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Donald Trump, Rascrucea vremurilor

Trump’s top trade adviser accuses Germany of currency exploitation
Berlin is using a ‘grossly undervalued’ euro to gain advantage over trading partners, says Navarro

Germany is using a “grossly undervalued” euro to “exploit” the US and its EU partners, Donald Trump’s top trade adviser has said in comments that are likely to trigger alarm in Europe’s largest economy.

Peter Navarro, the head of Mr Trump’s new National Trade Council, told the Financial Times the euro was like an “implicit Deutsche Mark” whose low valuation gave Germany an advantage over its main trading partners. His views suggest the new administration is focusing on currency as part of its hard-charging approach on trade ties.

In a departure from past US policy, Mr Navarro also called Germany one of the main hurdles to a US trade deal with the EU and declared talks with the bloc over a US-EU agreement, known as the Transatlantic Trade and Investment Partnership, dead.

Angela Merkel, the German chancellor, responded to Mr Navarro’s allegations, saying Germany could not influence the euro. At a press conference in Stockholm with Stefan Lofven, Sweden’s prime minister, Ms Merkel said Germany has always “supported an independent European Central Bank”.

The Trump administration has publicly declared it prefers bilateral trade deals rather than the broad multilateral accords pursued by Barack Obama, Mr Trump’s predecessor. Mr Trump last week also withdrew from a 12-country Pacific Rim deal negotiated by Mr Obama.

“A big obstacle to viewing TTIP as a bilateral deal is Germany, which continues to exploit other countries in the EU as well as the US with an ‘implicit Deutsche Mark’ that is grossly undervalued,” Mr Navarro said. “The German structural imbalance in trade with the rest of the EU and the US underscores the economic heterogeneity [diversity] within the EU — ergo, this is a multilateral deal in bilateral dress.”

Germany’s large trade surplus with the US and much of the eurozone has been a point of friction in Brussels and Washington for several years, with both capitals calling for Berlin to stimulate domestic demand to rebalance its economy.

Critics have argued Berlin has disproportionally benefited from weakness in the rest of the eurozone, which has held the euro lower than other regional currencies, like the Swiss Franc, making German exports cheaper in overseas markets like China and the US.

Despite those differences, most debate over German economic policy during the Obama administration was cloaked in diplomatic language; Mr Navarro’s comments highlight a growing willingness by the Trump administration to antagonise EU leaders and particularly the German chancellor.

Besides publicly supporting the British government in its negotiations with the EU over the terms of its exit, Mr Trump called the EU a vehicle for Germany, and Nato an obsolete alliance.

Mr Navarro’s intervention follows a visit to Washington last week by Theresa May, the British prime minister, in which she and Mr Trump discussed ways to launch negotiations for a US-UK trade deal. Mr Navarro said the Brexit vote marked the death knell of a US-EU deal; Britain had been one of the pact’s leading advocates.

“Brexit killed TTIP on both sides of the Atlantic even before the election of Donald Trump. I personally view TTIP as a multilateral deal with many countries under one ‘roof’,” Mr Navarro wrote in emailed responses to FT questions.

Although criticisms of German economic policy have been a staple of Group of 20 gathering since the height of the eurozone crisis, the view Berlin is intentionally advocating a weak euro to its own economic benefit is not widely shared.

The euro has weakened against the dollar over the past two years as the paths of the central banks of the two currency zones have split. The European Central Bank’s mass bond-buying programme has weakened the single currency, while rate hikes by the US Fed has strengthened the dollar.

But Berlin has been a leading critic of the ECB’s strategy. The Bundesbank has called for an end to bond buying, while lawmakers have pushed for higher rates — both measures which would strengthen the euro.

Mr Navarro said one of the administration’s trade priorities was unwinding and repatriating the international supply chains on which many US multinational companies rely, taking aim at one of the pillars of the modern global economy.

“It does the American economy no long-term good to only keep the big box factories where we are now assembling ‘American’ products that are composed primarily of foreign components,” he said. “We need to manufacture those components in a robust domestic supply chain that will spur job and wage growth.”

Mr Navarro, who served as an adviser to the Trump campaign, all but endorsed an import tax plan pushed by Republican leaders in the House of Representatives that has split the US business community. The proposal would eliminate companies’ ability to deduct import costs from their taxable revenues while making any export revenues tax-free. It drew attention last week when the White House pointed to it as one way in which it could pay for a wall on the Mexican border.

