Europe Stuns With “Surprising” Record High Unemployment Print, Inflation At 4 Year Low; Euro Tumbles | Zero Hedge
Broken down by country:
And yes, that sudden housing mecca for all rental condo flippers, Spain, was just found to also have a record high unemployment rate of 26.6%. So much for that.
But the worst print for Europe is not in any of the above charts or tables, but is and has always been its youth unemployment, as an entire generation is unable to find a productive life. In this case, the EA17 Under 25 unemployment just rose to a new record high 24.1%, from 24.0% in August, driven by Spain at 56.5%, Cyprus 43.9% (was 28.0% a year ago – thanks template), Portugal at 36.9%, and Greece somewhere in the 58% ballpark.
Finally, rounding out the abysmal picture was the Euro area’s just reported October CPI, which tumbled to 0.7%Y/Y, down from 1.1% in September and below the 1.1% expected. This was the weakest annual inflation print in the continent since 2009, and is a bright red flag for Draghi that everything he has done so far has failed to stimulate inflation, but at least his precious EUR is at 2 year highs against the dollar. Alas, not for much longer as the time to reprice the European currency has arrived.
End result of all of the above:
And going much lower.
While the submarines displayed on Sunday were the older generation of nuclear vessels that are part of China’s northern fleet – and not the more advanced Jin-class based at the southern Chinese island of Hainan – the display in the domestic media nonetheless reflects the Chinese military’s growing confidence.
“It is still the first time that the Xia class has been discussed in such detail in China’s state-run media,” said Taylor Fravel, an expert on Chinese security at the Massachusetts Institute of Technology in the US. “As China’s military modernisation continues to advance, the PLA has become more willing to discuss its capabilities.”
In recent years, the People’s Liberation Army Navy has become increasingly active in the Pacific, particularly in staking Chinese claims to disputed maritime territory in the South China Sea.
Chinese ships and aircraft have also become more aggressive in challenging Japanese control of the Senkaku Islands – which China calls the Diaoyu – in the East China Sea.Japan has administered the uninhabited group for decades, but China and Taiwan both claim sovereignty.
While the White House spied on Frau Merkel and Obamacare developed into a slow-moving train wreck, while Syria was saved from all-out war by the Russian bell and the Republicrats fought bitterly about the debt ceiling… something monumental happened that went unnoticed by most of the globe.
The US quietly surpassed Saudi Arabia as the biggest oil producer in the world.
You read that correctly: “The jump in output from shale plays has led to the second biggest oil boom in history,” stated Reuters on October 15. “U.S. output, which includes natural gas liquids and biofuels, has swelled 3.2 million barrels per day (bpd) since 2009, the fastest expansion in production over a four-year period since a surge in Saudi Arabia’s output from 1970-1974.”
After the initial moment of awe, pragmatic readers will surely wonder: Then why isn’t gasoline dirt-cheap in the US?
There’s indeed a good explanation why most Americans don’t drive up to the gas pump whistling a happy tune (and it has nothing to do with evil speculators). Let’s start with the demand side of this equation.
Crude oil consists of very long chains of carbon atoms. The refineries take the crude and essentially “crack” those long chains of carbon atoms into shorter chains of carbon atoms to make various petroleum products. Some of the products that are made from petroleum may surprise you.
|Top 10 Things You Didn’t Know
Use Compounds Made from Crude Oil
The United States has the largest refining capacity in the world and is still by far the largest consumer of oil in the world (though China is beginning to catch up), and its refineries require 15 million barrels of oil a day. That means even though, due to the shale revolution, domestic production has dramatically increased to about 8 million barrels, the US still has to import between 7 and 8 million barrels of expensive foreign oil a day.
Let’s take a look at who the US buys the imported oil from. (Now that I finally figured out my way around the new Windows 8—which, by the way, really sucks—I can even add some color to my tables.)
Millions of barrels
exported to US per day
Canada is blue because it is not only friendly with the US, but also has the ability to increase oil production. The other countries are red because they either have decreasing oil production, or the country is not on good terms with the US government, or the production may be at risk for various reasons. The “red countries” all sell oil to the US at higher prices than does Canada.
As I said, the US imports about 7 million barrels of oil a day, and our top 5 exporters make up between 5.6 and 6.8 million barrels while the rest is split among other countries.
This means that even though the US has significantly increased its oil production in the past five years, a good chunk of oil has to be imported at much higher prices. And higher crude oil prices for refineries means higher prices at the gas pump.
