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Weekend Economic Glance, Nov. 15-23

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Written by Frank Jakob exclusively for SouthFront

The last week send out some signals of hope regarding the relationship of the EU and Russia. Not only did the joint anti-terror campaign bring the closer together but President Juncker also wrote a letter to Putin in which he advocates a stronger economic relationship between the two partners. Furthermore, Russia and Iran are about to create a jointly led bank. Meanwhile Israeli is taking legal actions against the EU. Finally, Russia will sanction Ukraine in 2016 despite political pressure from the EU. 

President of EU offers Russia stronger economic ties. Jean-Claude Juncker wrote a letter to Vladimir Putin in which he proposed a stronger economic cooperation between the EU and the Russian-led Eurasian Economic Union (EEU). Juncker is an advocate for better ties with Russia, saying that “it’s not sexy but that must be the case, we can’t go on like this”. According to Reuters, a passage of the letter read: “The decision on the circumstances in which to proceed along this path is in the hands of the member states of the European Union and should in particular by synchronized with the implementing of the Minsk agreements“. Putin has confirmed the existence of such a letter, however, he did not disclose the contents but promised an answer.

Russian-Iranian bank in the pipeline. Tehran has agreed to Moscow’s proposal to open a jointly led bank. The banks purpose would be to finance economic projects between the two countries in order to strengthen both nations ties with each other. “This could happen soon. It depends on technical details and the ways they could be resolved,” Mehdi Mohtashemi, deputy co-chair of the Russian-Iranian intergovernmental commission told RIA Novosti. The initial capital of the bank would be $ 500 million with the option of a step up when trade and joint projects grow over time. Mohtashemi said that the ultimate goal of the bank would be to boost Russian-Iranian trade from $ 2 billion to $ 10 billion over time. Just like the newly formed Asian development bank (AIIB), it is projects like this that weaken the influence of the US-dominated International Monetary Fund and the World Bank and help create a muli-polar world, a vision that was long propagated by Russian President Putin.

Israel to consider lawsuit against the EU. The Israeli government has stated that it is thinking about legally challenging the EU’s decision to require origin labels on products from Israeli-occupied Arab settlements. According to Haaretz newspaper, Strategic Affairs Minister Gilad Erdan and Justice Minister Ayelet Shaked are pushing the government to take legal action. The European Commission has insisted that the labels are a technical matter while Israel insists it is a political move aimed at putting pressure on the country. Europe’s largest department store has apparently already removed all Israeli products from its shelves.

Russia to sanction Ukraine starting 2016. Russia is going to sanction the Ukrainian food sector starting January 1st 2016. This has been announced by the Russian government in spite of attempts made by the European Union to change Russia’s mind on the topic. Moscow justified the decision by saying that Ukraine has joined the anti-Russian sanction regime in both the economic as well as the financial sectors. Therefore Russia has to take countermeasures, said the chief of the Russian ministry for economic development. Russia previously said they were willing to forego the measure if a compromise could be reached over Ukraine joining the European free trade zone.

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