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Argentina and the IMF: Negotiations begin for a new $44bn agreement

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Argentina is pursuing a new agreement with the International Monetary Fund (IMF) to replace its current $44 billion arrangement. The effort signals a significant shift in the country’s financial strategy under President Javier Milei’s administration.

IMF Chief Spokesperson Julie Kozack confirmed on Thursday that the Milei government is prioritizing the establishment of a new programme over completing the final reviews of the existing deal inherited from the previous administration. According to a Bloomberg report, Kozack stated, “The authorities have formally expressed their desire to move to a new programme, and negotiations are now underway.”

The discussions intensified following a visit earlier this month by officials from Economy Minister Luis Caputo’s office and the central bank to Washington, where they engaged with IMF representatives.

The central question in the negotiations revolves around whether the IMF will extend additional financing beyond the $44 billion already allocated to Argentina. Milei had previously suggested an additional $15 billion, although he has not reiterated this figure recently. However, Caputo indicated this week that new funding could be included as part of the prospective programme.

If the parties reach an agreement, it would mark Argentina’s 23rd programme with the IMF since 1958 and its third since 2018. Historically, the IMF’s interventions in Argentina have faced criticism, as many past agreements failed to stabilize the economy. Successive governments often violated programme objectives, raising doubts about the effectiveness of IMF support in the country.

President Milei and his chief negotiator, Caputo, have a history of strained relations with the IMF. Earlier this year, Milei publicly criticized Rodrigo Valdes, one of the IMF’s senior officials, leading to Valdes stepping back from negotiations. Similarly, Caputo clashed with the IMF during his tenure as finance minister in 2018, particularly over exchange rate policies, which eventually prompted his resignation after a short stint as central bank governor.

Despite these tensions, the IMF has commended the Milei administration for implementing measures to cut spending, reduce inflation, and narrow gaps between the country’s various exchange rates.

DIPLOMACY

The final frontier in Ukraine’s crisis: Trump’s peace plan and the proposal for a sanitary zone

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Since its inception, the war in Ukraine has escalated into a profound crisis with far-reaching implications, not only for Eastern Europe but for the entire world. The diplomatic tensions, military interventions, and economic sanctions that have followed have underscored the precarious balance between war and peace on the European continent.

During his election campaign, former U.S. President Donald Trump made a bold assertion: “If I take office, I will end the war in Ukraine quickly.” This statement hints at a potential shift in U.S. military and material support for Europe. While the specifics of Trump’s plan remain unclear, his public rhetoric and insights from his advisors have sparked a multifaceted debate among European nations.

Trump’s stated goal is to “establish peace,” but it is evident that the U.S. aims to reduce its traditional military burdens. This could leave Europe facing a stark choice: either take on a greater role in resolving the conflict or bear the consequences of inaction. Such a scenario would force Europe, already strained by the crisis in Ukraine, to reevaluate its security framework.

At the same time, the question of sustained financial and military aid to Ukraine is testing Europe’s political resolve and economic capacity. Ukrainian President Volodymyr Zelensky has issued a stark warning: “Without financial support, we will lose.” He is urging Western allies to share the burden of the war. Without U.S. support—ranging from advanced weaponry to intelligence and operational planning—Ukraine’s military efforts against Russia would face even greater challenges. Meanwhile, Germany, a cornerstone of the EU, is grappling with whether it is prepared to assume a larger role if U.S. support diminishes. Within the European Union, the lack of a unified approach is evident, as each member state prioritizes its own interests.

What does Trump’s peace plan offer?

Donald Trump has claimed that, if elected president, he would swiftly end the war in Ukraine. During his previous presidency, Trump’s approach to NATO was marked by ambivalence. He notably pressured European countries to increase their defense spending and contribute more to the U.S.-led security umbrella. Now, as he eyes a potential return to the White House, his proposed actions regarding the Ukraine war are of direct concern to Europe. Given its geographical proximity, Europe is the primary region that would bear the consequences of any escalation or misstep in the conflict.

While the specifics of Trump’s peace plan remain undisclosed, leaks suggest that some politicians close to his advisors have discussed the creation of demilitarized zones between Ukraine and Russia. It is speculated that American troops would not be stationed in these zones; instead, they would be overseen by a European-led force. However, this scenario poses significant risks for Brussels. The establishment of such a buffer zone could inadvertently bring European states and Russia into direct confrontation, even with the slightest miscalculation.

