vague and therefore a political tool for the EU to interfere with domestic matters. Both countries have been at continuous loggerheads with the European Commission over rule-of-law issues over the past few years. Slovenia also supports the claim put forward by Poland and Hungary.

In any case, whereas the mechanism itself could be and has been adopted by a qualified majority in the Council, the 7y budget, i.e. the Multiannual Financial Framework (MFF) and Own Resources Decision (ORD), require unanimity in the Council. In addition, the ORD needs to be approved by national parliaments.

Below we look at the immediate implications and the potential scenarios further out.

The implications of a deadlock

As long as there is no agreement, the current MFF and ORD (2014-2020) would be rolled over. And, as things are looking right now, there will not be such an agreement before year-end. Importantly, this implies that the crisis recovery instrument (Next Generation EU, NGEU) would not see the light of day either. The ORD needs to be revised to provide the European Commission with the mandate to borrow money on financial markets to fund the crisis recovery instrument, among other things. Since the ORD also needs to be approved by national parliaments it is already a given that the NGEU will be delayed and that even if Hungary and Poland will lift their veto in December, crisis recovery funds will likely only start to flow late 2021 at the earliest. To be sure, this was already the assumption for the largest chunk of the recovery instrument, the Recovery and Resilience Fund (RRF, EUR 672.5bn), before the spat, because money from this fund would have to be earned by Member States by achieving reform milestones. Still a small part of the instrument was planned to become available ‘right away’, most importantly REACT-EU funds totaling almost EUR 40bn in 2021 (0.3% of 2020 GDP, figures 1 and 2). Clearly the longer an agreement takes, the more protracted the delay in disbursements of all parts of the new crisis recovery instrument.

Another implication would be that the annual budget for 2021 has to be based on the ceilings in the old MFF and that countries such as the Netherlands will lose their budget rebates. In case an agreement on next year’s budget would also not be reached, the EU will run an emergency budget, allowing it to spend 1/12th of its annual 2020 budget per month in 2021. The 2020 budget not only determines the amounts that can be spent, but also the eligible projects. Funds would only flow to those budget lines that were already present in the 2020 budget. So, for example, already existing cohesion projects in the budget of 2020 that carry over into 2021 can still be financed to some extent, but new cohesion projects cannot.

As for the Rule of Law mechanism, it could be implemented from the start of 2021, irrespective of what happens with the MFF.

What about SURE?

Aside from the RRF, many Member States have been making use of the EC’s SURE fund. The temporary “Support to mitigate Unemployment Risks in an Emergency” is available to Member States that need to mobilize significant financial means to fight the negative economic and social consequences of the coronavirus outbreak on their territory. It can provide financial assistance up to EUR 100bn in the form of loans from the EU to affected Member States on favorable terms to address sudden increases in public expenditure for the preservation of employment. The SURE fund itself would not be at risk from the current standoff. This is in the first place because these are loans apart from the budget rather than grants coming from the budget; and the loans are underpinned by a system of voluntary guarantees from Member States of in total EUR 25bn. Each Member State’s contribution to the overall amount of the guarantee corresponds to its relative share in the total gross national income (GNI) of the European Union, based on the 2020 EU budget. The funding is obtained in capital markets through ‘social bonds’ issued by the EC. Importantly, the EC has already been authorized to raise the EUR 100bn with these bonds via a separate SURE regulation. So, while not fully executed yet, new issuance is not linked to the new ORD and budget. Since its inception, the Council has approved EUR 11.2bn in support for Poland (2.1% of GDP) and EUR 0.5bn for Hungary (0.3% of GDP) – actual disbursements so far are still smaller. In total, EUR 87.9bn out of the total EUR 100bn has already been committed to Member States and final approval on EUR 2.5bn is on its way, bringing total commitments to EUR 90.3bn – EUR 31bn has actually been disbursed.

The current standoff would have no impact on the legal possibility to expand the SURE fund to mitigate the impact of the delayed implementation of the NGEU, if politicians would agree to increase the fund’s size. Given that, as mentioned, the European Commission is authorized to borrow for the SURE fund via a regulation apart from the budget. But to remain creditworthy and be able to borrow at very low rates, either a revision of the ORD, increasing the so-called available headroom, and/ or additional guarantees by Member States would seem to be required. Hence, even if it would be legally possible, it also requires political will, which can be very much questioned both from the side of Poland and Hungary and the other 25 Member States if the current standoff persists.