But that’s not the only issue: The “new oil” produced from the shale oil fields in the Bakken and Eagle Ford formations isn’t cheap. Both the Bakken and Eagle Ford have been hugely successful, and an average well in either region can produce over 400 barrels of oil per day.
That may sound like a lot, but drilling thousands of meters into the ground (both vertically and horizontally), then casing and fracking the well, costs millions of dollars. And the trouble doesn’t end once the well has been drilled: oil and gas production can drop as much as 50% in the first year.
Think of it as running on a treadmill—but the incline gets steeper and steeper the longer you run. That’s the current reality of America’s oil production.
Now, these areas also have to deal with declining legacy oil production (“legacy” meaning older oil wells that produced before fracking became popular) due to depletion rates. Freeze-offs, and even hurricane season can affect the legacy oil wells’ production decline.
As the old wells begin to deplete, they need to be replaced by unconventional wells with horizontal drilling and hydraulic fracturing. Even though these new wells provide an initial burst of production, they decline very quickly. That means you need to drill even more wells just to keep up—and the vicious cycle continues.
The costs, as you can imagine, are forbiddingly high. Even in known oil-rich regions like the Bakken and Eagle Ford, the all-in cost of extracting a barrel of oil from the ground can cost as much as US$75 per barrel (for comparison, Saudi Arabia can produce oil for as low as US$1 per barrel). To put it in simple terms: cheap oil in North America is a thing of the past.
So, the US produces expensive oil and relies on imports of even more expensive oil. And since the refiners need to make money as well, this means higher prices at the pumps. Who loses? The US consumer, of course.
What would help lower gas prices? Building more pipelines to deliver cheaper Canadian oil to refineries in the US and decreasing the refineries’ dependence on expensive foreign oil. Until these new and much safer pipelines are built, rail has to pick up the slack. Almost 400,000 railcars full of oil are expected to be shipped in 2013, compared with just 9,500 railcars in 2008, a whopping 41-fold increase.
But rail is not the answer. In fact, transporting oil by rail is much more dangerous than transporting it by pipeline. Just last week, we wrote about two recent accidents, one of which claimed 47 lives.
Federal and state taxes at every step of the gasoline-making progress make the pain at the pump even worse. The US government already takes more than 60% of the divisible income from every barrel of oil produced… and another 50 cents per gallon at the pump.
Then there’s the matter of Obama’s supposed “Green Revolution” and how America would be saved through the use of alternative energies. Obama wrote massive checks to different renewable energy firms that went belly-up, the most famous of them all being solar panel manufacturer Solyndra, whose bankruptcy cost American taxpayers more than $500 million. Obama is also a heavy supporter of ethanol (his home state of Illinois, after all, is the third-largest ethanol-producing state) and has increased the targets for the use of ethanol in transportation.
Someone has to pay for all of these subsidies, so why not get the dirty, evil oil companies to pay for them? Keep in mind, though, that the oil companies have enough lobbyists and lawyers to keep the government at bay—so the higher prices will be passed on to the consumers.
To sum up why the price of gasoline is so high even though the US is producing so much more oil than before:
- The high cost of American oil production
- Even higher costs due to imported (non-Canadian) oil
- Obama not allowing cheaper Canadian oil to flow to the refineries via pipelines such as the Keystone XL
- The taxes on crude are used to fund Obama’s green dream—his green-energy “legacy”—and his love for ethanol and the taxes at the pump will not decrease
So what does this mean for you, the consumer?
You have two options: You can gripe about high gas prices… or you can choose to profit from the situation, no matter how dire. If you’re the former type, so long, and I hope you enjoyed my missive today. If you’re the latter, let’s talk money.
Who am I? Well, I kinda look like this guy…
|Good day in the markets||Bad day in the markets|
But really, I’ve had a pretty good run. Here is my audited return since January 1, 2012 (green column on the left).
I stand by my performance and offer anyone reading this article a guarantee: if you try the Casey Energy Reporttoday and do not think that it’s the absolute best energy newsletter in the business, you get all your money back, no questions asked.
I’m not saying I’m perfect (my wife reminds me daily that I’m not ), but I’m willing to put myself out there and offer you a challenge to expand your knowledge and become a better investor. All of my past newsletters, going back to 2006, are up on the Casey website, and I want you to check them out.