Another proposal under consideration is the deployment of a United Nations peacekeeping force (often referred to as “blue berets”). However, the UN’s track record in conflicts like the Balkan Wars highlights the challenges of such missions. Issues such as a disorganized chain of command can undermine the effectiveness of peacekeepers on the ground. Additionally, creating a UN peacekeeping force requires approval from permanent Security Council members, including China, Russia, and the U.S., which introduces complex diplomatic hurdles. The prospect of a Russian veto in the UN Security Council—particularly on resolutions condemning Russia—remains a significant obstacle.

Within Europe itself, there are deep divisions and contradictions. Germany has pledged continued financial and military support for Ukraine, but debates persist over how much Europe can shoulder if the U.S. withdraws its backing. Ukraine, meanwhile, is in desperate need of funds, weapons, and personnel to sustain its war effort. The Ukrainian military, already outmatched by Russia in conventional power and logistics, requires far greater support from Europe. This support extends beyond cash and weaponry to include troop training, operational planning, intelligence sharing, and maintaining critical supply lines. For Europe, assuming the U.S.’s role in these areas independently would be an immense challenge. While countries like Spain, France, Poland, and Greece have called for joint military coordination, each nation has its own reservations and priorities.

In summary, while the details of Trump’s peace efforts remain unclear, the potential for their failure places Europe in a position of heightened responsibility. If U.S. support is withdrawn, European nations would need to take on greater economic and military risks to support Ukraine. Moreover, if peace negotiations collapse, the conflict could escalate into a larger-scale war, with Europe bearing the brunt of the fallout.

The Biden administration’s ATACMS decision

Since the outbreak of the war in Ukraine, U.S. President Joe Biden has approached arms aid to Ukraine with caution. Initially, he refrained from providing long-range ATACMS missiles, citing the risk of escalating the conflict into a potential “World War III.” However, Biden has now shifted his stance, greenlighting the use of these weapons for operations targeting deep inside Russian territory. This decision has been widely interpreted as an attempt to undermine former President Donald Trump’s peace initiative. While Ukraine argues that these strikes are acts of self-defense, the use of long-range missiles against Russian soil could escalate the conflict with a nuclear-armed state to an even more perilous level.

The Ukrainian military relies heavily on Western weapons and intelligence to target Russian strategic bases and air defense systems. While international law recognizes the right of an occupied nation to strike enemy logistics centers and military posts in self-defense, the situation remains delicate. The U.S. maintains that it only supports Ukraine’s “right to legitimate self-defense,” but this stance cannot obscure the fact that, in practice, the U.S. is aiding Ukraine by providing intelligence, target selection assistance, and advanced weaponry. This is precisely why German Chancellor Olaf Scholz has resisted supplying Ukraine with long-range Taurus missiles, similar to ATACMS. Scholz views it as a strategic imperative for NATO to avoid direct involvement and confrontation with Russia on the front lines.

The Biden administration’s decision also risks contradicting U.S. interests. As tensions with Russia escalate, the administration may be increasing the likelihood of a broader conflict. While the U.S. may aim to weaken Russia through attrition, the limits of this strategy remain unclear. Some commentators argue that the Biden administration is conflicted, seeking to make “final moves” on the Ukrainian front to counter Trump’s claims that he can bring peace. The U.S. withdrawal from Afghanistan and its aftermath may also be influencing Biden’s reluctance to take another significant step back. By cornering Russia, the U.S. is simultaneously drawing Europe deeper into the crisis.

Russian President Vladimir Putin’s response to these developments will be critical. Direct strikes on Russian strategic bases or airfields using Western long-range missiles could provoke a more aggressive reaction from Moscow. In an environment where nuclear threats have been repeatedly voiced, even a minor miscalculation could lead to catastrophic consequences. Some experts speculate that if Trump returns to power, Biden’s current policy could be sharply reversed, with a renewed focus on negotiations. From a strategic standpoint, it is often argued that no matter how many weapons Biden provides to Ukraine, he lacks a decisive “trump card” to fundamentally shift the balance of the war in Ukraine’s favor.

