Hyundai Heavy Industries, the world’s biggest shipbuilding group, has announced a share swap deal worth 2.1tn won ($1.98bn) to take over second-ranked Daewoo and create a global heavyweight controlling over 20% of the market.
The move comes as the worldwide shipbuilding sector recovers from a global economic downturn that led to massive losses, widespread job cuts and, in 2017, the $2.6bn bailout of South Korea’s Daewoo Shipbuilding & Marine Engineering Co Ltd.
State-funded Korea Development Bank (KDB) owns 55.7% of Daewoo, and has said it intends to sell the stake and consolidate the country’s three biggest shipbuilders – which includes Samsung Heavy Industries Co Ltd – into two.
The combination of two of the giant shipbuilders would ease competition and excess capacity, which have depressed ship prices, KDB chairman Lee Dong-gull said at a news conference.
The deal will “raise the fundamental competitiveness of Daewoo, at a time when the threat from latecomers in China and Singapore is growing,” Lee said yesterday.
Hyundai and Daewoo hold a combined market share of 21.2%, followed by Japan’s Imabari Shipbuilding with a 6.6%, showed data from Clarksons Research.
Lee said it will take several months to gain approval from antitrust regulators from related countries. He said the size of the resulting entity’s market share would not be detrimental to the interests of customers.
Daewoo will also receive liquidity support of 2.5tn won ($2.25bn) from KDB and Hyundai, Hyundai said in a stock exchange filing.
KDB also said it would approach Samsung Heavy to gauge any interest in taking over Daewoo. A Samsung Heavy spokesman said it has received a proposal from KDB and that it needs to review the matter.
Daewoo shares rose as much as 22% yesterday, before ending up 2.5%.
Those of Hyundai Heavy Industries Holdings Co Ltd and unit Hyundai Heavy Industries Co Ltd fell about 4% on concern about a high purchase price, analysts said. Meanwhile, Samsung Heavy shares ended up 2.5%, as investor concerns of it bidding for Daewoo eased. “Consolidation is good for the industry, but not for the company which buys the stake,” said analyst Um Kyung-a at Shinyoung Securities, citing overlapping businesses between Hyundai and Daewoo.
The shipbuilding industry accounts for 7% of both exports and employment in Asia’s fourth-biggest economy. Hyundai Heavy’s workers’ union said it will delay a vote on last year’s wage deal in protest of a purchase it says could threaten job security.
It said it would be “angered” if the shipbuilder ploughed money into buying another big firm having released workers after reporting losses and shrinking orders. KDB’s Lee ruled out any job cuts after the combination.
Hyundai’s holding company is set to raise funds for acquisitions through the sale of part of its stake in refiner Hyundai Oilbank Co Ltd to Saudi Aramco for up to 1.8tn won.

It has now been just over 100 years since the opening of the Paris Peace Conference, which produced the Treaties of Versailles, Saint-Germain-en-Laye, Neuilly-sur-Seine, Trianon, and Sèvres, bringing an end to World War I. To this day, resentment over the Treaty of Trianon fuels Hungarian nationalism and revisionism, particularly under the current government of Prime Minister Viktor Orbán.
Indeed, the Paris peace process is generally remembered as an example of how well-meaning international co-operation and democracy-promotion can go wrong. Now that we are living through a moment when multilateralism and democracy are again under strain, it is worth asking why efforts to promote the two so often fail.
In 1919, US President Woodrow Wilson’s attempt to forge a lasting peace by destroying the world’s autocracies proved overly high-minded, even as it inaugurated the interventionist consensus that has dominated US foreign-policy thinking ever since. Though US President Donald Trump claims to have abandoned that tradition, he has nonetheless ordered strikes against government military sites in Syria and recognised Venezuela’s opposition leader as the country’s legitimate president.
The Paris process failed because it set expectations too high. The victory of democratic powers did not mean that democratic wishes would be fulfilled, particularly when those wishes would require the losers to pay. Throughout WWI, every side simply assumed that an eventual peace settlement should saddle the vanquished with the material – and even the emotional – costs of the war, all but ensuring an unsatisfactory resolution to the conflict.
Likewise, in 2019, the problems resulting from rapid technological change and globalisation might not admit of any widely acceptable solutions. As a result, different countries will produce their own narratives about being cheated by globalisation. And, as in 1919, they will invent “villains” to bear the blame. For example, the Trump administration routinely complains about China’s unfair trade practices, Germany’s excessive current-account surplus, aid to developing countries, and so forth. Needless to say, compiling a litany of grievances hardly amounts to a solution.
A second explanation for the failure of the Paris process is that some of those involved – French Prime Minister Georges Clemenceau, British Prime Minister David Lloyd George, and Wilson – were uniquely incompetent or otherwise ill-disposed. Clemenceau was a lifelong nationalist, monomaniacally dedicated to the pursuit of French interests, whereas Lloyd George was the opposite, and thus too pliable and unprincipled for the task at hand. He was prone to attacking others personally, only to forget that he had done so when encountering those people again.
For his part, Wilson’s lofty aspirations far exceeded his acumen for political deal-making, both domestically and internationally. And his mounting health problems certainly didn’t help. Owing to his stratospherically high blood pressure, which went largely untreated, Wilson suffered a major stroke shortly after the Paris proceedings. One obvious lesson from this episode in history is that it is important to monitor the physical and mental health of world leaders, particularly the president of the United States, during periods of consequential decision-making.
When it comes to leaders’ character flaws, 2019 offers just as much fodder as 1919 did. Trump and British Prime Minister Theresa May could not be more different in terms of their personalities, yet both have dispensed with expert advice and done serious damage to their respective countries’ political systems. While French President Emmanuel Macron is often criticised for relative inexperience, German Chancellor Angela Merkel is seen as too experienced at preserving an outdated status quo.
The third reason the Paris process failed is perhaps the most important. The conference’s overly ambitious goals, and the flawed personalities of those pursuing them, were so obvious as to invite a lethal public rebuke. That rebuke came from the British economist John Maynard Keynes, one of the most brilliant minds of the age, in his 1919 book, The Economic Consequences of the Peace.
Keynes’s critique of the Paris process and its participants was devastating, and he knew it. In October and November of 1919, he attended meetings, hosted by the Dutch banker Gerard Vissering, where bankers from the US and various neutral powers developed a sophisticated plan for leveraging private US finance for the reconstruction of Europe. The plan showed great promise, but Keynes could not associate himself with it, because his brilliant polemic had alienated the political leaders who were needed to carry it out. In the end, only a few elements of the plan were adopted, and not until 1924, when it was already too late.
The lesson is that an overwritten critique can be counterproductive. Setting political leaders on the right course of action requires persuasion, not polemics. Hence, when it came time to remake the world in 1944-45, Keynes adopted a very different approach. He elaborated a complex reconstruction plan, but this time he operated behind the scenes. It would not have been difficult to attack British Prime Minister Winston Churchill and US President Franklin D Roosevelt for their past economic policies, but nor would it have accomplished anything.
True, Churchill and Roosevelt were far better leaders than Lloyd George and Wilson. But even if they had been just as flawed, Keynes had learned the costs of focusing too much on the foibles of bad leaders during bad times. Whether it is 1919 or 2019, obsessing over individual leaders can distract us from working toward the solutions that today’s most pressing problems demand. – Project Syndicate

