BRUSSELS, May 13 (Reuters) – Washington and the EU will pledge joint action to tackle concerns focused on China about non-market practices and coordinate their export controls on semiconductors and other goods at a meeting this month, a draft statement showed.
U.S. Secretary of State Antony Blinken, European Commission Vice-President Margrethe Vestager and other senior officials are due to meet for the fourth edition of the EU-U.S. Trade and Technology Council (TTC) in Lulea, Sweden, on May 30-31.
The draft statement seen by Reuters said the two sides would address non-market practices and economic coercion, and aim to hold regular talks on efforts to stop their companies’ knowledge linked to outbound investment supporting technologies of strategic rivals – an oblique reference to China.
They will also coordinate on their export controls on “sensitive items” – including goods that have a military use – and semiconductors, said the statement, which only mentions China twice and could still be changed before the meeting.
Brussels says it considers China a partner in some fields, an economic competitor and a strategic rival. The European Union plans to recalibrate its China policy, recognising coordination with a more hawkish United States is essential.
Highlighting the medical devices sector in China, the document said the transatlantic partners are “exploring possible actions” over the threat posed by non-market policies and practices.
They also aim to cooperate on efforts to counter foreign manipulation of information, including “China’s amplification of Russian disinformation narratives about the war” in Ukraine.
The two sides also said they were committed to working with the G7 to coordinate action to counteract acts of economic coercion, such as the trade restrictions the EU says China has imposed on EU member Lithuania.
Reporting by Philip Blenkinsop
Editing by Helen Popper
LUXEMBOURG, April 24 (Reuters) – China respects the status of former Soviet member states as sovereign nations, its foreign ministry said on Monday, distancing itself from comments by its envoy to Paris that triggered an uproar among European capitals.
Several European Union foreign ministers had said comments by ambassador Lu Shaye – in which he questioned the sovereignty of Ukraine and other former Soviet states – were unacceptable and had asked Beijing to clarify its stance.
Asked if Lu’s comments represented China’s official position, foreign ministry spokesperson Mao Ning said that Beijing respected the status of the former Soviet member states as sovereign nations following the collapse of the Soviet Union.
Mao told a regular news briefing that it was her remarks on sovereignty that represented China’s official government stance.
The Chinese embassy in Paris issued a statement later on Monday to say that Lu’s comments on Ukraine “were not a political declaration but an expression of his personal views”.
Both statements, following the backlash, appeared to be an effort to ease the tension with the EU while Washington also cited growing closeness between Beijing and Moscow.
“Beijing has distanced itself from the unacceptable remarks by its ambassador,” Josep Borrell told a news conference, saying it was “good news”.
The French foreign ministry said it was “taking note” of Beijing’s “clarifications” and that the minister’s chief of staff had met with Lu on Monday, told him his comments were unacceptable and urged him to speak in a way “that is in line with his country’s official stance.”
Lu has earned himself a reputation as one of China’s “wolf warrior” diplomats, so-called for their hawkish and abrasive style.
Asked about his position on whether Crimea was part of Ukraine or not, Lu had said in an interview aired on French TV on Friday that historically it was part of Russia and had been offered to Ukraine by former Soviet leader Nikita Khrushchev.
“These ex-USSR countries don’t have actual status in international law because there is no international agreement to materialize their sovereign status,” Lu added.
Czech Foreign Minister Jan Lipavsky speaks during a news conference, in Riga, Latvia April 21, 2023. REUTERS/Ints Kalnins
‘TOTALLY UNACCEPTABLE’
Monday’s statements from the Chinese foreign ministry and embassy in Paris came after criticism from across the EU.
Speaking ahead of a Luxembourg meeting of EU foreign ministers earlier in the day, Czech Foreign Minister Jan Lipavsky said Lu’s comments were “totally unacceptable”.
“I hope the bosses of this ambassador will make these things straight,” he told reporters.
A spokesperson for Germany’s foreign ministry said it had taken note of Lu’s comments “with great astonishment, especially as the statements are not in line with the Chinese position we have known so far.”
Lithuanian Foreign Minister Gabrielius Landsbergis said the three Baltic countries would summon Chinese representatives to officially ask for clarification.
He said Beijing was “sending the same message” as Moscow on questioning the sovereignty of former Soviet countries, which he described as “dangerous”.
Lithuania and its Baltic neighbours Latvia and Estonia were incorporated into the Soviet Union in 1940, but regained independence after its break-up in 1991.
EU leaders would discuss the bloc’s stance towards China and its future relations with Beijing during their next summit in June, EU Council President Charles Michel said.
Lu has been summoned to France’s foreign ministry several times in the past, including for suggesting France was abandoning old people in nursing homes during the COVID-19 pandemic and for calling a respected China scholar at a French think-tank a “mad hyena”.