I have lost money on investments (anyone who says they haven’t is a liar), but I made sure I learned something from every harsh experience. And overall, I’ve made much more than I’ve lost. Our energy portfolio has been delivering +50% gains since January 1, 2012.
Right now, I’m the first to publish on what I think is going to send my track record to the moon. I’m on to an investment theme that I believe has the potential to make 10-fold returns for investors who play it right. That theme is the European Energy Renaissance.
Doug Casey and I are convinced that new technologies applied in the Old World will bring huge New World profits. But don’t take my word for it—I challenge you to try out my research. Click here to take me up on my 100% money-back guarantee.
- Oil falls below $98 on plentiful supply (kansascity.com)
- Retail gasoline prices across Texas down 2 cents (wfaa.com)
- Gasoline could fall to $3 a gallon as crude prices continue to drop (jsonline.com)
If one watches (or reads) any of the mainstream media, it might seem ‘obvious’ that Europe is doing well; it’s recovering; and the crisis is over (almost over..). However, as Punk Economic’s David McWilliams explains in this excellent overview of the European delusion and Merkel’s dilemma, there is a “wedge” of unreality between the so-called “markets” and the reality of economic progress. From playing with Germany’s money to moar bailouts, and from Merkel’s enabling of Draghi’s excess to the reality that nothing has changed across the European region, in under 9 minutes, McWilliams brief tour-de-force is a must-watch before you ‘chase’ more performance with the herd. McWilliams concludes, however, with a darker edge of the inevitable endgame of a “slow trudge” to federalization (and loss of sovereignty) that will likely see Nigel Farage (and many others) apoplectic.
While nearly three years after the Fukushima disaster the world is finally focused, rightfully so, on the epic ecological and radioactive clusterfuck unfolding in Japan, where in a desperate effort to distract the population from what is going on in its back yard, the Premier has launched the most ridiculous monetary experiment doomed to failure, the reality is that the US itself harbors a veritable waste land of radioactive fallout, much of it hidden in plain sight.
As the following interactive map from the WSJ shows, of the 517 active sites in the continental US, found on the Department of Energy’s listing of facilities “considered” for radioactive cleanup through its Formerly Utilized Sites Remedial Action Program, some 43 have a “potential for significant radioactive contamination” through the time of the study.
From the WSJ:
During the build-up to the Cold War, the U.S. government called upon hundreds of factories and research centers to help develop nuclear weapons and other forms of atomic energy. At many sites, this work left behind residual radioactive contamination requiring government cleanups, some of which are still going on.
The Department of Energy says it has protected the public health, and studies about radiation harm aren’t definitive. But with the government’s own records about many of the sites unclear, the Journal has compiled a database that draws on thousands of public records and other sources to trace this historic atomic development effort and its consequences.
Find out if your state, city, or town is located next to a potential dormant and largely secret Fukushima, using the following handy interactive map.
While we invite readers to drill down their particular state, the top ten states with the most cites are listed in descending order below, starting with…
- In your neighborhood? WSJ lists locations of Cold War-era nuclear manufacturing and research sites (casesblog.blogspot.com)
By Chen Aizhu
BEIJING (Reuters) – Sinopec Group wants to sell half of its two biggest shale gas fields in Canada to spread costs and accelerate their development as the Chinese energy company focuses increasingly on return of investment, an executive said.
The sale of an overseas asset would be a rare move for one of China’s state-owned energy companies, which have spent hundreds of billions of dollars investing in hydrocarbon resources from North America to Australia to secure China’s energy supply, often to hostile reaction.
Canadian Natural Resources Minister Joe Oliver told Reuters in Ottawa that Sinopec’s stance shows “a state-owned enterprise that is acting like a commercial operation”: buying, selling or bringing in partners when appropriate.
Sinopec would join a number of other companies seeking partners in the shale regions of Western Canada, in what has become a buyer’s market, albeit a popular one because the high-value shale gas is likely to soon find a ready market in Asia.
“We are not only buyers, but also actively seek joint-venture partners to optimize assets,” said Feng Zhiqiang, newly appointed chairman of North America operations at Sinopec International Petroleum Exploration and Production Corp, Sinopec Group’s main acquisition vehicle.
“There is no such thing that a state-owned company’s job is only to obtain resources. Scale is important, profitable scale is more so,” Feng told Reuters in an interview.