* Harold James is Professor of History and International Affairs at Princeton University and a senior fellow at the Center for International Governance Innovation.

Venezuela’s state oil company and its customers will be blocked from using the U.S. financial system by late April, as the Trump administration ratchets up the pressure on President Nicolas Maduro to step aside and allow an opposition leader to take his place.

The U.S. already announced it would effectively prohibit imports of Venezuelan crude and bar companies from selling cargoes of light oil to the Latin American country, which are needed to keep its pipelines flowing. The latest measures posted on the U.S. Treasury’s website suggest the sanctions could have an even wider impact on the petroleum exports that constitute the nation’s economic lifeline.

Any transactions with Petroleos de Venezuela SA, or any entity in which it has a controlling stake, involving U.S. citizens or passing through the country’s financial system must be wound down by April 28, the Treasury said. Americans who work for non-U.S. companies must stop doing any business with PDVSA by March 29.

“Thinking about oil as being a dollar-denominated business, if U.S. banks are jittery and concerned about what they can do, that will cause them to decline all transactions,” said Daniel Martin, a partner at law firm Holman Fenwick Willan. “What is happening is that if you’re a non-U.S. entity you’ll be restricted as to what you can do with PDVSA, if that involves a U.S. person or nexus.”

The U.S. government’s decision to impose sweeping sanctions on Venezuela’s state-run oil firm already look like a de facto oil embargo on the country. The administration of U.S. President Donald Trump has made clear it believes Maduro’s re-election was illegitimate and is applying intense economic pressure after recognizing opposition leader Juan Guaido as interim president.

John Bolton, Trump’s national security adviser, tweeted that “bankers, brokers, traders, facilitators, and other businesses” should not deal in any Venezuelan commodities that he alleged were being stolen by the “Maduro mafia.”

Some European oil traders had temporarily stopped dealing with PDVSA while their lawyers weighed whether it’s possible for non-U.S. entities to continue buying Venezuelan crude without falling foul of American sanctions, people familiar with the matter said earlier this week.

Venezuela pumped 1.2 million barrels a day of crude in December, a decline of almost 50 percent in four years, according to data compiled by Bloomberg. About 500,000 barrels a day of that output was exported to the U.S., but could potentially be diverted to other markets, if buyers are able to find ways to avoid using the American financial system. Some tankers have already turned away from Venezuela without loading crude, Bloomberg data show. Disruption could reach as much as 1 million barrels a day, Citigroup analysts including Ed Morse wrote in a report on Friday.

“The combination of ongoing domestic protests, global political pressure, and concerted economic pressure via sanctions could hasten a transition as well as lift oil prices,” the analysts said.