Exporters such as General Electric have hailed the switch to a “border adjustable” system as putting them on an equal footing with international competitors that are able to claim value added tax refunds on their exports. Retailers such as Walmart and other import-dependent businesses, however, say that what would amount to 20 per cent tax on imports would raise consumer prices and hurt their businesses.

“The unequal treatment of the US income tax system under biased WTO [World Trade Organisation] rules is a grossly unfair subsidy to foreigners exporting to the US and a backdoor tariff on American exports to the world that kills American jobs and drives American factories offshore,” Mr Navarro said. “President Trump promised during the campaign he would put an end to this unfair treatment of our income tax, and the House border adjustable proposal offers one possible option among several.”

Mr Navarro rejected the argument that US consumers would end up paying the cost of such a tax change. That was “an old and tired argument the globalist wing of the offshoring lobby has used for years to put Americans out of work and depress wages by shipping our jobs offshore”.

“We prefer paychecks to welfare checks for the American people and a robust middle class with rising wages,” he said.

Proponents argue that at least some of the impact on consumers would be absorbed by a one-time appreciation in the dollar. That in turn, they concede, could also impact on US export competitiveness and lead to a widening of the US trade deficit with the world, which the Trump administration has vowed to reduce.

Mr Navarro, however, said he was not concerned about the possibility of a stronger dollar and its impact on US exports.

“I worry about the actual impact America’s trade deficit in goods is having on our rates of economic growth and income growth.”


Negative carry
If anyone was confused about why the EU exists and the reasons its a good idea, then this Navarro person has just given it to you. Trump wants the EU to dissolve because he knows that he can negotiate a better deal against the parts rather than the whole. He is sending out his staff to attack and divide. Once you Brexit, you will be another state of the US in all but name. Your negotiation position and the deal you think you will have struck will be at the whim of an intellectual 8 year old.

If ever there was a time for security in numbers, this is it. " Dark times loom, bad people are coming...."

Tony Islington
The reason why Germany performs so well at trade is because it has world class companies making world class products supported by world class education.

When BMW hired American workers for their plant in South Carolina they had to train some of the recruits using pictures because their level of reading was so poor. The United States needs to sort this out before it lectures more successful countries.

Yes, Germany is beneficiary of the Euro - but the markets determine the value, and the European Central Bank is like the BoE, independent.

These are just more awful statements from the right of the hard right of the Republican Party - they do not like unity, and like their English cousins, look to sow division. They know that division means more superiority for their country. It is tried and tested.

To think the English led UK want to bestow the privilege of a State Visit to an administration that looks to create such a mess on our own continent, just shows what equally awful people are running the UK, at the most critical time.

Trump is an unmitigated idiot. He paints America as a victim of globalisation. America is not only the architect, having imposed the design to anybody else, but it is also the biggest winner: we are surrounded but US products, technology, financial and consulting services and culture. The issue is not that the US is a victim, it has on balance benefited massively from the trend. It is that the winners (among whom Trump and his billionaire, Goldman and private equity / hedge fund buddies) have taken all the spoils and left nothing to the losers. This is a domestic matter, and from what I see, this is continuing. For sure his buddies are doing well, I am not sure if anything will trickle down. But that does not sell well, so scare people, attack the immigrants, accuse Germany, China, Mexico, of all the evils, and swipe you sh... under the carpet.

Pathetic infrastructure, schools, mass education. Yes, look at Germany, with their apprenticeship systems have really managed to defend their industries and craftsmanship. Looks at the Scandinavian, they are investing in their people (and yes, they are taxing them as well). Anglo-Saxons of the world, you could learn from that instead of giving B.S. lessons to the world, instead of voting for Brexit or Trump.

The worst are the naïve fools who voted from Trump not because they share his values (or lack thereof) but because they think he is a talented business man, a pragmatic, a man of success... you can always agree a deal with a business man, close a transaction. Or don't worry, he does not mean what he says.

No, he is a madman combining paranoia with narcissism. His policies are repulsive. He surrounds himself with dangerous well-to-do fascistic ideologues (they have enough cash in the bank not to worry about the consequence of their folly). He is slowly destroying decency and fairness. And America is powerful enough to do a lot of damage. Shame on you.

Dear Peter and Donald,

Germany is an export powerhouse because she makes great, fantastic, beautiful, amazing, and stupendous products that are smart, brilliant and innovative. Its nimble and highly efficient Mittelstand companies combined with a highly educated and disciplined workforce have made Germany into the great country that it is today - and a true engineering mecca.

