EU Joint Funds Gaining Support as Leaders Confront Defense Needs
By , Milda Seputyte, and Sanne Wass
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Discussions are gathering pace in the European Union on how to increase defense spending, with joint financing becoming a realistic option for a growing list of leaders, according to people familiar with the talks.
The topic will likely be raised informally at a meeting French President Emmanuel Macron is hosting in Paris Monday with other leaders including the UK's Keir Starmer, German Chancellor Olaf Scholz and Italian Prime Minister Giorgia Meloni, said the people, who spoke on the condition of anonymity.
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Hamilton Spectator
41 minutes ago
- Hamilton Spectator
For Mark Carney, every decision has trade-offs — but that's not slowing him down
OTTAWA—If there is a Carney 'doctrine' taking shape more than 100 days into the prime ministership of Mark Carney, maybe it is this: get it done, and damn the details. A few short months ago, Carney was blunt: 'I am a pragmatist above all. So when I see something that's not working, I will change it.' That's what the former central banker and UN climate finance envoy said when he captured the Liberal party leadership to replace Justin Trudeau. He went on to win the 2025 federal election on his outsider's pitch to rescue the economy from the threat of Donald Trump's tariff war. Pragmatism was how he justified abrupt domestic moves: ditching the consumer carbon tax, reversing capital gains tax hikes, and lowering income taxes while jamming 'nation-building' red-tape-cutting bills through Parliament to juice the economy. Pragmatism helps explain why, in his single mandate letter to cabinet ministers, Carney told them, 'We must redefine Canada's international, commercial, and security relationships.' But in an era where Trump is the one defining Canada's closest relationship, it's not clear if Carney's pragmatism can win over the U.S. president's chaos. On Friday, the unpredictable Trump cancelled talks towards a new deal with Canada, angry at Canada's deadline Monday for Big Tech giants to pay a digital services tax. Retroactive to 2022, it would collect $2.3 billion at first, and about $900 million yearly after that. Small potatoes compared to what Carney has already put on Canada's tab. In hopes of getting along with Trump, Carney in the past week promised to ramp up Canada's spending, along with NATO allies — all under intense pressure from the U.S. president — to a whopping $150 billion a year on military and related spending, a level almost unthinkable last year, as he vows to shift Canadian economic and security ties away from America towards Europe and beyond. In a spate of a few weeks, Carney signed what he calls a new economic, security and defence partnership with the European Union, increased aid to Ukraine, hosted a G7 summit where he offered backing of Trump's leadership efforts to end the Russia-Ukraine war and left a wide open runway for Trump to handle the Iran-Israel conflict as he saw fit. Carney defended his vow to lead where the U.S. does not, telling CNN it should be seen as a 'positive' not a negative reaction 'against' the U.S. or Trump. 'The way we would like to lead, the way European Union would like to lead, a number of Asian countries as well, is in a positive respect. If the U.S. is pulling back from multilateralism, as it is with respect to trade … effectively U.S. trade policy is now bilateral — if the U.S. is pulling back, there are others of us who do believe in multilateralism,' the rule of law, 'fair and open' trade, and in defence co-operation, said Carney. 'Do something,' seems to be the Carney mantra, said Kerry Buck, a former Canadian ambassador to NATO who welcomed the prime minister's commitment hit the new NATO military spending goal of five per cent of GDP. Although Justin Trudeau eventually committed to reaching the old NATO two per cent target at the end of last year's summit, he did so without a clear plan and with a 2032 timeline that was 'clearly going to damage our bilateral relations with the U.S. under Trump, where we're very vulnerable on trade,' said Buck, speaking before Trump's move Friday. In contrast, two weeks ahead of this week's NATO summit Carney accelerated action, said he'd hit two per cent this year, and at the summit adopted the bigger five per cent goal by 2035 with no hesitation. ' It was smart transactionally to do that. And I think in terms of content, it was also necessary,' Buck said. Others wonder how Carney is going to pay for it all. Questions remain about how the government will reach its two per cent promise this year, with the independent Parliamentary Budget Officer saying it can't verify Carney's plan to hit the old target. 'Some might start to think that he has a guns-before-butter kind of approach to foreign policy … a muscular foreign policy focused on defence,' but Buck said Carney had no choice, given it was 'our most vulnerable point' with the U.S. in ongoing trade talks. Forget the 'peace dividend' that Canada and other western allies hailed at the end of the Cold War, welcoming the ability to spend less on the military and more on social welfare systems. Now Carney and the other leaders challenged by Trump are embracing what NATO Secretary General Mark Rutte called a 'defence dividend,' claiming that spending five per cent of GDP on defence will create 'an engine of growth for our economies, driving literally millions of jobs on both sides of the Atlantic.' Carney echoed the claim, acknowledging higher military spending may one day entail federal spending trade-offs or