And the ESM?

Finally, the standoff has no impact on the functioning of the ESM. It could be called to draw a support program if asked for by a Euro area Member State and to activate credit lines within its Pandemic Crisis Support programme linked to the COVID-19 crisis. Remember? The hard fought cheap credit lines Member States can ask for with the only condition for them being that they spend this money on the fight against the health crisis. Indeed, no country has dared to use it, yet, probably out of fear of reputational damage when doing so. Admittedly, given the current, historically low, bond yields in the market, pressure on countries to do so has also been lacking. When push comes to shove (i.e. in case of a long-running standoff and rising bond yields), however, we would still expect EZ Member States to call for them.

Possible scenarios going forward

The big question is whether a compromise can be found on the rule-of-law mechanism or whether talks will remain in deadlock. The next official meeting of EU leaders is scheduled for 10 and 11 December, while finance ministers are due to meet 19 December. It is difficult to predict what will happen and whether either side of the table will blink beforehand. In any case, the risk that no agreement will be found is non-negligible.

One way out, perhaps, is a (non-binding) political declaration (similar to the political declaration setting out the framework for the future relationship between the EU and UK after Brexit) that promises to keep the rule-of-law mechanism at bay, as long as countries do not radically depart from the status quo. This is what the German presidency has proposed.

Yet according to Poland and Hungary such a declaration would be insufficient as it is not legally binding. In fact, on 26 November, Polish PM Morawiecki and Hungarian PM Orban underscored their view saying that the EU should drop the rule-of-law conditionality altogether and that any enforcement mechanism on democratic standards in future would require an amendment in the treaty. The joint declaration signed by both PMs implies that they are not willing to make substantial concessions to overcome the impasse caused by their veto and unlock hundreds of billions of euros which are urgently required by EU countries to start rebuilding their economies from a recession caused by the coronavirus pandemic. They clearly believe they have considerable leverage and they are hoping that the European Parliament and other EU Member States are willing to substantially water down the rule-of-law mechanism, as the latter are loath to harm the post-crisis recovery. Particularly in poorer regions, a lack of cohesion funds could even be more painful than a lack of funds from the Recovery Facility later in 2021.

Meanwhile, on the part of European Parliament and most of the other Member States there is a conviction that there should be a strong link between EU funds and the rule-of-law, an opinion that has been building for years. Given that there is a tendency of slippage on this front (see figure 3), putting the mechanism on ice would be a signal to countries to ‘test the boundaries’ of a commitment to delay the enforcement of the mechanism.

Whereas poorer and hard-hit countries might be more willing to soften the tone, others, such as the European Parliament and the Netherlands, have extremely little wiggle room given the sentiment among their rank and file members. Moreover, they know that Hungary and Poland would eventually suffer major economic damage without new EU cohesion fund money and the substantial share of the recovery funds they would be entitled to. As explained below, however, the discussion is not only a matter of economy, but also of sovereignty and ideology. Furthermore, it could take a while before Poland and Hungary would feel economic pain in the event of an emergency budget and no crisis recovery funds.

Why Poland and Hungary may not cave in -for now

One may argue that it is irrational for Fidesz and the Law & Justice party to block the financial package. After all, over the next seven years Hungary and Poland are in line to reportedly receive at least EUR 180bn between them (over 25% of their combined 2019 GDP) from the EU budget and the Recovery Fund. For a short period of time Hungarian and Polish governments may be able to borrow funds from the markets to finance their expenditures, should European transfers be put on hold. However, without cash from the EU, GDP growth will be significantly lower over the long-term horizon and the upward potential for living standards substantially  lower.

But, what seems irrational from an economic point of view can be justified by a strong preference to set domestic policies. By blocking the mechanism that would allow Brussels to interfere in domestic policies, PM Orban and PM Morawiecki are fulfilling obligations to their conservative and nationalistic supporters who expect them to fight for sovereignty at all costs, even if the price is as high as EUR 180bn. Conservativism and nationalism are generally perceived as important pillars of support for Fidesz and the Law & Justice. Both parties have also allegedly tightened their grip on the media. This allows them to control the narrative at home and portrait their countries as victims.

