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Nagorno-Karabakh conflict reignites with worst clashes in decades



Residents of Stepanakert, Nagorno-Karabakh’s capital, have endured an anxious week, filled with the sound of air-raid sirens warning them to take shelter and the threat of artillery fire and drone attacks.

“Everyone is hiding in bomb shelters. Women and children are there 24 hours a day,” said Alexander Bagdasaryan, who was visiting the town when Azerbaijan launched its assault on Nagorno-Karabakh last weekend. “They’re attacking as if it’s a full-on war. I saw them shoot down five drones with my own eyes,” he added.

The fierce clashes this week in the disputed Caucasus Mountains enclave, situated within Azerbaijan’s borders but populated by ethnic Armenians, are the worst since the adversaries fought a bloody war over the territory after the Soviet Union’s collapse. 

At least 169 people have died in the latest chapter of one of the world’s more intractable conflicts, given a new dimension this time by the muscular support that Turkey has given to Azerbaijan.

“The cultural and symbolic meaning of [Nagorno-Karabakh] for both peoples cannot be overstated,” Thomas de Waal writes in Black Garden: Armenia and Azerbaijan Through Peace and War, his history of the conflict. “For Armenians, Karabakh is the last outpost of their Christian civilisation. Azerbaijanis talk of it as a cradle, nursery, or conservatoire, the birthplace of their musicians and poets.”

It was in the late 1980s that Armenians in Nagorno-Karabakh, then part of Soviet Azerbaijan, rebelled against what they saw as “forced Azerification” and demanded that the territory become part of Soviet Armenia.

War broke out between Armenia and Azerbaijan as the Soviet Union collapsed and although a ceasefire was struck in 1994, it failed to bring a lasting settlement. The conflict has erupted several times since, most notably when more than 100 people died in a four-day skirmish in 2016.

Today, the self-proclaimed republic of fewer than 150,000 people remains unrecognised worldwide and essentially propped up by Armenia, which has floated the idea of fully annexing it.

Armenia and its sizeable diaspora have poured significant resources into rebuilding Stepanakert, a town of about 55,000 people, which boasts new roads, well-stocked shops and, in the surrounding hills, a burgeoning wine industry. 

But scars from the wars remain. A number of towns populated by thousands of ethnic Azeris during the Soviet era, such as Aghdam, now lie empty.

As Azerbaijan has this week continued its aerial and missile assault, it claims to have captured several strategic heights and to have taken out a number of Armenian defensive fortifications.

Despite the use of Turkish-made drones and sophisticated weaponry, much of the fighting is akin with conflicts fought a century ago.

Nagorno-Karabakh map

This is “very much first world war-style trench warfare and well-entrenched fortified positions where it’s very difficult to gain any kind of military breakthrough,” said Richard Giragosian, director of the Regional Studies Center, a Yerevan think-tank.

Carey Cavanaugh, a former US ambassador who helped broker landmark talks between Azerbaijan and Armenia in 2001, said: “What exists in Nagorno-Karabakh today are trenches . . . that look exactly like those dug in Belgium in the first world war.”

He characterised the fighting as “a situation where you may lose a lot of people to move a front line a very small distance, and not even be sure you can hold it in the long term”.

On Friday, Armenia’s foreign ministry said it was prepared for ceasefire talks but Azerbaijan has refused to halt what it called a “counter-offensive” until it regains complete control over the territory.

Hikmet Hadjiyev, senior aide to Azeri president Ilham Aliyev, on Friday said Azerbaijan wanted to redress grievances dating back to the 1994 ceasefire. “Complete resolution of this conflict is the ending of occupation and the withdrawal of Armenian troops,” he said.

Mr Aliyev is under domestic pressure to retake territory after tens of thousands of pro-war protesters stormed parliament in July, prompting him to sack his longtime foreign minister.

He has been boosted by unprecedented backing from Turkey, which denies Armenian claims it has sent foreign mercenaries and its own air support to help Azeri forces but has rejected western and Russian calls for a ceasefire.