Sinopec Group, the parent of top Asian refiner Sinopec Corp, is looking for an equal equity partner for Montney and Duvernay, two Western Canadian shale gas plays totaling some 500,000 acres (2,000 sq. km). They are operated by Daylight Energy, which Sinopec acquired in 2011 for more than $2 billion and later expanded.
A sale could be viewed positively in Canada, where a landmark $15.1 billion acquisition of domestic company Nexen by state-owned Chinese oil firm CNOOC Ltd generated intense political debate and a policy backlash that centered in part on whether state-owned firms would follow market signals like normal commercial companies.
Oliver, who visited China earlier this month, said he got no sense of a diminished interest in Canada’s resources.
“There was a lot interest and enthusiasm for our resources and investing in resource sectors in Canada at the very highest level in the government, right up to and including the president (Xi Jinping),” Oliver said.
“The president commented (that) …there is a real complementarity between our countries’ strategic interests, particularly in the energy sector. We need to diversify our markets. It’s a strategic imperative. And they want to diversify their sources of supply and want to make investments in that context as well.”
STEPPING UP EXPANSION
Feng declined to give a price tag for the stakes in the acreage but said their combined recoverable reserves were in the range of tens of trillions cubic feet.
Thanks to successful exploration and a low purchase price, Sinopec has boosted the value of Montney “many times over”, but the cost of the drilling to monetize the unconventional resource is too heavy for Sinopec to handle alone, said Feng. Sinopec wants to remain the operator.
Sinopec, which supplies nearly half of the Chinese oil market, has so far spent $10 billion in Canada, around 14 percent of its total overseas investments.
It pumps an oil equivalent of 3.5 million tonnes a year, or 70,000 barrels per day, from its two main acquisitions there -shale gas-focused Daylight Energy, and a 9.03 percent stake in heavy oil producer Syncrude.
That is a fraction of the nearly 5 million barrels a day Sinopec buys on the international market for Chinese refineries.
As a result of very high development costs and weak gas prices following the U.S. shale boom, Sinopec’s Syncrude operations have so far generated returns below expectations, and Daylight is still seeing negative cash flows, Feng said.
Despite that, Sinopec wants to accelerate expansion over the next few years in Canada, potentially a major and stable supplier to China, which overtook the United States last month as the world’s top net oil importer. Canada holds the world’s third-largest oil reserves after Saudi Arabia and Venezuela.
Sinopec also hopes to be a sizeable gas player in Canada, building on the Daylight business and targeting annual capacity of 10 million tonnes of liquefied natural gas by around 2020 to help feed China’s rapidly growing demand for the cleaner fuel.
“There are few other pairs of countries like Canada and China that best complement each other,” Feng said.
But regulatory hurdles and lack of key infrastructure may hinder the growth of the Canadian energy sector, he said.
The Canadian government has raised the bar for future acquisitions of its vast oil sands reserves by state-owned enterprises, limiting them to being minority stake holders.
Sinopec also holds a 5 percent stake in Enbridge Inc’s planned $5.8 billion Northern Gateway pipeline, which would take oil sands crude from Edmonton, Alberta, to the Pacific Coast port of Kitimat, British Columbia.
The line is awaiting a final decision from federal regulators, expected by yearend. But the provincial government of British Columbia is wary, and the project faces solid opposition from environmental groups and aboriginal communities.
Changing market conditions have brought Sinopec many takeover targets, but it will be picky and aim for “fair price” deals, Feng said.
“Many companies are chasing us as a lot of oil sands and gas companies are in financial difficulties. But most of them still have very high expectations and believe that Chinese or Asian companies are ready to pay significant premiums,” he said.
Talisman Energy Inc, Canadian Natural Resources Ltd, Athabasca Oil Corp and others are already looking partners for their holdings in the Montney and Duvernay shale gas regions.
The two regions have become attractive to the oil industry despite low natural gas prices. Not only will the gas from the regions’ fields find a ready market in Asia once planned LNG plants are completed on the British Columbia coast, but the regions also contain millions of barrels of high-value natural-gas liquids such as ethane and propane.
