As early as July 2017, the French energy group Total announced within the framework of the South Pars 11 project (SP11) led in association with the Chinese group PetroChina (CNPC) that it took all possible precautions to restrain the field of influence of the the Iranian Revolutionary Guards Corps (IRGC).
Following the decision of President Donald Trump to withdraw the United States from the Iranian nuclear deal (JCPOA) signed in July 2015, Total said it would discontinue its participation in SP11 if it did not obtain a specific project waiver by the US authorities with the support of the French and European authorities before November 4, 2018.
Since then, the Trump administration has reinstated the sanctions against Iran and the Congress could toughen them a little more before the mid-term elections in November.
In the absence of a US guarantee and considering the significant fines paid by European companies to the benefit of the US government in recent years, the Total group has announced its definitive withdrawal from the SP11 project despite related expenditure valued at around 40 million euros, confirming a decision known for two months according to Tehran and especially the extraterritoriality of US legislation in Europe.
“Total had little choice for two reasons. The first is caution because even with the support of the French government, there was no guarantee that the US government would be comfortable with it. The second and most important is of course the possibility at any time for the US government to paralyze the financial activities of Total knowing that US banks are present in 90% of the group’s financing operations,” said an observer.
The decision of Total is also a disavowal for the European Union (EU) which Commission has yet adopted on July 16, 2018 a legal instrument – the Blocking Statute – with a view to protecting European companies in Iran against US sanctions. Finally, in accordance with the contract signed on July 3, 2017, PetroChina is expected to acquire Total’s shares and to chair the SP11 consortium.
The German car group BMW has been producing and selling cars in China since 1994. Since then, China has become the second largest economy in the world just years away from dethroning the United States while in purchasing power parity (PPP) the Chinese gross GDP exceeds its US counterpart since 2014 according to IMF data.
According to Chinese state media, BMW is now considering selling Chinese production overseas, which was previously reserved for the Chinese domestic market. As part of a redefinition of the general rules of the Chinese government’s industrial and automotive policy, the BMW X3 electric vehicle would not only be produced in China but also exported to third markets, explained Thomas Becker, vice president of governmental affairs with BMW Group, to Chinese news agency Xinhua.
“Customer demand for our X vehicles continues to be very high – July sales of BMW X3 increased 52.3% – and now we’ve increased production capacity by localizing the BMW X3 in China and South Africa,” said Pieter Nota, Member of the Board of Management of BMW AG responsible for Sales and Brand BMW. If such evolution remains to be confirmed, BMW believes that the Chinese government is supporting it, this way addressing logically a message to its American competitor Tesla (TSLA).
The latter, whose stock price fell from USD 379 to USD 300 over August 7-20, 2018, seems in great difficulty following the complicated statements of its CEO Elon Musk. Burning a lot of cash and lacking capital to ensure production capacity in line with its objectives, Tesla could well see these very compromised if BMW produces in China electric vehicles for export worldwide. In addition to a presumably easier access to the resources needed to produce the batteries, BMW has an experience, a reputation and a production capacity incomparable to that of Tesla.
“If BMW and China get along, other automakers will take the same path and when it happens, the future of Tesla will darken more,” said an analyst of the automotive sector. As evidence, in the first five months of the year 2018, sales of BMW i, BMW iPerformance and MINI Electric vehicles jumped 41.0% to total 46,849.
After eight years of an economic and social crisis that seemed endless, the European Union (EU) authorities in Brussels have largely welcomed the exit of Greece from its third and last aid plan.
“The far-reaching reforms that Greece has achieved have laid the foundation for a sustainable recovery: it must be nurtured and maintained to enable the Greek people to reap the benefits of their efforts and sacrifices. Europe will continue to stand with Greece,” said EU Commissioner for Economic and Financial Affairs Pierre Moscovici.
With forecasts of economic growth at 2% for 2018 and 2019, Greece enjoys a higher growth rate than major European economies such as France. Inside the country, Cyceon correspondents posted a much more moderate optimism, recalling that unemployment remains very high at 21.5% and that precariousness always strongly undermines the quality of life of all age groups, especially among young people and retirees.
Also, the massive sale of large parts of the public service to the private sector since 2011, the continued weight of the public debt at 191.1% against the GDP and the announcement of new austerity measures by Prime Minister Alexis Tsipras are as many elements which greatly reduce the satisfaction expressed in Brussels.
According to Cyceon, the Greek political scene is not as stable as it seems, especially with the difficulties related to the migration crisis that could quickly resurface after the decision of Germany to return migrants to Greece.