In case you still don't get it, the kinds of products that Germany makes and sells are relatively price inelastic. Customers want engineering solutions that can work and are easy to work with no matter what the prices are! The trade surplus that Germany enjoys is therefore structural, not mercantilist. Just a little side note, Germany still did have a trade surplus even when 1 euro is worth 1.50 American dollars.

You could blame Germany, Mexico, China or the world for the decline of America's manufacturing/engineering industry but that will not help to improve American competitiveness, productivity, innovativeness, and quality of labor workforce. Shame that you have to resort to petty threat and malicious divide-and-rule strategy to bully other countries, including your own (ex) allies. What a sore loser.

Paul N. Goldschmidt
It is now clear why Donald Trump is pushing EU breakup: by attacking the "weak" € as a proxy for the DM it creates a wedge between Eurozone Members, the vast majority of which have benefitted from a weaker €. Surely, the right answer is deeper Eurozone integration and suitable measures to protect the single market. Only at the level of the single market with its 500 million consumers can we afford to treat the "external" value of the € with the same "benign neglect" as the USA do with their currency and 320 million domestic consumers. If we return to national currencies we will become totally dependent on the Dollar for international trade and will put the burden of adjustments on the Europeans by resorting to competitive devaluations. No wonder Trump backs EU breakup

peromaneste: Navarro este unul din consilierii electorali ai lui Trump, acum responsabil cu politica americana comerciala. Din ce a scris/spus pana acum, ne dam seama ca este un avocat al Pivotului catre Asia--ceea ce inseamna ca Europa romaneasca isi va relua cursul agreat de Bush I & Gorbi. 

Dati click aici pentru o discutie din 2015 despre o recenta carte a sa (Crouching Tiger: What China's Militarism Means for the World)

5.0 out of 5 stars A fascinating book on China's growth and its military ambitions, January 4, 2016

A must read book for policy makers, politicians and anyone concerned about World order with China emerging as a super power intent on dominating Asia and its neighbors. By enabling China economically through free trade, US opened door for China to invest heavily into defense and get on par with US. A real conflict may be the horizon unless US reevaluates its military strength and make strong alliances in Asia and keep an active engagement. China is already pushing boundaries on what it considers its national waters by artificially building up islands and its own forward bases. With distractions in Middle East, US is unable focus on its strategy to Pivot to Asia. With not so strong economy, costly wars, and declining military spend, US may have no choice and pull back from Asia. If that ever happens, it will be a disaster for China's neighbor countries like Japan, Taiwan, Philippines and India. If US were to slow down China's military growth, it needs to revisit trade policies and balance its trade, improve domestic manufacturing, diversify trade with other countries like India with military alliances.

1.0 out of 5 stars Crouching hawk, November 29, 2015
By Hande Z

I agree with the previous reviewer who gave this a one star. It is difficult to be impartial about this book. It is a four star or a one star. The book is supposedly based on interviews with more than thirty experts but it is not known what the experts say but from the snippets of quotations from some of these experts, it is evident that they are all anti-China 'experts'. The questions posed at the top of each chapter are not only loaded but many are hypocritical. For example the ones in chapter 39 in which Navarro asks: 'Which of these statements most accurately characterizes China's perspective on transparency, negotiations, and the rule of law: 1. China likes to build direct communication links to minimize tensions and avoid miscalculations; 2. China favours transparency when it comes to revealing its military capabilities; 3. China prefers to operate in a multilateral, rather than bilateral, negotiating framework and does not seek to gain leverage over smaller nations; 4. China plays strictly within the rules of international organizations such as the United Nations and World Trade Organization; 5. China has a strong track record in abiding by the agreements that it negotiates. The answers are virtually 'None of the above'. The same can be said if one were to substitute 'America' for 'China' - only America may appear an even bigger version of the depicted China.

The author has a photograph of Chinese soldiers sitting in front of computer screens and the caption was: 'A platoon of China's more than one hundred thousand cyber warriors. From digital sweatshops like these China infiltrates the computers of the Pentagon and American industry with computer viruses, Trojans, and worms.' The books also refer to American environmentalists and human rights activists as 'those pesky' environmental and human rights activists'. This is not just another 'China bashing' book. It reads like a voice-over of Donald Trump. It is a disservice to both China and America.


