From 10 to 20 December 2017 in the Middle East

During the second decade of December two main events affected the Middle East: the U.S President's decision to recognise Jerusalem as the capital of Israel, and the Houthi rebels' ballistic missile targeting  the Saudi Arabia's Royal Palace in Riyadh. At the same time stock markets rose steadily! It's easy to understand how human rights abuses and violations of international law are strictly related to the increase of stock markets around the world. At first glance, it seems that the two facts contradict each other. But it isn't always the case.

 

Sale of weapons and stock markets booming

It seems that a lot of people, such as investors, individual traders, market experts and columnist have been waiting for a new periodic crisis of the markets. Actually, we could see a "rotation" in terms of money which may flow out from the stock markets. In particular,  technology stocks have been on a all time high for a long time, thanks to the sharp development of networks and nodes both related to the world's system on transactions.       

Unfortunately, there are also some geopolitical uncertainties in the Eastern emisphere which may affect the markets:   

• Saudi Arabia leadership accepts to partially normalise relation with Israel in exchange for an alliance against Iran.
• Rohinjy people are still brutally oppressed while the developed world holds its inaction in the face of genocide and example of ethnic cleasing.
• The EU has been cutting funds allocated to Turkey due to the deteriorating situation in terms of democracy, rule of law and human rights.
• U.S. President is considering recognising Jerusalem as capital of Israel, although 330,000 Palestinians, who make up 37 percent of the city's population, have been living there since Israel captured and annexed the Eastern Sector.
• Conflicts in Yemen and Syria haven't still gone to an end.
• Sale of weapons to Saudi Arabia, Myanmar and Iran has increased sharply since 2016.

It seems that there is a relationship between the rise of stock markets and the frenetic and uncontrolled sale of weapons and munitions in the Asian continent. 

In addition to this, China and Russia call on U.S. to reduce military exercises in East Asia Region of the World. In particular, Russia foreign minister have questioned U.S. tactics on East Asia, considering the U.S. secretary of state pushes diplomatic options on North Korea.

In this perspective, while secretary of State Tillerson was consistently calling for dialogue, Trump responded to North Korea missile tests with insults on Twitter ... He called Kim Jong "Little rocket man" and "Sick puppy".

 

The most prosperous EU's regions claim the right to form a new state

With regard to Catalonia's independence declaration, which was passed by the Parliament of Catalonia on 27 October, most experts say there's no doubt that, on the long term, an independent Catalonia may be a good thing in terms of competition and regulation. Actually, Catalonia is one of the most prosperous of EU's regions.

Catalans only accounts for about 16% of the Spanish population, and 19% of Spain economy comes from Catalonia, which contributes $ 263 Billion a year to the overall Spanish economy.

Although Catalonia is bigger than many EU Member States, a very important condition for independence, to be an economic success, is that it happens peacefully. Unfortunately, Spanish government does not agree with Catalonia independence, and from a political point of view this is very different from the Scottish case, where the British Prime Minister said Scotland would hold a legal referendum. As it is known, in 2014 Scottish people voted to stay in the UK, but against Brexit in 2016. That's why Scotland should hold another referendum in order to leave the UK.

Catalans are not alone in the desire to form a new independent state and there are longstanding independence claims in other EU's regions, such as Wallonia, South Tyrol and Silesia, where people want more flexibility.  

This shows why populist movements in Europe are able to give an answer to the feel people are losing control of their own fate. As we have seen, during the last twenty-five years some countries grew enormously after they had become independent. Take for example the huge economic development of Slovakia, which split from Czech Republic in 1993.

In this perspective, Switzerland political system, in the hearth of Europe and outside the European economic area, may be a model: the Confoederatio Helvetica's decentralised entities, the Cantons, are allowed to be flexible in terms of taxation. Actually, Switzerland's federal legislation leaves a respectable amount of self-determination to the 26 Cantons, which may collect income taxes to finance their affairs, such as education system, universities, armed police forces and hospitals. And this helps to keep the country togheter.  

View of a pedestrian area in Barcelona (Catalonia)

Catalonia, Galicia and Basque country

After the higest court had declared the secession vote incostitutional, the Spanish government triggered article 155, which allows for direct control. It means, firstly, the replacement of Catalonia's senior government officials with his ministers and, secondly, the control of the region's police force, finances and public media. The Spanish Senate will decide this week.
Meanwhile the situation may deteriorate as Catalan government have declared: "use of article 155 would be see as a rejection of talks. And if talks are suspended, we will push ahead with independence". Most Catalans have been pushing for independence from Spain for decades: they have a distincs culture and language from Spain, and Spanish government marginalises them.

In addition, Galician and Basque nationalists may follow the Catalan model.

Suspension of the Catalan Parliament

The Article 155 of the Spanish Constitution says that "If a self-governing community" does not fulfill the obligations imposed on by the Constitution, or acts in a way that is seriously prejuditial to the general interest of Spain, the Government may, following Senate approval, take all measures necessary  to compel the community to meet said obbligations".

This article is never be used in the Spanish parliamentary system with its self-governing provinces. And similar provisions in other European countries have also never been invoked. It could be the natural reaction of the Spanish central government to the unilateral declaration of independence.

If the Spanish government were to invoke the article 155, it would be unclear exactly what would follow from it. We will probably see a suspension of the Catalan Parliament and Catalan Government, possibly with the arrest of members of the Catalan Government who made this proclamation, and the imposition of direct rules and administrative control of Catalonia. 

View of Barcelona, Capital and largest city of Catalonia

Catalan independence. Who will be the next in the EU?

People hang up the Catalan flag

Last Sunday, on 1st October 2017, 2.26 Million people voted  the Catalan referendum showing 90% in favour of indipendence. 1996 polling stations out of 2315 weren't closed although the Spanish government had declared the poll to be illegal. Unfortunately, police battled their way into voting stations to confiscate ballot boxes.

Catalan referendum was deemed illegal by the Spanish Supreme Court. On the one hand, section 2 of the Spanish Constitutional law says that the unity of Spanish people is indissoluble. On the other hand, Spanish Constitutional law indicates Spanish people, and Catalans think they are different from Spanish people. Catalan culture in past has experienced many challenges in efforts to maintain its distinct identity. 

In this perspective, other EU countries, which are structurated in a federal state pattern, are afraid the escalating conflict, between the Spanish government and Catalan separatists, may affect their political systems. That's why EU leaders haven't denounced the brutal police crackdown on Catalan independence referendum. They would like to think the dispute is an internal Spanish matter. It's easy to see that other people in the EU may begin to follow the Catalan independence path. 

"Alternative für deutschland" will be the third biggest party in Parliament

Just to say that after German people voted on Sunday, 24th September, the "Alternative für deutschland" party was set to enter the Bundestag for the first time. With its 80 seats, it will be the third biggest party in Parliament.

In 2013 an economics professor founded "Alternative für deutschland" party, which was soon known as eurosceptic and liberal. The new political group increased sharply since 2015 to 2016, after Ms Merkel had decided to let in more than one Million refugees.

Although it is said that the party may be considered in an extreme rightwing position, Germany's election results haven't been affecting European stock markets.