The Israeli government has decided to suspend tax transfers to the Palestinian Authority in retaliation for its decision to seek international recognition by seeking membership in 15 UN conventions. The Israeli government collects the taxes in the Occupied Territories and then disburses them to the Palestinian Authority. By suspending the transfers, Israel will effectively deprive the PA of any revenues to keep its services going. In addition, a member of the government, Naftali Bennett, has recommended that Israel simply annex all the Israeli settlements in the West Bank, effectively ending any possibility for a negotiated solution. The breakdown of the peace negotiations is not yet technically dead, but it is perilously close.
The Russian military buildup along the Ukrainian border is quite extensive, belying Russian claims that its troops are there just on a training mission. Satellite photographs clearly indicate that Russia could easily invade Ukraine if it chose to do so. The buildup is clearly meant to intimidate, but as yet there is no evidence that an invasion is planned.
Ambrose Evans-Pritchard is a very astute analyst of European economic affairs. This post is a few days old, but it is highly pertinent as Greece re-enters the bond market after almost four years of austerity. Evans-Pritchard fears that the many years of austerity is going to lead Europe into a deflationary cycle. Because Europe does not have a central bank capable of lending directly to banks (it is limited by treaty to lending only to sovereign governments), deflation would be extremely difficult to address in the continent. The specter of a years-long economic slowdown is not far-fetched if the trend toward deflation is not stopped.
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