Drawing parallels

Clearly, one can draw some parallels with how Brexit came about and the referendum on EU membership held in 2016 serves as a reminder that ‘nothing is set in stone’. Basically it shows us that the undercurrents in societies can prove very strong. Being able to ‘take matters in one’s own hands’ is one of those undercurrents that has been visible in many places over the last decades. Calls for more sovereignty (and strong leadership) may stem from dissatisfaction with the multilateral framework (which includes the EU) in which countries are operating. This may lead to alienation of voters (as powers increasingly shift from the national to the international level) and rising dissatisfaction with democracy, which is a global phenomenon. Rising inequality could be another source of voter dissatisfaction, which then turns itself on external institutions – if well managed by populist national politicians. To some extent this is what seems to have happened in Poland, for the general public has actually become more satisfied with how democracy is working in Poland (see figure 4) and a similar observation applies to Hungary (figure 5), although the public still is more positive on balance with the EU than with national democracy. However, this also points to another reason for both populist leaders to hold out: they have the support of an increasing number of their people.

Perhaps Hungary’s PM Orban and his Polish counterpart Morawiecki, under pressure from other European leaders, will soften their stance and a compromise can be reached. However, we would not underestimate their determination to fight hard against a mechanism that could potentially force them to ease their grip on power in Hungary and Poland. Reaching a compromise could therefore prove quite difficult in the very near future. This is also because Hungarian and Polish governments may be able to borrow funds from the markets to finance the possible shortfall in European transfers from the budget for a while. Moreover, the rule-of-law mechanism is projected to come into force in 2021, irrespective of whether there will be a deal on the new MFF. Hence, if Poland and Hungary fear they will miss out on EU funds because of this mechanism, they might have less incentive to agree on a new MFF and budget, because it would benefit them less than in previous years.

A different scenario: Bypassing obstructive states

Technically it seems possible to create a separate Recovery and Resilience Fund (the largest chunk of the total EUR750bn new crisis recovery instrument) among willing Member States, outside the MFF. It could be based on an intergovernmental treaty between all EU Member States except for Poland and Hungary – and possibly Slovenia. It might persuade Poland and Hungary to come around on the MFF given their needs for EU funds and weakened bargaining position, but could also reach the opposite, not for economic reasons but by feeding emotions of anger and frustration. We don’t think this scenario is viable in the foreseeable future, for several reasons. First, it would push the EU into uncharted waters and take months at least to talk things through, politically and legally, prior to implementing it. Also because it would likely require paid-in capital from participating Member States. Second, it could make it more difficult to solve the deadlock on the MFF and ORD, which would harm those Member States which depend more on regular budget funds than recovery funds and see budget rebates withheld from certain Member States. Third, it would underscore a failure of EU cooperation, with accompanying risks. That said, as time passes, this option might still become viable in the eyes of most Member States, as the EU would not want to be held hostage by (a few) obstructing Member States.

A track-record of last-minute deals and compromises

Admittedly, the EU has a reputation of sealing last-minute deals. In the past, the EU have shown considerable ingenuity when it comes to interpreting the Treaty, enabling them to do whatever they believe is necessary in the face of opposition from certain Member States:

• Key examples of its ingenuity are the support for Greece in the sovereign debt crisis (despite the prohibition on financial support to Member States), the way it handled the German Constitutional Court ruling on ECB bond buying and, last but not least, the recent COVID-19 response, by (temporarily) watering down state-aid rules and suspending the Stability and Growth Pact;
• The EU has also shown that – when push comes to shove – they can close the ranks, also vis-à-vis those countries that want to move in another direction; the Brexit dossier is a prime example here.

So expect the EU to look for all options/articles in the Treaty that would allow it to come to a solution including all Member States, but also for the cooperating Member States to raise the pressure on Poland and Hungary. For the latter, the key question remains, how sensitive these two Member States will be to financial and political pressures.

What would be the implications for markets?

What is perhaps most remarkable is that the market seems to have largely ignored the potential implications of this situation leading to a protracted stasis. The euro barely budged when Poland and Hungary broke ranks and it has even strengthened against the dollar in recent days. The impact on sovereign spreads has been insignificant as well. This either suggests that markets are not concerned, and/or that market participants have simply been sedated by overflowing liquidity in markets and the ECB’s plans to add even more from December onwards. That said, the Hungarian forint and the Polish zloty were on track to end the last full week of trading in November on the back footing underperforming the Czech koruna.

