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All foreign policy is in part economic. Most economic policy is also of geostrategic import. These basic facts are well appreciated in Washington and Beijing. Not so in the capitals of Europe.

That is why, of the numerous thoughtful proposals in Mario Draghi’s report on European productivity, none is as intriguing or potentially far reaching as his call for a European “foreign economic policy”. The very realisation that none exists is a step forward.

What would it mean for the EU to have one? Most obviously, that even domestic economic policy would be made in light of geostrategic goals. Draghi explains such policy as “statecraft . . . to co-ordinate preferential trade agreements and direct investment with resource-rich nations, build up stockpiles in selected critical areas, and create industrial partnerships to secure the supply chain of key technologies”.

The need for such statecraft goes much further than Draghi’s focus on securing critical resources, to green industrial policies broadly and beyond.

For example, the EU’s new carbon tariffs have incentivised other jurisdictions to adopt carbon-pricing schemes of their own. Yet this effect, very much in the EU’s interest, is an afterthought rather than the policy’s principal purpose. (That was to prevent green European industry from being undercut by carbon-intensive imports.) It was more happy coincidence than statecraft.

New EU rulemaking on supply-chain sustainability (over deforestation, for example) has caused diplomatic frictions, with trade partners seeing it as protectionist. This caught Europeans unawares — something a foreign policy perspective could have avoided.

The point is not that such a perspective would or should have tempered the pursuit of domestic goals. On the contrary, placing geostrategic considerations at the centre of domestic economic decision-making would more often than not raise the level of ambition.

Take the European Central Bank’s work on a digital euro. It has largely focused on effects on the Eurozone’s domestic monetary system — which has led to a consensus on tight limits on the digital euro amounts anyone could hold to protect legacy banks’ business models. A foreign policy perspective would lift the euro’s international role and the strategic advantages it could bring. It would thus emphasise that letting foreign users hold ample digital euros easily would encourage euro invoicing in international trade, and tie other economies more strongly to the EU’s.

Similarly, a foreign policy perspective would inject much-needed urgency into the projects to unify EU banking and financial markets. National divisions sap Europe’s collective economic strength and increase its dependencies on other countries.

The issue of decarbonising Europe’s car fleet is where an EU foreign economic policy approach is most starkly needed. It should be obvious that EU countries need both a larger inflow of Chinese electric vehicles in the cheaper segment and also a sufficiently large domestic market for EU carmakers to confidently make the investments necessary to ramp up their own EV production capacity.

This requires a combination of policies: a managed openness to Chinese imports, a much stronger tilt of consumer subsidy and procurement policies towards EU-produced EVs, and an overall quantitative judgment of how much of each is optimal. Crucially, that judgment must be explicitly calibrated against what Beijing is willing to do in return. The obvious asks are for China to use more of its soaring EV production capacity itself and reduce its complicity in Russia’s egregious violation of Ukraine’s sovereignty.

Such joined-up policymaking is only possible if foreign policy and domestic economic and industrial policy are made as one. Simply put, that means Kaja Kallas — the EU’s incoming top foreign policy official — must be involved in decisions about taxation of corporate vehicles, and decision-making on EU’s capital markets and banking union must keep foreign ministers in the loop.

The structure of the EU discourages that. Commission president Ursula von der Leyen has tried to overcome this through an extreme centralisation of decision-making, but that is politically unsustainable outside the most acute crises. The make-up of her new commission suggests a welcome attempt to institutionalise joined-up thinking.

But that leaves national leaders who ultimately hold the most power in the EU. Realising an EU foreign economic policy requires enough national leaders to jointly make economic policy with collective strategic goals in mind. Europe will become strong in national capitals or not at all.

martin.sandbu@ft.com

The Hezbollah militia reported launching an attack on an industrial complex and an Israeli military base near the port city of Haifa in northern Israel early on Sunday, while the Israeli army said it launched attacks on Hezbollah targets in southern Lebanon.

Hezbollah described its attack as retaliation for Israel’s “brutal massacre” last week, in which coordinated blasts involving electronic devices across Lebanon caused death and injury.

The Iran-backed militia also said it had attacked the Israel Defence Forces’ (IDF) Ramat David airbase near Haifa in response to “repeated Israeli aggression in various regions in Lebanon.”

It did not mention the name of Ibrahim Akil, the senior Hezbollah commander killed in an Israeli attack on a Beirut suburb on Friday.

The death toll from Friday’s Israeli attack on Beirut’s southern suburbs, a hotbed of the Hezbollah movement, rose to 45, the Lebanese Health Ministry said on Sunday.