7 comentarii:

Anonim spunea...

For seven years, the United States has fought to keep the euro zone intact, urging European officials toward action and supporting international bailout programs to keep the 17-nation currency union from cracking apart.

That appears to have changed less than two weeks into Donald Trump's new administration.

A sharp shift in tone toward Germany, casting the euro as fuel for that country's massive trade surplus, has raised concerns that the U.S. president's trade-centric world view may see the euro not as a geopolitical plus, but as another needless bit of multilateralism.

While Trump has refrained from commenting directly on the euro, he praised Britain's decision to exit the European Union as a "great thing" and predicted that others would leave the bloc as the result of an influx of refugees.

In comments published in the European press on Tuesday, Trump trade adviser Peter Navarro said the "grossly undervalued" euro served as a currency for Germany alone, allowing the country to "exploit" the United States and others.

On Capitol Hill, Treasury Secretary-designate Steven Mnuchin softened the traditional U.S. "strong dollar" mantra, suggesting that the dollar's current strength may be working against what has become perhaps the administration's central economic priority: reviving U.S. manufacturing and exports.

Framed narrowly, that could put the United States on a clear a collision course with Germany, the world's fourth-largest economy and home to companies that rival top U.S. industrial giants, as it is with Mexico or China.

"There seems to be this desire to go back to a divide and conquer style strategy where the U.S. negotiates against individual countries," said Douglas Rediker, executive chair of International Capital Strategies and a former U.S. executive board member at the International Monetary Fund.

"To single (Germany) out when they don't have authority to manipulate their currency, requires you to make a leap - which is to say that 'We don't care that there actually is a common currency. We are going to take you to account.'"

Monetary policy in the euro zone is set by the European Central Bank, and it is the ECB's money creation policies that have contributed to the euro's recent decline in value.

Like the U.S. Federal Reserve's quantitative easing, those efforts have been regarded internationally as a reasonable response to the region's dangerous economic weakness - not as an effort to cheapen the currency to gain a trade advantage.

"The question is how far will the new administration go with this?" said Jeromin Zettelmeyer, a senior fellow at the Peterson Institute for International Economics and a former German economic official.

Trump could, for example, try to tax German goods to offset any perceived advantage gained from a cheap euro, Zettelmeyer said. An import duty has already been suggested as a way to redress alleged currency manipulation by China.

"Trump seems to think that having a trade deficit with another country means that the other country is somehow stealing or at least getting the better deal," said Zettelmeyer.

Anonim spunea...


The first days of Trump's administration have touched off a wave of anxiety in Europe. European Council President Donald Tusk went so far as to list the new government in Washington among the chief "external" threats faced by Europe.

Criticism of Germany's trade surplus, however, is not unique to Trump.

The Treasury Department under President Obama added Germany to a "watch list" because of its large trade imbalances. The U.S. trade deficit with Germany stood at $77 billion as of 2015, three times that of other European Union countries combined, and $20 billion more than the deficit with Mexico, one of Trump's other economic nemeses.

But for Obama officials, the aim was to get Germany to spend more and boost its imports of goods from the rest of Europe and the rest of the world. It was not to target the euro's value and, by extension, the steps taken by the ECB to revive European growth more broadly.

Partly under American influence, the Group of 20 nations, including China, has in recent years agreed to consensus language that countries would "refrain from competitive devaluations."

They have also generally avoided criticizing each other's central banks. That diplomacy is credited at least in part for China's recent shift toward a more flexible currency regime that organizations like the International Monetary Fund feel have brought the renminbi currency close to fair market value.

In their last report on the euro zone, IMF staff said they did think the euro was undervalued. But they said the range could be anywhere from 0 to 10 percent, though likely larger for Germany.

"The consequences (of a protectionist United States) affect us Germans as a leading export and import nation particularly hard," Federation of German Industries chief Dieter Kempf said in a speech in Berlin after the Navarro comments.

Anonim spunea...

Donald Trump has joined Russia, China and radical Islam as a threat to the European Union, EU leaders were told on Tuesday by the man chairing a summit where they will debate relations with the United States.

European Council President Donald Tusk, a conservative former premier of Poland, wrote to EU national leaders to lay out themes for discussion when they meet in Malta on Friday to discuss the future of their Union as Britain prepares to leave.

In vivid language that reflects deep concern in Europe at the new U.S. president's support for Brexit, as well as his ban on refugees and people from several Muslim countries, Tusk called on Europeans to rally against eurosceptic nationalists at home and take "spectacular steps" to deepen the continent's integration.