- Sinopec keen to sell half of its Canadian shale assets in Montney and Duvernay (business.financialpost.com)
- Sinopec profit rises as fuel price controls eased (kansascity.com)
- Sinopec 3Q profit up 20 per cent after China loosens fuel price controls (canadianbusiness.com)
- Sinopec Profit Precedes Li’s Plan to Reduce State Role – Bloomberg (bloomberg.com)
I recently wrote an article entitled “What Is A Liquidity Trap & Why Is Bernanke Caught In It?” wherein I discussed the definition of a liquidity trap as:
“A liquidity trap is a situation described in Keynesian economics in which injections of cash into the private banking system by a central bank fail to lower interest rates and hence fail to stimulate economic growth. A liquidity trap is caused when people hoard cash because they expect an adverse event such as deflation, insufficient aggregate demand, or war. Signature characteristics of a liquidity trap are short-term interest rates that are near zero and fluctuations in the monetary base that fail to translate into fluctuations in the general price levels.“
Importantly, this evidence is mounting that the Federal Reserve has now become trapped within this dynamic. The boost in asset prices caused by the increased levels of liquidity in the system has benefited the wealthy while doing little to jumpstart the real economy. As I stated previously:
“However, the real question is whether, or not, all of this excess liquidity and artificially low interest rates is spurring economic activity? To answer that question let’s take a look at a 4-panel chart of the most common measures of economic activity – Real GDP, Industrial Production, Employment and Real Consumption.”
“While an argument could be made that the early initial rounds of QE contributed to a bounce in economic activity; it is also important to remember several things about that particular period. First, if you refer to the long term chart of GDP above you will see that economic growth has ALWAYS surged post recessionary weakness. This is due to the pent-up demand that was built up during the recession that is unleashed back into the economy. Secondly, during 2009 there were multiple bailouts going on from ‘cash for houses’, ‘cash for clunkers’, direct bailouts of the banking system and the economy, etc. However, the real test for the success of the Fed’s interventions actually began in 2010 as the Fed became ‘the only game in town’. As shown above, at best, we can assume that the increases in liquidity have been responsible in keeping the economy from slipping into a secondary recession. Currently, with most economic indicators showing signs of weakness, it is clear that the Federal Reserve is currently experiencing a diminishing rate of return from their monetary policies.”
From this standpoint it was shocking to see someone, particularly Larry Summers, actually discuss this issue during a recent CNBC interview stating his case on why it is wrong to rely on monetary policy as the main driver of the economy.
The important point is that, for the first time that I am aware of, someone has verbally stated that we are indeed caught within a liquidity trap. This has been a point that has been vigorously opposed by supporters of the Federal Reserve actions.
Of course, the lack of transmission of the current monetary interventions into the real economy has remained a conundrum for the Federal Reserve as the gap between improving economic statistics and the real underlying economic fabric continues to widen. As Larry states, we are indeed in uncharted territory. With the direct manipulation of interest rates near impossible, it leaves only verbal (forward guidance) and liquidity (increases of excess reserves) policy tools available. The problem is that these tools have never been used to such a massive extent before in history. While analysts and economist continue to suggest, with each passing year, that stronger economic growth is coming; it has yet to be the case. As discussed previously, this is a tell-tale sign of a liquidity trap.
My belief all along has been and remains that a well thought out combination of both fiscal and monetary policy is the correct remedy for what ails the U.S. economy currently. However, up to this point, the Fed has been the “only game in town” to quote the famous words of Senator Chuck Schumer. I have to admit that I was pleasantly surprised by Larry Summers view point as I believe that it is the correct one at this late stage of the current economic recovery cycle.
“Canada is a developed country and it is having an implosion of the sort that we’ve only seen in the developing countries,” said Rebecca Adamson, president and co-founder of First Peoples’ Worldwide, the group that conducted the study.
“We’ve always seen this erupt when a government refuses to be clear in upholding indigenous land tenure.”
The Indigenous Rights Risk Report studied 52 U.S. resource companies and 370 projects around the world, including 16 companies and 76 projects active in Canada. The aim of the survey is to assess how likely it is that conflict with indigenous communities could result in costly shutdowns.
Canada is home to six of the 21 projects deemed to be at highest risk of collapse according to the group’s analysis — more than any other country. Countries such as Argentina, Indonesia and Ghana are its peers on the list.
The Canadian government is “operating like a third-world country,” Adamson said, adding that its approach to indigenous rights more closely mimics the Philippines and Brazil than the U.S and Australia.
Signs are pointing to an increasing number of protests and possible violence in the country, she added.
First Nations have been on a legal winning streak in Canada, with nearly 200 court victories recognizing their right to be consulted — and in some cases accommodated.