Meanwhile, the IDF reported on Sunday that Hezbollah had launched around 115 attacks on civilian targets in northern Israel.

IDF forces were on high alert in the region to ward off the attacks and to “intensify” attacks on Hezbollah, it said. The attacks penetrated further south than previously.

Air raid sirens were also heard to the south-west of Nazareth, which lies inland from Haifa.

Lebanese authorities described the Israeli air attacks as the heaviest since the start of the war in the Gaza Strip on October 7 last year. Some 70 targets had been attacked within 20 minutes, they said.

Hospitals in northern Israel to move patients to bunker

Amid increased cross-border rocket attacks from Lebanon, hospitals in northern Israel have been instructed to move patients to shelters, Isreali media reported on Sunday.

Rambam Hospital in Haifa, the region’s largest, announced it would begin relocating patients to its underground emergency facility at midday, following army directives.

Rambam’s so-called “bunker hospital,” built in 2014 and located more than 16 metres underground, can accommodate up to 1,400 patients, both soldiers and civilians, according to its website.

Normally used as a car park, the facility is also fortified against biological and chemical attacks.

Since the war began in the Gaza Strip on October 7 last year between Israel and the Palestinian Islamist Hamas movement, which is allied with Hezbollah, there have been almost daily military confrontations between the Israeli army and Hezbollah in the border area between the two countries.

There have been deaths on both sides, most of them members of the Lebanese Hezbollah militia. Hezbollah says it is acting in solidarity with Hamas.

Concerns are rising that the IDF could launch a ground offensive into southern Lebanon to force Hezbollah units back from the border in order to allow thousands of Israeli civilians to return to their homes in the region.

UN warns of ‘imminentcatastrophe’ in the Middle East

The United Nations special coordinator for Lebanon, Jeanine Hennis-Plasschaert, has warned that the Middle East is facing a catastrophic situation, stating that the region is “on the brink of an imminent catastrophe.”

She said: “It cannot be overstated enough: there is no military solution that will make either side safer.”

Hennis-Plasschaert’s remarks referred to the ongoing exchanges between Israel’s army and Hezbollah in Lebanon, which continued through the night.

Both sides have engaged in some of the most intense exchanges since their renewed confrontations began nearly a year ago.

The UN observer mission UNIFIL has been monitoring the Israel-Lebanon border since 1978. Last month, three UNIFIL soldiers were slightly injured by an explosion near their vehicle in southern Lebanon.

The mission currently involves around 10,000 troops and 800 civilians. Since its inception nearly 50 years ago, more than 300 UN peacekeepers have lost their lives.

US calls on citizens to leave Lebanon

Meanwhile, in view of the escalation, the United States is calling on its citizens to leave Lebanon.

“Due to the unpredictable nature of ongoing conflict between [Hezbollah] and Israel and recent explosions throughout Lebanon including the capital Beirut,” the US Embassy is advising its citizens to leave Lebanon while commercial options are still available, the US State Department said in a statement.

At this time, flights are still available, but with reduced capacity, it added.

US banks made a $1tn windfall from the Federal Reserve’s two-and-a-half-year era of high interest rates, an analysis of official data by the Financial Times has found.

Lenders got higher yields for their deposits at the Fed but kept rates lower for many savers, the review of Federal Deposit Insurance Corporation data showed. The boost to the US’s more than 4,000 banks has helped pad out profit margins.

While rates on some savings accounts were raised in line with the Fed’s target of more than 5 per cent, the vast majority of depositors, especially those at the largest banks, such as JPMorgan Chase and Bank of America, got far less.

At the end of the second quarter, the average US bank was paying its depositors interest at the annual rate of just 2.2 per cent, according to regulatory data that includes accounts that do not pay interest at all. This is higher than the 0.2 per cent they paid two years ago but far lower than the Fed’s 5.5 per cent overnight rate that the banks themselves can get.

At JPMorgan and Bank of America, annual deposit costs were 1.5 per cent and 1.7 per cent, respectively, according to this data.

Those lower payments to depositors generated $1.1tn in excess interest revenue for the banks, or about half of the total dollars banks brought in during that time, according to the FT’s calculations.

This is in sharp contrast to Europe, where some governments imposed windfall taxes on banks which benefited from higher interest rates.

The Fed tightened its main policy rate this week, cutting by half a percentage point. Some US banks sought to pass the cuts on to depositors as quickly as possible, a move that would shore up their margins.