Asked about Chinese officials’ comments, White House spokesperson John Kirby told MSNBC broadcaster that China and Russia are clearly aligning, adding: “These are two countries that want to challenge outright the international rules-based order … that respects sovereignty around the world.”
“They want to undermine it. They want to reduce and diminish not only the United States and our influence around the world but also our allies and partners.”
April 14 (Reuters) – European foreign policy officials on Friday urged China not to use force over Taiwan, taking a tough stance against Beijing’s threats over the democratically governed island, after comments by French President Emmanuel Macron were perceived as weak.
China in recent days has held intense military drills around Taiwan, which it claims as its own, and has never renounced the use of force to bring the island under its control.
German Foreign Minister Annalena Baerbock, addressing the issue at a press conference in Beijing alongside her Chinese counterpart Qin Gang, said any attempt by China to control Taiwan would be unacceptable and would have serious repercussions for Europe.
EU foreign policy chief Joseph Borrell echoed her remarks in a statement prepared for a speech due to be delivered in Beijing at the Center for China and Globalization think tank on Friday that had to be cancelled after he caught COVID-19.
“A military escalation in the Taiwan Strait, through which … 50% of world trade goes every day, would be a horror scenario for the entire world,” said Baerbock, adding it would have “inevitable repercussions” for European interests.
In interviews published after his trip to China last week, which was meant to showcase European unity on China policy, Macron cautioned against being drawn into a crisis over Taiwan driven by an “American rhythm and a Chinese overreaction”.
While many of the remarks were not new, the timing of their publication, and their bluntness, annoyed many Western officials.
“The European Union’s position (on Taiwan) is consistent and clear,” Borrell said in his remarks. “Any attempt to change the status quo by force would be unacceptable.”
UKRAINE ISSUE
Borrell also said Europe’s future relationship with China depended on it trying to use its influence to find a political solution to the Ukraine crisis.
“It will be extremely difficult, if not impossible, for the European Union to maintain a relationship of trust with China, which I would like to see, if China does not contribute to the search for a political solution based on Russia’s withdrawal from the Ukrainian territory,” Borrell said.
“Neutrality in the face of the violation of international law is not credible,” Borrell said, adding an appeal for Chinese President Xi Jinping to speak to Ukrainian President Volodymyr Zelenskiy and for China to provide more humanitarian aid to Ukraine.
Xi has met Russian President Vladimir Putin twice but not spoken with Zelenskiy since Russia invaded Ukraine in what Moscow calls a “special military operation” in February 2022.
China stated its opposition to attacks on civilians and on nuclear facilities in a position paper on Ukraine published in February, but it has refrained from openly criticising Russia.
“President Xi’s visit to Moscow has demonstrated that no other country has a bigger influence on Russia than China,” said Baerbock.
“It is good that China has signalled to get engaged in finding a solution. But I have to say clearly that I wonder why China so far has not asked the aggressor Russia to stop the war. We all know President Putin has the opportunity to do so any time he wants to.”
Poland’s prime minister warned earlier this week that Ukraine’s defeat may embolden China to invade Taiwan.
Baerbock and Borrell also spoke about the risks of being too dependent economically on China, in line with comments made by European Commission President Ursula von der Leyen in a speech last month on the eve of her China visit.
“We just paid a high price for our energy dependency on Russia, and it is well-known that one should not make the same mistake twice,” said Baerbock, adding that economic security is core to Germany’s strategy for China.
Borrell said that the EU needs to diversify its value chains to reduce its dependency on China for raw materials.
He also said that the increasing trade imbalances between the EU and China are “unsustainable” and called on China to remove market access barriers.
Reporting by Yew Lun Tian in Beijing; Editing by Clarence Fernandez
BERLIN/LONDON, Feb 13 (Reuters) – A Russian scheme to grant loan payment holidays to troops fighting in Ukraine, and for banks to write off the entire debt if they are killed or maimed, has added to growing pressure for the remaining overseas lenders in Russia to leave.
Almost a year since Moscow launched what it calls a “special military operation” in Ukraine, a handful of European banks, including Austria’s Raiffeisen Bank International (RBIV.VI) and Italy’s UniCredit (CRDI.MI), are still making money in Russia.
The loan relief scheme has not only triggered criticism from Ukraine’s central bank, which said it had appealed to Raiffeisen and other banks to stop doing business in Russia, but also from investors concerned about any reputational impact.
Raiffeisen and UniCredit are both deeply embedded in the Russian financial system and are the only foreign banks on the central bank’s list of 13 “systemically important credit institutions”, underscoring their importance to Russia’s economy, which is grappling with sweeping Western sanctions.
Latest Updates
View 2 more stories
Their role in supporting the Russian economy at a critical time for President Vladimir Putin has prompted some investors to go public with their misgivings.