Turkey’s top economic body ruled out seeking support from the International Monetary Fund, in an effort to end market speculation that Ankara is in touch with the Washington-based lender to negotiate a rescue package.
Those spreading the rumours are carrying out a propaganda war to “harm the Turkish government, the Turkish economy and Turkish people,” the Treasury and Finance Ministry said in an e-mailed statement on Friday. “This sick state of mind has reached a dangerous level.”
Market chatter about a possible agreement with the IMF intensified after the lira lost more than a quarter of its value in August last year. The currency crash pushed consumer inflation to over four times the official target of 5%.
Turkish officials have repeatedly said the economy’s fundamentals are strong notwithstanding the turmoil in financial markets. The Treasury cited its level of indebtedness, rollover ratios and its fiscal discipline as reasons why “it’s out of the question for Turkey’s path to cross with that of the IMF.”

After last year’s market rout, President Recep Tayyip Erdogan said Turkey would never take another loan from the IMF as the lender’s conditions make it impossible to pursue an independent foreign policy.
The Treasury’s latest intervention is unlikely to silence Turkey watchers who are convinced that the nation will eventually need an IMF anchor to stabilise its economy.
“If Turkey actually went on an IMF programme, it would reduce risk premiums, rally the lira and bring forward” interest rate cuts, said Timothy Ash, a strategist at BlueBay Asset Management in London.

Delphi Economic Forum IV will take place between Thursday, February 28 and Sunday, March 3, 2019 aiming to identify the main global trends, assess their implications and review the resulting challenges and policy options confronting decision-makers of the wider Eastern Mediterranean Region. Moreover, it places Greece’s need for structural reforms and new leadership strategies under the microscope with the aim to explore a new model of governance. The main theme of Delphi Economic Forum IV is “The Challenge of Inclusive Growth”.

Delphi Economic Forum IV Agenda

Delphi Economic Forum IV Speakers List

The fifth Southern EU countries (MED7) Summit which will convene on January 29 in Nicosia will discuss migration, Brexit, eurozone reform, Europe’s energy security, climate changes and the 2021-2027 EU Multiannual Financial Framework.

The states participating in the summit are France, Spain, Portugal, Malta, Italy, Greece and Cyprus.

Ahead of the summit, President Nicos Anastasiades will hold bilateral meetings with the prime minister of Portugal Antonio Costa – who is arriving on January 28 for an official visit to Cyprus – and with French President Emmanuel Macron and Italian Prime Minister Giuseppe Conte.
Speaking during a press conference on Wednesday, Foreign Minister Nikos Christodoulides underlined the importance of the summit, adding that discussions will focus on issues which concern the EU.

Christodoulides also described Anastasiades’ bilateral meetings with Costa, Macron and Conte as very important, adding that a lot of issues of mutual interest are expected to be discussed.
Responding to questions about the energy issues, Christodoulides said that with energy companies Total and ENI actively participating in operations in Cyprus Exclusive Economic Zone possible expansion of their operations was likely to be one of the issues discussed during the bilateral meetings which Anastasiades will have.

Referring to the issue of Europe`s energy security, Christodoulides said the seven countries would discuss how the EU can enhance its energy autonomy and independence.

With regard to Anastasiades’ meeting with Macron he noted that when the foreign minister of France Jean-Yves Le Drian visited Cyprus in September, the two countries agreed to begin discussions on concluding bilateral agreements on energy, defence, security and other issues.
Responding to a question about Brexit, the foreign minister said that the EU27 have a common approach on this issue.

“We are following developments in Britain very closely. The issue is continuously being discussed at the European level and it is very important that the EU27 have a common approach on it,” Christodoulides stressed.

To another question about the different approach of France and Italy as regards the migration issue, Christodoulides said that migration has a bigger impact on the EU Mediterranean countries than on the other EU member states, and the aim of the discussion that will take place is to outline very concrete suggestions and positions.

On the occasion of the 5th South EU Summit – taking place today in Nicosia – the President of Cyprus provided an exclusive interview, highlighting the importance of 2019 for the future of the European Union, the role of Southern Europe in catalysing a reform agenda, while emphasizing the increasing relevance of Cyprus in the attainment of EU energy security and climate targets.

South EU Summit: You assumed your duties as President of Cyprus on the 1st of March, 2013 – only a few days before the climax of the financial crisis in the country. Now, in your second term, not only has the island-nation made a smooth exit from its bailout programme, Cyprus returned to investment grade in 2018, and is currently one of the fastest growing Member States in the eurozone (with a 4% GDP growth rate). What were the keys to achieving this feat, and what measures do you believe need to be prioritized to continue building confidence and credibility in the Cypriot economy?

President Anastasiades: During the past few years, we have succeeded in turning an economy in distress into a story of strong economic recovery, that gained international praise.

The positive repercussions of an ambitious reform programme, and the careful management of state finances, are being reflected through, among others: successive budget surpluses, a dynamic growth rate of 4%, a drastic reduction in unemployment, consecutive upgrades of our economy by international rating agencies, as well as a significant reduction in taxation.

At the same time, despite the economic difficulties we have faced, our country’s comparative advantages not only remain intact, but have been further enhanced and expanded. These include one of the most competitive corporate tax rates, a significant network of Agreements for Avoidance of Double Taxation, a highly qualified and professional workforce, and a fully EU harmonised tax and legal system.