Russia, which has a defence pact with Armenia but which is also a longstanding ally of Azerbaijan, has found itself struggling to influence events in a region it has long dominated.

Turkey and Azerbaijan’s bellicose rhetoric, however, masks the difficulty in quickly advancing through such difficult terrain.

Zaur Shiriyev, an analyst for the International Crisis Group think-tank, said the attritional nature of the war would damp public appetite to continue fighting.

After the last major escalation in 2016 killed more than 100 people, “public opinion was behind the government in the first days of the fighting, but when they saw the Azeris only retook a small piece of land, people started questioning whether the battle might be lost,” he said.

“Are the soldiers being killed just for the sake of taking a few hills?”

For many in Nagorno-Karabakh, the clashes this week have only strengthened their resolve. Mr Bagdasaryan quickly abandoned plans to return to his Moscow home and enlisted in Nagorno-Karabakh’s army. 

“Everyone knows that Armenians have always lived here. And nobody is going to leave because people have buried their fathers, grandfathers, mothers, wives, and children here,” he said. “Everyone will fight until the last drop of blood.”

Additional reporting by Henry Foy in Moscow

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Biden says he is open to exchange of cybercriminals with Putin




US president Joe Biden said he was open to Russian president Vladimir Putin’s proposal to hand over cybercriminals to the US if Washington did the same for Moscow, just days before the two leaders meet for a summit in Geneva.

Biden and Putin will sit down in Switzerland on Wednesday for their first face-to-face meeting since the former was sworn in as US president. Both leaders said at the weekend that relations between their two countries were at a low point, but Biden’s latest comments suggested there could be room for co-operation.

Speaking at the conclusion of a meeting of G7 leaders in the UK on Sunday, Biden told reporters he was receptive to Putin’s suggestion of reciprocal extradition of cybercriminals responsible for disruptive ransomware attacks.

Earlier on Sunday, Russian state TV aired an interview with Putin in which the Russian president said that Moscow and Washington must “assume equal commitments”.

“Russia will naturally do that but only if the other side — in this case the United States — agrees to the same and will also extradite corresponding criminals to the Russian Federation.”

Asked about Putin’s comments, Biden said: “Yes, I am open to, if there are crimes committed against Russia, that in fact are people committing those crimes are being harboured in the United States, I am committed to holding them accountable.”

“I was told as I was flying here, that [Putin] said that,” Biden added. “I think that is potentially a good sign of progress.”

An increasing number of audacious ransomware attacks has paralysed companies in recent weeks. These have included the disruption of the Colonial Pipeline, which provides petroleum supplies for much of the US east coast, as well as operations at JBS, the Brazilian meat processing company. The White House has said it believes both attacks originated in Russia.

Jake Sullivan, US national security adviser, later clarified that Biden had not signed up to a “prisoner swap”.

“What he was saying was that if Vladimir Putin wants to come and say I am prepared to make sure that cyber criminals are held accountable, Joe Biden is perfectly willing to show up and say cyber criminals can be held accountable in America, because they already are. That is what we do,” Sullivan told reporters on Air Force One en route to the Nato summit in Brussels, the second leg of Biden’s first foreign tour as president.

“This is not about exchanges or swaps or anything like that.”

Putin told NBC News in an interview that aired on Friday that relations between the US and Russia were at their “lowest point in recent years”. Biden on Sunday said that he agreed with the characterisation, but also pointed out areas where he believed the two countries could work together.

The White House confirmed on Saturday that Biden would hold a solo press conference following the summit with Putin, rather than share a stage as his predecessor Donald Trump did with the Russian president in Helsinki in 2018.

Joe Biden disembarks from Air Force One in Belgium on Sunday for a Nato summit
Joe Biden disembarks from Air Force One in Belgium on Sunday for a Nato summit © Benoit Doppagne/POOL/EPA-EFE/Shutterstock

“This is not a contest about who can do better in front of a press conference or try to embarrass each other,” Biden said. “It is about making myself very clear what the conditions are to get a better relationship.”