Still, we would argue, the market may be under-estimating the potential impact from a protracted delay or even a collapse in the EU’s Recovery Fund plans. In that case, the market could yet revise its positive stance on Europe, although we believe the impact will likely be most noticeable in the value of the euro. Some volatility may return in the sovereign bond markets, but the ECB’s PEPP remains the unstoppable force. To add more color to this view we first zoom into how the market has digested the (generally) positive news flow on the European strategy to mitigate the COVID-19 shock.

Looking back (over my shoulder)

Looking back on the market developments since the ECB launched its Pandemic Emergency Purchase Programme, the euro has clearly appreciated while sovereign spreads have declined to new lows. This is an unusual combination of currency and rates moves if we compare it to the ECB’s first venture into quantitative easing: while QE compressed spreads, back in 2015 the additional monetary stimulus also had a profound weakening effect on the currency (see figure 6). Fast forward to 2020, in the wake of the PEPP, spreads have acted the same as before, but it is the –at first glance counterintuitive– response of the euro that caused a breakdown in the correlation between the euro’s performance and peripheral spreads.

Ignoring factors that weighed on the US dollar, the fact that the euro appreciated despite more monetary stimulus can be explained by the one key difference in the pandemic response: the fiscal response. The ECB’s PEPP served as a nod to governments to open the fiscal spigots, which mitigated the economic damage. Moreover, Europe’s surprisingly quick agreement on a joint EU Recovery Fund in July reinforced confidence in the currency union, and in the EU as a whole by pushing back against fears of fragmentation. After an initial selloff of European assets in late Q1, early Q2, foreign investors flocked back into European assets, which was also visible in a rise in portfolio liabilities in the financial account after April (figure 7). Over the summer there was a general perception that Europe successfully contained the coronavirus pandemic, which increased demand for European assets.

This impact of the Recovery Fund on investors’ confidence in Europe becomes even more obvious if we look at the three phases toward an agreement (figure 8 below). These three phases are also well-illustrated by the news flow and search behavior on Google, which basically shows that the market turning points coincide with the peaks in the search activity for phrases related to the Recovery Fund:

1. The first serious discussions on an EU Recovery Fund started in April following the ECB’s pandemic support package announced in March and pressure from the ECB on the EU to take up the baton; in that early phase (April-May) there was still considerable uncertainty, in part because of the hardline stance by (initially) Germany and the ‘frugal four’ Member States. In this stage, when the ECB was still at it alone, it was mainly sovereign spreads that were affected.
2. But as the pressure on Europe grew and Chancellor Merkel and French President Macron launched their plan on 18 May (which was followed by the official EC plan one week later), the opinion among investors started to shift. Mid-May is also a clear turning point for the euro, while the proposal stopped the renewed widening of sovereign spreads in its tracks.
3. Confidence in Europe was given another boost by the unexpectedly swift (preliminary) agreement in the European Council on the EC plan on 19 July, which, importantly, paved the way for a common EU debt asset as from 2021. Investors interpreted this as a  positive signal with regard to the ability and decisiveness of ‘Brussels’ and importantly as a confirmation the euro is here to stay; the euro strengthened well into the summer, reaching multi-year highs in trade-weighted terms in August.

What if… and then what?

Having established that at least part of the recent strength in the euro has been down to the ‘successful’ flight of the Recovery Fund plan and that, in its wake, sovereign risk premiums have only further tightened, this obviously raises the risk that if the Recovery Plan runs into significant delays we could expect part of that positive sentiment to reverse. Even worse, of course, would be a total collapse of the plan, as that would imply (how unpalatable or even unlikely that may sound) that the market will again start to question the whole European project.

So basically we can envisage two scenarios: either one side ultimately blinks, or the spat between Poland & Hungary and the rest of the EU blocks the implementation of the new EU budget. Technically speaking, a third scenario could be a circumvention of the Hungarian/Polish budget blockade altogether, but that would perhaps be more of an extension of the second scenario.