The limitations of Europe’s military capacity

One of the most pressing debates throughout the Ukraine crisis has been the extent of the European Union and NATO member states’ commitment to bolstering their own military capabilities. Former U.S. President Donald Trump has long criticized Europe, arguing that “Europeans are not paying enough for their own security.” Indeed, the NATO target of increasing defense spending to 2% of GDP faced significant resistance in many European countries. Now, discussions are even turning to higher thresholds, such as 3%. However, what this would mean in practice remains unclear. While some argue that Europe must build a conventional deterrent against Russia, viewing defense spending as a form of essential insurance, others warn that diverting massive budgets to the arms industry would come at the expense of social spending, likely provoking public backlash.

In this context, it is worth recalling the insights of Helmut Schmidt, the former Chancellor of Germany. During the Cold War, Schmidt emphasized the importance of maintaining a “military balance” but also argued that this alone was insufficient to ensure peace. He believed that military balance needed to be complemented by political compromises, arms control agreements, and confidence-building measures. In other words, investing solely in weapons is not enough; diplomacy must also play a central role. Schmidt’s legacy serves as a warning to today’s European leaders: “Strength is important, but flexible diplomacy, openness to dialogue, and active efforts to prevent conflicts from escalating are equally essential.” This principle could be applied to rebuilding de-escalation mechanisms between Russia and NATO. However, in the current climate, such dialogue seems distant, particularly as the conflict in Ukraine continues to escalate.

Moreover, the idea that “all European countries should participate in Europe’s security architecture” remains an ideal that is often voiced but rarely realized in practice. Russia’s annexation of Crimea, the ongoing conflict in the Donbas region, and its full-scale invasion of Ukraine have fundamentally undermined the notion of “accepting Russia as part of the European security system.” As a result, even if peace initiatives in this new era seek some form of “deal” with Russia, it is unclear how far Europe is willing or able to stretch to accommodate such an agreement.

Zelensky’s stillborn ‘victory plan’

At the onset of the war, Ukrainian President Volodymyr Zelensky unveiled what he called the “Victory Plan,” aiming for complete military success. His declaration, “We will push Russia back to its borders; we will not cede a single inch of our territory,” was met with widespread enthusiasm in the West. However, as the conflict dragged on, the Ukrainian army suffered significant losses, Russia’s long-term strategy took hold, and it became evident that Western support was not unlimited. The United States and Germany, in particular, have repeatedly cautioned that Ukraine cannot afford the risk of a major escalation by launching large-scale attacks on Russian territory.

In the 10-point peace plan Zelensky presented, the primary condition is the return of all Ukrainian territory, including regions annexed by Russia. Moscow, however, claims legitimacy over these areas through referendums in Crimea and Donbas. This fundamental disagreement leaves the question, “Is there common ground for compromise?” unanswered. Furthermore, Zelensky has ruled out direct talks with Russian President Vladimir Putin, even issuing a decree declaring Putin’s administration illegitimate. This stance effectively blocks the path to a diplomatic solution from the outset. Nevertheless, some European leaders support Zelensky’s proposal to organize a peace conference, arguing that Russia’s participation would be beneficial.

This impasse has created an opening for former U.S. President Donald Trump’s rhetoric: “If I am elected, I will sit down and talk.” In both Europe and the United States, there is growing sentiment that negotiations are the only viable way to end the war. However, a ceasefire—freezing the conflict—is a prerequisite for any talks. The direction of such negotiations, the terms under which Ukraine and Russia might reach an agreement, and the guarantees Europe would provide remain deeply uncertain. The deployment of a UN peacekeeping force, for instance, would require Russia to refrain from using its veto in the Security Council.

European leaders now face a critical choice: support Trump’s peace initiatives or align with President Joe Biden’s strategy of “pushing Russia back.” Both scenarios carry significant risks for Europe. If Trump succeeds, a demilitarized zone could be established between Ukraine and Russia, but European troops would likely be required to secure it. If Biden’s policy prevails, Europe could become a target for Russia amid escalating tensions, especially with the use of long-range weapons.

Moreover, institutions like the European Union, NATO, and the United Nations are grappling with their roles in this evolving security architecture. Whether Europe will develop an independent military structure or deepen its defense cooperation under the U.S. umbrella remains unclear.

The greatest irony in this situation is that the hope for peace appears to hinge on two uncertain factors: Vladimir Putin’s restraint and Donald Trump’s potential election as president, which could lead to a reversal of Biden’s policies. How sustainable or healthy this is for Europe is a matter of intense debate.