sacrifices, but for now, 'more of it will help build our economy at the same time as it improves our defence. And we'll get the benefits.' There is more continuity than many think between Trudeau and Carney: Carney continued the imposition of counter-tariffs against the U.S. that Trudeau launched. But he has withheld tit-for-tat retaliation against the 50 per cent steel and aluminum penalties Trump levied pending the outcome of trade talks. Carney has continued Trudeau's staunch support for Ukraine and its embattled president Volodymyr Zelenskyy. Carney backs a two-state solution to the Israel-Palestine conflict, a ceasefire in Gaza, and went so far as to sanction two Israeli cabinet ministers. Like Trudeau, Carney believes government has a role and responsibility to address climate change. That Carney has moved swiftly on foreign and defence files is partly due to the flow of the international summits that coincided with his first two months after winning the April 28 election. It's also due to the urgency of the threat posed by the 'tariff' president in the White House. Carney, though, has a view of the larger global economic imbalances and the roles of China and the U.S. in those imbalances, that he shares with leaders like France's President Emmanuel Macron, and as they try to persuade Trump to drop tariffs, Carney seeks to position Canada's critical mineral, AI and quantum computing sectors for a world in which those imbalances continue. Janice Gross Stein said it is too early to describe a Carney 'doctrine' but it's clear 'the fundamental thing for him is that he, like everyone, is defining a path to dealing with a very different United States.' Carney is of necessity pursuing a new more predictable economic and security deal with the U.S. at a time of crisis , 'but it's an eyes-open arrangement,' Stein said. 'Yes, we need to diversify our partnerships — that's not a new idea in Canadian foreign policy … and yes,' Carney is focusing especially on Europe and like-minded states, and NATO, 'but that's built in to dealing with the more demanding United States.' Stein sees a pragmatic streak too in Carney's overtures to countries like China, India and Saudi Arabia. Carney identified China as the biggest threat to Canada's national security during the federal election. But in office, he's taken steps to thaw relations and ease Beijing's penalties on Canadian agricultural products. At the same time he is moving to block Chinese steel dumping via higher tariff rates against transshipment countries — in line with U.S. concerns. He rolled out a G7 welcome mat to India's Narendra Modi as a criminal investigation struggles to probe India's role in the killing of a Canadian Sikh in Surrey. And Carney invited Saudi Arabia Crown prince Mohamed bin Salman, the kingdom's de facto ruler, who declined to attend, in a week where the Saudi regime executed a journalist. Those three countries, China, India and Saudi Arabia are key economic players that are ignored at Canada's peril, said Stein. 'Where he's a pragmatist is in the recognition that every decision has trade-offs. You cannot make it a high priority to diversify your partnerships when you are the smaller next-door neighbour to a country that you are sending 75 per cent of your exports to and buying 75 per cent of everything that you buy in defence from that one country, which is the United States, and then continue to exclude others in the international community.' In parallel, said Stein, Carney is acting to ensure that Canada's economy is 'fit for purpose.' The bill to fast-track 'nation-building' development projects is part of that effort, as is his move to do 'important' consultation with Indigenous groups, but done simultaneously with other reviews, 'not sequentially,' she said. Carney is 'connecting defence, foreign policy to the Canadian economy because that's his comfort zone,' said Margaret McCuaig-Johnston, a senior fellow in the Graduate School of Public and International Affairs at the University of Ottawa. But she worries the emphasis on 'pragmatic' sends the wrong signal to countries like China, India or Saudi Arabia which will interpret it to mean Canada is ready to overlook human rights concerns in favour of doing business. Jonathan Berkshire Miller, director of foreign affairs, national defence and security policy at the Macdonald-Laurier Institute, said Carney is necessarily focused on 'two imperatives: mending the relationship with the United States and diversification from it.' And while Carney's experience gives him credibility in Washington 'where he is well known among economic and diplomatic elites,' Trump's second term makes traditional diplomatic approaches 'increasingly unrealistic,' he said. There is an inevitable geographic and economic reality, he said in a written response to the Star. 'America remains Canada's largest trading partner.' So rather than a drastic shift or severing of ties, he said, 'Expect, instead, a policy of pragmatic hedging: building multilateral ties while trying to be on balanced terms' with who is in the White House. For now, Carney may have some latitude, he believes. Increased defence spending can bring Canada greater strategic autonomy on Arctic sovereignty, cybersecurity and intelligence sharing. The narrow question is 'one of political will' where the requirements for sustained federal spending 'and public support' will be the big test, he said, particularly in an era where 'fiscal retrenchment' (Carney has vowed to bring the operating budget into balance) and 'domestic political division are the contemporary realities.' The broader question is whether Carney's pragmatic approach can secure both.