Either side blinks

It is still possible that either Poland and Hungary or the other Member States blink in the upcoming months – whilst signaling during the process that there is no definitive break. That could still pave the way for an agreement on the multi-annual budget. After all, as we argued above, Europe is known for its eleventh-hour deals. While this may still see some delays in the actual implementation of the Recovery Fund –largely owing to the need of national parliaments to ratify the amended ORD– the economic and market impact should be relatively limited.

National governments may need to pre-fund more of their spending plans, but the limited and temporary nature –and the continued presence of the ECB– should keep sovereign spreads from widening significantly. However, if the standoff persists in the coming weeks and the ratification is delayed beyond 10 December, that could lead to temporary pressure on the euro, but –like the standoff– this should not last in this scenario. As outlined in his latest note available here Piotr definitely sees the risk of a short-term squeeze higher in EUR/PLN and EUR/HUF on the back of growing tensions between Hungary/Poland and the rest of the EU.

Budget blockade

If, however, both sides stick to their red lines, this could block the EU budget for a protracted period, since it needs to be ratified by all EU members. This would put the EU on rations, and it would lead to much more severe delays in the time lines for the Recovery Fund. That puts more pressure on countries’ fiscal metrics; and would lead to lower-than-expected revenues from the EU, especially from 2022 onwards.

The severity of lost income differs per country and region, but crucially, those with weaker government finances also stand to lose more – particularly by omission of the Recovery Fund. These governments will have to cut back on their spending, or get themselves into more debt to continue boosting the economy. Either way, without the European funds, the economic recovery is likely to be less inclusive, and therefore less strong. Add to that the doubts it would cast on the newfound European solidarity.

Again, this is likely to weaken the euro as investors lose confidence in the continent and the currency. Meanwhile, reduced growth prospects and/or higher indebtedness are likely to exert upward pressure on spreads. With the ECB’s purchasing programs still in place, spread widening is likely to remain limited, but volatility is likely to increase as spread drivers would no longer be unidirectional. The question is then how much the ECB needs to intervene, and these interventions are then more likely to weigh further on the currency. In effect, this would bring us back to the 2015 period when quantitative easing was first started. Moreover, looking a bit further ahead, the lower growth prospects for Europe in this scenario would give more impetus to the ‘lower for longer’ rates environment.

The table below gives some indications for the direction, duration and extent of any of these three scenarios, although we have to stress that this is a good deal of expert judgment.

In short

The outcome of the current standoff is uncertain. While the EU is known for its eleventh-hour deals, the risk that no agreement will be reached in the Council’s meeting in December is non-negligible. This is especially because there is more at play than ‘plain’ economics. Identity and sovereignty are also part of the discussion – and this is by no means the first case at hand.

Should Hungary and Poland uphold their veto for a protracted period, especially poorer regions and countries hard-hit by the crisis will feel the pain. A protracted period of uncertainty could dent the euro in currency markets, although we feel that significant volatility in bond markets is likely to be attenuated by ECB policy actions if required.

Authored by Robert Bridge via The Strategic Culture Foundation,

The globalists responsible for engineering a medical tyranny across much of the Western world have something valuable to teach right-wing nationalists and would-be fascists, and that is you don’t sell your damaged product out of the barrel of a machine gun, but rather dripping from the end of a syringe that promises to end all pain and misery.

Patrick Henry, one of America’s more outspoken Founding Fathers, famously remarked “give me liberty or give me death” when the life of his nation was on the line.

Today, America’s famous battle cry has been replaced by a masked and muffled gasp that advises, without hope of a second opinion, “give me lockdowns and keep me safe.”

So terrified is the American public of catching a virus that comes with a 99 percent survival rate that they are willing to forego Thanksgiving, the great national holiday commemorating – with no loss of irony – their Pilgrim ancestors’ collective courage to overcome the wild, hostile conditions of their new land.

It must be said that no fascist party has ever been so adept when it came to sealing the collective fate of their people to a common enemy. That’s because the threat facing mankind today, or so we are told, is not some nefarious ideology, like communism, or even a terrorist organization that the masses can be rallied to fight. Rather, the threat is a microscopic contagion that is capable of invading every nook and cranny of our lives. Already the age of manly handshakes is over, replaced by an emasculated majority, while an entire generation of youth now looks at their fellow human beings as infernal germ factories.