Saying the EU faced the biggest challenges of its 60-year history, Tusk named an "assertive China", "Russia's aggressive policy" toward its neighbors and "radical Islam" fuelling anarchy in the Middle East and Africa as key external threats.

These, "as well as worrying declarations by the new American administration, all make our future highly unpredictable," he said.

Laying out issues leaders may address in a 60th anniversary declaration at Rome in March, Tusk said the EU unity built after World War Two and the Cold War was needed "to avoid another historic catastrophe". He also said Americans should not weaken Transatlantic ties fundamental to "global order and peace".

"The disintegration of the European Union will not lead to the restoration of some mythical, full sovereignty of its member states, but to their real and factual dependence on the great superpowers: the United States, Russia and China," Tusk wrote to the EU leaders. "Only together can we be fully independent."

Anonim spunea...


Senior officials discussed a possible EU response to Trump at a meeting in Brussels on Monday where some governments stressed that Europeans should not be hasty to alienate a key ally, diplomats said.

"We don't want to get fired," one senior EU diplomat said in reference to Trump's reality TV catchphrase.

Another said that because the full U.S. administration was not yet in place, Europeans should be cautious: "No government in Europe can respond in a coherent manner to this series of orders and tweets," the diplomat said.

Yet after 11 days in office, Trump and his aides have stirred concern in Europe due to their doubts about NATO and countering Russia in Ukraine, as well as over free trade. The Socialist finance minister of France, a nation long skeptical of U.S. market economics, said on Tuesday Washington seemed set on protectionism that was a "grave risk to the world trade order".

Friday's summit could also expose tensions with British Prime Minister Theresa May, who will attend a morning session on efforts to curb migrants heading for Europe from Libya but will leave before the other 27 discuss post-Brexit reforms.

British and EU officials said they expect May to attend a lunch where all 28 leaders will discuss "international challenges", including Trump. But May's embrace of Trump by way of a visit to Washington last week and push for a post-Brexit UK-U.S. trade deal have irritated London's continental partners.

Some were also annoyed by a British announcement that its citizens who also hold passports from the seven states on Trump's banned list could enter the United States. That, diplomats said, risked breaking EU rules on equal treatment for EU citizens. Washington later said it would accept all EU passports.

Donald Tusk spunea...

Dear colleagues,

In order to best prepare our discussion in Malta about the future of the European Union of 27 member states, and in light of the conversations I have had with some of you, let me put forward a few reflections that I believe most of us share.

The challenges currently facing the European Union are more dangerous than ever before in the time since the signature of the Treaty of Rome. Today we are dealing with three threats, which have previously not occurred, at least not on such a scale.

The first threat, an external one, is related to the new geopolitical situation in the world and around Europe. An increasingly, let us call it, assertive China, especially on the seas, Russia's aggressive policy towards Ukraine and its neighbours, wars, terror and anarchy in the Middle East and in Africa, with radical Islam playing a major role, as well as worrying declarations by the new American administration all make our future highly unpredictable. For the first time in our history, in an increasingly multipolar external world, so many are becoming openly anti-European, or Eurosceptic at best. Particularly the change in Washington puts the European Union in a difficult situation; with the new administration seeming to put into question the last 70 years of American foreign policy.

The second threat, an internal one, is connected with the rise in anti-EU, nationalist, increasingly xenophobic sentiment in the EU itself. National egoism is also becoming an attractive alternative to integration. In addition, centrifugal tendencies feed on mistakes made by those, for whom ideology and institutions have become more important than the interests and emotions of the people.

The third threat is the state of mind of the pro-European elites. A decline of faith in political integration, submission to populist arguments as well as doubt in the fundamental values of liberal democracy are all increasingly visible.

In a world full of tension and confrontation, what is needed is courage, determination and political solidarity of Europeans. Without them we will not survive. If we do not believe in ourselves, in the deeper purpose of integration, why should anyone else? In Rome we should renew this declaration of faith. In today's world of states-continents with hundreds of millions of inhabitants, European countries taken separately have little weight. But the EU has demographic and economic potential, which makes it a partner equal to the largest powers. For this reason, the most important signal that should come out of Rome is that of readiness of the 27 to be united. A signal that we not only must, but we want to be united.

