Kazakhstan-Russia Summit Seeks Deeper Cooperation

Presidents Nursultan Nazarbayev of Kazakhstan and Dmitry Medvedev of Russia held a two-day summit in early September, at the two countries’ Seventh Forum on Interregional Cooperation in Oskemen (settled by order of Peter the Great in 1720, called Ust’-Kamenogorsk from the mid-nineteenth century until 1992), the capital of the East-Kazakhstan province. While some agreements to implement existing agreements for joint energy development of the Khvalynskoe and Imashevskoe deposits were reached, the summit was mainly notable for being less superficial than other such meetings in the recent past. 

Turkmenistan Confirms Shift Away from Russia

In mid-August, BP Azerbaijan announced that oil from Turkmenistan is now entering the BTC in Azerbaijan and will constitute between four and five percent of its present throughput of 800,000 barrels per day (bpd), which is being upgraded to 1.2 million bpd with a view towards eventual inclusion of oil from Kazakhstan’s offshore Tengiz field. These practical steps of cooperation with Azerbaijan, combined with the mid-August announcement in Ashgabad of new directions in Turkmenistan’s gas export policy, point the way towards a European direction for future Turkmenistani production, not forgetting China and the possibility of South Asia, while Iran is given only marginal reference and Russia is ignored.

The Black Sea’s West Coast Weighs In on Caspian Sea Basin Pipelines

Bulgaria and Romania have over the course of the summer been setting down their markers as regards the Nabucco and South Stream pipeline projects in an on-again, off-again manner. What they finally decide may determine which pipelines from the South Caucasus and Turkey get built where in Southeast Europe. Major investment decisions are also on the line in coming months. It is consequently little exaggeration to say that the next year, if not the next half-year, will set the main lines of the blueprint for Caspian/Black Sea hydrocarbon development for the better part of the oncoming decade.

Stress-Testing European Banks

Last month, the Committee of European Banking Supervisors carried out what is known as a ‘stress test exercise’ in order to determine how well the principal European banks could hold up in the event of a replay of a major financial crisis. The Council of the European Union had told it to do so in the wake of the chaos following the panic of 2007-08. In the event, 91 banks were tested and seven failed: five in Spain, one in Germany, and one in Greece.

However, leading financial analysts in Europe have scoffed at the results and dismissed them as misleading or worse.

US-China Economic Conflict: Not Dead, But Asleep

Currency issues have been at the center of relations between the US and China since the end of last year. Earlier this month the Obama administration chose not to name China as a ‘currency manipulator.’ Doing so would have opened the door to imposing heavy tariffs on Chinese imports. The next day, China’s State Administration of Foreign Exchange announced that it would not divest its US Treasury holdings.   

Turkmenistan Diversifies Gas Export Routes

Turkmenistan has broken Russia’s stranglehold on its gas exports by opening a pipeline through Uzbekistan and Kazakhstan to China. The country’s president Gurbanguly Berdimuhamedov has just made his first trip to New Delhi where the Turkmenistan-Afghanistan-Pakistan-India natural gas pipeline project was discussed. Earlier this year a short pipeline was opened in order to increase exports to Iran, and gas is in the process of being identified for eventual export to Europe via a Trans-Caspian Gas Pipeline and the EU’s Southern Corridor. The era of Russian control over the country’s exports is over, and Ashgabat is taking care to make certain that it is not squeezed between Moscow and Beijing.

1. Background

Europe Sets Taxing Questions

In March, the IMF reported to the G-20 finance ministers on policy options for raising money from the financial sector to pay for the costs of government intervention. Since then, many policy alternatives have been publicly discussed.

One of the first concrete policy results came this week, when the European Commission proposed on Wednesday what it calls a “preventive” bank levy to constitute a “resolution fund” that could collect up to €50 billion annually.