Business & Finance

The Court of Justice of the European Union issued a decision Tuesday that Israeli-made products from East Jerusalem and other disputed Israeli territories be labeled with the designation “colonies israéliennes” (“Israeli colony or settlement”). The controversial regulation was driven by foreign policy concerns, and contributes in no demonstrable way to food safety or consumer protection. The Lawfare Project and Cabinet Briard initiated legal action in 2017 on behalf of Israeli winemaker Psâgot, challenging the regulation before France’s administrative supreme court (Conseil d’État), which asked for guidance from the CJEU. [Lawfare Project press release]

Ironically, the US itself can weaken the world role of the dollar by unrestrained budget deficits (although the mechanism is uncertain) and certainly by overusing economic sanctions as a form of warfare. Sanctions involve ending a country’s direct links with the US economy, and indirectly by limiting its use of the dollar. We can cut off its use of US financial institutions and urge foreign banks to do the same by threatening their access to US financial facilities. Our weakening of the Iranian economy indicates that economic sanctions can be quite effective. The natural way for a sanctioned country to respond is to seek other currencies with which to do business and use financial institutions without links to the US. If the US does a lot of this, a critical mass of “sanctioned” countries might find a common new currency for their international transactions. The Chinese Remindbi comes to mind. The dollar’s world role would be greatly reduced. [Lawrence Krause, PhD]