He added: “Russia has engaged in activities which we believe are contrary to international norms. But they have also bitten off some real problems they are going to have trouble chewing on. For example, the rebuilding of Syria, of Libya.”

“I am hopeful that we can find an accommodation that can save the lives of people in, for example, Libya.”

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Construction sector warns rising costs will eat into EU recovery plan




Construction industry executives across Europe have warned that “dangerous” price rises and shortages of many building materials risk undermining the EU’s flagship €800bn economic stimulus programme.

The EU construction sector generates almost 10 per cent of the bloc’s economic output and vast infrastructure projects make up a sizeable proportion of Brussels’ recovery fund, which will distribute grants and loans to rebuild member states’ economies after the Covid-19 pandemic.

But prices of construction materials from steel and wood to concrete and copper have begun to rise sharply in recent weeks as the economic rebound both in Europe and elsewhere — including the US and China — triggers a building boom.

According to the European Construction Industry Federation (FIEC), bitumen prices have risen 15 per cent in only three months, cement prices were up 10 per cent in a single month and wood prices were up over 20 per cent.

Public infrastructure projects usually impose penalties on builders for delays, while contractors often have to bear the cost of unexpected price increases.

Domenico Campogrande, director-general of FIEC, warned that the price rises and extra delays risked diluting the impact of the EU funds.

“The danger is that we have this big EU recovery plan but if 30 to 40 per cent of these funds are absorbed in extra financial instruments to cover the higher prices, it would be a real nonsense as it won’t go into the real economy,” he said. 

In a recent letter to the European Commission, the FIEC expressed “alarm” at the price rises and shortages of materials, including a more than doubling of the Italian price of steel bars used to make reinforced concrete in four months to March. 

“This phenomenon is jeopardising the construction sector’s contribution to economic recovery and is threatening the potential impact of European recovery programmes,” it said.

In Italy — the biggest beneficiary of the stimulus cash from Brussels — the government is planning to spend more than €100bn of its EU funding on building new infrastructure over the next five years. But the construction sector has warned officials that it will struggle to rise to the challenge without major reforms.

“We are facing shortages of many basic materials for construction and this is very dangerous as Italy is being hit harder than the rest of Europe,” said Flavio Monosilio, research director at ANCE, the association of Italian construction companies. “This crisis is at the heart of the new EU recovery plan.”

Line chart of Price indices rebased in US dollar terms showing Construction materials prices soar

Construction executives blame several factors for the bottlenecks, including the sharp rebound in demand which has outstripped the supply of materials in many countries, as well as pandemic-related disruption to supply chains and continued trade tensions.

Some materials have been hit by additional problems such as a bark beetle infestation that has hit wood production, and delays in the redistribution of unused steel.

Thomas Birtel, chief executive of Austrian construction group Strabag, said price rises had “increased tremendously in the last two weeks” and the company had to “report delays on individual construction sites because the material is simply no longer available”. 

Strabag, which built the Copenhagen Metro in Denmark and the Limerick Tunnel in Ireland, operates its own concrete and asphalt plants, but Birtel said: “Construction is a small-scale business and it is not even possible to control the supply chains for all building materials.”

In Germany, 44 per cent of construction companies surveyed by the Ifo Institute in May reported problems procuring materials on time, up from less than 6 per cent in March.

“We haven’t seen a bottleneck like this since 1991,” said Felix Leiss at Ifo. “This evidently caused construction activity to slow down in April, at least temporarily.”

Production in the German construction industry fell 4.3 per cent in April from the previous month, despite companies in the sector reporting a record order backlog of €62bn in March.

“Many producers are unable to supply the materials before the end of the year and that’s a real problem,” said Stephan Rabe at the German construction industry association. “A lot of money is going into public and private sector construction projects in the US and China and that is sucking up a lot of materials. Wood is being produced in Germany and exported to the US, so it is in short supply here.”

Some German politicians have called on Berlin to seek temporary EU export restrictions on wood and other materials.

As the US government prepares to launch a $1.7tn infrastructure programme and the global economic rebound is expected to gain pace, the pressures are expected to remain high in the coming months.