Atlantic
2 hours ago
- Atlantic
The Iran-China-Russia Axis Crumbles When It Matters
As Israel and then the United States battered Iran this month, the reaction from China and Russia was surprisingly muted. For years, shared antagonism toward the U.S. has been pushing China, Russia, and Iran together. All three benefit from embarrassing the West in Ukraine and the Middle East, and widening the gaps between Washington and Europe. So after Israel's first strike, on June 13, China—the strongest partner in the anti-America triad—could have been expected to rush short-range missiles and other air-defense equipment to Iran. Surely, Beijing would use its growing diplomatic muscle to isolate Israel and the U.S., demand an emergency session of the United Nations Security Council, and introduce a resolution deploring the two governments that were attacking China's ally. Instead, recent events in Iran have revealed that anti-Americanism can bind an alliance together only so much. After ritually denouncing Israel's first strike as 'b razen ' and a ' violation of Iran's sovereignty, ' Beijing proceeded cautiously, emphasizing the need for diplomacy instead of further assigning blame. Chinese Foreign Minister Wang Yi refrained from condemning Israel's actions, in a call with his Israeli counterpart on June 14, and President Xi Jinping waited four days before calling for 'd e-escalation ' and declaring that 'China stands ready to work with all parties to play a constructive role in restoring peace and stability in the Middle East.' After Iran's parliament voted to close the Strait of Hormuz, Beijing's foreign-affairs spokesperson stressed—in what looked like a warning to Iran —that the Persian Gulf is a crucial global trade route for goods and energy, and called for partners to 'prevent the regional turmoil from having a greater impact on global economic growth.' In calmer times, China, like Russia, is happy to use Iran as a battering ram against the U.S. and its allies. But when tensions turn into military confrontation and global stability is at risk, backing Iran looks like a far less sensible investment to Beijing than preserving its own economic and diplomatic relations with the West. China's mild reaction isn't just a blow to Iran; it may also suggest that the much ballyhooed 'no limits' partnership between Xi and Russia's President Vladimir Putin might not be as sturdy as Moscow and Beijing advertise. Iran, Russia, and China have different ideologies, political regimes, and strategic aims. Iran's relations with its two larger partners are wildly asymmetric. China, for example, is Iran's lifeline. It buys about 90 percent of Iran's oil and supplies materials and technologies central to Iran's weapons development. Yet the trading relationship matters less to China, which gets only about 10 percent of its oil from Iran. Plus, China has an economy more than 40 times as large, and it does far more business with the U.S. and the European Union. Russia has interests that similarly diverge from Iran's, and it, too, has conspicuously refrained from coming to the Islamic Republic's aid. But China following a similar approach toward Iran likely does not please Moscow. Although Moscow's relations with Beijing are less lopsided than Tehran's are, Russia's economy is still less than one-eighth the size of China's. One-third of Russia's state budget comes from oil sales, and China is the largest customer by far. Russia also depends on Chinese supplies for its war machine. This past March, the G7 foreign ministers called China a ' decisive enabler ' of Russia's war in Ukraine. But should the Kremlin begin to run out of money or soldiers, China's willingness to bail out its ally is very much in doubt. Even among authoritarian regimes, differences in values can limit cooperation. In 2023, Xi called Russia's 1917 October Revolution a 'cannon blast' that 'brought Marxism-Leninism to China, demonstrating the way forward and offering a new choice for the Chinese people who were seeking a way to save China from subjugation.' Putin, despite his formative years in the Soviet-era KGB, now laments the fall of the Russian empire and describes Vladimir Lenin's coup as the deed of 'political adventurists and foreign forces' who 'divided the country and tore it apart for selfish benefit.' The head of China's Communist Party may resent Putin's reduction of its Russian counterpart—the country's second-largest party—to the status of another bit player in Russia's rubber-stamping parliament. Since World War II, leaders of Western democracies have successfully collaborated in part because they have shared a common worldview. Whether Iran's Islamic theocrats can say the same about Xi, the leader of an