The combination of the above, in conjunction with the reforms in the public sector, and the enhancement of the tax and legal frameworks, resulted in renewed substantial investments in a wide range of sectors.

From the operation of oil and gas giants in our Exclusive Economic Zone, to the licensing of the first integrated casino resort (with an investment of more than half a billion euros), an impressive 18 per cent annual increase in the registration of investment funds, the record numbers of the tourism industry in both arrivals and revenue, and the commercialization of the Limassol port, it is evident that our efforts have borne fruit.

The challenge now is to keep up the momentum and ensure that Cyprus remains on a path of sustainable growth. Sound governance of public finances, complemented by a business-friendly investment environment, a comprehensive government strategy for investment facilitation, and continuing to invest in education, research and development, entrepreneurship, and the empowerment of our youth, are critical elements on this path.

To this end, maintaining the reform momentum is imperative. The entire planning for the years 2018-2023 is a continuation of everything we achieved during my first term in office. With this in mind, we will continue consultations with the parliamentary parties, with a view to gain their support for our reforms programme, in the fields of public service, education, health, the judiciary system, research and innovation, and e-governance.

We also aim to continue with the policy of tax reductions, and provide new incentives in order to further boost entrepreneurship and attract new investments, with emphasis placed on innovation and start-ups. The new Investment Law to fast-track licensing procedures for large investments, and the establishment of a new enhanced investment funds framework, are crucial steps in this direction.

At the same time, the newly-established Deputy Ministry of Shipping, offers substantial support and attention to the already thriving maritime sector of Cyprus, and we have no doubt that the Deputy Ministry of Tourism, operational since January 1^st of 2019, will further enhance the growing tourism industry.

Most importantly, we will continue to invest in our people, and work with determination and passion to drive change, progress, and prosperity in our country.

South EU Summit: Deepening the Economic and Monetary Union is a critical step towards greater integration at a eurozone level. What measures do you believe need to be prioritised at an EU policy level, leveraging on Cyprus’ experience, to safeguard the country – and the eurozone – from future headwinds?

President Anastasiades: Without a doubt, we, the Member States of the Economic and Monetary Union, have come a long way in further deepening and strengthening the architecture of this relatively young structure.

Actually, this year only marks the Eurozone’s 20^th year of existence.

Mediterranean states have significantly contributed to this effort; we have taken part in long, sometimes difficult debates, on how to best promote the reform of the euro area. We have done so always in a constructive spirit.

As we all acknowledge, there are still a number of open issues that we need to discuss and decide upon, on which compromises have to be made, from all sides. At the end of the day, the further deepening of the Economic and Monetary Union shall, and will bring benefits to all its members, regardless of their geographic position.

Important issues ahead of us include the establishment of a central stabilisation function, in order to cushion Economic and Monetary Union countries from large and asymmetric macroeconomic shocks.

Advancing on the design and gradual implementation of a budgetary instrument, for convergence and competitiveness of the euro area, remains a priority. We stand ready to pursue the discussion within the eurozone towards a stabilisation function in the Euro area as well.

Concerning the Banking Union, significant progress has been achieved, in risk reducing measures for the banks. It is now time to move on with more concrete actions, and timelines, in regard to risk sharing measures, including the establishment of a European Deposit Insurance Scheme, so as to provide protection to depositors, regardless of the geographic location of deposits.

South EU Summit: Cyprus is the host of the fifth South EU Summit since its launch in September 2016, bringing together 7 governments that jointly represent close to 40% of EU GDP and population. What is the purpose behind this gathering, and what results would you like to see come about?

President Anastasiades: I am certain that we all agree that this year, 2019, will be a defining year for Europe; this year the legislative programme of the last five years is coming to an end; starting in May, with the European elections, we are opening the cycle of institutional changes; in May, we, the EU leaders, are also called on to set out our strategic vision for the EU, and provide an answer to our citizens’ legitimate concerns; in two months’ time, we need to be ready to move forward as a Union of 27. Our actions this year will count more than ever.

Europe is facing all sorts of challenges – social, economic, environmental, political threats and security issues, challenges that touch upon the life of our citizens.

European citizens look to us, politicians, for answers to their daily problems; they demand the bettering of their living conditions; they ask for security, tighter control of our borders, and appropriate measures against migration; they seek a bold approach to a changing environment, the impacts of which, we in the Mediterranean feel the most.  Our citizens have every reason to turn to their leaders, and the Institutions, expecting solutions to their problems, and the conditions for a more stable, safe and prosperous future.

So, 2019 should be a year of change, and a change we deliver, it should be our defining moment; that we, as the European Union, do more in answering our citizens through targeted and visible actions.  We have a historic responsibility to do so, through a calibrated, ambitious, and result oriented strategy, that will put the European project back on track; make it relevant; adapt it to modernity.

We, the Mediterranean states, have common concerns, and we are determined to pursue fair and well-designed policies, for the benefit of Europe and our citizens. Change and progress are both possible if there is vision, determination, leadership, cooperation, and coordination. I have no doubt that all these elements exist, and we can take the Union one step further, for the benefit mostly of the Europeans. That is the reason and purpose of our gathering.