But companies operating in Canada have no clear regulatory guidelines for how to deal with aboriginal communities, creating an uncertain business climate.
“Canada is caught in a moment of schizophrenia because the Canadian court systems are upholding these cases the way that would be expected from all of the developed countries that uphold the rule of law,” Adamson said.
The Harper government’s stance on First Nations and resource development has been called into question in recent years, particularly in the wake of controversial changes to native rights in Bill C-45, the Idle No More protests and after violence erupted at a protest against fracking in New Brunswick this month.
Story continues below gallery
Elsipogtog First Nation Protest Fracking Projects
Canada’s risk level was graded three out of five — medium risk — higher than other industrialized countries like the U.S., New Zealand and Australia, which had a risk level of two.
Canada’s risk level started at a two when the study began two years ago, but after a series of flare-ups the group moved its risk factor higher citing an inconsistent enforcement of indigenous rights.
The group said Canadian projects scored so poorly partly because of the government’s failure to uphold its obligations to First Nations, which is in turn inflicting financial and reputational damage on companies trying to do business in the country.
“The Canadian government may be pro-business but its policies towards First Nations will have very anti-business results,” Adamson said.
“You can already see this in the fact it has the highest number of risky sites. Eventually the companies pull out.”
Houston-based Southwestern Energy’s project in New Brunswick made headlines earlier this month when violence broke out between police and First Nations protesters. That project was ranked highest of the Canadian projects with a risk rating of 4.2 out of 5, the same score as a project in Nigeria.
The company has said the blockades have cost it as much as $60,000 per day. It’s a consequence the report said shows why it makes good business sense to respect indigenous rights and work with their communities and a perfect example of what happens when governments ignore aboriginal sovereignty.
The report concluded that Southwestern “executives were ill-prepared and uninformed for how First Nations in Canada can impact their operations, thus leaving investors and shareholders at risk.”
Cliffs Natural Resources oft-delayed chromite project in Ontario’s Ring of Fire region also ranked highly on the list, with a score of 4.1 out of 5.
The surrounding First Nations in northern Ontario have many concerns about the impact of a giant mining development on their land and traditional way of life. They say an environmental review of the project was too weak.
Cliffs has cited frustration with hold-ups from government and First Nations fordelaying and potentially cancelling the project, saying if it is forced to walk away, it will send a bad signal about Canada’s mining climate.
Some ever-controversial oilsands projects rounded out the riskiest Canadian projects.Kinder Morgan’s Trans Mountain Pipeline, the Apache/Chevron/EOG Pacific Trails Pipeline, as well as Murphy Oil’s Alberta Bakken project and its Peace River Oil Sands project were assigned a risk rating of four.
Canada’s oil industry looks to governments to settle issues on land claims, treaty rights, traditional territories, consultation processes and royalty/revenue-sharing positions, said Canadian Association of Petroleum Producers spokeswoman Geraldine Anderson, adding CAPP wouldn’t comment specifically on the report.
The clash between resource extraction and indigenous rights is expected to become more pronounced in the coming years as indigenous people increasingly see their rights enshrined at national and international levels and exercise them more effectively.
At the same time, a shrinking number of available resource discoveries means companies are pushing into more remote regions and Indigenous lands.
The study found that most of the 52 companies studied were ill-prepared to engage and work with indigenous people — a whopping 90 per cent of them had no clear indigenous policy at all.
The report says the moral imperative alone has not been effective in forcing companies and governments to respect indigenous rights. The group aims to show companies that there are good financial reasons to accommodate aboriginal communities, namely avoiding protests, bad press and legal battles.
- UN: Canada faces crisis over indigenous issues (boston.com)
- Aboriginal Consultations Bypassed (indigenouscanada.wordpress.com)
- United Nations envoy arrives in Canada to document Aboriginal concerns (mining.com)
- First Nations aren’t swayed by vague promises (theglobeandmail.com)
UKRAINIAN MOD AND GENERAL STAFF DELEGATION VISITS SHAPE
Story by SHAPE Public Affairs Office
MONS, Belgium: A delegation from the MoD of Ukraine and General Staff met with Deputy Chief of Staff Military Partnerships, Major General Haluk Cumali Çetinkaya, and other Staff Representatives at Supreme Headquarters Allied Powers Europe (SHAPE) on Tuesday, 29 October 2013. Members of the delegation were briefed on ACO current structure and functions, as well on the NATO Force Generation process. Both briefings were followed by a question and answer session, where issues of mutual interest between NATO and Ukraine were discussed.
