World

New Zealand trials help for lower-income families to get electric vehicles. North Korea in lockdown as Covid-19 cases grow. US Treasury calls for regulation of volatile cryptocurrencies. By Jonathan Pearlman.

Finland and Sweden apply for NATO membership

Finland’s President Sauli Niinistö and Sweden’s Prime Minister Magdalena Andersson in Stockholm this week.
Finland’s President Sauli Niinistö and Sweden’s Prime Minister Magdalena Andersson in Stockholm this week.
Credit: Stella Pictures / ABACA

Great power rivalry

Ukraine: On Wednesday, Finland and Sweden formally applied to join the North Atlantic Treaty Organization – a direct affront to Russian President Vladimir Putin, whose invasion of Ukraine was aimed at resisting the expansion of the 30-nation bloc.

Finland, which neighbours Russia, maintained close ties to the Soviet Union during the Cold War and has traditionally remained committed to neutrality. But 76 per cent of Finns now support joining NATO, up from 20 per cent before the invasion of Ukraine.

Sweden became neutral in the 19th century but kept secret ties to NATO during the Cold War and has committed to European mutual security agreements since 2009. A recent poll by Swedish newspaper Aftonbladet found 61 per cent of people support joining NATO, up from 42 per cent before the Ukraine invasion.

Sweden’s prime minister, Magdalena Andersson, said this week that Russia’s “illegal war” had highlighted the need for Nordic nations to defend their common history and culture.

“Membership of NATO strengthens security in Sweden but also in the Baltic Sea region,” she said.

Putin said he “has no problem” with Finland and Sweden joining NATO, but warned that Russia will respond if the military alliance moves weapons into either country.

But the membership bid was opposed by Turkey, a NATO member, which criticised Sweden and Finland for hosting individuals linked to Kurdish militant groups and for imposing an arms embargo in response to Turkish military operations in Syria.

All 30 NATO nations must agree to accept new members.

Turkish President Recep Tayyip Erdoğan’s stance prompted speculation that he is trying to pressure the United States to support Turkish arms purchases, or to improve his domestic standing ahead of an election next year.

In Ukraine, the military stalemate has continued. Ukrainian forces, strengthened by Western military supplies, have recovered some territory in the east and retaken most of Kharkiv, Ukraine’s second-largest city.

But Ukrainian commanders ordered troops holding out in a steel plant in Mariupol to surrender, effectively ceding control of the pivotal city and enabling Russia to hold a swath of territory that connects southern and eastern Ukraine. Russia took 264 soldiers from the plant into custody on Monday, and more were due to emerge from underground. Putin promised to treat them in accordance with international law. Ukraine’s president, Volodymyr Zelensky, said in a video address: “Ukraine needs its Ukrainian heroes alive.”

About 20,000 civilians are believed to have died during the battle over Mariupol, which had a pre-war population of 450,000. 

The neighbourhood

New Zealand: On Monday, Jacinda Ardern, New Zealand’s prime minister, unveiled the government’s first plan to achieve its emissions reduction targets, including a “scrap and replace” scheme that will help lower-income households switch to electric vehicles.

The government’s emissions reductions plan outlined various proposals to ensure that it meets its initial round of reduction targets to 2025. Ardern, who has Covid-19 and was isolating, said in a statement: “This is a landmark day in our transition to a low-emissions future.”

The plan includes schemes to capture gases at landfills, improve the efficiency of household heating, and switch to a decarbonised bus fleet. The headline item was a $NZ569 million trial to support 2500 eligible households to sell their cars and buy an electric or hybrid vehicle.

New Zealand’s emissions per capita are less than half of Australia’s, but it has a dismal record of curbing emissions.

Ralph Sims, an emeritus professor at Massey University, told the Science Media Centre that the government’s new plan lacked urgency and deferred proposals – such as phasing out coal plants – that would lead to immediate reductions. “I would put money on New Zealand’s gross emissions continuing to rise for some years yet,” he said.

Democracy in retreat

North Korea: Until last week, North Korea had – officially – zero cases of Covid-19. On Tuesday, it reported that it had 1,483,060 suspected cases, including 56 deaths.

The sudden admission of the crisis last week prompted the government to order a nationwide lockdown and send troops to distribute medicines. But North Korea has limited testing capacity and inadequate health services and has refused to conduct vaccinations. Its main method of treating people with Covid-19 is to isolate them. On Tuesday, North Korea said at least 663,910 people were in quarantine.

North Korea’s leader, Kim Jong-un, criticised the health authorities for their poor response, saying the spread of the virus was the worst “turmoil to fall on our country since the founding”. Some healthcare officials have reportedly been arrested.

Since the beginning of the pandemic, North Korea, which has about 26 million residents, has conducted 64,200 Covid-19 tests. Australia, which has a similar population, has conducted 71 million tests.

North Korea closed its borders in 2020, believing this would help to protect it from the pandemic, as it did for outbreaks of Ebola and SARS.

Kim, who was shown on state television wearing a mask and visiting pharmacies, last year rejected an offer by the World Health Organization to assist with vaccinations. Eritrea is the only other country that has not conducted vaccinations.

Spotlight: The latest ‘crypto winter’

For years, cryptocurrencies were largely the domain of tech-savvy speculators and libertarian hyper-capitalists. But they have increasingly attracted investments from banks, hedge funds and personal investors, especially as plunging interest rates prompted a rush to sink loose capital into new classes of assets. As of November, the crypto market was worth $US2.9 trillion, up from $US500 billion a year earlier. More than 16 per cent of Americans say they have invested in cryptocurrencies, up from 1 per cent in 2015.

But plunging cryptocurrency values in recent weeks have led to a “crypto winter”, as various crypto-related products have collapsed. The value of the two largest cryptocurrencies, Bitcoin and Ethereum, have this year dropped about 30 per cent and 40 per cent respectively. Crypto-optimists noted there have been two previous crypto winters and that values quickly recovered and soared.

The latest panic was caused by the surprising drop in value of a stablecoin named Tether, which was supposed to have a consistent value of $US1 and to work as a safe place to store money in the crypto world. Tether’s value dropped as low as 95 cents before stabilising. Another stablecoin, Terra, became almost worthless. This stablecoin turbulence caused further selling of currencies and other crypto-related products.

The crisis has led to calls for regulation of cryptocurrencies, including proposals to ensure that stablecoins have their assets held by regular banks. Regulation may be anathema to many crypto enthusiasts, but it could also increase confidence and lead to further investment.

The US Treasury secretary, Janet Yellen, said last week the current crypto meltdown was not threatening the financial system but highlighted the need for oversight. “We’ve had a real-life demonstration of the risks,” she told a congressional committee. 

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This article was first published in the print edition of The Saturday Paper on May 21, 2022 as "Finland and Sweden apply for NATO membership".

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Jonathan Pearlman is The Saturday Paper’s world editor and the editor of Australian Foreign Affairs.

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