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This is an audio transcript of the FT News Briefing podcast episode: Why Ukraine and Russia are fighting over a teeny island

Marc Filippino
Good morning from the Financial Times. Today is Thursday, May 19, and this is your FT News Briefing. US retailers warned about their earnings and Wall Street crumbled. A tiny island in the Black Sea has taken on outsized importance in the war between Russia and Ukraine. Plus, London and Brussels are still fighting over trade rules for Northern Ireland. We’ll dig into the latest development in the Brexit saga. I’m Marc Filippino. Here’s the news you need to start your day.

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Marc Filippino
US stocks plummeted yesterday. The S&P 500 fell more than 4%. The Nasdaq nearly five. What’s the blame? Well, you guessed it, inflation and supply chain issues. Investors were spooked after the retail chain Target yesterday said that rising costs for fuel, freight and wages plus logistics would impact profit margins. Target stock fell 25%. That was just a day after Walmart raised its own alarm bells about earnings. Walmart stock continued its descent on Wednesday, along with other retailers, including Dollar Tree and Dollar General.

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Marc Filippino
There is a big rock off the coast of Ukraine called Snake Island. According to Greek mythology, Poseidon created Snake Island as a haven where the Trojan War hero, Achilles and Helen, could settle. In the past few months, Russia and Ukraine have been fighting over this strategic outpost. To talk about why Snake Island is so important, I’m joined by our defence and security correspondent John Paul Rathbone. Hey, John Paul.

John Paul Rathbone
Hi, Marc.

Marc Filippino
So, JP, why is Snake Island so important in this war?

John Paul Rathbone
Well, it has symbolic importance because at the very start of the war, there was that famous incident when the Russian navy approached the island and its small garrison there and said surrender or face naval bombardment and certain death. And one of the guardsmen responded, Russian warship, go f*** yourself. In the end, it transpired that the garrison was not bombarded or killed. It was captured and later released. But it played into the broader story of Ukrainian pluck and Russian belligerence. But it also, Snake Island and the whole naval aspect of this fight has a huge strategic and military significance that has often been overlooked.

Marc Filippino
So why is this big piece of rock so strategic?

John Paul Rathbone
It’s only 30 or 40 kilometres off the Romanian coast and Romania just to remind you, it’s a Nato member. If you control Snake Island and it’s only 0.2 kilometres square, there’s nothing on it. No trees, no grass and two deep water piers. But if you control Snake Island, you can put missiles on there. You can also put on air defence systems which have a, say, 200 mile radius. So in theory, if you control Snake Island or a platform comparable to it, because really military people think of, well, OK, what can I put on it? If you control it, then you can also partially control the skies for 200 kilometres or so. You can launch missile strikes, you could lead incursions into Moldova and the breakaway Russian Republic of Transnistria. You could hinder native deployments. So Snake Island is sort of the naval aspect of this battle writ large, albeit on to a very tiny island.

Marc Filippino
JP Rathbone is the FT’s defence and security correspondent. Thanks, JP.

John Paul Rathbone
Thanks, Marc.

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Marc Filippino
Britain and the EU are still fighting over Brexit. To be specific, they are still sparring over the rules that govern trade with Northern Ireland. This week, Britain’s Foreign Secretary Liz Truss announced plans to rip up some of those rules. Here’s the FT’s Jude Webber.

Jude Webber
What she said was, we want to continue dialogue with our counterparts in the European Union. We want flexibility. We want a negotiated settlement, we can fix these problems. But if we get nowhere with negotiation, then we’re going to announce a bill in the coming weeks which will unilaterally scrap the Northern Ireland Protocol as this trading arrangement has been called, and allow us to treat goods that are going into Northern Ireland and staying in Northern Ireland differently to goods that are going into Northern Ireland and then going on into the rest of the European Union via the Republic of Ireland.

Marc Filippino
So a brief explainer for those who haven’t been following the tangled affair. The Northern Ireland Protocol is part of the painfully negotiated Brexit deal. It requires all goods travelling between Great Britain and Northern Ireland to undergo custom checks at Northern Ireland’s ports. But Jude says the frustration isn’t so much about the trade rules but identity. Northern Ireland’s unionists don’t like the separation from the UK.

Jude Webber
And identity is obviously always been a very fraught issue in Northern Ireland. For unionists, people who believe that Northern Ireland’s place is and should ever be within the United Kingdom, then this sort of is about trade, but really it’s mostly about their place in the European Union. But if you’re a businessman or a businesswoman, for example, in Northern Ireland, what the protocol offers you and what Brussels is talking up is the unique potential, they say, to access two markets, the British internal market, but also the EU’s single market. And so, you know, they say that that that if they can iron out these difficulties and really the difficulties that we’ve seen up until now, because a lot of businesses say they’re not insurmountable, but it’s a lot of extra bureaucracy, a lot of red tape, and that’s expensive. So they want to iron that out so that they can get on with having access to two very big markets.

Marc Filippino
As for the UK, Prime Minister Boris Johnson is trying to finally make good on his campaign slogan to get Brexit done.

Jude Webber
The London government is dedicated to delivering Brexit and so they want to be able to finish this, put this issue to bed so that they can get on with, you know, Global Britain and, and all the things that they will stem from the Brexit that they claim already to have delivered, but which this row of the protocol shows isn’t quite finished yet. So they, they, it’s about some, it’s about identity, but a different identity for the British government. And, you know, it’s about sort of reordering relations with Brussels.

Marc Filippino
Jude Webber is the FT’s Ireland correspondent.

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Marc Filippino
After six years, the US women’s national soccer team has won its legal battle to be paid the same as their male counterparts. Both teams finalised contracts yesterday. Base pay will be the same, plus they’ll get equal prize money for their performance in future World Cups. Now, if you’re keeping score, the men have yet to win one World Cup. The women have won four World Cups. Here’s our US sports business correspondent Sara Germano.

Sara Germano
And for such excellence on the pitch, not to be compensated even in an equitable way, it really was this clear, tangible example of how Labour fights, not only in sports but particularly in the US, had much more progress to be made. And we’ve seen over the course of this dispute, people around the world rallying around the US team. In fact, at the 2019 World Cup final, which the US women won, the stadium in France, broke out into these chants of equal pay, you know, for these US women.

Marc Filippino
Sarah says the victors are hoping for a spillover effect.

Sara Germano
The US Soccer Federation president and, you know, parties who agreed to this deal said they hope can be an example for football and, you know, for women’s compensation around the world.

Marc Filippino
That’s the FT’s Sarah Germano.

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Marc Filippino
You can read more on all of these stories at FT.com. This has been your daily FT News Briefing. Make sure you check back tomorrow for the latest business news.

This transcript has been automatically generated. If by any chance there is an error please send the details for a correction to: typo@ft.com. We will do our best to make the amendment as soon as possible.

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