Workers on a crane put up Nato posters on Saturday ahead of the alliance's summit in Madrid. AP Photo
Workers on a crane put up Nato posters on Saturday ahead of the alliance's summit in Madrid. AP Photo
Workers on a crane put up Nato posters on Saturday ahead of the alliance's summit in Madrid. AP Photo
Workers on a crane put up Nato posters on Saturday ahead of the alliance's summit in Madrid. AP Photo


Nato is ripe for reform, but can Madrid begin the process?


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June 27, 2022

An exchange between a Ukrainian researcher and a former high-ranking US official at an event in London last week highlighted how far the Nato alliance must still travel to respond to the Russian war.

The Ukraine expert had travelled from the Donbas where she had heard her country’s troops crying out for the weapons systems that the western countries have pledged to Kyiv’s defence. As the Russian artillery rained down, the Ukrainians took the view that the shipments were not happening fast enough. The former US official conceded the point that, while the commitment was welcome, it shouldn't be a case of "too little, too late".

Nato is not at war with Russia. In fact none of its members are at war with Russia either. But Ukraine has gained support from within the alliance since the start of the Russian war in February. Notably last week, it also saw its application to join the EU accepted. This is something that had stalled for years as Ukraine failed to make the anti-corruption reforms and other improvements that accompany any application.

The push within EU for strategic autonomy could come in part through a unified defence policy

Significantly, given the role that the application played in the lead-up to the last war in 2014, Russian President Vladimir Putin said he had no objections to it because the EU is not a military alliance. The offer of Nato membership is less forthcoming to Ukraine. But as the 30-member grouping meets for a landmark summit in Madrid later this week, Nato is the reference point for how the defence of the continent will play out.

As the link between the US and Europe, the shock to the latter's security was always going to play out in Nato’s court. With the Europeans themselves assessing that it will take until 2040 before the region can defend itself from external aggression, this is a long-term issue – not a one- or two-year passing phase.

If the arms don’t go fast enough to Ukraine, the prestige of the alliance will certainly suffer a blow. If the unity of purpose shown in the months since February unwinds, this will all be a lost opportunity.

Presidents and prime ministers have the opportunity to look at the defensive alliance in a new way and ask if there should be a systematic approach to raising the capabilities of friendly countries. Getting the arms to states deemed to be just as vulnerable as Ukraine before trouble strikes is an important consideration in allowing those places to have their own deterrence.

Polls show that more than 90 per cent of Americans hold a negative view of Mr Putin. Other polls conducted across Europe show support for Ukraine and its struggle well above 50 per cent everywhere – between 70 per cent in Poland to 58 per cent in Spain. Contrast that with a poll taken in Russia, where a majority backs the invasion and provides support for the Kremlin’s narratives.

Within Nato the spirit of unity is high, but these are early days. Not only is the test of the energy and food crises still creeping up on its members, but so too are critical choices in the defence sphere.

Germany's Angela Merkel, Turkey's Recep Tayyip Erdogan, Donald Trump of the US and France's President Emmanuel Macron at the 2019 Nato summit. Reuters
Germany's Angela Merkel, Turkey's Recep Tayyip Erdogan, Donald Trump of the US and France's President Emmanuel Macron at the 2019 Nato summit. Reuters

This week, Nato will reveal its strategic concept. In 1997, the Nato summit in Madrid set the stage for the group's enlargement. When the last strategic concept came out in 2009, Russia was still being categorised as a strategic partner. At the closing of a 20-year cycle, a new blueprint for the alliance is clearly needed.

The growing push within EU states for strategic autonomy could come in part through a unified defence policy.

One of the most important preparatory meetings that Nato Secretary General Jens Stoltenberg held was with French President Emmanuel Macron last week. Mr Macron probed how the strategic concept could incorporate EU ambitions. The Elysee Palace can no longer afford to talk about the Nato alliance being "brain dead". Now it says it has suffered an “electric shock” and is demanding answers.

America’s pivot to Asia is certainly not dead. Indeed its move to seal Aukus, a strategic rearmament agreement with the UK and Australia, shows that it is ambitious in the platforms it seeks. For now, the Europeans are not actively challenging the US over China in the way that was true two years ago. They may be seeking to end their cheap energy relationship with Russia, but they are not altering their trade-focused relationship with Beijing.

Nato’s efforts to flesh out a strategic outlook that straddles those interests is going to be a key test of its thinking next week. How it implements that approach and sticks to it when it is inevitably tested is one of the greatest challenges facing the alliance.

With the US mid-term election looming and the short run-up to the next presidential election, Nato is hostage to another concern. Europeans are broadly convinced that Donald Trump stands a good chance of being elected US president in 2024. What chance of the alliance holding together, then, is probably best described as slim to nil.

Living in...

This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home. 

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Will the pound fall to parity with the dollar?

The idea of pound parity now seems less far-fetched as the risk grows that Britain may split away from the European Union without a deal.

Rupert Harrison, a fund manager at BlackRock, sees the risk of it falling to trade level with the dollar on a no-deal Brexit. The view echoes Morgan Stanley’s recent forecast that the currency can plunge toward $1 (Dh3.67) on such an outcome. That isn’t the majority view yet – a Bloomberg survey this month estimated the pound will slide to $1.10 should the UK exit the bloc without an agreement.

New Prime Minister Boris Johnson has repeatedly said that Britain will leave the EU on the October 31 deadline with or without an agreement, fuelling concern the nation is headed for a disorderly departure and fanning pessimism toward the pound. Sterling has fallen more than 7 per cent in the past three months, the worst performance among major developed-market currencies.

“The pound is at a much lower level now but I still think a no-deal exit would lead to significant volatility and we could be testing parity on a really bad outcome,” said Mr Harrison, who manages more than $10 billion in assets at BlackRock. “We will see this game of chicken continue through August and that’s likely negative for sterling,” he said about the deadlocked Brexit talks.

The pound fell 0.8 per cent to $1.2033 on Friday, its weakest closing level since the 1980s, after a report on the second quarter showed the UK economy shrank for the first time in six years. The data means it is likely the Bank of England will cut interest rates, according to Mizuho Bank.

The BOE said in November that the currency could fall even below $1 in an analysis on possible worst-case Brexit scenarios. Options-based calculations showed around a 6.4 per cent chance of pound-dollar parity in the next one year, markedly higher than 0.2 per cent in early March when prospects of a no-deal outcome were seemingly off the table.

Bloomberg

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Tips from the expert

Dobromir Radichkov, chief data officer at dubizzle and Bayut, offers a few tips for UAE residents looking to earn some cash from pre-loved items.

  1. Sellers should focus on providing high-quality used goods at attractive prices to buyers.
  2. It’s important to use clear and appealing photos, with catchy titles and detailed descriptions to capture the attention of prospective buyers.
  3. Try to advertise a realistic price to attract buyers looking for good deals, especially in the current environment where consumers are significantly more price-sensitive.
  4. Be creative and look around your home for valuable items that you no longer need but might be useful to others.
The nine articles of the 50-Year Charter

1. Dubai silk road

2.  A geo-economic map for Dubai

3. First virtual commercial city

4. A central education file for every citizen

5. A doctor to every citizen

6. Free economic and creative zones in universities

7. Self-sufficiency in Dubai homes

8. Co-operative companies in various sectors

­9: Annual growth in philanthropy

Updated: June 27, 2022, 4:00 AM