avowedly atheist state, or Putin, who now positions himself as the champion of Orthodox Christianity, is another question entirely. Beijing's response to Iran's predicament ought to make the West feel cautiously optimistic. If Donald Trump finally learns to distinguish the aggressor from the victim—or at least realizes that Putin has been playing him—the U.S. president could support Ukraine in earnest without worrying much about China expanding its assistance to Russia. As long as both Iran and Russia keep providing cheap oil and antagonizing the West and its allies, they are serving China's purposes. But at least for now, Beijing looks unlikely to back either of its supposed partners if they jeopardize China's interest in stability or its extensive and profitable relations with the West.
Chicago Tribune
2 hours ago
- Chicago Tribune
Editorial: Why Chicago has a restaurant crisis
The hit TV show 'The Bear' chronicles an independent restaurant's existential struggles and celebrates Chicagoans' determination to survive. But you need only traverse one of the city's real-life arteries, such as North Broadway through Edgewater or along 26th Street in Little Village, to see the the state of one of Chicago's most celebrated and artful industries: shuttered restaurants pockmark almost every block. Chicago's storied restaurant business is mired in crisis. If you doubt our word that this is a dire emergency, we suggest you swivel your head from road or sidewalk and look for yourselves. Fine dining. Trattorias. Taquerias. Vietnamese cuisine. Italian beef. It seems not to matter. Chicago has never been a locus of chain restaurants, unlike many cities in the south. The fame of the city's restaurants has sprouted from the creativity of independent operators, some craving (and winning) James Beard Awards and international acclaim, and others merely wanting to serve and nourish their communities. We hardly need to tell you that many locally owned restaurants are the foci of their neighborhoods, which accounts for why there was such a howl of anguish in recent days when the cozy Gale Street Inn on Milwaukee Avenue in Jefferson Park announced its closure. Its famously genial operator, George Karzas, had owned and run the restaurant since 1994. Among his many other good works, he supported his local Jefferson Park theater, The Gift, storefront theaters and storefront restaurants sharing much of the same homegrown DNA in this city. At the Gale Street Inn, you always knew you were in Chicago. The problem? The current headwinds are many in the restaurant business, including the well-documented rise in food costs. But top of mind of those in the hospitality industry in Chicago is the high cost of labor and the city's shortsighted decision to get rid of the so-called tipped minimum wage following a campaign by an out-of-state activist group, One Fair Wage, which had worked its agenda on Mayor Brandon Johnson and enough of the aldermen in the City Council. Karzas' decision to close the Gale Street Inn comes as the tipped minimum wage was set to increase again Tuesday, rising from $11.02 to $12.62 an hour as part of a phased-in approach that has been a progressive nightmare for restaurants. One Fair Wage is led by Saru Jayaraman, a Yale University-educated lawyer, activist and academic who runs the Food Labor Research Center at the University of California at Berkeley. Back in Chicago, Christina Gonzalez from Taqueria Los Comales told us this past week that she worries not about political campaigns, but the price of her burritos at a family business with a 50-year history. 'I can't charge $24 for a burrito,' she told us. 'My customers won't come.' Gonzalez thus defined the Catch-22. While fine-dining establishments that attract the wealthiest customers can raise (and have raised) their menu prices to eye-popping levels, restaurants that appeal to ordinary Chicagoans know that they have already hit the ceiling of what their customers can afford to pay. Their only option often is to close. 'You raise prices, you lose customers,' Sam Toia, head of the Illinois Restaurant Association told us. And that is exactly what has been happening, Gonzalez said. Counter service is looking to her like the only way to go, which means laying off servers and defeating what the rise in the tipped minimum wage sought to achieve. Anyone who attended the National Restaurant Show in Chicago last month was smacked in the face at booth after booth by a single agenda wrought from desperation: how to harness technology to find ways to use fewer human workers. But while fast-food joints can and will have a robot flipping burgers, independent, table-service restaurants are all about human interaction. We think there is a preponderance of evidence that the end of the tipped minimum wage, which Johnson has consistently defended using racially charged language, is a major cause of the current crisis. Even some servers agree, because their hours are being cut and they're being cross-trained to juggle multiple roles as owners try to cut costs. They can see that their workplaces are on the cusp of going out of business. 