And unlike a traditional enemy that can be seen, attacked and eventually defeated, the coronavirus – we have been oddly forewarned – will make landfall again and again, while regularly morphing with comic book abilities into an increasingly deadlier villain. In this landless battle, only the medical authorities are decorated as heroes, while the people, lacking the professional credentials, are forced to be passive and helpless onlookers, their freedom of movement severely constrained. More importantly, the forces of nationalism have become irrelevant; only a globalist, one-world-order response can defeat this pandemic.

There is very good reason to suspect, however, that either the science on all of this is half-baked, or we the people are being intentionally duped on a grand scale. In fact, it’s probably a little bit of both. First, relying on nothing more than empirical evidence, it does not seem unreasonable to suggest that there is no existential emergency confronting mankind. If there were, we would expect to see decomposing bodies piling up in the streets, like in the medieval times during the Black Plague. This would be especially the case among the homeless population, which is certainly not practicing social distancing etiquette as they pass around open containers on street corners.

Nor does there seem to be any massive queuing up at hospitals for emergency treatment. In fact, as early as April, New York Governor Andrew Cuomo told President Trump that the Navy hospital ship USNS Comfort deployed to New York City by the federal government to help fight the coronavirus outbreak was “no longer needed”. Cuomo said the need for the support vessel “didn’t reach the levels that had been projected.” And I am certainly not the only one who has noticed that Covid cases seem to fluctuate curiously with the political climate.

Plenty of hospital rooms. You’ve got that right! https://t.co/lg0Bb2Ai9j

— Richard Hillbilly Chad (@DPotcner) October 28, 2020

Let’s not forget that the overwhelming majority of Covid ‘victims’ recover nicely at home, according to no less of an authority than Anthony Fauci. At the same time, many people who acquire the disease are asymptomatic and never even knew they were infected. Children, meanwhile, seem amazingly impervious to the virus. That is not to say that there has been no sign of a virus this winter season. Of course there has been, just like every year. But while Covid cases may be on the rise in some places, and invisible in others, the death rate from this illness remains low and tumbling, predominantly hitting elderly people already suffering from comorbidities.

There are other reasons to be suspicious that what we are dealing with is not a first-class medical emergency, but rather something much more sinister. Like maybe an excuse for rolling out a Western-made vaccine that carries a microchip implant with tracking technology? Such a claim will sound less fantastic when it is realized that it has already been developed.

It is no secret that just one month before Covid-19 made its dramatic landfall in the United States, purportedly from Wuhan, China, MIT researchers announced a new method for recording a patient’s vaccination history: storing the smartphone-readable data under the skin at the same time a vaccine is administered.

“By selectively loading microparticles into microneedles, the patches deliver a pattern in the skin that is invisible to the naked eye but can be scanned with a smartphone that has the infrared filter removed,” MIT News reported.

“The patch can be customized to imprint different patterns that correspond to the type of vaccine delivered.”

Would it surprise anyone to know that the research was funded largely by the Bill and Melinda Gates Foundation, the same family venture that now provides the bulk of funding to the World Health Organization?

In a new interview, Bill Gates authoritatively states that mass public gatherings will not come back “at all” until we have mass vaccination. Who made him king of the world? https://t.co/siW7bZ9yGc … https://t.co/ivaCI8eAEl

— Alternative News (@NewsAlternative) April 4, 2020

Then, in September 2019, ID2020, a San Francisco-based biometric company that counts Microsoft as one of its founding members, announced a new project that involves the “exploration of multiple biometric identification technologies for infants” that is based on “infant immunization.”

We could continue here with a long list of other disturbing technologies that would effectively turn people into walking antennae for the rest of their lives, but the point is hopefully clear: although many people might be willing to accept a vaccine against Covid-19, they probably do not want the extra technological add-ons that people like Bill Gates, a man with zero medical qualifications, seem extremely anxious to include.

“The food supply chain is breaking,” Tyson Foods warns in a full page ad in NYT today pic.twitter.com/5cyusH6L9V

— Ana Swanson (@AnaSwanson) April 26, 2020

So what can Americans expect next? How about ‘Freedom Passes’ that Britons may need before they are able to return to some semblance of normalcy?