South EU Summit: It is widely accepted that Cyprus cannot reach its full potential without a reunification. Besides reducing the political risk of the country, there are estimates that suggest that the reunification of the island could triple the Cypriot economy’s growth rate. You recently expressed your commitment to resume “a creative dialogue” to reach “a settlement that brings peace and stability” to Cyprus. Further to the stalemate in Crans-Montana, how do you propose to move forward on the Cyprus issue, and what type of solution to you envisage?

President Anastasiades: I cannot stress enough, the significance, and the consequent multiple benefits, that the solution of the long-lasting Cyprus problem, and the normalisation of our relations with Turkey, would bring about.

In this regard, with a renewed mandate from the people, my top priority remains none other than addressing the unacceptable current state of affairs, with the continuing Turkish occupation of 37 per cent of the territory of the Republic of Cyprus, since there is no doubt, that lasting peace and stability can only be achieved through the comprehensive settlement of the Cyprus Problem.

To this end, on numerous occasions, I reiterated in the clearest terms to the UN Secretary-General, our partners in the EU, the Permanent and non-Permanent Members of the Security Council, and the international community in general, that I remain strongly committed to resuming the negotiating process.

What is of course required, is to create the necessary conditions, that will allow the dialogue to resume, on the basis of good will, and a constructive stance from all stakeholders, particularly from the Turkish side, in order to safeguard the positive outcome of the negotiations.

The above-mentioned were repeatedly reiterated during my meetings with the UN Secretary-General, during which I also stressed, that I remain sincerely committed to negotiate a solution within the framework set out by the Secretary-General, as clarified on July 4, 2017, with the same determination and positive attitude we have demonstrated since the beginning of the dialogue.

Currently, we expect the arrival of the Special Envoy of the United Nations Secretary-General, who has already held two separate meetings with all parties involved, with the aim of agreeing on the “Terms of Reference”, as regards the methodology of a new negotiating process.

Within this context, I do hope that the meetings of the special envoy of the United Nations, which will soon take place with all other interested parties and stakeholders involved, will allow the Secretary-General to be in a position to resume negotiations.

Taking this opportunity, I wish to state that the failure of the Conference on Cyprus in July 2017 was precisely due to Turkey’s insistence on its long-standing position, in maintaining the continuation of the anachronistic system of guarantees, the unilateral right of intervention, and the permanent presence of Turkish troops.

I also wish to state that our side submitted comprehensive written proposals for each and every one of Mr. Guterres six-point framework, including on a new security architecture that would replace anachronisms, and the strategic aspirations of third countries against Cyprus.

Having said the above, at the same time, we should also not ignore the remaining significant differences on the other chapters of the Cyprus Problem.  Differences that can be easily resolved, by adopting and respecting what is considered as our obligation: The European acquis.

It is only through adhering to these fundamental principles, which determine that a member-state of the United Nations, and the European Union, can only be considered as truly independent and sovereign, if it is free of any third country dependencies, that we can truly establish the conditions for prosperity, and peaceful co-existence between all the citizens of Cyprus, in an environment of safety and stability.

I truly wish that both our Turkish Cypriot compatriots, and Turkey, will respond positively to the new prospect that is unfolding again upon us, taking into account, in a comprehensive manner, and without being selective, the provisions set by the Secretary-General at the Conference in Crans-Montana.

On my own behalf, I wish to reassure, once again, my determination to work tirelessly to reach a comprehensive settlement, that will finally reunify our island after 44 years of division, ensuring conditions of safety for the future generations of Greek and Turkish Cypriots, without any third country military troops or guarantees.

A settlement that will satisfy the genuine desire of our people, especially of the younger generations, to live together and peacefully co-exist, collaborate and prosper, in a European country which fully respects their fundamental human rights and freedoms.

And, aside from the obvious fact that the solution of the Cyprus Problem, would be first and foremost to the benefit of all Cypriots, please allow me to bring to your attention some other merits that a settlement would bring:

• On a regional level, it would turn Cyprus into a model-country of stability and predictability, and would amplify Cyprus’ role as a security provider, in one of the most turbulent areas of the world.
• At a European level, it would end the oxymoron of having one of its member-states being divided, while it would also positively reinforce EU-Turkey relations, and the overall security architecture of the EU.
• Last, but not least, the solution of the international problem, which has been on the agenda of the United Nations during the last decades, will offer a beacon of hope, that even the most intractable problems can be solved peacefully, through the United Nations.

South EU Summit: Establishing a united strategy to manage migratory inflows currently constitutes one of the biggest challenges for the EU writ large. In fact, in 2018 Cyprus ranked 1st in asylum claims per capita, with close to 6,000 requests. What is your perspective in this regard, and how can the Union strike a balance between upholding EU founding values, such as solidarity, while safeguarding the interests of European citizens? What reforms to you believe should be made to the EU’s Common Migration Policy?

President Anastasiades: Last December, at the European Council, we discussed once more the implementation of the EU’s comprehensive approach. We had a rather heated discussion, I would say, during which I intervened three times.