“Companies should be very careful,” said Kiran Aziz, of Norwegian pension fund KLP, cautioning of a major risk that the banks could be used to “in other ways finance the war”. KLP funds hold shares in both Raiffeisen and UniCredit.
At the time the payment holiday law was going through parliament in September, Vyacheslav Volodin, the influential speaker of the lower house, made clear its importance to Russia.
“Soldiers and officers ensure the security of our country and we must be sure that they will be taken care of,” he said.
Eric Christian Pederson of Nordea Asset Management, which has more than 300 billion euros ($320 billion) under management, said he too was concerned about Raiffeisen and UniCredit’s Russian presence and had raised this with them.
The requirement that the banks grant payment holidays to soldiers “illustrates the dangers of operating in jurisdictions where companies can … be forced into actions that go directly against their corporate values,” he added.
“We feel that it is right for companies to withdraw from Russia, given its unprovoked attack on Ukraine,” said Pederson. Refinitiv data shows Nordea owns shares in UniCredit.
Banks restructured a total of 167,600 loans for military personnel or their family members, worth more than 800 million euros, between Sept. 21 and the end of last year, Russian central bank data shows.
Raiffeisen said that only 0.2% of its Russian loans are affected by the “government-imposed loan moratorium”, a sum it described as “negligible”. The bank has a total of almost 9 billion euros of loans in Russia, where it has been for more than 25 years, including to companies.
It made a net profit of roughly 3.8 billion euros last year, thanks in large part to a 2 billion euro plus profit from its Russia business.
UniCredit, which entered the Russian market almost 20 years ago when it acquired an Austrian bank, said that the rule was “mandatory under the federal law … for all banks”, declining to say how many of its loans had been forgiven.
The Italian bank added that its business in Russia was focused on companies rather than individuals. Of UniCredit’s more than 20 billion euro total revenue last year, Russia accounted for more than 1 billion euros.
But despite an initial sharp fall, UniCredit’s shares are now significantly higher than before Russia moved its troops into Ukraine on Feb. 24 last year, while Raiffeisen’s, with a more limited free float, have not recovered.
“Any profiteering on the ongoing war is not acceptable or aligned with our view of responsible investments,” said a spokesperson for Swedbank Robur, one of Scandinavia’s top investors, adding that reputational risk was a worry.
Swedbank Robur said it has stakes in both banks, but did not disclose figures.
Larger institutional investors, including France’s Amundi and Norway’s sovereign wealth fund, which advocates responsible investing, declined to comment when asked for their views.
WINDOW CLOSING?
Some foreign banks have made relatively quick exits.
France’s Societe Generale (SOGN.PA) severed its Russia ties in May by selling Rosbank (ROSB.MM) to businessman Vladimir Potanin’s Interros Group.
But the continued presence of two of Europe’s biggest banks is attracting the attention of regulators at the European Central Bank (ECB), one person familiar with the matter said.
Andrea Enria, the ECB’s chief supervisor, said the window to quit was “closing a bit” because Russian authorities were taking a more “hostile” approach. But he also voiced support for any bank wanting to reduce their business there or leave.
Raiffeisen and UniCredit confirmed they were in discussions about Russia with the ECB.
UniCredit said it kept the ECB “fully and regularly up to date on our strategy of orderly de-risking our exposure to Russia”.
But with money still to be made, Raiffeisen saw profit from its business in Russia more than triple last year.
Meanwhile, Russian savers lodged more than 20 billion euros with the bank, which offers a place to deposit funds with fewer sanctions risks.
This means there is no great impetus for banks to leave Russia, despite regulatory pressure.
And in Austria, which has close historical and economic ties to eastern Europe and Russia, politicians are largely silent on Raiffeisen’s continuing Russian presence, which in recent months prompted protests outside its headquarters.
Johann Strobl, Raiffeisen’s CEO, has said he is examining options for the Russian business, although points out that any move is complicated, having earlier said that the bank is not “a sausage stand” that could be closed overnight.
For some the question is more about morality than money.
Heinrich Schaller, head of RBI’s third largest shareholder Raiffeisenlandesbank Oberoesterreich and deputy chairman of Raiffeisen, is among those to have aired doubts about staying.
“Of course it is a question of morals,” he said recently. “No doubt about it.”
Whatever shareholders may say, a decree by Putin is likely to make getting out of Russia difficult. It banned investors from so-called unfriendly countries from selling shares in banks, unless the Russian President grants an exemption.
($1 = 0.9376 euros)
Additional reporting by Alexandra Schwarz-Goerlich in Vienna and Tom Sims in Frankfurt; Writing by John O’Donnell; Editing by Alexander Smith
ANKARA, Jan 23 (Reuters) – Sweden should not expect Turkey’s support for its NATO membership after a protest near the Turkish embassy in Stockholm at the weekend including the burning of a copy of the Koran, President Tayyip Erdogan said on Monday.
