Top 5 news of the week

It is always good, and necessary, to keep abreast of the most important events of the last few days, both to understand the reality around us, and to be able to analyze it, and thus understand how things are transformed in our day to day. Here is a brief summary of the 5 most important news of the last week Wednesday, February 22, 2023

1.      One year of war in Ukraine

Exactly this Friday, it will be one year since the beginning of the conflict between Russia and Ukraine. On that fateful February 24, the Russian invasion of Ukraine began, planned at first as a "lightning operation", but which gradually got stuck in the Kremlin's craw.

The data on the war are disastrous: the UN estimates that Europe has received (officially) 8 million people, with Germany and Poland receiving more than one million displaced persons. In Spain, the number of refugees has risen to 166,000.  Of these refugees, an estimated 90% are women and children, with the majority of the male population remaining due to logistical and military requirements. This drama means that we are talking about the largest exodus of refugees in Europe since the Second World War.

Meanwhile, the situation is becoming tense at the international level: the US claims to have evidence that China is planning to become more involved in the conflict, giving arms to Moscow, and warning the Asian giant that this action would have consequences in terms of international relations. In turn, Scholz and Macron are calling for unity among European partners in the face of the conflict, and encouraging them to become more explicitly involved in military support for Ukraine. Just a few days ago, a convoy of Ukrainian military personnel landed on Spanish territory to be trained in the use of tanks and anti-aircraft batteries.

Far from a solution to the conflict, the humanitarian drama continues to grow. To this situation must be added the impatience of some countries such as Belarus and Moldova, which could increase their support to Russia in this conflict, as well as rumors that Moscow is preparing an offensive at the end of this month.

Finally, it seems that the swords are up. Last Monday, U.S. President Joe Biden visited Kiev, while Putin announced a speech to the nation the following day that could turn the situation around.

2.      Earthquake in Syria and Turkey: one week on from the disaster

Ten days after the fateful earthquake that shook the border between Turkey and Syria, the first more or less stabilized figures of the consequences of the earthquake are beginning to arrive. While in Syria the earthquake left 5000 dead, Turkey, the main affected country, estimates the number of dead at 40,000.

In Turkey, some of the real estate companies responsible for the construction of the buildings that did not withstand the earthquakes have been held accountable. The investigation has brought to 254 people, 55 of whom are already in custody. On the other hand, it seems that the misfortune in Syria has reached such a point that some countries that since the beginning of the war in the country (2011) did not maintain relations with the government of Al-Assad (such as Saudi Arabia or Jordan) have decided to maintain them momentarily. This reestablishment of relations is aimed at sending humanitarian aid. Meanwhile, the United Arab Emirates, a participant in the normalization of relations in the region with Al-Assad, has offered $100 million to the regime to help it get over the hump.

The thawing of relations between Syria and some countries in the area, in addition to the lifting of some sanctions by the USA, and in Europe they are beginning to consider the review of these sanctions. The earthquake seems to be an opportunity for the Syrian regime to improve its relations in the international framework, as well as a way to stabilize the regime, which has been decimated for more than a decade.

3.      Economy: Inflation moderates broadly, but continues to affect food prices

Last week we reported how inflation began to moderate, and how this fact seemed to encourage European economies, which improved their financial forecasts for the coming months. Even so, it seems that in some areas price increases are not slowing down, as in the case of some basic foodstuffs.

Inflation in the food sector, already present in the months prior to the beginning of the conflict in Ukraine, exploded with the war, due to the importance of Ukraine and Russia in wheat production. It is specifically with the EU blockade of Russian products and the sanctions against Putin that the price increase escalates rapidly.

One year after the beginning of the war, core inflation, which is the most worrying among experts, stands at a dangerous 7.5%, while food inflation rises to 15.4%, punishing the poorest incomes.

4.      Renfe scandal: chief and number two resign over train size error

A few weeks ago, the Spanish audience was surprised by the umpteenth inoperability of RENFE: the trains designed for Asturias and Cantabria were too big, to the point that they could not pass through some tunnels in the region.

Initially, some senior officials of ADIF and Renfe resigned, and it seemed that everything ended there, but, probably due to the fact that the regional elections are approaching, and this issue has strongly shaken local politics in these communities, in this case the accountability has gone further than expected. And the fact is that the head of RENFE (Isaías Tobias) and the number two of transport (Isabel Pardo de Vera), announced on Monday their resignation.

5.      Economy and climate: CEPSA opens a corridor to bring hydrogen to Rotterdam

The Dutch consortium of companies ACTE signed yesterday with Respol a memorandum of understanding in which the two parties undertook to reach an agreement to facilitate the transport of maritime transport between Algeciras and Rotterdam. In this transport high quantities of green ammonia, used for industrial purposes, would be shipped.

Supposedly, this corridor will be open by 2027, allowing CEPSA to enter the northern European market and open the door to increase the potential of customers interested in the use of this material, which the Spanish company produces in the south of the Iberian country.

The agreement has been of such magnitude that the Minister for Ecological Transition, Teresa Ribera, and the Minister of Energy of the Netherlands, Rob Jetten, signed the agreement and a complementary memorandum of understanding on hydrogen cooperation. This agreement will have a duration of 5 years, and is also welcomed by the EU, which solidifies its intention to be the leader in the transition to the green economy.    

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