In Geopolitics Today - Monday, June 27th
G-7 Doubles Down on Support for Ukraine, NATO to Drastically Increase Number of Deployable Troops, and other stories.
G-7 Doubles Down on Support for Ukraine
Meeting in Elmau, Germany, leaders from G-7 countries pledged to provide security commitments in any post-war settlement in Ukraine, expressed continued intent to politically, economically and militarily support Ukraine, and outlined further ways G-7 economies will seek to punish Russia. At the same time, the G-7 countries are attempting to convince five countries — Senegal, Indonesia, India, South Africa, and Argentina — into breaking with Moscow and joining the anti-Russia sanctions.
G-7 nations want to increase pressure on Russia by preparing new measures in the ongoing economic war. According to these plans, Washington is seeking to reach an agreement on projects that would lower the price of oil at Russia’s expense while G-7 countries pledged they were ready to grant up to $29.5 billion to Ukraine. The objectives are seeking to target Russia’s state revenues while minimizing the impact of such measures on the G-7 economies. The expanded sanctions would also target Russia's revenue stream from gold exports, Moscow's military production and officials installed by Moscow in occupied areas.
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EU Grants €300 Million Loan to Moldova
The European Bank for Reconstruction and Development (EBRD) is lending Moldova €300 million to boost its energy security. The loan is to be used for transfers of natural gas from European Union natural gas hubs to Moldova’s state-owned energy trader JSC Energocom, and will work to establish some semblance of energy security for Moldova in the coming months.
The loan will be divided into two tranches. A €200 million emergency tranche intended for use in the event of a supply disruption, while a further €100 million will go toward the creation of a strategic gas reserve located in either Romania or Ukraine. Currently Moldova imports all its natural gas from the Russian state-owned Gazprom under a contract that expires in 2026. In all, the loan will finance up to one-fifth of all Moldovan gas imports for 2022, making the country slightly less vulnerable to potential disruptions.
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Egypt and Saudi Arabia Sign Economic Agreements
On the side-lines of Saudi Crown Prince Mohammed bin Salman’s visit to Egypt, the two countries signed a total of 14 agreements and memoranda of understanding worth $7.7 billion. Saudi Arabia intends to invest across a number of sectors of the Egyptian economy as Cairo seeks an economic rebound from new investments and the promise of domestic job opportunities.
The signed agreements cover infrastructure, petroleum, renewable, green hydrogen, information technology, e-commerce, pharmaceutical, and cybersecurity sectors. The bulk of the investment stems from a deal worth $3.3 billion between Saudi Arabia’s Ajlan & Bros Holding Co. and Egypt’s Arab Supply Chain Group Co. to build a Egypt petroleum storage facility in Egypt. Furthermore, ACWA Power and the Egyptian Electricity Holding agreed to produce and generate 1,100 megawatts of energy in a project estimated to cost $1.3 billion.
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NATO to Drastically Increase Number of Deployable Troops
NATO’s secretary-general, Jens Stoltenberg, has announced a move to strengthen the 30-country military alliance. Stoltenberg announced that NATO intends to increase the number of high-readiness combat troops from 40,000 to 300,000 a day ahead of a crucial NATO summit taking place in Madrid.
Stoltenberg said he expects NATO’s member states to consider Russia “the most significant threat” to their national security going forward as they contribute toward a joint military force. The stated goals of boosting the number of high-readiness combat troops is to protect NATO’s eastern flank, specifically the Baltic states of Estonia, Latvia and Lithuania. Stoltenberg failed to commit to a timeline for reaching the required number of troops, how much the initiative would cost to build and maintain or where exactly those soldiers would be stationed.
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