Protests in Stockholm on Saturday against Turkey and against Sweden’s bid to join the North Atlantic Treaty Organization (NATO) have heightened tensions with Turkey, whose backing Sweden needs to gain entry to the military alliance.
“Those who allow such blasphemy in front of our embassy can no longer expect our support for their NATO membership,” Erdogan said in a speech after a Cabinet meeting.
“If you love members of terrorist organisations and enemies of Islam so much and protect them, then we advise you to seek their support for your countries’ security,” he said.
Swedish Foreign Minister Tobias Billstrom declined to immediately comment on Erdogan’s remarks, telling Reuters in a written statement he wanted to understand exactly what had been said.
“But Sweden will respect the agreement that exists between Sweden, Finland and Turkey regarding our NATO membership,” he added.
Sweden and Finland applied last year to join NATO following Russia’s invasion of Ukraine but all 30 member states must approve their bids. Ankara has previously said Sweden in particular must first take a clearer stance against what it sees as terrorists, mainly Kurdish militants and a group it blames for a 2016 coup attempt in Turkey.
U.S. State Department spokesperson Ned Price said Finland and Sweden are ready to join the alliance, but declined to comment on whether Washington thought Erdogan’s comments meant a definitive shutting of the door to them.
“Ultimately, this is a decision and consensus that Finland and Sweden are going to have to reach with Turkey,” Price said.
Price told reporters that burning books that are holy to many is a deeply disrespectful act, adding that the United States is cognizant that those who may be behind what took place in Sweden may be intentionally trying to weaken unity across the Atlantic and among Washington’s European allies.
“We have a saying in this country – something can be lawful but awful. I think in this case, what we’ve seen in the context of Sweden falls into that category,” Price said.
The Koran-burning was carried out by Rasmus Paludan, leader of Danish far-right political party Hard Line. Paludan, who also has Swedish citizenship, has staged a number of demonstrations in the past where he burned the Koran.
Several Arab countries including Saudi Arabia, Jordan and Kuwait denounced the event. Turkey had already summoned Sweden’s ambassador and cancelled a planned visit by the Swedish defence minister to Ankara.
Reporting by Ece Toksabay and Huseyin Hayatsever; Additional reporting by Niklas Pollard in Stockholm and Humeyra Pamuk in Washington; Editing by Hugh Lawson and Grant McCool
GNOIEN, Germany Jan 23 (Reuters) – Germany on Monday dispatched the first two out of three Patriot air defence units that will be sent to the Polish town of Zamosc close to the Ukrainian border where they will be deployed to prevent stray missile strikes.
Two men were killed by a stray Ukrainian missile that struck the Polish village of Przewodow in the region last November, in an incident that raised fears of the war in Ukraine spilling over the border.
As a result, Berlin offered to deploy three of its Patriot units to Poland to help secure its air space.
Ground-based air defence systems such as Raytheon’s (RTX.N) Patriot are built to intercept incoming missiles.
“One of the reasons why Germany will now support NATO’s eastern flank in Poland with Patriots is certainly because we saw how quickly the conflict between Russia and Ukraine could spill over to NATO member countries,” Colonel Joerg Sievers told reporters in the eastern German town of Gnoien before the Patriots’ departure.
Sievers, who will command the German unit in Poland, underlined the defensive nature of the Patriot system.
“We are not the only defence forces on the ground, the British and Americans are also on the ground,” he said.
“Patriot is a strictly defensive system, and we hope that we will be able to provide sufficient protection there to prevent attacks or accidents like the one in November in the future,” he added.
.
Reporting by Oliver Ellrodt and Stefan Remter, writing by Sabine Siebold
/cloudfront-us-east-2.images.arcpublishing.com/reuters/I7DURYCRLZOA5BEUHD36PYJAKA.jpg)
/cloudfront-us-east-2.images.arcpublishing.com/reuters/KY6HQSSBJNMIROIFJ3ZDPLGZIQ.jpg)
/cloudfront-us-east-2.images.arcpublishing.com/reuters/FXR5SOEDRBK6ZEYFL4DYOTZAUA.jpg)
/cloudfront-us-east-2.images.arcpublishing.com/reuters/BQFO6E5PZVIHPDN3VSMTQBN6ME.jpg)
/cloudfront-us-east-2.images.arcpublishing.com/reuters/6LTBMNOJXBKVHEEM4AF6AV6FQE.jpg)
/cloudfront-us-east-2.images.arcpublishing.com/reuters/OHBUGWJCXJJTLCQD7Y6ISNHEME.jpg)