Let us show our European pride. If we pretend we cannot hear the words and we do not notice the decisions aimed against the EU and our future, people will stop treating Europe as their wider homeland. Equally dangerously, global partners will cease to respect us. Objectively speaking, there is no reason why Europe and its leaders should pander to external powers and their rulers. I know that in politics, the argument of dignity must not be overused, as it often leads to conflict and negative emotions. But today we must stand up very clearly for our dignity, the dignity of a united Europe - regardless of whether we are talking to Russia, China, the US or Turkey. Therefore, let us have the courage to be proud of our own achievements, which have made our continent the best place on Earth. Let us have the courage to oppose the rhetoric of demagogues, who claim that European integration is beneficial only to the elites, that ordinary people have only suffered as its result, and that countries will cope better on their own, rather than together.

Donald Tusk spunea...

We must look to the future - this was your most frequent request in our consultations over the past months. And there is no doubt about it. But we should never, under any circumstances, forget about the most important reasons why 60 years ago we decided to unite Europe. We often hear the argument that the memory of the past tragedies of a divided Europe is no longer an argument, that new generations do not remember the sources of our inspiration. But amnesia does not invalidate these inspirations, nor does it relieve us of our duty to continuously recall the tragic lessons of a divided Europe. In Rome, we should strongly reiterate these two basic, yet forgotten, truths: firstly, we have united in order to avoid another historic catastrophe, and secondly, that the times of European unity have been the best times in all of Europe's centuries-long history. It must be made crystal clear that the disintegration of the European Union will not lead to the restoration of some mythical, full sovereignty of its member states, but to their real and factual dependence on the great superpowers: the United States, Russia and China. Only together can we be fully independent.

We must therefore take assertive and spectacular steps that would change the collective emotions and revive the aspiration to raise European integration to the next level. In order to do this, we must restore the sense of external and internal security as well as socio-economic welfare for European citizens. This requires a definitive reinforcement of the EU external borders; improved cooperation of services responsible for combating terrorism and protecting order and peace within the border-free area; an increase in defence spending; strengthening the foreign policy of the EU as a whole as well as better coordinating individual member states' foreign policies; and last but not least fostering investment, social inclusion, growth, employment, reaping the benefits of technological change and convergence in both the euro area and the whole of Europe.

We should use the change in the trade strategy of the US to the EU's advantage by intensifying our talks with interested partners, while defending our interests at the same time. The European Union should not abandon its role as a trade superpower which is open to others, while protecting its own citizens and businesses, and remembering that free trade means fair trade. We should also firmly defend the international order based on the rule of law. We cannot surrender to those who want to weaken or invalidate the Transatlantic bond, without which global order and peace cannot survive. We should remind our American friends of their own motto: United we stand, divided we fall.

Anonim spunea...

Germany's center-left chancellor candidate Martin Schulz has criticized U.S. President Donald Trump's policies as "un-American" and warned against lifting sanctions imposed against Russia over its role in the Ukraine crisis.

In one of the sharpest remarks yet by a senior German politician since the new American leader took office, Schulz told the Funke media group in an interview published on Wednesday that Europe had to stand up to defend liberal values.

"What Trump is doing is un-American," Schulz said, adding that the United States like no other country in the world stood for enlightenment, democracy and freedom.

"If Trump is now driving a wrecking ball through this set of values, then I will tell him as chancellor: That's not the policy of Germany and Europe," Schulz added.

Germany's Social Democrats last week nominated former European Parliament president Schulz to run against Chancellor Angela Merkel in a federal election in September, and the surprise move has boosted popular support for the centre-left party.

Merkel said on Monday the global fight against terrorism does not warrant putting groups of people under suspicion, adding Trump's order to restrict people from seven Muslim-majority countries from entering the United States violates the spirit of international cooperation.

Turning to Russian President Vladimir Putin and the Ukraine conflict, Schulz said that sanctions imposed against Russia could only be lifted after both sides had implemented the so-called Minsk peace plan.

"As long as the Minsk peace agreement is not fully implemented, the sanctions cannot be lifted. We must tell Putin very clearly that Russia is obliged to respect and defend international law," Schulz said.

Schulz' comments bring more clarity about his stance on Russia after some leading Social Democrats have voiced support for a partial lifting of sanctions as long as Russia is implementing some aspects of the plan.

Merkel, one of the architects of the peace deal, has repeatedly said that sanctions against Russia can only be lifted once the Minsk agreement has been fully implemented.


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