We have been striving for months to come to a satisfactory solution to the migratory pressures we are faced with. Since the beginning of the crisis, several measures have been adopted, producing positive results; we welcome these, but there is still work to be done, especially on fair burden sharing, and shared responsibility among Member States.

What do we actually need in the end, in order to come to a lasting solution?

First, solidarity: front line states cannot be left alone anymore, to bear the responsibility of hosting, and providing adequate reception conditions, to the immense flows of asylum seekers, while other Member States provide only financial and technical assistance. Nor can the EU be dependent on the goodwill of certain third countries, to cooperate, and to carry out their obligations.

Second, measures concerning border control, or prevention of human trafficking and smuggling. The present crisis has an important humanitarian dimension that cannot be overlooked.

Third, effective cooperation with third countries, based on equal partnership, and mutual honouring of respective obligations.

Cyprus has been facing disproportionate pressures from asylum seekers during the last years. We are the first among Member States concerning the number of first time asylum applications in relation to the population. There is a 55 per cent increase for 2018, compared to the same period last year.

Since the beginning of 2018, we have registered the illegal entry of more than 1,840 persons into the areas that are under the effective control of the Republic. The main point of their departure remains Turkey and, recently, to a lesser extent, Lebanon (204 persons since the beginning of 2018).

Irregular migrants entering Cyprus are mostly Syrians, who are entitled to international protection, and cannot be returned. Hence, measures mainly focused on the management of flows of economic migrants, cannot help Cyprus.

There is also a high percentage of economic migrants whose return is not feasible, because Turkey does not apply the EU –Turkey Readmission Agreement towards Cyprus, (and does not apply the third country nationals clause towards any Member State).

Last but not least, the refusal of Turkey to properly implement the EU–Turkey Statement towards Cyprus, and prevent new migratory routes from emerging, aggravates the situation, since a considerable number of irregular migrants arrive in the areas that are not under the effective control of the Republic of Cyprus.

South EU Summit: Cyprus, Greece, Italy and Israel are at the forefront of re-designing new energy routes running through the Eastern Mediterranean. Besides the EuroAsia Interconnector, an EU decision regarding the EastMed pipeline is expected within the first months of 2019. Likewise, international attention is set on the results of the exploratory drilling being undertaken by ExxonMobil. What is your evaluation of the potential of Cyprus becoming a decisive player within the context of EU energy security, and how can these cross-border energy projects contribute to the strengthening of EU energy independence?

President Anastasiades: Energy security is of strategic importance for the EU, as it underpins not only our economic growth, but also our ability to alleviate poverty and improve social welfare. Most importantly, of course, it safeguards our ability to make political decisions, based solely on our code of principles, free of undesirable interdependencies.

The European Union has faced challenges in the past, that have illustrated the need to ensure that it is not over-reliant on a limited number of sources of energy, or be vulnerable to external pressure. Diversification of energy resources, and routes, is thus of paramount importance in ensuring secure, sustainable, affordable, and safe energy supply to Europe.

In this respect, I welcome the special attention paid by all to the Eastern Mediterranean, as a region that can become a reliable energy supplier, thus contributing substantially to the EU’s energy security.

Towards this end, we are actively working on the EastMed Pipeline Project, an ambitious project of great geopolitical significance, that will transfer Israeli and Cypriot resources to the EU, via Greece and Italy. We hope that the Intergovernmental Agreement that has been negotiated between Cyprus, Greece, Israel, and Italy, will be signed as soon as possible.

In the same vein, the signing of the Intergovernmental Agreement between Cyprus and Egypt last September, concerning the construction of an underwater pipeline, to export Cypriot natural gas to Egypt, the first of this kind in the region, is an equally important development, since the natural gas, through the Idku LNG plant, will be exported to the EU. In this respect, it has to be clear that the Government of the Republic of Cyprus is acting in the interest of all its citizens, Greek-Cypriots as well as Turkish-Cypriots, who will benefit accordingly.

All these developments highlight our firm conviction, that the wealth of the region can bring the countries of the region together, creating common interests, and contributing to peace and stability. In fact, it can become what coal and steel was for the EU, this time in a new regional context.

Unfortunately, Turkey, almost on a daily basis, continues to issue warnings and threats if we insist on proceeding with our energy programme. It is clear that Turkey’s actions in our maritime zones aim at advancing Turkey’s interests in the Eastern Mediterranean: to place the region’s hydrocarbon reserves under its control, and become the energy hub of Europe.

At the same time, Turkey’s behaviour poses a broader security threat in the fragile Eastern Mediterranean, and needs to be addressed, not only as a severe infringement of the sovereign rights of a Member State, but also of the rights and interests of the European Union as a whole.

Unqualified, tangible solidarity, is what is called for by the Treaties, and dictated by Turkey’s actions, and we need to send the message that Turkey needs to avoid any kind of friction, threat, or action, directed against a Member State, which damages good neighbourly relations and the peaceful settlement of disputes

South EU Summit: Taking into consideration the need to shape domestic policies that comply with climate targets on the one hand (penetration of  RES in electricity production equivalent to at least 32%, energy efficiency of 32.5% by 2030 and becoming the world’s first climate-neutral economy by 2050), guarantee the competitiveness of individual economies on the other, while also catering to the social implications derived from this energy transition – what is your strategy in this regard?