According to the Daily Mail, “Britons are set to be given Covid ‘freedom passes’ as long as they test negative for the virus twice in a week, it has been suggested…To earn the freedom pass, people will need to be tested regularly and, provided the results come back negative, they will then be given a letter, card or document they can show to people as they move around.”

And this is what they call a “return to normalcy.”

Personally, I call those plans the approach of fascism. And for those who doubt that it could not happen in America should heed the words of the late sagacious comedian George Carlin, who once quipped that “when fascism comes to America, it will not be in brown and black shirts. It will not be with jackboots. It will be Nike sneakers and smiley shirts.” Had Carlin been alive today to see the tremendous mess we’ve inherited, he would most likely have included a syringe in the neo-fascist’s toolkit.

As COVID-19 cases slow after reaching a worldwide peak, eliciting a warning from WHO chief Dr. Tedros that people living in hard-hit areas shouldn’t get too complacent, a strain of “highly contagious” Avian bird flu has apparently traveled from Europe to South Korea.

A few days after an outbreak of bird flu led to a culling of more than 10,000 birds in northern England – though authorities were quick to reassure the public that there was no risk to the food supply – South Korean authorities have discovered an outbreak of a “highly contagious” H5N8 bird flu on a duck farm in the southwestern part of the country.

The outbreak, which occurred in the town of Girin-ri, roughly 300 kilometers from Seoul, killed 19,000 ducks.

There are six other poultry farms within a radius of three kilometers (1.9 miles) from the farm where the infected ducks were found, and all are being inspected.

Nearly 20k ducks died, and some 392k chickens and ducks at a total of six farms were killed, to prevent the spread of the disease, the ministry also said.

Authorities have already issued an order to stop any activities at poultry and livestock facilities, while freezing the movement of poultry products across the country for 48 hours. The blockage will last seven days for poultry farms in Jeongeup, as well as for farms within a radius of 10 kilometers from the site of the outbreak 30 days. The national alert level over the spread of bird flu has been raised to a “serious hazard.”.

The same strain of bird flu emerged in populations in Germany early this year.  It hit several of Europe’s largest poultry producers located in Germany and elsewhere. While scientists believe the pathogen – while highly contagious – isn’t contagious to humans, at one point scientists in China said the same thing about COVID-19.

Submitted by SouthFront,

US President Donald Trump is apparently set to slam the door and go to great lengths to show love to his friends in Tel Aviv before withdrawing from the White House.

On November 27, Mohsen Fakhrizadeh, a prominent Iranian professor of physics and quantum field theorist, was assassinated near the Iranian capital of Tehran. Formally, Fakhrizadeh was the head of its Organization of Defensive Innovation and Research, while Israel and the U.S. insist that he headed the Iranian nuclear weapons program.

Israeli media even called Fakhrizadeh “the Nuclear Soleimani” referring to the commander of the Iranian Qods Force, who was assassinated by a US drone strike in Iraq on January 3, 2020. That assassination almost led to a US-Iranian war and the White House even swallowed a ballistic missile strike on its bases in Iraq, while Iranian air defense forces accidentally shot down an airliner near Tehran. Fortunately, a larger war was avoided, but the region entered into a new spiral of tensions between the Israeli-US bloc and Iranian-led forces. The November assassination did not trigger an immediate military response from Tehran, but there are little doubts that it will also have negative consequences for regional stability.

According to US and Israeli media, the development of the Iranian nuclear program requires the following factors: time, money and specialists.

1. Iran has already had a lot of time.

2. Trump’s “maximum pressure campaign” was intended to target the ‘money’ factor, but Iran’s so-called resistance economy survived despite the pressure.

3. Now, the US and Israel once again turned to the ‘specialists’ factor of this formula and they have capabilities to conduct politically-motivated assassinations as a part of what they call the ‘deterrence campaign’ against Iran.

Initial reports say that the car of Fakhrizadeh was targeted by a car bomb explosion and then was subjected to gunmen fire at Absard city. According to the Iranian Defense Ministry, Fakhrizadeh “was severely wounded in the course of the clashes between his security team and terrorists and was transferred to a hospital,” where he later succumbed to his wounds. Later it appeared in the unofficial version of events, claims that the attackers used a remotely-controlled machine gun that was installed in the trunk of a Nisan pickup. Then, the pickup and the gun were detonated. The Iranian Fars News report insists that the entire attack lasted for only 3 minutes and that no gunmen were involved.