Hours before the Fed rate cut on Wednesday, Citi told its employees at its private bank, whose wealthy clients typically receive preferential rates, that if the US central bank were to cut rates by half a percentage point the bank would do the same to its rate on accounts paying 5 per cent or more, according to a person familiar with the matter.

At JPMorgan, bankers have been told that clients with $10mn in cash or above would see their savings rates cut by 50bp and future cuts would move in lockstep with the Fed’s actions, people familiar with the matter said.

Because of the Fed’s rate cut, banks will “certainly” have “the ability to reduce deposit costs”, said Chris McGratty, head of US bank research at KBW. “The degree of aggressiveness will, I think, vary bank to bank.”

JPMorgan said the bank aimed to ensure a fair and competitive rate. Citi declined to comment. Bank of America declined to comment.

A report earlier this year from the Risk Management Association compared banks to petrol stations, which are typically quick to raise prices and slow to cut them. Banks, by contrast, are slow to raise the rates they offer on deposits and savings accounts but quick to cut them.

When the Fed began to tighten monetary policy in March 2022 many analysts predicted that competition from new financial technology companies and the growing ease with which consumers can move cash would force banks to dole out a greater share of the higher rates to their depositors.

But the FT’s calculations show that they were able to hold on to much of the benefit — although slightly less than in previous Fed tightening cycles.

The failure of Silicon Valley Bank and others in early 2023 forced many mid-sized and smaller banks to raise their rates in order to keep depositors from fleeing. Larger banks saw an influx of cash during the flight for safety, allowing them to delay the need to match higher rates elsewhere.

Overall US banks captured about two-thirds of the benefit of the Fed’s higher interest rates from March 2022 until the middle of this year, according to the FT’s calculations based on the latest data available. They paid depositors nearly $600bn in interest.

The last time the Fed raised interest rates, from early 2016 to until early 2019, US banks captured 77 per cent of the benefit.

Although the Fed has now begun to loosen monetary policy, bank stocks reacted positively on Thursday as investors bet that lower rates and a relatively healthy economy would create more demand for borrowing and boost investment banking dealmaking activity.

Nonetheless, the highest interest rates in more than a generation have pushed more money than ever, nearly $3tn, into certificates of deposit, which typically pay the highest rate of any bank deposits and also cannot be changed overnight.

As that money becomes unlocked, banks will be able to adjust their rates down, but not before, analysts said.

“It will be a slow grind down,” said Scott Hildenbrand, chief balance sheet strategist at Piper Sandler.

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According to a March 15th report from Reporters Without Borders (RSF), the Russian government has introduced strict laws aimed at tightening its grip on the internet by outlawing VPN promotion and increasing censorship of Western social media. These policies come in the wake of Russia’s 2024 presidential election and have raised fears of a rise in digital censorship, drawing parallels to China’s approach to controlling the internet.

Since the 2022 invasion of Ukraine, the Russian government has progressively increased censorship on Western social media platforms and thousands of websites, ostensibly to safeguard its digital space from external influences. However, this crackdown inadvertently led to a surge in VPN usage among citizens seeking to bypass these restrictions. To strengthen control, Roskomnadzor, the Russian media regulator, adopted blocking techniques similar to those employed by China. For example, on February 27, several permitted platforms like YouTube and WhatsApp suddenly became inaccessible, while banned platforms such as Facebook and Instagram briefly became accessible without the need for VPNs.

RSF sheds light on the Kremlin’s deliberate maneuvers to throttle the flow of information in Russia, particularly in the lead-up to the presidential election. It unveils the intricate workings of online censorship, showcasing strategies ranging from prosecuting VPN-related content to deploying blocking techniques modeled after those used by the Chinese government.

A notable example is the recent enactment of laws criminalizing VPN marketing and related information, underscoring the Russian government’s steadfast resolve to tighten its grip on internet freedom. This legislative tactic mirrors a broader trend observed in authoritarian regimes worldwide, where legal frameworks are wielded to silence dissent and mold digital narratives for political gain.

Moreover, the passage of a new bill by the Duma, Russia’s lower parliament, aims at Russian citizens and companies by prohibiting them from advertising on websites and media     

outlets labeled as “foreign agents.” The bill also extends its reach to forbid advertising information resources associated with foreign agencies. What few independent journalistic voices remain in Russia have seen their YouTube channels closed down.

Through initiatives such as deploying mirror sites (Operation Collateral Freedom), RSF ensures that vital information remains accessible to individuals within Russia despite governmental attempts to suppress it. In this regard, RSF is at the forefront of combating censorship and promoting press freedom globally.