'None of us want this,' said Jose Garcia, a veteran server at The Dearborn in Chicago's Loop. In Massachusetts, hardly a conservative state, a ballot initiative that would have eliminated the tipped minimum wage was defeated by voters last fall by a margin of roughly 2-to-1 after the state's Democratic governor, Maura Healey, came out against the proposal, saying she was convinced it would lead to the closing of restaurants. The arguments for the drastic rise in labor costs hardly make sense because it forms only a relatively small portion of servers' actual income. Hard as it may be for some in City Council to understand, the health of their restaurants matters more to most servers than the size of their base paycheck, because the bulk of their income comes from tips. Most servers of our acquaintance have no interest in being paid a flat hourly wage that discourages tipping; they know that will hurt their earnings. What they most want is to be working in a dynamic restaurant where they can offer excellent service so that the tips flow. It long has been state law that in the event tipped employees such as servers and bartenders do not at least make the prevailing minimum wage, their employers must make up the difference. Few need to do so but still, most do. And, even in the case of the few bad actors, fairness demands that the law be more strictly enforced, rather than forcing all restaurants to increase their wage bills. Toia told us his group would support the prosecution of those who do not do right by their workers. It's axiomatic in the restaurant business that servers make better money than those in the so-called back of the house. Korina Sanchez, vice president and general counsel at Third Coast Hospitality, told us that information from point-of-sale systems tells her that her servers typically make $40 an hour (good, this is hard work). Elsewhere, Toia said, it can be far more. Restaurants generally now know what their servers are making because cash tips have become rare. The change in the law is causing yet harsher inequity with non-tipped employees. Before these changes, servers were making significantly more than line cooks and dishwashers, who are more likely to be immigrants shouldering the support of a family. If Congress passes Donald Trump's tax-and-spending bill, which contains new tax breaks for tipped workers, that will tip the balance (no pun intended) even further in servers' favor. Sanchez said that one of the saddest aspects of the crisis is that it is preventing her from doing more for her kitchen workers. So what to do? Simply put, City Council should stop this craziness before we lose any more restaurants. Muriel Bowser, mayor of Washington, D.C., proposed last month to repeal Initiative 82 — the three-year-old law that eliminates D.C.'s tipped minimum wage. She knows it did not work. 'We think our restaurants are facing a perfect storm with increased operational and supply costs, higher rent, and unique labor challenges,' she said, arguing that it was part of her job to 'ensure our restaurants can compete, survive, grow and employ D.C. residents,' Axios reported. Amen. Meanwhile in Chicago, Mayor Johnson has made no such statements, insisting that the city will push ahead with its increases. His mouthpieces on City Council have been arguing that the sector is doing just great. This is nonsense. Only restaurants funded by chains and private equity groups are growing in Chicago. For independents, it's an existential crisis. At a bare minimum, City Council should stop the increase in the tipped minimum wage and leave it at its current rate, $11.02 an hour. Most likely, it would need to take this action with a two-thirds majority, so as to prevent a veto, given that the pleas from Chicago restaurants so far have fallen on unreceptive mayoral ears. There is an ordinance waiting in committee, as proposed by Ald. Bennett Lawson, 44th, that would repeal this entire misguided mishegoss. Ideally, City Council would listen to fellow Democratic leaders in Washington and Boston and admit this did not work. When pressed by us, Toia said that the Illinois Restaurant Association, which he described as 'progressive and pragmatic,' could live with a pause rather than a repeal. It is the least City Council should do to save Chicago's restaurants.