President Anastasiades: Let me start by underlining that the October 2018 report by the Intergovernmental Panel on Climate Change (IPCC), and the COP-24 deliberations are clear: climate change has emerged as the new major threat, especially for the Middle East and Northern Africa.

All countries in the Eastern Mediterranean, and the Middle East, are particularly vulnerable. The forecasted impacts of a changing environment are dire for our region. They include social unrest, conflict, and mass migration, with serious ramifications for international peace, stability, and security.

We need to take immediate action at a national, regional, and an international level. There is no doubt about it.

The EU shall maintain its position as the global leader in the fight against climate change. Thus, we need to support the efforts of the European Commission in putting together the EU’s long term strategy, the soonest possible. A strategy that should be result oriented, and ambitious, with a vision for a climate neutral economy for the future.

Having in mind the worrisome outcome of the latest IPCC report, and other scientific studies, I convened a meeting last June, to evaluate and enhance Cyprus’ action in combating the effects of climate change for Cyprus and the region.

Cyprus, due to its location, and its excellent relations with the countries of the region, can play an important regional role in tackling climate change and its impacts. Cyprus offers a particularly attractive institutional setting for a number of international organisations, looking for regional presence/headquarters.

Cyprus could promote coordination and cooperation, between the countries of the region, so that an Action Plan is developed; this will record and mitigate climate change impacts, on sectors like Environment, Agriculture, Tourism, Health, in Eastern Mediterranean and Middle Eastern countries. It will develop an inclusive “dialogue forum”- a platform where national and regional stakeholders, can discuss science-based practical solutions to challenges related to climate change.

The initiative could feed the Eastern Mediterranean and Middle-Eastern region, with environmental observations and predictions required to assess the extent of the rapid warming and drying conditions, as well as better support national policies to meet CO2 emission pledges to the Paris Agreement.

In collaboration with advanced regional and international partners, who are experts in the field, efforts are currently underway to establish a new regional Centre of Excellence on Climate Change in Cyprus, being a knowledge hub for environmental and climate change research, and sustainable solutions, addressing the societal challenges of Cyprus, the Eastern Mediterranean and the Middle Eastern region.

Spain, Portugal, France, Malta, Italy, Greece and Cyprus will meet to discuss security, energy and migration.

Nicosia, Cyprus – The fifth South EU Summit takes place on Tuesday in the Cypriot capital of Nicosia, where the issue of migration is again expected to be one of the key headlines of the one-day event.

The seven countries that make up SEUS – Spain, Portugal, France, Malta, Italy, Greece and Cyprus – first met in 2016 with the objective to increase cooperation and coordination by the European Union over security and migration.

Together, the SEUS countries, which are united along cultural similarities as well as similar economic models and geopolitical challenges, make up nearly 40 percent of the EU’s total population and gross domestic product, as well as half of the European bloc’s coastline.

The global refugee and migrant phenomenon that has landed at the doorstep of Europe in the past few years has alarmed European leaders and contributed to the rise of populism and far-right nationalist movements.

In particular, the Syrian refugees arriving from their war-ravaged country have shone a spotlight on asylum policies with politicians using these selectively to win over voters.

EU migration policy
Last year’s summit pledged to address the root causes of mass migration, as well as to reform the Common European Asylum System.

Olga Demetriou, an associate professor of post-conflict reconstruction and state-building at Durham University, told Al Jazeera in the last four years there has been a welcome change in discourse, now referring to the issue of migration as “responsibility sharing” as opposed to what used to be conveyed as “burden sharing”.

This is “an acknowledgement that refugee protection is the responsibility of states and not a strain,” she said.

“However, it is still far from evident that humaneness and inclusion are the driving forces of European and state policies.”

SEUS has “widely diverging stances on the issue” and the current system is aimed at greater convergence between policies relating to recognition of asylum across the EU – a factor with a worrying precedent.

“Having looked at rates in a comparative perspective over the last 20 years, history is teaching us that such convergence tends to be downward rather than upward,”

Many EU member states have also not followed through on achieving the target numbers it set regarding a relocation programme that ended in 2017.

Another worrying aspect of this strategy, she continued, is what it says about “qualification for refugee protection”, as it envisions more restrictions on people who awarded “complementary protection” – that is, people who have not been recognised as refugees under the terms of the 1951 Convention but still face a risk if returned to their countries.

“The current plans re-entrench this faulty understanding and in fact make it stricter,” said Demetriou. “And they additionally propose to restrict the temporal aspect of protection with a view to sending refugees back eventually.”

These last two points are at odds with the promise of integration, which the EU sees as a priority.

Energy and Brexit
Farid Mirbagheri, a professor of international relations at the University of Nicosia, told Al Jazeera that energy security is another topic that will be focused on during the summit.

“There is the all important of Mediterranean gas being piped to Europe via Cyprus, Greece and Italy,” he said.