Their proactive approach not only works to circumvent censorship but also underscores the resilience of civil society in the face of authoritarian repression. By leveraging technology to uphold the principles of democracy, RSF and similar organizations demonstrate that the fight for freedom of expression transcends borders and empowers individuals to access unbiased information, fostering a more informed and resilient society.

Corporate media coverage of this story has been rather limited, with only a few major outlets providing reports. The New York Times covered the story in early March, and Yahoo News reported on the upcoming legislative changes in February. However, there has been little coverage beyond these initial reports, and neither source addressed the recent bill prohibiting Russian citizens from engaging in financial interactions with “foreign agents.” 

This lack of extensive coverage raises concerns about the accessibility of information regarding significant legislative developments in Russia. Without broader media attention, important aspects of these measures and their implications may remain overlooked or underreported, potentially hindering public understanding of key governance and civil liberties issues.

Source: RSF, “Kremlin Steps up Online Censorship in Order to Silence Last Opposition Voices Ahead of Presidential Election,” Reporters Without Borders, March 15, 2024.

Student Researcher: Colton Boone (Diablo Valley College)

Faculty Evaluators: Nolan Higdon and Mickey Huff (Diablo Valley College)

Journalists working for foreign media in Gaza have participated in Hamas’ “Day of Loyalty to the Palestinian Journalist,” an annual event hosted by the terror group’s Government Media Office with the stated aim of aligning the media with Hamas’ agenda, an HonestReporting investigation revealed.

The exposure unveils the disturbing relationship between Gaza’s rulers and the journalists tasked with covering them, calling into question their objectivity and the ethical standards of their media outlets — the Associated Press, AFP and Reuters.

Here are the highlights:

• AP’s staff photographer Hatem Moussa delivered a video address at Hamas’ 2014 Loyalty Day event. It appears that his message was displayed on the same screen as the message of Abu Ubaida, the terror group’s military wing spokesperson. It was also published in propaganda style by Hamas’ official news agency.

• AP’s photographer Fatima Shbair and AFP’s Mohammed Baba spoke in a promotional video for the 2021 event, in which they were also honored by Hamas for receiving international awards.

• Two journalists were honored in the 2021 event as Hamas media office’s “work partners:” Yasser Qudih, who infiltrated into Israel on October 7 and recently won the Pulitzer Prize with Reuters’ photography staff, and The New York Times’s photographer Samar abu Elouf, who recently won the prestigious Polk Award.

• At the 2022 event, two journalists were honored for serving on the judging panel of the Government Media Office’s media contest: Reuters cameraman Fadi Shanaa and AP’s Adel Hana, whom we exposed for teaching Hamas’ media courses.

• Other journalists were honored in 2021 and 2022 for winning international awards. These included Reuters photographer Ibraheem Abu Mustafa, who recently also won the 2024 Staff Photography Pulitzer, and AP photographer Khalil Hamra.

• In 2022, the terror group also gave monetary awards to two journalists who were exposed by HonestReporting for their infiltration into Israel and their links to Hamas — Hassan Eslaiah, who worked for AP and CNN, and Ashraf Amra who worked for Reuters.

The following details were compiled based on a review of Palestinian social and mainstream media. HonestReporting has reached out to the relevant media agencies for comment.

Message For Hamas

AP’s award-winning photographer Hatem Moussa, who has been working for the agency since 1998, delivered a recorded video message at Hamas’ Day of Loyalty event on December 31, 2014.

His address, in which he mainly thanked fellow journalists, was recorded after his injury in the 2014 Gaza war and posted by a colleague on Facebook. 

But according to Hamas’ news agency, al-Rai, which seems to have added “context” to his words, his message was to expose “the occupation’s practices and crimes against Palestinians.”

And what’s most disturbing is that the report includes a picture of another speaker at the event, whose message was apparently displayed on the same screen: Abu Ubaida, Hamas’ military wing spokesperson who threatened to kill Israeli hostages at the beginning of the Israel-Hamas war:

It goes without saying that a journalist working for one of the world’s top media outlets cannot participate in an official Hamas event, nor deliver any message there while apparently sharing a stage with an armed terrorist. It compromises his objectivity and exposes disturbing ties to a proscribed terror group.

Moreover, it directly aids Hamas, which used Moussa’s appearance for its own propagandist goals.

Related Reading: Broken Borders: AP & Reuters Pictures of Hamas Atrocities Raise Ethical Questions

Serving Hamas

Moussa’s colleague, AP’s photographer Fatima Shbair, followed suit. Her message, as well as that of AFP’s photographer Mohammed Baba, was included in a promotional video featuring award-winning journalists honored by Hamas in the December 31, 2021 Loyalty Day event.