The assassination demonstrates the particular gaps in the security of such prominent and high-ranking persons. It is no secret that the life of Fakhrizadeh was under threat for years, but he still moved around the country with a small security team with only two cars, and his car was not even armored. This posture may be partly explained by the cult of martyrdom on the all levels of Iranian society and the fact that Iranian officials are pretty close to ordinary people, especially in comparison with other Middle Eastern states. These factors allow the current political regime in Iran to resist unprecedented sanctions, political and even military pressure from its opponents, but at the same time creates additional security difficulties.

Immediately after the assassination, the Iranian Revolutionary Guard Corps and the Army were put on high alert and top Iranian officials vowed to take revenge for the attack. Also, on November 29, the Iranian Parliament decided to speed up the consideration of the bill that supposes to increase the level of uranium enrichment. As a “double urgency”, it was ratified with 232 votes from a total of 246 MPs attending the session. The final vote on the adoption of the law may take place on December 2. The bill states that Iran would now produce at least 120kg of uranium enriched to 20% per year. In comparison, the Iranian nuclear deal, from which the Trump administration unilaterally withdrew, allowed Iran to enrich uranium to a maximum of 3.67%. In addition, under the bill in consideration, the government will have to put in operation one thousand additional centrifuges at the Natanz and Fordo nuclear facilities within a year. The bill also supposes an immediate return to the project for the reconstruction of the Arak nuclear reactor, which existed before the signing of the nuclear deal. Therefore, instead of slowing down the Iranian nuclear program, the assassination of Fakhrizadeh led to a public increase of the Iranian activity in the field. The United States and Israel will likely call these actions a great threat to global security and state that they are obliged to respond to the growing Iranian threat.

The only question is what do the Israeli and US leadership expect? Did they really believe that after the years of resistance and regional standoffs, that the Iranians would surrender after an assassination of one of their scientists?

On Sunday, SpaceWeather said the sun’s solar explosion was measured as an M4.4-category eruption, which produced a shortwave radio blackout over some parts of Earth and a bright coronal mass ejection (CME). 

“Remarkably, the flare was even bigger than it seemed. The blast site is located just behind the sun’s southeastern limb, so the explosion was partially eclipsed by the body of the sun. 

 

“X-rays and UV radiation from the flare ionized the top of Earth’s atmosphere, producing a shortwave radio blackout over the South Atlantic… Ham radio operators and mariners may have noticed strange propagation effects at frequencies below 20 MHz, with some transmissions below 10 MHz completely extinguished,” SpaceWeather said on its website.

A coronagraph video via the Solar and Heliospheric Observatory (SOHO) shows the massive burst of electromagnetic radiation ejecting from the sun. 

SpaceWeather said the flare and an associated CME were not Earth-facing but erupted behind the sun’s southeastern limb. This is good news because the explosion was partially eclipsed by the body of the sun. If the flare were Earth-facing, it would’ve likely been an X-class event, meaning it could’ve resulted in widespread radio blackouts, downed power grids, and disrupted communication networks. 

The last decade of solar activity has been on the decline, though the latest flare-up in activity could suggest a new busy cycle is about to start. 

In 2017, we noted that FEMA (Federal Emergency Management Administration) planned for a massive solar event that would be strong enough to take down the power grids.

There has also been a couple of notable solar flare events in the last three years:

• Huge Solar Flare Sparks Widespread Blackouts, May Deter Korean Missile Launch This Weekend
• NASA: “Sun Erupts With Significant Flare”

With the Earth entering what appears to be an active solar period that could last through 2025 – this would present many challenges for the new digital economy as remote working has been kicked into hyperdrive because of the virus pandemic. Solar flares can disrupt satellite-based communications networks, as show below:

SpaceWeather warns that from Dec. 1-2, Sunday’s M4.4-class solar flare might sideswipe Earth’s magnetic field. 

“The hidden sunspot that produced this major event will rotate onto the Earthside of the sun during the next day or two,” according to SpaceWeather. “Then its ability to spark geomagnetic storms will be greatly increased.” 

An active solar cycle could be bad news for the digital economy as disruptions sparked by solar flares could create massive economic damage.