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NATO demands investigation into Azerbaijani plane crash amid Russian missile allegations

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NATO has urged a comprehensive investigation into the crash of an Azerbaijan Airlines plane on Wednesday morning, which resulted in the tragic loss of 38 lives. Suspicion is growing that Russian air defense systems may have been involved in the incident.

The Embraer E190 passenger aircraft was en route from Baku, the Azerbaijani capital, to Grozny, the Chechen capital, when passengers reportedly heard an explosion. The plane was diverted hundreds of kilometers off course before crashing near the Kazakh city of Aktau. Miraculously, 29 people survived the crash.

“Our thoughts and prayers are with the families and victims of Azerbaijan Airlines flight J28243,” NATO spokeswoman Farah Dakhlallah said in a statement on X (formerly Twitter) on Thursday. “We wish a speedy recovery to those injured in the crash and call for a thorough investigation.”

Kremlin spokesman Dmitry Peskov echoed the call for patience, stating on Thursday, “We need to wait for the conclusion of the investigation,” while cautioning against premature assumptions.

Russia’s aviation watchdog attributed the crash to a collision with a flock of birds, which allegedly forced the aircraft to divert to Aktau. However, competing theories have emerged.

Media outlets including Reuters and Azerbaijan’s Caliber have speculated that the passenger plane was struck by a Russian air defense missile. These reports suggest the incident occurred in an area where Moscow has been actively targeting Ukrainian drones in recent weeks.

According to Caliber, citing Azerbaijani officials, the aircraft’s emergency request to land at three nearby Russian airports was denied. Instead, the plane was directed to fly over the Caspian Sea, exacerbating its perilous situation.

Further fueling these suspicions are reports of a simultaneous drone strike on Grozny. In a now-deleted Instagram post, Chechen Security Council Secretary Khamzat Kadyrov claimed that a drone attack on Grozny had been successfully neutralized.

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Brazil-Britain relations strengthen amid global challenges

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As Donald Trump’s second term looms and European allies like France and Germany grapple with political instability, the United Kingdom is seeking new allies on the global stage, POLITICO reports.

In this context, Keir Starmer’s administration has been cultivating strong ties with Brazil and the Lula government. Since Starmer assumed office as Prime Minister in July, at least 12 British ministers have traveled to Brazil, signaling a deepening partnership.

This intensified engagement coincides with Brazil hosting this year’s G20 summit, but it also highlights shared priorities in addressing the global climate crisis. Since November, the UK and Brazil have collaborated on launching a multilateral clean energy agreement, setting ambitious new climate targets, and laying groundwork for the next major United Nations Climate Summit in Belém, Brazil, in 2025.

According to Robin Niblett, former director general of the British think tank Chatham House, these are precisely the types of “coalitions of the willing” that leaders with a “green conscience” must forge amid global uncertainty.

However, bilateral ties are not without challenges. Disagreements over Russia and Ukraine represent a major foreign policy hurdle for both nations. To strengthen their alliance, Brazilian President Luiz Inácio Lula da Silva has invited Starmer for another visit next year, aiming to “map opportunities and economic areas for collaboration,” according to an official Brazilian statement.

The relationship between the two leaders extends beyond formal diplomacy. According to Antonio Patriota, Brazil’s ambassador to London, their shared enthusiasm for football has added a personal touch to diplomatic meetings. In fact, the initial moments of their bilateral discussions at the G20 summit were dedicated to football, POLITICO noted.

Foreign Secretary David Lammy also underscored the importance of climate issues in British foreign policy during his visit to Brazil last summer, preceding the general election. Starmer, then opposition leader, first met Lula at COP28 in 2023. This meeting laid the groundwork for the Clean Power Alliance energy agreement, which now includes 11 nations and the African Union. The alliance has pledged to triple renewable energy output by 2030, according to a British government official.

As POLITICO reports, the United Kingdom’s pivot to Brazil also reflects its need for dependable allies post-Brexit, particularly as the United States becomes less reliable under Trump. The new U.S. energy secretary, businessman Chris Wright, has accused the UK of “impoverishing people” with its green policies, further complicating transatlantic relations.

In Brazil, Starmer sees an ally capable of bridging the divide between developed nations, such as those in the G7 and NATO, and developing nations within the G20 and beyond. A UK government official described the partnership as exemplifying “cooperation between the Global North and South.”

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