“That would include the East-Mediterranean project laying 2,000km of pipes on the seabed,” he continued, adding this will have an effect on the Russian monopoly of fuel supply to Europe.

Other topics include climate change, which was “conspicuously absent from last year’s summit statement”, Demetriou said, and Brexit, “an overriding concern across Europe that has brought home the crisis of political legitimacy” the EU has been suffering from.

What’s behind the growing dispute between Italy and France?
“Brexit effect is devastating for the EU in the sense that, ultimately, the idea that has always driven the Union since its inception has been peace,” Demetriou explained.

“Considering how much of the discussion on the Brexit as a still-unfolding crisis is premised on the complications arising from the peace agreement in Northern Ireland, that overarching idea is effectively put into question,” she said.

According to Demetriou, despite Brexit acting as a deterrent for other EU member states against “experimenting with leaving” the block – as showcased by UK Prime Minister Theresa May’s own party and the opposition voting overwhelmingly against her deal – it has shaken other European leaders from being complacent of the role and function of the EU.

“I don’t think that European politicians should rest assured in the Union they are left with,” Demetriou said.

“Brexit has demonstrated that exiting the EU is a messy, uneasy and probably a very costly option for member states,” Mirbagheri agreed.

Furthermore, he said, the current state of international politics, demonstrated by the willingness of the United States’ government to part ways with European powers, has highlighted the significance of sustaining “a cohesive and credible EU”.

“Without US political support, European countries would find themselves more vulnerable to pressure applied by their eastern neighbour, the Russian Federation,” Mirbagheri said.

“Britain leaving the EU obviously reduces the weight of the EU in global affairs, yet it highlights the importance of staying more united to compensate for that deficit.”

ATHENS, Greece: Steps to define maritime borders between Lebanon and Israel would help stability throughout the East Mediterranean region, a leading energy expert told a key industry conference in Athens on Monday.

“In the past, borders were defined by wars; nowadays, with the UN and UNCLOS [or United Nations Convention on the Law of the Sea], all Maritime differences can be resolved peacefully,” Roudi Baroudi, a 40-year industry veteran, told the Athens Energy Forum. “With modern science and advanced imagery, new technologies give us unprecedented opportunities to reach our goals for Maritime Boundaries with a diplomatic/legal approach.” Baroudi pointed out also that the Mediterranean countries have 95 Actual Maritime Boundaries out of which 31 only Treaties and 64 are unresolved.

Baroudi, who serves as CEO of Energy and Environment Holding, an independent consultancy based in Doha, spoke on the opening day of the two-day Athens Energy Forum (AEF) at the Grand Hyatt Athens hotel.

“With a multi-disciplinary approach – a mixture of law and science – we can get to fair and just Maritime partitioning without going to war,” he told the audience.  “If we review the region’s current offshore oil and gas concession blocks, we quickly determine how these blocks are impacting certain un-demarcated Maritime Boundaries, and this is where the best law and the best science can give all countries a fair share.”

Speaking on the sidelines of the event, Baroudi said a diplomatic resolution of the Lebanese-Israeli maritime dispute and other maritime borders disputes between Cyprus, Turkey and Greece would have positive impacts across the region.

“This would send all the right signals to everyone with a stake in the East Med, from governments and their peoples to major energy companies and other investors,” he said.

“It would demonstrate by example – even more than last year’s landmark five-nation Caspian Sea deal – that even the most intractable disputes can be sidestepped if the principals are willing to be reasonable.”

Baroudi has advised companies and governments on several continents about how to approach energy issues, and has helped to formulate policy for key agencies of the European Union and the United Nations. He said any form understanding, direct or not, that allows both Lebanon and Israel to focus on developing their resources would confer significant benefits on the entire region.

“Even for countries not currently on the verge of becoming energy producers, the removal of a key source of friction between Israel and Lebanon would cast regional security in a more positive light, lowering the risk profiles of all business, trade, and investment activities,” he added. “And this is not to mention all the advantages that the Lebanon and Israel would gain from new revenues. Israel would make its own choices, of course, but Lebanon would have much more capacity to address pressing national objectives in terms of debt retirement, deficit reduction, health and education spending, and infrastructure development. Best of all, all of these measures would help alleviate poverty, another major source of local and regional instability.”

By all accounts, Baroudi’s remarks were delivered in the right room. As in previous years, the AEF attracted numerous executives and other key decision-makers from the private and public sectors like, including Greek Energy Minister George Stathakis.

“Of course it’s important to keep reminding the Lebanese and Israeli governments that if they want to exploit their respective energy resources to the fullest, the surest way forward is some kind of peaceful one. It may not even matter what route they take, just so long as they avoid armed conflict and the all the costs that would come with it,” he said on the sidelines of the forum. “But we also need to make sure that other players in the region realize that this matters for them as well: after all, if even an informal understanding on offshore resources can be reached between two of the world’s most mutually hostile neighbors, it would demonstrate that other rivalries also can be partially overcome for mutual benefit.”

This, Baroudi argued, would “bolster regional stability by encouraging other sets of Mediterranean neighbors – especially Cyprus and Turkey – to commit to peaceful means of dispute resolution”.