“It will take time to go back to normal — at least the end of the year,” said Campogrande.

Some countries, such as France and Germany, have responded by easing the rules on some public sector construction contracts, waiving fees for delays and compensating contractors for unforeseen price rises.

Monosilio said Rome was yet to offer any relief to the sector, which has been battered by a decade-long fall in public infrastructure investment, a lack of funding from banks and long delays in project approvals and payments.

Italy’s prime minister Mario Draghi has said the “destiny of the country” depends on the success of a €248bn package of investments and reforms mostly funded by the EU’s Recovery and Resilience Plan. It includes investment in high-speed train lines, renewable energy facilities, smart electricity grids and energy efficient buildings. 

EU states have a poor record in distributing funds; in the six years to 2020, they on average only spent just over half the money they were allocated by Brussels. 

Without reforms to address the Italian construction sector’s problems, Monosilio said similar problems could bedevil the EU’s recovery spending efforts.

“The Draghi government absolutely wants to improve the situation,” he said. “[But] it is a sword of Damocles hanging over the whole European project.”

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Macron warns Johnson to keep his word on Northern Ireland




Emmanuel Macron, French president, has warned Boris Johnson that efforts to reset relations between Paris and London depend on the UK prime minister keeping his word over the Brexit deal in Northern Ireland.

The EU has threatened to punish Britain — including imposing trade sanctions — if Johnson unilaterally breaks commitments on border checks made in the Northern Ireland protocol, part of his Brexit deal.

At a breakfast meeting on the margins of the G7 summit in Cornwall, Macron made it clear he expected Johnson to honour the Brexit deal sealed with the EU last December.

Macron is seen by Downing Street as the most hardline EU leader on the issue. Arguments between French presidents and British prime ministers at global summits are common — and often play well domestically.

But Macron’s warning underscored the seriousness with which the EU regards the mounting crisis in Northern Ireland.

Joe Biden, US president, has signalled his deep concern over the future of the peace process.

An Elysée source said Macron told Johnson at a breakfast meeting at Carbis Bay that he was ready to reset relations with London and that Britain and France had many common interests.

“The president, however, strongly underlined that this re-engagement requires the British to honour the promises made to Europeans and to respect the Brexit agreement,” the Elysée source said.

The protocol requires Britain to check certain goods moving between Great Britain and Northern Ireland to avoid them passing unchecked across the open border to Ireland, an EU member, and into the single market.

The introduction of an effective trade border within the UK’s territory has infuriated pro-UK unionists in Northern Ireland and added to tension in the region.

Johnson argues that the EU is being intransigent in the way it applies the protocol and Dominic Raab, UK foreign secretary, has accused Brussels of being “bloody minded”.

A clash is approaching later this month on exports of chilled meat products across the Irish Sea; the EU only permits trade in frozen meat. A “grace period” to allow continued sale of British sausages, minced beef and chicken nuggets in NI expires at the end of June.

Johnson has left open the option of unilaterally ignoring the ban in a move which the EU has warned could trigger retaliation under the terms of the EU/UK Brexit trade and co-operation agreement.

Maros Sefcovic, European Commission vice-president, confirmed last week that this could include trade sanctions, spawning fears of a trade war or — in tabloid headlines — a “sausage war”.

Johnson also held talks on Saturday morning with Angela Merkel, German chancellor, and European Council president Charles Michel and European Commission president Ursula von der Leyen.

Downing Street said after the meetings that Johnson was “confident” in his tough line on the protocol and that he had agreed with his European counterparts there was a need to find solutions “at speed”.

Johnson’s spokesman said “all options are on the table” if no solutions were found; Downing Street has not excluded suspending parts of the protocol. He added that none of the European leaders explicitly mentioned the threat of trade sanctions against the UK.

Von der Leyen said in a tweet that the Good Friday Agreement and peace on the island of Ireland were paramount.

“We negotiated a protocol that preserves this, signed and ratified by the UK and EU,” she said. “We want the best possible relations with the UK. Both sides must implement what we agreed on. There is complete EU unity on this.”

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