The recent Ukrainian commitment to participate in the Alliance’s counter–piracy mission, Operation Ocean Shield, is a recent example of NATO–Ukraine relations. The Ukrainian Navy frigate HETMAN SAGAIYDACHNIY joined Operation Ocean Shield on 10 October 2013, marking the first time a partner nation has contributed to NATO’s counter–piracy effort, which has been operating off the Horn of Africa, since 2009.
Ukraine also contributes to the NATO Response Force (NRF) and is participating in Exercise Steadfast Jazz in November, which is designed to train and certify the NRF.
“For many years UKR contributes to Euro-Atlantic security with respect to both NATO led operations and the NATO Response Forces. We are grateful for continued Ukrainian efforts to work together with NATO in the traditional areas of cooperation of defence reform, interoperability and operations, as well as emerging areas of cooperation”, said General Çetinkaya. “Your visit to SHAPE highlights once again the strength and depth of the NATO-Ukraine relationship” he said. As well General Çetinkaya expressed his gratitude for Ukraine efforts to maintain a permanent UKR Partner Liaison Team and two Partnership Staff Element officers presence in MPD, as it is a key element ensuring a smooth NATO – Ukraine Military Cooperation on a daily bases.
Currently, Ukraine is the only partner nation contributing to all NATO-led operations and the NRF. The Allies and Ukraine discuss issues of mutual interest within the NATO-Ukraine Commission, which provides a forum for consultation between the Allies and Ukraine on security issues of common concern, such as Afghanistan, the Balkans, the fight against terrorism, frozen conflicts and other regional security issues.
- NATO chief says Ukraine, Georgia will not accede to alliance in 2014 (panarmenian.net)
- Ukraine abandons bid to join NATO (stripes.com)
- Further Integration: Ukraine Joins NATO’s Indian Ocean Operation (dirtywhitegoy247.wordpress.com)
- NATO accepts – Georgia to join NATO’s Rapid-Reaction Force (phantomreport.com)
- NATO sees great potential for co-operation with Ukraine (glblgeopolitics.wordpress.com)
- Sweden To Join NATO Response Force (stratrisks.com)
Russia has denied reports that its intelligence services spied on hundreds of foreign delegates at a Group of 20 summit in St. Petersburg in September using gifts such as teddy bears, diaries and free USB keys.
Quoting a report from the European Council’s security office to Italian intelligence services, Italy’s Corriere della Sera daily has reported this week that at least 300 such devices were issued at the Sept. 5-6 summit and were revealed to be spy gear during security debriefing sessions last month.
The report fuels controversy over international espionage after reports that U.S. intelligence services had conducted telephone surveillance of allied countries and leaders.
Kremlin spokesman Dmitry Peskov said he did not know what the source of the latest allegations was.
“This is undoubtedly nothing but an attempt to shift the focus from issues that truly exist in relations between European capitals and Washington to unsubstantiated, non-existent issues,” he was quoted as saying by RIA news agency.
Tension between the United States and its allies has grown over reports that European leaders including German Chancellor Angela Merkel had been spied on by U.S. intelligence services.
Gifts showed signs of ‘manipulation’
According to Corriere della Sera, a regular debriefing with European Council President Herman Van Rompuy and other EU delegates revealed they had been given souvenir USB keys and cables to connect smartphones with personal computers.
It said EU officials alerted German intelligence services which conducted detailed tests on the devices.
“These are devices adapted to the clandestine interception of data from computers and mobile telephones,” the newspaper quoted an initial report as saying.
Daily La Stampa newspaper said the devices showed “anomalies” and signs of “manipulation” but it was not certain how much information had been collected by Russian spies.
The reports appear to show a more traditional pattern of intelligence gathering than the reported U.S. snooping.
The Guardian newspaper reported in July that British intelligence services had spied on G20 delegates at a summit in 2009, tricking some delegates into using free internet cafes apparently set up for their benefit.
- Italian Reports Say Russia ‘Tried To Spy On G20 Nations’ With Gifts Of Hacked Cables And USB Sticks (huffingtonpost.co.uk)
- Russia denies reports it spied on G20 leaders (abc.net.au)
- Did Russia use teddy bears, souvenir USB keys to spy on leaders during G20 summit? (thestar.com)