Both Shbair and Baba thanked the Hamas Media Office in a gushing display of emotion, with Shbair calling its efforts “incredible” and Baba voicing hope the office will “adhere to its pledge.”

Here are the translated relevant clips from the full promo, which was shared on the Office’s Facebook page:

As long as the battle continues, we must continue conveying the truth, and getting this picture out to the world. What the Government Press Office does every year to honor Palestinian journalists and their efforts on the ground is incredible. It encourages all of the journalists to carry on with the mission.

To the Government Press Office, which every year celebrates and honors journalists and photographers, I say this: This demonstrates your connection to the journalists, and I hope you will always adhere to your pledge.

When journalists from the world’s leading news agencies appear in a propaganda video for Hamas, their journalistic integrity is as good as gone. They practically voice support and allegiance to the terror group’s agenda.

But they’re not alone.

In the 2021 and 2022 Loyalty Day events, several journalists working for international media were honored by Hamas for working with the Government Media Office, serving as judges in the Office’s media contest, or winning international awards.

In 2021, according to a Facebook Live posted on the Office’s page, those honored as its “work partners” were photographers Yasser Qudih and Samar Abu Elouf.

Qudih infiltrated into Israel on October 7 and recently won the Pulitzer Prize with Reuters Photography Staff, and Elouf — who was also honored at the event for winning an international award — is a New York Times photographer, who recently won the prestigious Polk Award.

In 2022, as seen in another Facebook Live of the annual event, Hamas honored AP’s veteran photographer Adel Hana and Reuters cameraman Fadi Shanaa, for serving on a judging panel for one of its media contests. Both donned an official scarf of the Hamas Government Media Office:

Elouf’s and Hana’s commendation by Hamas is hardly surprising — Elouf had also spoken at a Hamas event she was honored at in 2012, as revealed by media analyst Eitan Fischberger.

And Hana was exposed by HonesReporting last July as having instructed media training courses supervised by the Hamas-run Information Ministry.

But the fact that they and other foreign media journalists in Gaza have actively served the Hamas government as “work partners” or official judges paints an even darker picture, equivalent to serving the Nazi propaganda ministry of Joseph Goebbels. Because those chosen for such positions are most likely those who abide by the standards that serve the propagandist terrorists, not the standards of ethical journalism.

Other journalists in the 2021 and 2022 events played a more passive yet unethical role by receiving honors for winning international awards. These included Reuters photographer Ibraheem Abu Mustafa, who recently also won the 2024 Staff Photography Pulitzer, and AP photographer Khalil Hamra.

How objective can their coverage of Hamas be after receiving such honors from them?

Lastly, Hamas has also given monetary awards to show its “loyalty” to Gazan journalists — making it clear that the equation is in fact the opposite.

Among those receiving the de-facto bribery in 2022 were two journalists exposed by HonestReporting last year: Hassan Eslaiah, who infiltrated into Israel on October 7 and was fired from CNN and AP after the exposure of his cozy photo with Hamas leader Yahya Sinwar. And Ashraf Amra, who worked for Reuters and shared a call on social media to infiltrate into the Jewish state.

No Transparency

The fact that the “Loyalty Day for the Palestinian Journalist” is organized by a so-called “government” body (as opposed to a military one) shouldn’t confuse anyone — the media office is de-facto run by Hamas.

And the office’s head, Salama Maarouf, is a Hamas official who shares podiums with figures like Ghazi Hamad, who vowed to repeat the October 7 massacre in which 1,200 people were slaughtered in Israel:

Because these figures are in power, the extravagant show of “loyalty” to journalists in Gaza is in fact a show of deterrence to anyone who is not loyal to Hamas’ agenda. For example, here is what Maarouf said back in 2015 about the purpose of the Loyalty Day:

Marouf explained that the “Day of Loyalty to the Palestinian Journalist” has been firmly established as part of the Palestinian national agenda, not just the media’s, emphasizing that the compass of the resistance should also be the compass of the Palestinian journalist.

The conclusion is clear: Whether they willingly cooperated with Hamas or not, these Gaza journalists cannot be objective. The give-and-take relationship with the terror group is too deep and official to detach from.

International media outlets must be transparent about the fact that their news from Gaza is one-sided.

They should also look into their journalists’ official and personal relations with Hamas, and discipline those who actively cooperate with the terrorists.

News consumers deserve nothing less.

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