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European Union Geopolitical Watch – From September 17 to September 23, 2022

European Union Geopolitical Watch Team: Léo Caget, Audrey Moisan, Yanis Kourrad, Antoine Bézier, Etienne Mathieu

09/19/2022: French Prime Minister announces a 9 billion euro investment over three years in the astronautical sector. – Léo Caget-

On Sunday, September 18th, French Prime Minister Elisabeth Borne announced a major investment of 9 billion euros in the space sector, at the opening of the 73rd International Astronautical Congress in Paris: “In total, France is preparing to invest more than 9 billion euros in the space sector over the next three years, for research and our space industry.” This envelope includes a set of credits, some of which have already been voted earlier this year. They are intended for the space section of the France 2030 investment program (1.5 billion euros), the financing of the National Center for Space Studies (CNES), the programming law for research to 2030, and some must cover part of the 5 billion euros allocated to the military programming law 2019-2025. This announcement is also part of a European strategy, since these 9 billion will contribute to the budget of the European Space Agency (ESA), the French contribution will be determined in November with the ministers of the 22 ESA member states. This 25% increase in the space budget – compared to the last 3 years – shows a French and European willingness to stay in the space race, facing new Chinese and American ambitions. The United States should start its Artemis program at the end of September, despite two postponements due to technical problems.

09/20/2022: The Council of the European Union approves a decision for the conclusion of a framework agreement between the EU and Australia. -Yanis Kourrad-

After several months of negotiations, the conclusion of a framework agreement between the European Union and Australia was finally approved by the Council of the EU on 20 September.

This agreement provides for a strengthening of the links between the EU and Australia, particularly in order to take up foreign policy challenges such as security and climate change with greater vigor. It is within the framework of this agreement, based on common principles of respect for human rights and the rule of law, that the two parties also intend to pursue their cooperation in several policy areas such as legal cooperation, energy and health. At a time of rising geopolitical tensions, this agreement is intended to support a close relationship between civil society, business and government leaders in the European Union, its Member States and Australia.

While the framework agreement will enter into force from the end of October 2022, the simple decision on the conclusion of the framework agreement entered into force on 20 September.

09/20/2022: French President Emmanuel Macron speaks about the Russian-Ukrainian situation at the UN. -Audrey Moisan-

September 20, 2022 was held in New York the 77th session of the UN General Assembly, during which the Russian-Ukrainian crisis had a consequent place. French President Emmanuel Macron was invited to speak at the podium on this subject.

In his speech, the President of the French Republic emphasized the fear of a return of Russia’s imperialist aspirations, which are contrary to the Charter of the United Nations, of which Russia is one of the 5 permanent members of the Security Council. The President also reaffirmed France’s position in the conflict, as well as against any form of imperialism or colonial will; while denouncing the neutrality of certain States which he judged as “[serving] in spite of themselves the cause of a new imperialism which threatens our international order“.

Finally, the management of the food crisis that is emerging as a result of the agricultural situation in Ukraine, one of the main granaries of the world, was discussed. President Emmanuel Macron called for the implementation of cooperation programs for countries in need, highlighting France’s action in Somalia. Financial aid to LDCs was also put forward.

This speech at the UN General Assembly also gave President Macron the opportunity to recall the Peace Forum to be held in Paris next November.

09/21/2022: The dollar rises to its highest rate against the euro in twenty years.  -Etienne Mathieu-

The US Federal Reserve announced on September 21 a 0.75 percentage point increase in its key interest rate. The dollar then saw its nominal value rise by 1.35% against the euro, which is now worth only $0.9814, its lowest rate since 2002. The dollar also has a record exchange rate with the British pound, at $1.1238 per pound. The dollar entered the still small circle of currencies with a nominal value higher than the euro in the summer of 2022; on July 12, the two currencies were at parity for the first time in two decades.

Susannah Streeter, an analyst at Hargreaves Lansdown, pointed to the importance of the war in Ukraine in the decline in confidence in European currencies, both the euro and the pound sterling. These currencies have indeed fallen further after Vladimir Putin’s announcement on September 21 of the partial mobilization of Russian reservists, 300,000 additional soldiers. Christopher Vecchio, of DailyFX, invited to relativize the consequences of the increase of the Fed’s key rate, which is much higher than the 0.5 percentage point expected by most analysts.

The eurozone, dependent on imports of energy and raw materials, has been more heavily hit than the United States by the consequences of the war in Ukraine, as Stéphanie Villers, economist specialist in the eurozone, pointed out.

09/23/2022: Italian parliamentary elections: far-right dominated alliance holds triumphant rally in Rome. – Antoine Bézier –

On 23th September 2022, the far-right dominated electoral alliance, favourite for the legislative elections on Sunday 25th September 2022, held its only joint rally in Rome. Fratelli d’Italia leader Giorgia Meloni, the real star of the rally, spoke to a cheering crowd after her allies Silvio Berlusconi (Forza Italia), Maurizio Lupi (Noi Con l’Italia) and Matteo Salvini (Liga). “We want a strong, serious and respected Italy on the international scene,” she said in a speech lasting more than half an hour. The Italian politician proposed a reform of the Italian institutions in order to reduce the endemic and chronic political instability in Italy by opting for a more presidential regime. Joining her partners on the themes of immigration and Islam, she stands out for her protectionist and interventionist proposals on economic matters and, in keeping with the anti-communist tradition of her political family, for a resolutely Atlanticist and pro-Ukrainian approach to the Russian-Ukrainian war. “We are ready, you will see it on Sunday,” she assured. According to the latest polls, Fratelli d’Italia is credited with 24 to 25% of voting intentions, ahead of the Democratic Party (21 to 22%), the 5 Star Movement (13 to 15%), the League (12%) and Forza Italia (8%). Thus, the right/far-right coalition could win between 45% and 55% of the seats in Parliament. After the recent victory of a right-wing and far-right bloc in Sweden, this election is being closely watched in Brussels, especially as Giorgia Meloni, a former admirer of Benito Mussolini, could become the first head of government of an EU founding country from a post-fascist party. In the context of an amorphous campaign organised in the middle of the summer and dominated by the far-right, presaging a historically low turnout (below 70%), the left-wing candidate Enrico Letta (Democratic Party), guarantor of an Italy anchored in the EU (a strong point after the EU granted nearly 200 billion euros in aid to Italy to revive its economy after the pandemic), did not manage to impose his themes and raise hopes of a victory for his camp.

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